459 thoughts on “PORTFOLIO CHANGE”

  3. Dan

    This flip flopping is insane, what ever happened to all those cycles that said this correction isn’t over??

  4. Shalom Bernanke

    I agree with Gary and will add increase my positions by 50% before the close. Not that I expect a rocket ride higher from here, I’m just adding to winners and hope for a drift sideways over the next few weeks to get heavy.

  5. Harry235

    Gary,

    I would really enjoy a post today or tonight as to why you have decided to change your views on Gold hitting it’s lows in late July or early August. Your post today have me a little confused as to what you are seeing in the cycle right now.

  6. Shalom Bernanke

    One thing for sure, action like this portends higher prices eventually. I’m not sure when, or if we drift lower some beforehand, but it’s obvious to me the metals are still a long and very soon to being “in play” again.

  7. Gary

    Dan,
    What flip-flopping? We’ve been waiting patiently for the intermediate cycle low. Usually that low is easier to discern, but the fact that gold surged back above $1500 and has given nothing back today, and completed a weekly swing is a strong suggestion that we have a bottom and today is day one of a new intermediate cycle.

    Folks let me say this again. If that was the bottom all you’ve missed is one day.

    ONE DAY!

  8. Frank

    Wow that’s quite the reversal from 0 to 50% exposure. I added and did some trades during the June weakness on the margins and always believe in keeping a core position. Now you know why.

    But this could easily be whipsawed.

  9. DG

    I agree with Gary. This is not a trading site. If you expect to get the exact low and never have a 3% drawdown you are in the wrong place. A few of us fool around and try to get it just right, but missing 2-3% off the bottom is, well, just 2-3%. If you buy and we go back down buy more as we are close regardless. I may try for a better entry point but that’s just me and I am prepared to deal with whatever happens.

  11. Frank

    Well, NGD is up 20% since its June low, and it’s not down 50% from the peak like some miner.

    SLW was down around 30 and now close to 35.

    Sure, one didn’t miss much in gold but if one is targeting miners it was quite a lot to leave on the table.

  12. Dan

    Yesterday we were bearish and today based off one days action were are 50% in. Ya this can definitely get whipsawed. Summer doldrums last all of July and august so I don’t see any reason to panic into positions here. /Jmho.

  13. Gary

    Hardly, if gold is going to make an average leg up up 24% then missing 5% in miners is insignificant.

    By the time gold hits its intermediate top the minor should be 15 to 20 maybe even 30% above the prior highs. That’s still a huge gain from where we are right now.

    If you are not willing to play the game unless every trade is timed perfectly then you probably better get out of this business, because I have news for you, you will almost never time any trade perfectly.

  14. Unknown

    have been following this blog for the last few months now. it appears that recently new bloggers want to know why gary “flip flops” .people if gary had a crystal ball , we all would be rich by now. and he wouldnt have to blog at all. he has said many times in the past to flip on the dime, if thats what the market demands.

  15. Gary

    Dan,
    I’m still leaving dry powder in the model portfolio in case gold does reverse and make a lower low.

    But it is deep enough in the intermediate cycle that I think at this point we’re close enough. At least to begin building positions.

  16. Frank

    And that’s exactly why I ease out of positions and ease into them. I am not a trader.

    I made the mistake of not selling much of anything(easing out) earlier this year because of how gold miners behaved and the subsequent silver bubble. Got a bit over-exuberant about the future.

  17. Gary

    Ben,
    Well if you knew the bottom was in then why didn’t you buy?

    For me I need the bottom to also be in on gold before I buy. There was no sign of that until today. So regardless of what the miners had done, until I got some sign that gold bottomed there’s no way I’m going to buy anything in the precious metals sector.

  18. T

    Gary,
    After reading all the posts on the blog, that would lead me to believe that you don’t think silver will fall nearly as precipitously as you once thought, since gold’s intermediate cycle low is in. Is that correct?

  19. Gary

    T,
    Correct. If gold has bottomed then it is going to drag silver higher, although I don’t think it will be moving above $50 any time soon.

    I will be focusing on gold and miners during this leg.

  20. Brian

    Let’s take advantage of the 3-6 month rally ahead, ease into positions now and over the next 2-3 weeks as the opportunity presents. After the move, we’ll look back and see Gary made the right call.

  21. Dan

    I’m keeping eveything as is, I can’t commit to buy stuff today and hold to the end of the year based of one days action. I like to phase into and out of my positions unless there are clear reversal days. Fortunately my silver short positions are still in green as I bought very early on and the PMs appear to be selling off into the close somewhat. I’ll live with the consequences either way.

  22. Marty

    Gary,

    Haven’t you said the Gold Bull will do everything it can to get the buyer in before it dumps. Could this be a part of everything? I am still looking for the 150dma yet think it is now being pushed down the road a little. I still think your intitial estimate of late July early Aug would still be accurate. This rally today really blows though for the downside. We will see how this week plays out.

  25. honus

    Gary,
    I’m new to learning about cycles. Can you tell me what indicators you used, to define this bottom.
    Thanks
    Harry

  27. Shalom Bernanke

    I added as planned to my miners, and started to accumulate PHYS as well.

    We might not rip higher from right here, but the bottom prices are likely already behind us. I can live with that, and will take advantage of weakness if it occurs to do some more buying.

    I don’t like sitting in Benny’s funny money anyway.

    Good luck fellow traders!

  28. honus

    Gary,
    I’m new to learning about cycles. Can you tell me what indicators you used, to define this bottom.
    Thanks
    Harry

  30. Gary

    Marty,
    If this is the bottom it’s unlike any bottom I have ever seen. However the move back above $1500 was powerful and gave back nothing.

    Since it is late in the intermediate cycle we have to consider that the bottom may very well be in.

    Let me say this. If you are going to wait hoping on further declines be prepared to chase the move just in case gold doesn’t give us a lower entry.

    I started to build a position in the model portfolio today. I do still have some dry powder just in case there is another dip down.

  34. MBS

    Gary –
    I’m sure you will cover this in tonights report, but how does the dollar play into your gold cycle? We are looking for a new daily cycle starting any day (probably today was day 1) so I guess you are expecting this dollar rally to fail and take out May lows? I guess we could also have rising dollar and gold as well.

    Thanks

  35. Adam

    That doesn’t mean anything. That means big money might be forced to chase it. If they want to cover their tracks with program trading/internal crossing/options trading/whatever they can.

  36. Gary

    MBS,
    If the market is convinced that the dollar is going lower than it will probably get a jump on the move even if the dollar rallies for a bit.

    Since most terms have come unemployment report we could see the dollar drifted lower into Friday followed by possibly a weak rally and failure.

  37. William Wallace

    The dollar rallied today and gold rallied right along with it, anyone trying to gauge gold’s moves by watching the dollar is in for a ride. Gold could care less what the dollar is doing, today, as many times before, I watched gold trade up right beside the S&P, while the dollar was rallying.

  38. Gary

    I don’t think I would make the mistake of thinking that the dollar is meaningless to gold. Not at this stage of the bull market.

    Yes gold can fight a rising dollar from time to time but we have never had a major C wave leg up along with a rising dollar.

    Last summer gold did manage to make marginal new highs in the face of a rising dollar, but the really big moves have always come during a major leg down in the dollar.

    The action in stocks, oil and gold is all suggesting that the dollar still has another leg down.

  42. eeelove8

    what happened to the end of QE and a deflationary period coming? Commodities and the stock market going lower?

    I am confused.

  45. gold silver troll

    i’ve followed gary for years and he’s very good at what he does

    for the past year, EVERYTIME Gary makes a stock market bear post, the market ZOOMS HIGHER

    it’s like his stock market doom post is the perfect entry to go long…

    I found this very funny

  46. lodmund

    Gary

    brave call, i’ve criticised you in the past, but hope and suspect your interpretation here is correct. No one can seriously expect you to pinpoint the exact bottom, but if a bottom in gold forms around here i will be impressed

  47. Brian

    From Fleck’s post this evening:
    “With so many people now fearing weakness in gold, the stage is set for all of those who prepared for gold to take a hit to now find themselves chasing prices higher. Whether that starts in July, August, or September I don’t know, but I feel strongly that it will happen, and the earlier it begins, the more people will have to scramble.”
    You’re going to be proved correct again Gary over the next few weeks.

  53. Cool_Loser

    I’m with you William. I can’t help but believe gold hasn’t put in it’s intermediate cycle low yet. I know cycles aren’t absolute, but it just doesn’t seem reasonable otherwise.

  55. Duuuuuude

    Here are the two scenarios:
    1. PM’s rally into a new intermediate cycle, and the complainers on the blog whine that we missed the bottom, or we did not commit a larger position size.
    2. We are not at the Intermediate low yet, and the complainers whine that they are losing money on the position they took, completely losing focus that they own a long position in a much larger bull market.

    All this second guessing is a drag to read. If there were a mute button on comments, I would be using it.

  56. William Wallace

    Cool Loser,

    Dont get me wrong, I am not saying it is not possible that we have seen a gold bottom (anything is possible in this train wreck of a world economy we are in the midst of), im just throwing out there exactly what I see in all the previous intermediate corrections.

  57. Gart

    I’m not at all surprised to see Gary going long here. I’m going to wait for a little weakness, mainly because I got killed chasing a trend day higher at the IT low in January.

    What does surprise me is to see Shalom buying into the tail end of a stretched trend day up. You’re usually one of the most disciplined buyers around here. Maybe got the happies with those 12% daily receipts on EXK and SVM today, eh? What’s up, friend?

    Best of luck to all the new longs!

  58. Poly

    An interesting observation I just made, $HUI, GDX and GDXJ (I’m sure many others too didn’t check) all very recently formed a cross on the 50 and 200, the first time since the 8yr low.

    Miners are so undervalued relative the metal, they are trading at levels where gold was below $1,000.

    So bullion may not have corrected a hell of a lot recently, but in light of gold’s rise and the equities rally this past 2 years, the miners sure have been beaten down.

  59. Duuuuuude

    R2R, for it to be a bullish abandoned baby, it needs to be at the bottom of a down trend. I really don’t think this qualifies.

  60. Dan

    Poly,

    The 50 crossing the 200 is a bear cross, it’s not bullish action. Your other points however are true and have been true for many months.

  61. Poly

    A bear cross it is.

    In the depths of a big secular bull market like gold, I read it as being a sign of severely undervalued and beaten down.

  62. Rosabarba

    It might not be at the exact bottom of the downtrend, though it is in the lower edge of the IT range.

    More important, imo, is the baby/island/whatever action: a gap down day reversed the next day on a big unfilled gap up. Shorts are stuck inside, prospective longs are are stuck outside, or both have to bite the bullet and accept worse terms than they had the day before. The implication seems bullish enough, esp. if we get follow-through and a close above the 200dsma.

  63. Return to Resistance

    Dude,

    I think the BAB chart patterns mark trend changes more than marking an exact bottom.

    You could certainly argue that we haven’t exactly been in a downtrend over the last couple months, more of a sideways consolidation, but when you take into consideration the market action last week, and the big moves in commodities today, I’m forced to take notice that our previous expectation for deflationary markets needs to be re-considered.

  64. Felix

    Is it not possible that, contrary to CNBS’ reality, at this point your average marketeer is just as aware as we are that QE cannot end? I mean, I knew it before I found this site, and I’m absolutely nobody as market and finance go. Why should the various markets act otherwise?

  65. EricH

    ahhhh…
    This action is a little bit emotional don’t you think???

    If this is all still keying off of the dollar and the 3 year cycle then the dollar did nothing to justify this add today.

  66. Rosabarba

    I would again suggest that I think it is a misnomer to say that that QE2 has “ended.” What has happened is the Fed has met its programmed target for monetary/balance sheet expansion with its $600B program. With the statement that it plans to roll $300B in maturing securities rather than run them off, it seems to me the current program is one of continued (though not expanding, for now) ease in monetary policy.

  68. Shalom Bernanke

    Gart,

    Good observation, as I typically buy the dips. Keep in mind when I add 50%, it’s not 50% of capital, but rather 50% of my current position.

    I intend to own much more in the future, but bet size is everything in trading. I try to keep the size of each bet to where I always have strong hand status, in that I can see clearly.

  69. EricH

    So Gary, for weeks you said to keep an eye on the dollar. So with this add, is it time to ignore the dollar now?

  70. Shalom Bernanke

    Even if a trade goes sharply against me initially, proper sizing lets me view the position without too much emotional interference. This is how I was able to stay in miners when most here had conviction they were going lower.

  71. Ben

    Gary,

    I’m just trying out new information the past six months, and it hasn’t been working out nearly as well as what I did before. Signs that I was looking at which weren’t part of your posts in the past two weeks: the gold/xau reaching well above normal; the bull sentiment reaching just 26.67 last week, well below the prior IM lows; miners which had appeared to base to me (charting doesn’t work…). There was the anemic lower high in the dollar a couple weeks ago, and I posted a query on the blog asking if that made the dollar cycle left translated — that would have been an omen, right? I still don’t understand why the dollar would be key yet that was not considered. I chalked it up to my own misinterpretation of the cycles. That would be June 24th, which was a lower high than June 16th.

    Just giving these cycles a chance, but the thrashing and mistiming since late December is pretty high. Missing 10% up or 20% retraction adds up to quite a chunk. Last year it was easy, even I was nearly all in by the end of July (without using cycles).

    I became a subscriber in order to do better, miss debacles like ’08. So far, it’s quite a mixed bag. It’s too late for the jury to be out, yet it has not seemed particularly helpful so far.

    My failing this time was in being too patient, largely thanks to cycle analysis. If gold heads down to 1425 next week, this week will simply have been more thrashing. With my retirement account where I have restrictions on switching in and out of funds, just missing the D wave would have been worth the price of admission. Yet the fido fund is higher today than when I sold in early May. That’s kind of crazy…

  72. Ben

    I misspoke — the jury is still out on cycles, imho, that is, I’m not writing them off. It does appear to be quite a bit less useful overall — just one more thing to consider but not necessarily even the best tool in the bag. Another six months and I’ll have a more solid opinion.

  73. Poly

    Most people here, myself included have been looking at past IT cycle behavior to gauge current expectations. One main thesis has been the near perfect touching of the 30wma of Gold when forming bottoms. This thinking seems to be shaping our current thought process more than it should be, as we all know, banking on past correlations is a good way to get it really wrong.
    Anyway, I’m not trying to say otherwise with the chart below, but just a head’s up that there are other possibilities, if one is looking for past IT cycle low behavior to shape current expectations. It also potentially fits the behavior right before a major C-wave top.

    Past-Gold-IT-Lows

  74. fubsy_cooter

    I read a few comments and see quetions re the dollar. In my mind the dollar and pms can both rally out of the dollars dcl as the forces that drive the dollar higher in the short term would also support pms..sov debt, and money printing.

    Also, as Gary suggests, the markets may just be forecasting more of he same, which puts the c wave in play.

    f

  76. EricH

    “In the depths of a big secular bull market like gold, I read it as being a sign of severely undervalued and beaten down.”

    Hogwash.
    It means nothing in the bigger picture. Have a look at S&P over the past decade. I could see a few death crosses. 2 lead to big declines (2000 & 20007). The others was correction in an overall uptrend.

  77. Shalom Bernanke

    The funny thing is that everybody here is waiting to buy metals in the very near future, either next week or next month, even if they are sold short for an expected brief decline.

    That’s what bull markets are made of, so one knows we’ll see higher prices whether we nail the bottom or not on our entry. I like the odds, and with proper sizing to my risk tolerance, I can ride out any volatility.

    No worries here. They go lower I will add, and if they rip, I’ve got a piece of it.

  78. Ivan

    In my opinion USD will start rising and Gold will go back down to make a bottom bellow 1462.So far problems are in Europe.Today Portugal rating was downgraded to Junk.I dont see how Euro can jump in such situation.
    Thursday we expect interest rates in Europe to stay the same.That will most likely pressing the Euro.

  79. Ben

    Poly, it isn’t just that chart, but the repeated discussions about the massive D wave coming up.

    If gold goes up from here, then clearly there’s a bigger picture at work that is rendering the cycle analysis fairly flawed. Foreign CB buying? That’s the driving factor over the next few years that one person I know thinks means it would be reckless to punt your holdings.

    So far, cycling in and out has only served to lower my return, not raise it. It’s starting to feel like options, where maybe one time you save 40% (or gain) but in between you are whipsawed several times for 10-20% (much worse in silver last time).

    It’s all a moving target of course — nothing repeats exactly. That’s the rub with cycles, charts, fundamentals, black swans, etc.

  80. EricH

    Anyone realize we have reached 30+ months and not test the 200 dma yet on gold.

    30+ MONTHS!!!

    When was the last time you seen a market that haven’t tested the 200 dma in over 2.5 years?????

  81. EricH

    As Gary said many times before, in a D wave ‘the action’ will do everything to keep you in.

    Yet, here we are…….

  83. Shalom Bernanke

    Eric,

    You have an opinion, and could be justified in standing aside. Perhaps Gary did get lured into a D-wave trap. He was quite clear that it might go against him, thus his 50% invested. If he knew positively, he’d go 125% in.

    Trading is probabilities, not certainties, and a trader should accept this in all decisions.

  84. Dan

    If today was the low then it has been by far the weakest IT decline I have ever experienced since I started playing this game many years ago. Gold is literally just two days like today away from being at all time highs! If you bring up a chart of gold we are at the same level as April and have just been consolidating since then, it would be a stretch to even call golds action the past couple months a “correction.” If this is over then we will be making new highs within a week or two max.

    At the same time, the USD’s 8 month correction is going to continue and the base we have been building the past 2 months will just break down. If so then this has been by far the weakest bounce after hitting lows relative to the 200dmva.

    I personally believe there are three options here, we are going to (1) continue down (2) go nowhere for the next couple months until all the averages catch up or (3) we are starting the mania phase because if we start making highs in the middle of summer then where are we going to be by the new year?

  86. Dan

    Poly,

    According to that chart you are betting on 1/10 odds that the correction has ended before hitting the dmva? Furthermore, I personally distinguish between corrections that happen in the summer after parabolic moves and corrections that happen during the winter IN THE MIDDLE of a uptrend.

    Considering the parabola is broken, I think the odds are we are not in middle of a uptrend but rather in a real correction.

  87. Felix

    SB,

    Do you remember that when G changed the model portfolio policy after we rode out the Great May Day Silver Massacre, he said that it would probably never read 100% invested ever again, let alone any leverage like previously? But perhaps it’s good to let on there may be a “code” to work out based on prior portfolios, however vigorously denied! LOL

    – Proud Recipient of the Silver Heart Medal

  88. Shalom Bernanke

    Dan,

    No offense intended, but: “I personally believe there are three options here, we are going to (1) continue down (2) go nowhere for the next couple months until all the averages catch up or (3) we are starting the mania phase because if we start making highs in the middle of summer then where are we going to be by the new year?”

    So, we’re either going down, hanging steady, or headed higher?

    I can guarantee you’ll be correct! 🙂

  89. Shalom Bernanke

    I remember that time Felix, but fortunately the silver miners were telling me to exit at the time, so I sold them and waited for a signal to get long silver, which never came so I stayed in cash.

    I do know that staying all in on AGQ was too risky for me, so was not in it for the ride lower. Gary has a much greater risk-tolerance than me, and will enjoy much bigger gains when he’s correct.

  91. aviat72

    Just stepping back a bit, it looks like Gold broke down from a triangle consolidation and then went right back up. It will very soon hit the mid point of that triangle and that is where the real challenge lies (1530-1540). From what I have heard the news about hidden debt in China seems to have sparked some safe-haven buying.

    Clearly there is a risk bid in Gold. However if the Dollar is going to rally, then in dollar terms it will be hard for Gold to continue charging up. If that repatriation of foreign profits tax break is for real, then the dollar is likely to see a serious bid; last time it happened the dollar moved up 15%.

    FWIW these are very tricky times so trade small. There is a lot of reallocation going on and a lot of macro uncertainty.

  92. Shalom Bernanke

    Eamonn,

    If your’re trading metals, don’t worry about the dollar. Trade the vehicle you’re betting on. Who knows, gold screaming higher could drive the dollar lower, in that order.

    I have no opinion on the dollar and, other than that I’d never go long it. Even though being parked in cash is same as long dollar, I don’t like it. Look for any opportunity to own metal vs. paper. The dollar will fall into place eventually, but metals are going higher regardless, and if not tomorrow it will be soon enough for me.

    Investors and savers alike will realize that miners are second only to owning physical, as miners still own physical (in the ground).

    It’s the best way to ride out the crisis, should it occur. For years to come, buy metals when they’ve been hurt, knowing you won’t get the timing perfectly.

  95. catbird

    Shalom, when you wrote:

    “The funny thing is that everybody here is waiting to buy metals in the very near future, either next week or next month, even if they are sold short for an expected brief decline.

    That’s what bull markets are made of, so one knows we’ll see higher prices whether we nail the bottom or not on our entry. I like the odds, and with proper sizing to my risk tolerance, I can ride out any volatility.”

    ….were you saying that a secular bull like PMs is, by definition, a market that everybody wants to buy, with the only question being, WHEN exactly do they summon the nerve to buy?

  96. Dan

    SB,

    If we go down or go nowhere, then there is no point in buying and if we head into a mania phase, which I think it unlikely, then yes it is the right time to be buying gold/silver. Considering were in the weakest period seasonally and criteria that was met at previous IT lows has not been this time, I believe its either point 1 or 2. That is all I was trying to say.

    If you choose to read it at face value then yes its either up down or nowhere but your not considering time value, which I factor into my portfolio, as most mortals do.

  97. white2ronin

    All,

    As I was saying last week, forget the cycles for gold just buy it if you think its going higher. The downside was $1400, upside? Today is now the time to buy? Why not last week? Anyway – Now for the bad news, if DXY continues to rally you are going to get a pullback, perhaps to $1300. If DXY breaks 73.50 then its off to races. DXY is the lagging piece of risk on/risk off. All just opinion….of course.

  98. Shalom Bernanke

    catbird,

    Yes, but even within the secular bull many have jumped on and off at suspected intermediate turns.

    All of us want to eventually buy for the big move higher we’re anticipating. A few here are short metals, and even they want to get long in for the “A-wave”. It’s all potential buyers, albeit with different criteria for entry.

    I’ll stay long, and get more long at every opportunity, unless I get stopped out. It’s the same trade every time, but I do keep very wide stops (smaller % of capital at risk)compared to most here.

  99. Gary

    White,
    Obviously the reason to use cycles is that most people would not be able to hold on to their positions if they bought gold at 1490-1500 and it dropped to 1400.

    what cycles do is tell us when to step on the gas and when the coast.

    Yes the daily cycle is still a bit early for a bottom. But the intermediate cycle is right smack dab in the middle of the timing band for a major cycle low.

    That being the case, and today’s action in gold looking like a potential bottom, the intermediate cycle would suggest taking at least initial positions. The daily cycle is saying that we might want to save a little dry powder just in case.

  100. Shalom Bernanke

    Dan,

    I’m not getting on you for your views, my point is simply that one cannot think themselves out of uncertainty, it exists. Don’t think too hard, similar to what I suggested to Eamonn about getting confirmation from analysis of the dollar. I don’t care where the dollar goes, as long as metals work higher. In time, I’m sure we’ll see the dollar lost vs. metal, but for entry/exit, it’s not where I focus.

  101. Razvan

    this is a very poor entry compared to previous bottoms where we had clear targets ahead of time. Now we are not even using cycles to enter…we just go long because we had one strong move following a big holiday… brings back memories of new years eve when we flip flopped out position straight into the abyss.
    Personally i am staying out until we have a clear direction.

  102. Gary

    I find it hilarious that one shortened daily cycle has people questioning the validity of the tool.

    Let me remind everyone that it was mostly cycles that have kept us long, kept draw downs mostly to a minimum, and have allowed us to ride the gold bull since April of 09.

    If you had followed the model portfolio you made money on the short and you potentially are in on day one of a new intermediate gold cycle.

  105. Moneyman

    Hmm..

    Portugal was downgraded..

    Maybe Italy is next..?

    http://www.bloomberg.com/news/2011-07-05/could-italy-be-next-european-domino-to-fall-commentary-by-simon-johnson.html

    This is not good for the Euro..

    The big question is what the dollar might do?

    This bad news from the Euro zone might drive gold higher..A lot higher..I can see that happen..

    But its such a mess right now..Its amazing that the stockmarket is heading higher..For me that is the real miracle here..

  106. Russell

    Great post Jeff,
    I often think we make errors when we look at gold only thru the eyes of our currency. Seems like the Euro price of gold or Chinese currency and relation to gold might have a huge impact on gold’s moves.

  108. JEFFtheFLEA

    i have three puts and not sure what the heck to do
    1 aug 1525 put
    1 oct 1500 put
    and 1 sept 1500 put

    i just went long one futures contract so as to be delta nutral

    by the time the next daily cycle comes the aug will expire.
    but when the next daily cycle comes and all looks like we are heading up i guess that would be the time to add.

    i have been around for a while and has heard gary say the suprises are on the upside. Well i guess this is one of those suprises and that is why he does not short the bull.
    i just dont want a flea bath

  109. Gary

    A trap as in you have to time the exact bottom or you won’t take the trade?

    We are close enough to an intermediate bottom that one can take this at face value and do just fine.

  110. Shalom Bernanke

    Everybody focuses on the dollar, which is particularly useless in recent hindsight. The dollar is a floating target measured only by other worthless paper. I don’t give a rat’s ass where the confetti goes, but my guess is down over time.

    That said, I’m usually a little early. 🙂

  111. FSR

    Gary, do you have a new rationale to replace the one that got kicked to the curb, the one where without QE and with the economy going into recession deflation would take over?

  112. Poly

    Dan,

    I’m not betting on anything from that chart, just pointing out that many using past occurrences to frame this current setup. I’m showing an alternate example using the same analysis.
    I’m always open to any framework, I just place probabilities to each. I’m not married to either, which explains my mainly cash position.

    @Eric,

    Call it hogwash if you like, but your example of S&P and it’s various death crosses is a poor one in arguing against my point. Equities have been in a secular bear market since 2000, you should expect many of them. Gold is in a secular bull, my argument is that in a bull market, bear/death crosses are a sign oversold and lagging.

  115. EricH

    “Equities have been in a secular bear market since 2000, you should expect many of them”

    Poly,
    In 2000, the market was still in a bull market. In 2007 the both the Dow & S&P made new highs. I won’t call it both of those points a secular bear market.

  116. Gary

    Eric,
    In inflation adjusted terms both the Dow and the S&P were way below their 2000 highs in 2007.

    In real purchasing power people lost a ton of money from 2000 2007.

  119. smt_troll

    > Thursday we expect interest
    > rates in Europe to stay the
    > same.

    What planet are you on? JCT has already telegraphed an increase (which fifty-five out of fifty-five economists are also predicting).

    If you find anyone foolish enough to wager on the ECB main refinancing rate not rising on Thursday, take the other side.

  122. Dan

    Well surfing other blogs and forums people are already predicting $40+ silver by the end of next week and up to the three digits by the end of the year. This sure doesnt feel like any other summer doldrums or bottom of an intermediate correction I have been through before.

    But either way, if silver breaks out of its downtrend channel, I will sell my shorts and consider buying in slowly but until then, the trend continues to be down. After today, we’re hitting our head on the top of that trend line so were risking very little while the upside remains quite large – 200dmva.

  124. SF Giants Fan

    Gary

    Maybe I should have used the term knuckle ball.
    Many were waiting for a tag of the 150ma like most others in the past and that gets tossed out because of a one day move.

    I didn’t answer your question but I’m just more patient. I’ve been following you since last august and am very happy, but luckily dodging the silver collapse opened my eyes to surprises.

    My point was it (the one day big move) smells fishy.

  126. EricH

    Gary,
    Good point in regards to inflation adjusted numbers but on price along 2000 was still a bull market and 2007 too. Both the 50 and 200 DMA are derived from those price points.

  129. Gary

    wmp,
    If the dollar continues lower for the rest of the week in the jobs report would be the most likely spot for the daily cycle low to form.

    If the rally in gold continues for the rest of the week the rally in the dollar might force a retest of the $1500 level.

  130. MrMiyagi

    How much would S&P and NASDAQ continuing up affect gold prices?
    After all, market going up insinuates better economy and less need to go to safe haven PMs, in public minds.
    In other words, if PMs keep going up to near 1800$ or so, will equities revert?

  131. Gary

    Let me ask a question. Has anyone here ever bought gold because they thought it was a safe haven?

    I know I never have. I buy gold because I think the Fed is going to continue to debase the dollar and inflation will eat away at my purchasing power. I also buy gold because I think it’s going higher.

    Since most humans are motivated by the same things I suspect 99% of the people that buy gold buy it for the same two reasons that I do.

  133. Gary

    The only people that perceive gold as a safe haven are the media, and that’s only because they need some reason to explain why gold is going up.

  135. catbird

    I’m splitting the difference.

    I have a limit order on GLD which should fill at the open unless it gaps up.

    I want the PMs to show me more before I buy DGP and GDX. If the A wave just began I won’t lose much. If not, my partial position in GLD won’t drive me to drinking.

  139. don

    Gary

    I strongly disagree with your analysis…i am very much disappointed to see one of three persons who taught me cycles, doing it wrong way. 🙁

    How can friday be the intermediate low? It can be at best a daily cycle low. If gold moves up from here then IT low will be marked at week of May 02

  140. don

    the current scenario is an excellent example that cycle is no different than EW (which gary keeps critisizing a lot)…

  142. Christian

    Poly,
    nice graph of Gold’s IT cycle lows. Coupled together with Gary’s earlier predictions that this might not be the D-wave (yes, he has said it before) and that we have gold’s parabolic C-wave finish ahead of us it seems to have some validity. We’ll see soon enough.

  148. JEFFtheFLEA

    wave

    i have 3 puts. i through one on just to be delta neutral.
    the next daily cycle, if all is well, ill buy in. futures are impossible to take the drawdown that might be comeing

  150. grimweasel

    Looks like the USD Index has also put in a swing low. I’m not convinced on gold – I think a bearish diamond could be forming. I’m still willing to bet the USD will get bullish from here, esp when banks like Morgan Stanley are pumping out ‘buy USD recs’ in their weekly FXPulse to commercial players?? The trend in equities has also changed and I’m willing to bet this is a suckers move drawing the last bulls into the market prior to a crappy NFP.

  151. Aaron

    This is day 2 of the new dollar cycle. I have no idea why everyone stopped using the USD as a clue as to where we are in the move for gold.
    I think the dollar has legs to run, how far is the real question.

  152. NJ

    Gary:

    Since we are not using stops now, we still have a plan (as you mentioned a couple of weeks back) in place to exit if this does turn out to be a D wave, correct?

    Or is the D-wave scenario now a very low probability given the action yesterday?

    Thanks!

  156. Gary

    Don,
    I think we have to take into consideration that none of the cycles, stock market, oil, or gold are conforming to the norms at this particular time.

    Gold did violate a daily cycle low which typically happens as it moves down into an intermediate bottom. Yes there still is the possibility of one more move down but the power of yesterday’s surge would suggest the odds are not high of that happening.

    Considering that we are right in the middle of an intermediate timing band and that sentiment has reached bearish levels that usually sparks an intermediate rally I think the odds are good that we did put in an intermediate bottom yesterday.

    I’m confident enough in it that I’m willing to at least take initial positions and even if there is one move down it’s so late in the intermediate cycle that should be very brief.

    Let’s face it gold it’s daily cycle was only four days short. Four days isn’t that big a deal.

  157. Gary

    Wav,
    you do realize that every intermediate bottom happens while gold is still in a down trend. The key is to pick the spot where the trend has changed, not necessarily wait until the trend channel has been broken as you will miss some of the rally.

    If you don’t mind missing that part of the rally then by all means wait for the trend channel to break but understand you will be buying into overbought conditions once it does.

  158. Shalom Bernanke

    sammpa,

    I hope the dollar rallies hard and can push metals lower. That is, assuming the typical inverse relationship holds.

    I’m just glad everybody is looking to buy in the next month or so.

  159. Gary

    NJ,
    I think the D wave is a low probability at this point. And at 22 weeks with sentiment at the levels it’s at we should have, or are very close to, an intermediate bottom.

  161. mdsn

    Gary or others,
    In cycles, is the day or week that forms the swing counted as the first day of the cycle?
    Example: If I am understanding this correctly yesterday formed a swing low in the dollar. So is today day 1 or 2 of the new daily cycle? TIA

  162. Gary

    The intraday low is counted as the last day of the cycle. The swing marks of the bottom but it may not come on day one.

    As an example, the first day of the cycle may not be large enough to form the swing but it still holds above the intraday low.

    It appears that today is day two of a new dollar cycle.

  163. Gary

    If gold can hold above the 10 day moving average despite the dollar rally that would be a very positive sign.

  165. 86d4life

    I realize I`ll probably be shot for treason for saying this but what if; take Fridays print on gld and slv out of the mix. It leaves a pretty perfect crawl on the 75 for the gld and a pretty nice bear flag too. In the face of a rising dollar. And the euro is going down Fast. I sure wouldn`t bet long on that. I`m going to get last rights now.

  166. grimweasel

    Euro confidence is shot – with Moody’s downgrade for Portugal yesterday and ongoing Greece – this plays into the hands of USD as people consider switching Euro reserves into USD. I visted the Chilean Central Bank two weeks ago where we had a lecture. They have 50% USD and 40% Euro in their reserves and 10% Yen. They said they were worried about the ongoing crisis in both USD and Euro and were looking at other reserves – if they are thinking this then you can bet that other Cent Banks are too! I think the Euro has the biggest issues – once the market has trashed that then focus will switch back to the USD. Short Euro and Long USD for me – which means bearish Equities and PMs! Sorry ;-0

  167. Veronica

    My gold futures system did go to a buy overnight; today’s action will be interesting.Will there be follow through to the upside, or a short term top like last July?

  168. Gary

    86,
    Let me ask you this. With gold on the 23rd week of its intermediate cycle and sentiment in the basement, and the bullish percent chart at long-term bottom levels, how much downside do you think there can be from here?

  169. Gary

    I would also point out that yesterday’s move not only close back above the 10 day moving average but it broke the down trend line.

  170. Poly

    Gary,

    Your call makes a lot of sense. Whatever downside remains, if any, will be swallowed back up on the swing within a few days, at most!

    Most other confirming TA indicators are at basement IT low levels.

  173. Shalom Bernanke

    Dollar up, metals up again. How long before traders realize they don’t need to predict the dollar’s future to know the direction of metals?

    It amazes me that they want to add an extra step, and an unreliable one at that! Of course I’d generally prefer a weakening currency if I have my choice, but I’m content to trade the trade I’m in. I haven’t seen anybody here gain an edge from their dollar prognostications, and that’s over a few years.

  175. Gary

    That’s not exactly true. Debasement of the currency is obviously the fundamental driver behind the gold bull market.

    The vast majority of the time gold will trade inversely to the dollar. There are times though where gold can resist movements in the dollar. Those tend to be centered around intermediate turning points.

    If gold is due for an intermediate bottom, extremely oversold, with sentiment skewed extremely bearish it can and often will rally in the face of a rising dollar.

    On the flip side if gold is overbought, due for an intermediate decline, and sentiment has reached extreme bullish levels it will decline even as the dollar falls.

    But generally speaking the gold bull will continue for as long as the Fed continues to try and prop up the financial system and economy by printing money. At some point we will get another Volker and put a stop to this madness. That will end the bull market just like it did in 1980.

  177. Shalom Bernanke

    of course gold rises when it’s priced in depreciating dollars over the long haul, my point is simply that nobody here has made any money by predicting the USD direction to trade gold. It’s unnecessary at best, and more likely a distraction.

    For example, grimweasel gives all the reasons why people and even central banks would want commodities (Chile fears the USD, but the EUR is even worse, etc), but then draws the conclusion that he should buy dollars and short metals. His preoccupation with the dollar has blinded him, IMO. His conclusion should be that ALL paper currencies are flawed, and that could drive a smallish metals market through the roof, regardless of where each fiat goes vs. other fiat paper.

    Btw, I like grimweasel and most others here, so my comments are not meant to hurt feelings but rather share my observations. I hope we all make (take) lots of money from the markets!

  181. Veronica

    On a very positive note, my gold system in weekly format will go to a buy with some more strength the next couple weeks.Other than 2008, every long trade has been a winner since the gold bull started, and I don’t expect another 2008 type of year here.

  185. Moneyman

    Long dollar and long gold..Feels nice! lol

    The thing is..If we get a left translated daily cycle here in the dollar..How many days can we rally before we roll over? Today is day 2..If you look at gold, silver and oil it looks like this dollar rally will fail.

    But we must wait and see..More mess in Europe is on its way..

    The thing is..We still dont know if the dollar can make a new high..This will be very interesting to follow..

  186. Russell

    Is there any site which reveals the geographical breakdown of who is buying gold or do most buyers use the US markets? My question is based on the fact that if I lived in Euro land, I would want gold to protect my capital. I’m looking to see why PMs rise when US$ goes up.

  187. Edwin

    see some technical resistance at 1540 level in gold.

    see if it can punch through that with authority in the next few weeks will be the true test.

    gold price has gotten a little exhuberant going up so fast in 2 days. like to see it retrace to 1515 before buying anymore.

  190. grimweasel

    LOL @ Shalmon – I like you too man!! 😉

    I do hear you on the Fiat currencies and I would prefer hard tangible assets such as land and gold but I’m a FOREX type of guy so I try and trade each currency based on its chart and not the news and what I think I know – because most of the time I don’t know squat and the market has already priced in my thoughts and analysis.

    I’m actually on the side lines bar some Eur shorts. The Equities are too skitty and there is nothing concrete to get me long PMs yet. I don’t mind keeping my powder dry and coming out to play once we have some confirmation such as a higher low, or break of last high of downtrend and test. I’m happy to miss a few pips for confirmation rather than get rinsed by a skitty market.

    I must say the US session always trades the best. It seems that whatever Europe does the US session comes in and does the opposite most of the time!!

    Good luck and trading to all those already long!

  191. Gary

    Quite often a powerful surge above the 10 day moving average is a sign of an intermediate bottom. Once the move stretches considerably above that average it will either retrace to tag it before continuing higher or consolidate while the average catches up.

    The fact that gold is following through with another powerful up day right on the heels of yesterday’s strong surge is a pretty good sign that we do indeed have an intermediate cycle low.

    Let me say this again. This is potentially only day two of a brand-new intermediate cycle. If you couldn’t make yourself buy yesterday you need to make a plan for how you are going to chase the move if need be.

    Yesterday the move had just exited from oversold conditions. The longer one waits the more overbought this is going to become. If you are the kind of person that can’t by into overbought conditions you may run the risk of locking yourself out of the move.

    I will be updating the stops and trade triggers link here in a minute as I think we clearly have at least a daily cycle low.

  192. grimweasel

    PS @ Shalmon – I never suggested shorting PMs – I’m just bearish still short term. I would only short on a decent technical set up off a TL and below the 10 and 20 MA generally! 😉

  193. TheBookGuy

    I really don’t understand the folks who are upset. We’ve been waiting on our hands for weeks. We’ve been expecting the A-wave. We are now fairly certain that the C-wave is back on and folks are upset? Hell, this means more profits!

    Thanks Gary. This is fun!

  194. phantom

    gary,
    i believe that the COT reports for silver are extraordinarily bullish. quite a few commentators are predicting a major breakout in silver. i know u have stated many times that u dont want to touch silver for the next 2-3 years. even if silver peaks at 43$ an ounce( conservative estimate), this would mean 22% gain , roughly to what gold prices gain u have predicted in last night’s report. if it goes up more, gains will be exponentially higher.
    does the COT report change your stance on silver. u have said before that the COT reports are helpfull at bottoms rather than at tops.

  196. Gary

    The COT report for silver hasn’t been very reliable. It became extremely bullish right at the top.

    Generally speaking I don’t invest in broken parabola’s. Silver has already had its run. It may rally back to 40 or even above but from here on out I will be playing gold and miners.

  198. Shalom Bernanke

    grimweasel,

    gotcha, I misinterpreted your comment.

    I’ll wait for a pullback or sideways move for a couple days before adding. I’m confident the next larger move will be higher after watching the last few days, even if not immediately. We’ve already seen the lows in miners, IMO.

  199. basil

    In 2008 the dollar was in a narrow trading range for five months (early March until late July) before moving higher. That might very well be what it’s going to do now. It’s already doing it for the past two months; add another three and we are in late September. At that time the dollar might either move up strongly or, and that is what I am leaning towards, put in a rapid 15% collapse (coinciding with a high in PMs, stocks, etc.- possibly after a summer trading range), followed by a strong move up (coinciding with a steeper correction in PMs and stocks).
    There is absolutely no reason why the dollar has to decide here and now to either drop and make new lows or bounce. I think it might be likely that it will test everybody’s patience and play cat and mouse for a while.

  200. samppa_nyman

    I bought some Sandstorm Gold CVE:SSL. Anybody else invested in this one? Similar business to Silver Wheaton, same people running.
    I’m glad we’re not touching silver anymore, it sucked my capital on the long side and now managed to make a loss on the short side as well… Damnit, it’s so easy to lose money.

  202. grimweasel

    Will this move have anything to do with the Feds buying gold from the Treasury to add funds to the broken US economy or is this debt ceiling thing spooking the hell out of the markets?

  203. EricH

    Have the characteristics of this Gold bull market changed? Since this bull started in 1999-2000, GOLD have never made a yearly high in July/August time frame. Why would it do that now? The lows could have been in at 1481 last week but there’s simply no rush to get back in. Technically if the characteristics of this bull market remains the same then we should trade sideways for another 3-4 more weeks before taking off.

  204. LowTax

    Sadly, we have no volume whatsoever on this “bottom.” And all those big gaps on GLD… What was the name of the guy that kept saying “BE VERY, VERY AFRAID” whenever we got near gaps and he shorted the hell out of PMs??

  205. MarkMarin

    I’ve been in Sandstorm for a couple of years, with initial buys around $.50 and $.70. Well run company focused on gold purchase agreements, a long term hold. Similar to buying SLW in single digits. Would buy again on a solid pullback.

  206. Mark

    Gary is flip flopping like John Kerry. What happened to the $1350 to $1400 you talked about in your interview? What about the 100 to 200% in PM miners, after the cycle low? Admit it, your cycles are useless in these manipulated markets.

  207. Gary

    Eric,
    I think what’s more important is that we tend to make long-term bottoms in July/August. Last summer gold put in its yearly cycle low in July and then powered straight up at that point.

    It looks like it has done the same thing this year with the yearly cycle low in July that is now starting to ramp up into fall.

  208. Gary

    Mark,
    Obviously gold bottomed above my expected target. I don’t have a problem with that. Sure I would prefer to get in at lower prices but if the markets not going to give it to me I’m not going to sit on the sidelines and cry about it.

    The cycles are working just fine. The intermediate cycle has bottomed right smack dab in the middle of its expected timing band. The daily cycle was four days early, but four days isn’t that big of a deal.

  210. Gary

    Obviously the problem here is that a great many of you continue to ignore me when I tell you not to short a bull market.

    Folks if you follow the basic guidelines of the model portfolio you will rarely lose money. If you want to be a cowboy and make risky bets then yes you are going to lose money from time to time. You may also end up making more money if you can time those risky bets well.

    It’s up to you, if you are willing to take on more risk than the model portfolio then you must be willing to accept many more losses in return for potentially making more money if you can time those counter trend trades correctly.

    Just know that very few people can time those counter trend trades correctly.

  211. Michael

    Today from Deutsche Bank on largest component of GDX (15% weighting):

    Barrick Gold (ABX) looks attractive on valuation. Given its large un-hedged gold portfolio, Barrick is well positioned to take advantage of expected near to medium-term boom in gold prices. Dividend hike has already come into play and with strong cash flow further dividend increases are possible. Recent acquisition of Equinox Minerals increases copper exposure, but contribution remains within range of other gold peers.

    It’s not the analysts spoof that interests me but the fact that ABX’s gold hedges are off.

    c’mon folks – any of you deal with proper brokers/access to real research? How hedged – and thus not participating in higher gold prices – are the other major components of GDX – GG, NEM, KGC, AU?

  213. Gary

    Harry,
    I covered that in the aggressive portfolio updates. I think I’m going to abstain from talking about options here as too many beginners can get into big trouble with them.

  214. fubsy_cooter

    Gary
    Re silver.. even if it only does to 45, it will still outperform gold going to 1800.
    I’m shooting for the following exposure, and will be adding on bull flags
    , breakouts from flags and at the next dcl.
    40% DGP
    30% GDX
    30% GDXJ
    10% AGQ

    Currently at
    23% GDX
    15% GDXJ
    18% EUO.
    Will be unloading EUO on the next daily swing high.

    fc

  215. Gary

    FB,
    Yes I realize the potential is there is for silver to again outperformed gold. But the fact remains it is a broken parabola and subject to another vicious decline at any time.

    I really have no intentions of getting caught like that again.

    I will buy silver again after it has weathered a long consolidation process and is ready for another leg up. In my opinion that will take a minimum of at least one year and probably more.

  216. E

    Gary, how do i access various portfolios, is there any other diffferent link that I am missing on the premium site?

  218. ...at ease

    Thanks Gary for getting us in right away. What a turnaround from Friday!

    All, I can say if you are sitting on the fence…you might want to get your feet wet in the model portfolio, look for possible dips to buy in.

    I got half in this morning and although in profit already, hoping myself for some dips to complete my buying.

  221. Gary

    The aggressive portfolio is a separate subscription for high net worth individuals and people willing to accept larger than normal risk.

    It is not appropriate for the vast majority of investors.

  223. E

    how do i get in the aggressive portfolio. I am ready to assume the risk, and you will never see me complaining about losing. i am adult enough to accept consequences of my actions.

  224. DG

    Test: You often post your portfolio percentages, but never a comment. That’s fine of course, but with no one here knowing anything about whether you are any good at this game it’s hard to care what a random unknown person is doing. Want to make some market calls sometimes so we can see if you are worth following? I doubt anyone is writing down your percentage changes and then checking to see how you have done. A verbal comment now and then might give us a clue. Just a thought…

  226. Gary

    E,
    You have to e-mail me a request. I will then send you a disclaimer and try to talk you out of the aggressive portfolio subscription.

    If you still want to proceed then I will send you a PayPal money request.

  230. test

    Sure, performance over the last thirteen months:
    +2.40%, +20.90%, -4.20%, +14.70%, +6.40%, +8.50%, +8.80%, -0.29%, +3.40%, +3.01%, -11.35%, +13.35%, -1.37%

    This is a test portfolio, and I prefer not to comment unnecessarily. Personally I think the majority of those here are making rookie mistakes such as: their trading not matching up to their personality and not maintaining a long-term perspective.

    Anyway, it’s all in good spirit. Cheers!

  231. Elaine

    Interestingly, I did a day count from one of Gary’s earlier reports and marked last Thursday as the swing low in gold on my iCal.

    Gary, is the D wave off the table for now? Or is this the start of the A wave?

  232. Gary

    Mitchell,
    I’m already looking for intraday levels to add to positions. Unfortunately we haven’t had any opportunities today.

    Perhaps we’ll get a gap fill in the next day or two.

  233. marksomething

    for all those people who use the “flip flop” term…

    The “flip flop” is a sign of intelligence!!!!

    By using a political reference to describe what G is doing here (on his blog) is laziness.

    The U.S. Political system is professional wrasslin’. The outcome has been predetermined, all that remains is the anticipation and pageantry.

    If you can remember “flip flopping” is in fact INTELLIGENCE” you may grow as a person and your bank account will as well.

  234. Michael

    TEST,

    you are to be commended. you were one of the few that started to accumulate on the way down and stuck it out through a significant drawdown. well done!

  238. test

    Michael, the portfolio is one out of several strategies that I use (so it’s a portion of my worth) but it is real.

  239. Glenn

    My gut told me to sell silver at 48…I followed Gary’s advice and lost 1/2 the profits. My gut is telling me not to buy before the employment report…not sure who is right but I’m following my gut this time. I may lose some profits but as Gary often says, plenty of money to be made in a c wave.

  240. GoldWhisperer

    Trader’s must get a sixth sense. Extrasensory perception (ESP) involves reception of information not gained through the recognized physical senses but sensed with the mind.

  241. Ryan

    Gary,
    From what I remember, you said on the model portfolio you would put in a max of 70%? So if I want 100% exposure, I should be 80% in right now and save 20% dry powder?

  242. Gary

    Ryan,
    75%.

    You know where the stops are at now, so you can decide how large your position sizes can be by how much you can potentially lose if the stops are hit.

  243. MBS

    Gary-
    What do you think of a situation similar to 2008 where the dollar bottomed in April and consolidated until finally breaking out in August 2008? Same 3-year cycle timing, of course different macro headlines. seems like we could oscillate in range for a while with 73 being the bottom and 77 being the top. Thanks

  244. Gary

    Anything is possible, although this particular intermediate cycle has topped, as of today, in only four weeks. Unless that is corrected the odds are for a move to new lows below the May pivot.

  245. Frank

    GSS is up 6+% today. This is one that I picked up in mid-June at 2.teens.

    However, “value investing” in miners is a risky business.

  246. Hack

    Increased my PM positions to 15% which is more than enough. My SLW, EXK and IAG are acting well. Also buying retail in advance of the same store numbers tomorrow. I’ll be selling bonds after the dividends post tonight and re-allocate 100% into equities. The market is on track for 1450 by years end.

  247. William Wallace

    I thought I would just throw this out there…

    Gold always retests the 10sma on a weekly chart during an intermediate cycle before bottoming on the 30sma, if we did not see a pop this week this would have been the first during this c-wave. But if we have seen a bottom already, then that doesnt really matter now does it.

  248. Werner

    Gary,

    Please read Old Turkey before you change the portfolio again.

    The constant change in direction is distracting, and for taxable accounts expensive.

    thanks.

    Werner

  249. LowTax

    WW – I tend to agree with you and am holding back. No big deal to lose some upside with all the crap going on in Europe. I’d like to see how GLD handles its gaps and MA’s…

  251. Gary

    Werner,
    I am trying to avoid intermediate degree draw downs in the model portfolio as most investors can’t weather them.

    If you don’t mind holding through an intermediate degree correction or a possible D-wave then just ignore the sell recommendations.

  254. discreet shopping

    sorry for the above,trouble signing in!

    Gary,a few postings above,Ryan asks:
    “From what I remember, you said on the model portfolio you would put in a max of 70%? So if I want 100% exposure, I should be 80% in right now and save 20% dry powder? “

    You answer him: “75%”

    Isn’t the model portfolio at 20/20/10 (total 50%) right now?

  256. Ryan

    discreet shopping,
    Yes, right now the model portfolio is 50% but the max the model portfolio will be is 75% so right now there’s 25% dry powder waiting to be deployed.

  259. Ryan

    discreet shopping,
    Awhile back, we were using 2x leverage funds and options and it was too much risk for the average investor. Gary has since changed the model portfolio to not include options nor any 2x leveraged funds. So if you want to increase your exposure and still mirror the percentage in the model portfolio, it will only be 75% max.

  260. DG

    Busy day. These turns are intense for me. Been nibbling at GDX, GDXJ, DGP, and AG all day. Every share is in the black (for now). Been shorting lightly too. VGK (Europe) OIH, JCP (two days ago) A quiet day after a ramp with the Dow up and other indices down usually means a dip. Dip. I’ll cover by Friday. May sell me EUO then too…we’ll see.

    Good luck all. Keep your eye on the gold-bull-market ball. Everything else is a footnote.

  263. Le Fou

    Gary,

    Are you calling an intermediate top on the dollar today? See @9:53:

    “Anything is possible, although this particular intermediate cycle has topped, as of today, in only four weeks.”

    Best,
    Le Fou

  265. coolkevs

    In my study of some metal-related stocks vs EWJ from Dec 7 (GDX high)
    GDX – 64.20 adjusted high Dec 7
    56.13 close today
    -12.6% loss
    SLW – 42.27 adjusted high on Dec 7
    36.23 close today
    -14.2% losss
    EWJ – 10.54 adjusted high on Dec 7
    10.60 close today
    + 0.6% gain

    I know you would have done a lot better trading versus buy and hold, but given all the mayhem that happened in Japan during this time, it is amazing to me that EWJ outperformed these. This idea came from the DeMark insight of Kevin Depew at minyanville.com.
    Back to your regularly scheduled investing…

  266. ckpc

    DOC has a new post up now over on his site. He’s a little more on the cautious side, waiting for a confirmation on gold. Otherwise, he’s in agreement that the dollar’s 3 year cycle low may be pushed out until later this fall, and great opportunities are on our doorstep.

  267. Russell

    Anyone have any thoughts re impact on PMs of a the jobs report or an agreement on debt ceiling talks? My concern is that anything that is positive for the dollar which the market wasn’t expecting could drop PMs.

  268. Gary

    The dollar has just had a monster rally over the last two days and it didn’t affect gold at all. Why would you think that would change?

    The odds are very high that gold is rallying out of an intermediate degree bottom. Those moves are powerful enough to fight a rising dollar.

  269. LowTax

    Gary, I think a lot of us are still worried that the 3 year low for the dollar is in. So regardless of the fact that gold is up for a couple of days at the same time as the dollar, we remember your lesson that gold can only go up SUBSTANTIALLY when the dollar is declining.

  270. Marty

    Gary

    Any thoughts on the fact that the futures market is rolling over to the next month thus shorts have been getting out of there current positions to not be active for delivery date. If a majority of people were pesimistic (short)on the PM’s, wouldn’t that put an upward pressure on that market as they cover? I believe the volumn was also low thus increasing the movement. I agree with putting your toe in the water to go long for the longer term. I am just not believing this rally. Something smells fishy.

  271. Gary

    low tax,
    It boils down to whether or not you think this is an intermediate bottom.

    If it is an intermediate bottom then you are missing the best part of the rally, and the part with the least risk as your stop is still very close.

    If you think the intermediate cycle has another complete daily cycle down then you should start looking for a top somewhere around 1550 or 1575 and maybe on day 6 to 10.

    I think this is an intermediate bottom because we’re deep into the intermediate cycle, we have a weekly swing low, and sentiment has reached intermediate cycle bottom levels. If that’s the case then the recent low at 1478 should never be violated again during this bull market.

  272. Gary

    Marty,
    I got news for you every intermediate bottom is going to smell fishy. And the vast majority of people are not able to buy. It is those people that have to chase that drive the market much much higher.

  273. FSR

    The risk as I see it is that SP500 commences a steep correction taking most other risk assets along with it and causing a sharp rise in the dollar index. This could alter the gold cycle structure. That said, I am 40% gold investments.

  274. Russell

    I’m a relatively new sub so excuse my questions re the dollar, but if the dollar breaks out of the triangle and keeps rising, wouldn’t PMs fall. What dollar parameters need to be met to show how to interpret the dollar cycle , ie if it breaks this, it’s in decline, or if it tops this, May was the 3 yr low? Doc warned of choppy cycles out of 3yr lows. This is choppy.

  275. Gary

    I wouldn’t put a tremendous amount weight on the triangle pattern but a higher high will keep alive the possibilities of the May three-year cycle bottom.

    A move below 74.20 will indicate a failed and left translated daily cycle and high odds they left translated intermediate cycle. That would indicate that the three-year cycle low most likely lies ahead for us.

  276. LowTax

    Gary, I understand the significance of an intermediate cycle. However, why would we chase an intermediate cycle leading into a D-wave? If the dollar 3yr low is in, does that not imply we are on the cusp of a D-wave? And doesn’t that imply that this will be a left translated interim cycle which is too risky to play to the long side?

  277. Gary

    Other than an eight year cycle low intermediate degree bottoms should never be violated. Gold had its chance to move down into a D-wave decline in May. Instead it consolidated for two months.

    The only real question is whether or not you believe we just put in a daily cycle low, and since it’s so late in the intermediate cycle that would also have to mark an intermediate low.

    If you believe that was a daily cycle low then you better get in and do it quickly. If you don’t believe that was a daily cycle low then you better make a plan to decide at what point you are wrong and enter long positions.

  280. Hack

    Ivang;

    I know several folks who own GPL. Highly recommended. I also like EGO, AAU (+9% today), NGD, NG, and PAAS.

  282. Chris

    >> I got news for you every intermediate bottom is going to smell fishy. And the vast majority of people are not able to buy. It is those people that have to chase that drive the market much much higher.

    Wise words. Hindsight is always 20/20, so you can 2nd guess your (and other people’s) calls all the way to the poorhouse. Gary seems to be implementing disciplined strategy based on the current data, and I commend him for it.

  283. wmp

    Gary,

    If this plays out as you are thinking, continuation of the c-wave with an impending parabola, have you a target in mind?

  285. Bullion Baron

    “If that’s the case then the recent low at 1478 should never be violated again during this bull market.”

    You have suggested in the past that a D wave decline would generally retrace 50% of the C wave advance. So based on the above you don’t think we will see a D wave or it just won’t be as deep as on previous occasions?

    Your recent commentary seems to put the whole ABCD pattern into question…

  288. Dan

    Well seems you made the correct call yesterday Gary. Thank you for sticking your neck out. I sold out of my silver shorts as the downtrend channel has now officially been broken on the upside. Started purchasing some positions although I obviously do not feel comfortable established positions after the recent run up.

    On the HUI weve already moved up about 10% (487 to 534) since mid June and are just over 10% from the highs now. My concern here is how much more of a move up could we expect here before starting some corrective action?

  289. Gary

    Dan,
    I tend to view it differently. Instead of worrying about a short term correction. I just look at the potential upside from here and take into account what day we are on in the daily cycle.

    I think the odds are high that gold will test the all-time highs before this particular daily cycle tops. If the dollar reverses on the jobs report it could test those highs by the middle of next week. That could send the miners close to all-time highs also.

    So rather than focus on a possible short term correction that will get swallowed up by the bull quickly anyway I concentrate on the potential upside of this particular daily cycle.

  291. Gary

    I won’t be using ultra funds in the alternate portfolio anymore.

    If you want to trade those funds in your account that’s up to you.

  293. deshy

    Gary: In today’s report you mentioned “the final 25%”–but the model portfolio only shows an allocation of 50% positions. Does this mean you are keeping 25% in cash?

  294. Bob loves Hawaii

    Gary, I could not help but notice the manipulation talk in the post tonight. Welcome to the dark side. If they manipulate as you say, they certainly intervene in the silver and gold markets.

    🙂

  295. Gary

    Bob,
    I can understand why the Fed would want to inflate the stock market. Hell they have as much as admitted that is their third mandate.

    However I can’t come up with any logical reason at all why the government or the Fed gives a damn about the price of a shiny metal.

    No matter how high it goes it’s not going to affect the economy. The only people that are even aware of the gold price are experienced investors. Those people are not going to be fooled into thinking there’s no inflation if the Fed can somehow take down the price of gold.

    It just makes no sense for me to believe that the Fed or the government are actively trying to influence the price of gold.

    They are very obviously trying to influence the price of oil and food. That makes sense their monetary policies are causing inflation and inflation is poisoning the economy. So yes I can see manipulation attempts in these markets but not in the precious metals market.

  297. Chris

    Gary, I think you are spot on with regards to the government’s opinion of gold prices. We are not the typical american. The typical american doesn’t follow gold prices at all, but EVERYONE is impacted by oil & food prices. So that is a logical focal point for any government manipulation.

  298. Done

    Hey, when people just put a (dot) as a comment, what does that do? Does it update you each time someone comments?

  299. Ben

    Gary, the gov’t (the is, the Fed) cares about the price of gold because it reveals inflationary outcomes of their policy. Read what Volker I think it was wrote about wishing they’d nipped the gold rise when they had the chance.

    Regardless of whether we understand why they would do it, gold screeching to all time highs and starting to draw the attention it did in ’79 and ’80 would mean that their lies about no inflation would be severely scrutinized.

  302. Gary

    Do you really think that suppressing the price of gold would fool anyone into thinking that there is no inflation? If you do I have some beachfront property I’d like to sell you here in Las Vegas.

    The simple fact is that gold is doing what all bull markets in history do. There is nothing manipulated about it. The government could care less what the price of gold is and they certainly aren’t going to throw away billions of dollars trying to manipulate it. Not to mention that they would have to manipulate the world market for it to have any effect. How in the hell is the Fed going to stop Indians and Chinese from buying gold?

    Do you people seriously believe this nonsense? People all it takes is a little common sense.

  303. Ben

    Gary, I found where Greenspan accidentally let slip their philosophy in 1998 testimony:

    “…where central banks stand ready to lease gold in increasing quantities should the price rise”

    http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm

    If they do it, it doesn’t matter if you believe it or understand why.

    My belief is that, sure they meddle, but the effectiveness diminishes with time and ultimately will prove fruitless (or completely backfire). Gold’s in a long term bull market IN SPITE of whatever interventions they are doing.

  304. DG

    What ever happened to TZ? Does anyone know? Did he blow his account out or something? It’s been a long time since he;’s posted here.

  305. Gary

    Greenspan in that speech was referencing when the US was still on a gold standard. The conspiracy theorists conveniently fail to mention that when they point to Greenspan’s speech as proof of manipulation.

    If the US money supply was constrained by a gold standard then yes the Fed would have every reason to control the price of gold. That’s not the case anymore. The Fed is free to print as much money as they please. The price of gold is irrelevant.

  308. Ben

    Re: fooling people in inflation.

    Not just yes, but hell yes! The Federal Reserve, whose job is to create inflation, brands themselves the group that controls or fights inflation. Talk about creating a false image. They’ve even taken out advertisements (PR) to support their perceived roll. When oil goes bonkers, notice how it’s blamed on speculators, and not a symptom of monetary inflation. There job has been bailing out their banker buddies, and the cover story for that is that they are saving the world and that it isn’t costing joe six-pack a thing. If people connected the dots between the Fed’s policies and the food/energy/tuition/medical inflation that’s costing them so much, there might be a bit of blow back.

    Any attempt to calm the gold market would be to serve themselves. Just follow the money and follow the false image they’ve created.

    I think you cannot believe anything of a sort because you think we’d have to be crazy to be involved in the same market. I’m involved because the market forces resulting from their actions (and the trade deficit) dwarf their piddling actions (if any — I think there have been some in the past, don’t know about now however).

    IN short, it doesn’t matter — the market is bigger and will prevail.

  311. Ben

    Gary, I will just disagree about their motives and what they’d gain. I’m not saying they are doing it — I am saying they have motivation, and regardless, the market is far bigger (i.e. China and India CBs for starters).

    I just reread those paragraphs, and he isn’t using past tense. I doubt he misspoke, but I’m too tired to read the entire testimony to figure out if that’s what he meant.

    Regardless, the bigger point is that it doesn’t matter what they (or JPM or Goldman Sachs) do to suppress the gold bull. They may have very short term success, but longer term, it will make no difference at all to the outcome (until currency controls or other confiscatory measures are possibly enacted anyway).

  312. Done

    Eamonn,

    This is my first time playin with these settings in blogger. Is there a way to subscribe to just certain posters?

  314. Éamonn

    A subscriber to Doc’s service posted the following comment:
    “I am one of those who insists that the dollar 3yr low has not been put in, and the development over the last two months lends support to this belief. In the short term, the DX is forming a very neat triangle consolidation, so it must fail in the coming days. If I am wrong and DX rises to 76.5, then I’ll stop out my short. It’s a good setup because my loss is limited to around 1.5 and I’ll know the answer in a few days’ time.
    My view is the effect of the QE since 2009 will continue to trickle down the economy and it will probably another two years before the effect dies down. My long-term outlook is still inflationary, unless a very strong exogenous event drives down the global economy and turn it to deflationary (eg. China, or India and Brazil combined, suffer a hard landing in economy or have a financial crisis). I agree that once DX sees its 3yr low, it will rise sharply, but then it could well stay in the low region (like below 85) for a considerable length of time.”

    Would Gary or other please comment on the validity of this argument?

  315. Gary

    Certainly the precious metals markets are manipulated around an options expiration but then so are almost all markets.

    I find it hilarious that the conspiracy theorists scream manipulation when the largest silver parabola of this entire bull market collapses. Folks that parabola was gonna collapse no matter what. There was no way silver was gonna get through $50 on its first try. At $50 every silver investor in the world was nervous as hell. When the selling started Sunday night everybody hit the exits at once to protect their profits.

    What’s more I can tell you exactly what’s gonna happen later this fall.

    Gold will most likely form a parabolic C-wave top. Price will get stretched extremely far above the 200 day moving average. That, and that alone will be responsible for a severe regression to the mean, profit-taking event.

    It will have absolutely nothing to do with the Fed “taking down” the price of gold. But I guarantee you the conspiracy nuts will be screaming at the top of their lungs manipulation, manipulation, manipulation!

    If these people had any investing savvy at all they would figure out that once gold rallies over 20% the intermediate leg is at risk of a correction. They could also look at history and see that gold has a profit-taking event about every 20 to 25 weeks and has like clockwork for decades.

    But no it’s easier to just blame some mysterious cartel for their inefficiencies as a trader.

  316. catbird

    Gary,

    When you say a gap fill in GLD might be a good time to add, do you mean this morning’s gap up or yesterday’s?

  317. Gary

    Eamonn,
    The strength of the rise in the dollar out of the three-year cycle low should should be directly proportional to the severity of the decline.

    The rubber band theory so to speak.

    The further anything gets stretched from the mean the harder it tends to snap back in the other direction.

  319. Gary

    catbird,
    I doubt yesterday’s gap will be filled as that would require and move back below $1500. But it is possible that we could see today’s gap filled possibly as an emotional reaction to the jobs report.

    It would be very tough to buy into that gap fill as it would come very early in the daily cycle and look like the daily cycle is failing in real time. That’s why I suggested the second option which was to wait for the scary correction to reverse before buying.

  320. Gary

    I think I pushed my shoulder a little too soon by going to the tournament a couple weeks ago. I’ve had to forgo all overhead lifts for the time being and just concentrating on pulls and squats.

    Apparently these things take longer than two weeks to heal.

  322. Éamonn

    Interesting comment from Marc Faber in one of his reports that I thought should share with the blog: “In general, I would argue that investors should buy stocks which do not make new lows on extremely negative news whereas they should sell stocks which, on very good news and amidst high expectations, fail to make new highs.”

  323. Unknown

    Hi, I’m new here (and on paid site). Besides Livermore, what are a few good books to start understanding trading–maybe one on technicals, one on cycles, and one on trading psychology? Thanks for any suggestions.

  326. Gary

    CKPC,
    This is why I don’t put a lot of faith in charts. If you play around with the axis lines you can make them say just about anything you want them to say.

  329. Veronica

    If new lows for this gold cycle are not in yet it should happen quickly. My system is still holding without a stop, but it will soon be adding one pending time and price.A quick smackdown to 1450 will be what the DOC has ordered:)This would also enable my system to hold onto this trade.GL all.

  330. Veronica

    Also, new IT cycles usually don’t move up in earnest till the 9 day deferred MA is broken. It moved above overnight but is now showing it’s resistance.

  332. Gary

    If we’re going to get a $75 drop in gold it better happen quick otherwise we’re gonna have a weekly swing on Friday.

  333. Veronica

    Gary, I do agree that it is looking like gold has bottomed and that’s why I’ve added to my position. If we do get a quick downdraft to new lows I will be holding and adding at the 150 MA.BTW,the 150 MA is acting very much like the 220 MA did in the latter part of the 1970’s gold bull.

  335. flaunt

    Gary, you say now that there was no way silver was going to make it through $50 on its first try, but at the time you thought it would get marginally over $50 before coming down. What made you think at the time that would happen?

    I had the silly idea in my head that because everybody thought $50 would be huge resistance that maybe it would blow right through it. Obviously, I was wrong. I don’t think you can discount the effect the margin-raising spree had on the price. The reaction to the first increase was a minor drop that quickly recovered. No doubt in my mind they intentionally raised margins the way they did in order to crush the silver price. It’s not a conspiracy, it’s just how they do business.

  336. Gary

    They raised margins because silver was going through the roof and volatility was exploding. Notice how they decreased margin requirements now that silver has come down. If they were trying to manipulate price lower would they do that?

  337. flaunt

    I don’t think they’re trying to do that now, because the vast majority of the specs have been flushed at this point. I found the manner in which they raised margins to be suspect. The first increase was very mild, but then they piled on several more times after everyone thought the reaction had been priced in, even as the price was crashing.

  338. Poly

    Looks like equities want to push to bull marke highs. Maybe this bull will end in another blowoff?

    Eitherway, strength in equities will certainly help the miners case.

  339. Sandy

    Poly,

    If you don’t mind me asking, how much invested are you (in terms of app. percentages)and in what vehicles.

    Appreciate your posts.

  340. Moneyman

    Or is this just a big trap?

    The mess in Europe is getting bigger..For how long can this last?

    I think that we will get a big sell off soon..Just my opinion..Who will buy at these levels?

    But ofc gold can still go higher..But what will happen if we get a big correction in stocks?

    The whole scenario is that the dollar will soon turn down, but how can it do that when the mess in Portugal is getting bigger..

    Today I read that Spain and Italy might be next..Its geting harder for them to pay off the debt because of rising interest rates..And its getting higher and higher everyday..

    But im also long gold but for me its hard to see the euro get higher from here right now..

  341. Gary

    I don’t think I have ever seen an intermediate cycle roll over after only 14 days. So if anybody is hoping for a market top right here it’s very unlikely. Usually a left translated intermediate cycle will rally for at least 6 to 8 weeks before topping.

  342. samppa_nyman

    Decided to go with 50/50 Barrick Gold and Sandstorm Gold for gold related plays, should be an interesting mix. Sandstorm at an all time high due to newsletter hype but Barrick has some 20% to catch up…

    In what timeframe is Gary guesstimating the all time highs in gold to be broken if this is a sustained rally?

  343. Shalom Bernanke

    No need to over-analyze, moneyman. The path of least resistance is higher whether the trade works or not. We just be the probablities. 🙂

    I suspect some that bought the lows in miners a week or two ago will be tempted to take profits after a 20% rally. I’m keeping everything I have and only looking to add on dips.

    I won’t even watch after the open as I’ll be out all day. Good luck!

  346. Poly

    @Sandy, around 25% of cash deployed, invested in GLD, GDXJ, SPY, all with options, so obviously leveraged way more than 25%.

  349. Frank

    Investing in Barrick Gold is masochism and they have become involved in copper as well.

    If you want big cap then go with GG or GDX.

  350. DG

    Sold the last of my EUO. Bought at 16.80 so a good trade but I was hoping for much more. Just too confusing a picture on the dollar right now. I will be back in it…

  351. phantom

    gary,
    gold going down and silver rising . does this mean some price stalling secondary to the spike in the last few days or the fact that that the gold /silver price ratio has changed and this could mean some significant correction, what i mean is that could this mean that this was a fake out . the exact reverse scenario played out on the last friday of april,2011.

  352. E

    is this good time to get in GPL, or any other miners that you guys would recommend? I already have gdx, gdxj.

  353. Moneyman

    DG

    Also sold my dollar long and boughts some shorts here in the dollar..

    If the dollar cant rise with the job numbers today I think that we are close to a top. Put a stop at 76,50..

    Actually a think its weird with the mess in Europe..But I think the mess in US is bigger..

    Long gold..
    Short dollar.

    Bought some more gold also..Have a nice day everyone!

  356. Peter

    Gary,

    You mentioned this probably has 6-8 more weeks. However, bullish sentiment and RSI are climbing pretty high.

    The recent action could suggest that we are in a topping phase similar to 2001 and 2008 with violent declines/rallies. So far, I’ve seen nothing that did not appear at the tops of the other two major peaks. Why is this necessarily different?

  357. Michael

    ECB raised rates 0.5% to 1.5% as expected but said “very closely” monitors risks to price stability, which is same words they used after April rate increase, meaning market now looking at October rate increase also.

  359. Gary

    Peter,
    I said that left translated intermediate stock cycles almost always rally at least 6 to 8 weeks before topping.

    This rally is only three weeks old. Based on history it’s probably too soon to expect a top, and that is assuming that we will get a top during this intermediate cycle.

  360. Gary

    Phantom,
    Gold rallied $50 in three days. I don’t think it’s too much to expect a rest for a day or two.

  361. Poly

    The Europeans have no qualms in putting it’s populace through a monster depression in the name of debt.
    Cutting spending, raising interest rates and taxes in the middle of 15% unemployment is only going to guarantee a nasty 2012/13 for the Europeans, which of course will spill over to the US. We’re not as crazy here, but state and federal spending is being slashed and no significant stimulus is on the horizon.
    Something tells me the FED will need to play a few more cards, sooner than later.

  365. fubsy_cooter

    Just looking at the chart of the dollar. If it has topped, the Int cycle topped in only 3 weeks! Pretty pathetic, and speaks to a waterfall decline if the 3 yr low is still ahead of us. Of course, the metals will skyrocket..if that’s the case.

    f

  369. JReality

    Not that this has anything to do with metals, but it is funny how they REDUCED stock index future margins (ES, NQ) etc. this spring when the price was getting near the high of year. I guess the idea was to prevent too much forced selling during the correction that was about to happen. I think reducing ES margins when the price was high is a form of manipulation.

  372. DG

    Daniel: Thanks. Sending me a negative article on the euro is like waving a bottle in front of an ex-alcoholic. I can’t wait to reshort it (via EUO) but the time is not now. The time will come, however, at the next dollar bottom this fall.

  373. Beanie

    There’s no hope for bears.

    This equities market will eventually go SO MUCH HIGHER. The last 7 days was just appetizer.

  375. DG

    Beanie: You always say that. Why do you bother to write posts? You may as well just copy and paste the same one over and over. You really must be kidding to keep posting the same stuff over and over here. Peoples’ psychology is fascinating! I can’t even imagine what is driving you.

  376. Michael

    FarmGirl, if gold goes down you will lose a lot of money on both DGP and call options; if gold stays where it is now DGP will not move for the most part but your call options will actually decline in value very significantly and some will go to zero; if gold starts running and clocking big moves and extended range days to the upside, your call options will increase in value faster than DGP because the implied volatility of the options will increase.

  378. samppa_nyman

    I think Beanie is just a friend of comedy and likes to give people some laughs. I like these characters on the blog, keeps the mood light and not too serious even though trying (that’s all it has been for me so far, TRYING) to make money is serious business. Good to have some “contrarians” here to spice things up.

  379. Wes

    Gary,

    Maybe you’ve covered this and I missed it, but if the IT cycle is marked by the lowest low after the cycle high, didn’t it come on 5/5 ?

  380. Frank

    Re Barrick, it probably doesn’t matter short term (if you follow Gary’s cycles) as a trade but long term it’s not a great company. They made the mistake of getting into copper at the peak. Mid to long term that is going to be a mistake when China implodes. You get enough exposure to ABX in GDX.

    Today some of the “value names” like GSS, JAG and THM are doing better than the pack at +3%. In value names I refer to beaten up miners that have fallen more than average due to operational difficulties but may have turned the corner.

  381. Frank

    For people who believe in gold out-performing silver there is a new etf called “pure gold miners” or something like that. I forget the symbol.

    Otherwise I prefer GDXJ or GLDX to GDX. Barrick free ETFs.

  384. Ryan

    I went in about 40% on Gary’s call and I would really like to get to 100% so my question would be should I wait for a dip and leg in another 30% or do the 30% now and then the final 30% when Gary does so? Am I just being impatient wanting to buy more now?

  385. samppa_nyman

    Frank, thanks for the input. Have to consider this when taking in profits (would be nice to make some actual profits in PM’s, none this year so far), maybe another producer or index rather than Barrick then.

  386. ...at ease

    Ryan,
    I just buy on the days dips compared to prior days lower prices.
    Watch for dips in prices usually around lunchtime 11:30 to 12:30 EST. Prices are back up right now.

  387. DG

    I am going to wait for the next daily cycle low to add quite a bit. I bought a good chunk of PM’s and may add little bits on down days, but if this rally extends it will “prove” the IT bottom is in. The next DCL will be a great place to add.

  389. Ben

    Hack,

    Monkeys were throwing darts in 1999 and lovin’ it. Ditto last April. Monkeys randomly typing out winning orders always rings alarm bells for me.

    Every sure thing for the past few years, save one or two, has had a sliver in the lining.

    The dollar seems to be in this shrinking triangle, and something I read yesterday from a person smarter than me (Heinz Blasnik) has part of me thinking that the dollar is nearing the end of it’s doldrums rather than about to embark on a severe drop into fall.

    Not sure what they will mean for gold, however. Could be the end of July last year is like the beginning of July this year — that is, a great time to load up. I’m at about 25% and need a bit more convincing to move past that right now.

  391. DA

    As Jeb Handwerger so eloquently described the battered mining stocks in an article today:

    “The bounce could be as frenetic as the panic”

  392. Éamonn

    I love gold. No strange stuff like shorting the stock market. Make a mistake and it comes back to save you. Nice and simple

  393. Ben

    Eamonn, if I had held my Fido fund since Nov instead of answering the IM call to sell and then D-wave call to sell, it would be about 20% higher right now. I’m going to revise how I manage that particular aspect of my portfolio. If we really have a blowoff top in gold (something I still don’t expect), then I will sell it off because we really will get a D wave. But otherwise, I’m going to scale back to 100% in the gold fund and leave that as permanent core except for a possible D-wave this fall or next year. The IM decline jiggling has been far too unreliable to time with the cycles (gold leading or trailing the miners, delay in getting the swing low/high confirmation versus the high volatility at those junctures. Even if I scale out for what I think is a huge decline coming up, I think I will still only cut 50% and leave the rest as permanent core. For another 3-7 years, when ever the gold bull appears to be in it’s final inning.

  394. Ben

    to clarify, I meant should, in the future, I think there’s a huge decline coming up (etc.) — I do not believe that for a second right now in gold at least.

  395. Ben

    Anybody else trying to use cycles to manage their retirement in gold (most of us don’t have that option) has probably encountered the same volatility gap I have (which makes trading it nearly ineffective except for genuine D-waves). I’d like to hear how others have thought through how to handle that. Note that I get penalized 1% for short term trades, with a risk the second time of being banned from that fund for a year.

  396. Éamonn

    Ben, yes that is an option to keep a gold core. But my point was more that there are so many forces acting on the stock market, its easy to get caught out either way, short or long. It seems to me if you make a bad entry in gold, your only problem is you have to wait. Its unlikely you will lose money.

  397. Hack

    Ben;

    I agree. I would normally load up with some TZA right here but I would get crushed by the bull. Right now the trend is my friend. Also, I follow election year cycles and since May it has been dead on the money…

  400. gold silver troll

    Gary,

    couple of questions:

    1) silver still below the 50day MA…which has been resistance for the past 2 months…are you concerned about that? will gold tank because of that?

    2) In 2010 Jan, during gold’s intermediate cycle, gold had a nice 1 week rally like today and then tanked for 4 more weeks? Was that because gold was not in the timing band or was that a head fake that fooled everyone?

  406. MrMiyagi

    SLW went down 50 cents in a few minutes and ABX went down about 62 cents in the same timeframe on the TSX. BB crashed, SLW bouncing a bit now.

  410. Poly

    Even with a nice move off lows, the sub here are nervous to buy and hold gold/miners, imagine how everybody else feels. Bullish % on miners is rock bottom, these sentiments are what spawn major bull runs.

  414. Poly

    Everybody I speak with still fear “the drop” or waiting for “the pullback”, that can only be bullish.

  415. wmp

    Gary,

    Can you explain what a good or bad employment number will mean tomorrow (in terms of adding to our positions)? Or, is this like you’ve said before, the reaction will be what the market needs it to be?

  417. white2ronin

    All,

    The Euro credit/bond/swap spreads are telling me that DXY is going to do well. I think we have put the low in for DXY. IF the Payroll numbers are strong, this would be USD positive. The risk on trade has come on alot stronger than expected so I am less confident in equities rallying. Gold looks vunerable to me, despite the cycle analysis which says the bottom is in, in fact I think we may see 1300 before 1600. Just my opinion.

  419. aviat72

    white2ronnin: Yeah, whats up with these Euro spreads etc. We had a relief rally after JCT said that ratings do not matter any more.

    However, in a bigger picture it shows signs of panics and what I called a breakdown in the pact between the oligarchs. I think a number of macro funds are probably getting ready to bring out the knives.

    The only question is how long can they kick the can down the road and what is the implication be on the PMs. Buying Gold in Euro terms might be the best way out.

  421. gold silver troll

    also, ugly candle on USD as well…

    this is too confusing..too many mixed signals

    looking like a down down tomorrow for miners based on all the exhaustion candle sticks today

  424. Alex in Montana

    SILVER SUMMIT
    Spokane Washington
    OCT 20, 21 2011
    Davenport Hotel

    http://www.cambridgehouse.com

    For any of you interested in silver. Silver Wheaton, Revett, Mines Management and 45 other companies wil have booths.

    I went last year and learned a lot about mining and silver.

    Just made reservations for this years conference.

    Cost is 1 oz. silver coin or $40.00 – pretty cheap.

  425. Gary

    Wes,
    If that was the case then we could call March 15 the bottom.

    Recent low occurred in the timing band for an intermediate bottom so that has the best odds for marking that low.

  426. Gary

    gold troll,
    That was a fake out in January 2010. That possibility is why I am still holding some dry powder although the severely depressed sentiment levels are suggesting that this probably is a final intermediate bottom.

  427. Gary

    The miners are making their first attempt at breaking through the 200 day moving average. People that have rode this up from the bottom are taking profits.

    If the employment report triggers a swing in the dollar that could potentially send gold higher and push the miners through the 200 day moving average.

  428. Return to Resistance

    Re: Gold
    Based on my reading of the charts things look bullish longer and shorter term, and probably neutral in the intermediate term (though Gary’s cycle analysis says it’s bullish in the intermediate term).

    I think it’s fair to say that this recent action is how all the intermediate bottoms have come out of their lows with miners leading up higher and sentiment in the dumps.

    A lot of the miners are up 15-20% of their june lows, so if there is a correction, I think they’ve earned the right for a breather here.

  429. Poly

    Gary,

    The current setup looks like a T1 pattern unfolding, have you given it any thought?

    I’ve noticed that before any major top, like your C Wave tops (06 and 08), they too were T1’s.

    I’ve also noticed in the T1 consolidation phase (middle) you don’t get that steep IT cycle drop, more of a sideways triangle consolidation, this is similar to what is unfolding now. We’re also way overdue for a C wave top, D wave type event.

  432. fubsy_cooter

    Hi All,

    I thought I’d share my plan for entering positions for the last leg of the C-Wave, if in fact it plays out as we expect. I’m going to be legging in to positions and have the goal of being 100% invested in pms by the next DCL.

    As you’ll see, I tend to keep my initial position sizes small in order to limit losses if the market goes against me. Of course, this also serves to sacrifice some gains if the move launches out of the gates, but I’m willing to do that to limit my risk.

    I currently have the following allocation:

    20% GDX
    13% GDXJ
    67% cash

    I will be entering the following allocations during a corrective move in the coming days that may materialize in the form of a bull flag and breakout from bull flag, a gap fill and break out above the high of the move thus far, a sideways move and break higher, or a touch of the 10dma and swing reversal etc…

    18% DGP
    8% GDX
    3% AGQ

    On the next daily cycle low I will add:

    14% DGP
    12% GDXJ
    7% GDX
    4% AGQ

    Total Allocation
    35% GDX
    32% DGP
    25% GDXJ
    7% AGQ
    1% Cash

    The reason for the odd percentages is that I will be buying in even numbers of shares.

    I’d be interested in seeing what others are planning, as well.

    fubsy

  433. fubsy_cooter

    @ Poly/Miyagi

    I can’t imagine that there is any retail participation in the pms now. The buyers are the central banks of asia (putting a bid under the physical market), and money managers who are playing the secular bull, who are likely insignificant on a percentage basis.

    I agree with Poly, as far as sentiment is concerned, this sector has been cleansed, and those that would sell have sold.

    f

  434. Gary

    Bob,
    We all know short term manipulation occurs in the market. And not just the gold market but most markets.

    Short-term manipulation is meaningless. What I’m talking about are these ridiculous claims that a mysterious cartel is retarding the progress of the gold bull market.

    We conveniently never hear any of this stupidity when gold is going up week after week after week. It only occurs as gold drops down into an intermediate cycle low.

    Folks I have news for you all bull markets in history have profit-taking events. Every single one of them.

    Amazingly the calls of manipulation are loudest when a parabolic move collapses. Are these people serious? No parabolic move in history has ever been sustainable.

    Ask yourself this, is it more likely that a parabolic move collapses because of a regression to the mean profit-taking event? Or is it because some mysterious cartel is taking down the gold market for some reason that for the life of me I have no clue what it could be.

    Folks J.P. Morgan has some of the smartest traders in the world. Do you really think these folks are trying to fight a bull market? I guarantee they are not. What they are doing is playing a straight regression to the mean strategy, which is basically the same strategy that most big money players use.

    When any assets gets stretched far above the mean it invariably succumbs to the pull of gravity. Smart money knows this and so they sell short when any move starts to become extreme. There is nothing evil about this. It’s just a very intelligent and dependable way to make money.

  436. Gary

    WMP,
    If I had a crystal ball I would have a satisfactory answer for your question.

    The best I can do at this time is to say that I think an intermediate bottom has been put in place.

  437. Felix

    Felix in LV w family now looking out at the lovely view of the mountains surrounding the town. First time here. Nice, dry heat, good climbing terrain.

    Now that commitment-time is here, I wouldn’t mind just a tad more discussion about why silver/AGQ is dangerous. FB, you pointed out silver has equal or greater upside at gold target, but your allocation is small, for example.

    Do I understand that the danger is on account of large underwater traders dumping large positions on a spike? If so – don’t they also want to ride the silver inflation QE hedge? Why won’t they also want to continue the ride once we get in gear again?

  439. Poly

    There is a real distinct difference between “the houses” and the “hedge funds” smacking and manipulating thinly traded markets for trading profits compared to the central banks and government conspiracy theories.

  440. fubsy_cooter

    Gary’s report reminded me of another variable I’ll be watching to add to positions is a weak dollar. If it breaks and closes below its pivot, I’ll use that to add to positions, as well.

    Felix,
    I was primarily in Silver for its run for the last couple years. Still, I was small in AGQ and used it for juice similar to my allocation now. I also sold it pretty early in Silver’s parabola with AGQ around 290ish, and then focused on SLV, and unfortunately miners, which hugely underperformed.

    I’m going light on Silver this time (14%) exposure because I agree with Gary, that broken parabolas are subject to huge volatility. Although, I suspect silver will get back to the 50 area for a double top before falling hard again.

    Also, I think gold needs to go parabolic to put this C-wave to rest. Given that gold is typically less volatile, that’s where I’m going to be placing my money. I’ve learned that I hate taking losses, so I build my positions with risk aversion as my top priority.

    A more aggressive trader may decide to do it differently, but a lot of aggressive traders got hurt pretty bad when the silver parabola broke. At that time I was out of silver positions completely and mostly into DGP, which limited my losses at the end.

    fc

  441. rapper

    agq is dangerous because

    200% and paper in a thin market. Obviously you know this right? Plain english is this thing will make you dance for joy when it is bull trending and it will rip your face off when things go wrong. That written, I own a small amount as I am a glutton for punishment. Only a small amount right now 50 shares but will go to 75 or 100 when I feel the time is right. Small potatoes compared to the rest of the group but we each have our comfort levels.

  442. catbird

    Fubsy,

    Thanks for sharing your portfolio plan.

    I put on a small amount of GLD yesterday, just for the sake of buying something (I was all cash).

    I want to own GDX but it’s been defying gravity lately so I want it to touch its 10 DMA. I’m using GDX as my “trigger” since the miners seem to be taking the lead this time.

    So, my plan is to wait for GDX to kiss its 10 DMA, and then I will buy it and DGP in a 1:2 ratio to take me to 90% invested.

  445. gold silver troll

    Gary,

    Thank you for your reply. So back in Jan 2010, was the USD in a similar situation?

    Also, if this were to play out like 2010, 4 more weeks of downtrend and gold could be below 1400 – quiet scary for those that are in at 50%

  446. ALEX

    Blogger rapper said…

    Hey Alex,
    Ever own AUQ before? I am going to pick this one up soon.

    July 7, 2011 5:33 PM

    If I am the ALEX you mean, I was actually looking at it too.. thats a double bottom cup (basing pattern ) but I will wait- ( I am expecting a mild pullback )the chart is telling me that it MAY pull back to $11 ( thats the top of the cup/break out area…and the 10 sma is there.

    This used to be GRS, I believe..name change .

    If this pulls back to the 20sma..you could buy more at the 10.75ish area.

  450. Éamonn

    MrMiyagi, she lead a very good life. One of those quiet unknown Saints in the world.
    Those who have experienced the death of a parent must know how sorrowful it truly is

  451. wmp

    Gary,

    Wasn’t asking for the crystal ball reading, just an opinion…which you provided in the nightly report. Thanks.

  452. Blake

    Anyone looking at the Dec GLD DITM Options for some extra juice?

    There was zero volume on these today, what gives?

  454. ALEX

    EAMONN

    During stressful times such as terminal illness, no doubt all ‘well wishes’, even from strangers 1000’s of miles away, CAN make a difference. Send them my best please.

  458. Blake

    Poly and Mr. Miyagi

    Thanks, ya just taking a look at the AUG 11 144 Calls for 6.30. They look pretty juicy to me.

    I guess I’ll just roll these over until we get to December.

Comments are closed.