348 thoughts on “PORTFOLIO UPDATE

  1. wolf33

    Bot some DIA calls on Friday close. Whatever happens they are gone on the open. Rather small trade.

    More interested in what DUST does.

  2. wolf33

    Gary===Your weekend report was one of the best I have seen in a long time. Your description of what most investors/traders go through is a classic!

  3. Bill

    Gary, how about running another weekend (or some other such) special as a bone to get boneheads like me to subscribe?

  4. 86d4life

    Bill,
    did you ever get a chance to try lake trout? Like in a tie for first place with mackeral for most omega 3, double salmon. I know a guy locally that get`s it from a fisherman up in Grand Marais for a dollar a pound for the whole fish, 15-20 lb fish. It was too late last fall when I heard about it, but this fall I`m going to back up the truck. Nothing beats smoked lake trout.

  5. Le Fou

    Bill,

    The cost of the subscription is a wiggle on the daily chart.

    The cost of not subscribing, now that’s a different matter . . .

    Good trading,
    Le Fou

  6. Gann360

    As i stated last week . Gold and Silver Rallied back up to another High ,at exactly 90 Degree’s in Time ,on July 29. From the April High

    Silver Rallied Back to 50% of the Big Red Weekly Candle ,and Found Resistance.(as i thought would Happen )

    While Gold Rallied back up to a New High Exactly 90 Degree’s in Time (April,29,2011 – July,29th,2011 )

    http://screencast.com/t/SINleqMD

    http://screencast.com/t/bgnLofMbHR09

    Of course there isn’t any Confirmation of a Top Yet,But,I get a High in using Gann TA to help me figure out a Date for a Potential Pivot in Time,Where a Meaningful High (in this Case ) May Occur.and last week ,May have been a Pivot High.

    If this ends up being a Meaning Top,It should be Clear by the End of Next Week..

    Remember nothing is 100%.And Gold may Keep Running Up,but i shorted Silver last week at the High’s and still Holding 1/4 of that Position.

    Good luck to All

  7. Bill

    Wow, 3 beatings w/just 1 little post. It’s working! OK, I’ll subscribe.

    86, lakes here are polluted from acid rain filled w/lead and mercury from Chinese factories upwind. Sounds great where you are though.

  8. 86d4life

    Honestly Bill,
    I signed up with Gary on Jan 20, in time for the ride up in silver and I am still amazed how far I have come in this amount of time. I never would have believed it.

  9. William Wallace

    Bill,

    Funny you ask…I would most likely be a seal now if I had not lost my leg in an accident, my best friend went off to be a seal without me…it was rough.

  10. William Wallace

    Bill,

    Welcome to the party my friend…did you know that Gary is always drunk when he writes the reports? Just kidding, just kidding!!!!!!!!!!!!!

    Bill that is the best decision you ever made!

  11. William Wallace

    Bill,

    I cycle too, only for cardio on my exercise bike, do about 35 miles a day…its probably not like real cycling though…although I do the cardio setting which is up and down hills.

  12. Bill

    WW, riding on a trainer indoors is actually excellent for cardio, and very hard as you know. There is no one to draft behind, and you are spinning at 100-120 rpm w/no pause, which is an incredible workout.

    Last year I had a crash and broke my collarbone. I spent 3 months on a trainer trying to keep my legs, and man I couldn’t believe how hard it was. I did 1 hr/day at 120 rpm. Sweat like a pig.

  13. William Wallace

    Wow I thought cycling outdoors was harder…I mean yeah I do sweat like a pig, and its hard as hell when your trying to maintain 160 beats per minute heart rate, but I always thought cycling outdoors was harder for some reason, I forgot that you guys drift like a flock of geese!

  14. William Wallace

    86,

    Bro thats what they do no? You ever see geese flock, they fly in a V shape because they are drafting, makes it easier for them to fly long distances…you have to apply that to trading also…lol

    I mean c’mon now, you out of all people, the wild beaver trapper (I never even knew beavers could be trapped!) didnt know this???

  15. William Wallace

    Gary,

    Not sure if you responded to this question I asked earlier…do you think you will be setting up an “East Coast Tracker” get together on this trip to the Gunks?

  16. Bill

    Gary, nice report (I can also now say ๐Ÿ˜‰

    On the $GOLD chart showing the intermediate corrections … the July 1 low sure looks like an intermediate correction low.

    So it’s just the $HUI divergence that’s causing you to step back? I mean, if the $HUI weren’t divergent, would you be questioning $GOLD, correct? But it is, so good call.

    Do you have like a 10 yr chart that shows gold’s intermediate and long term cycles somewhere? Same for the $SPX?

    Thanks!

  17. 86d4life

    You think those geese aren`t up there working there ass off?? Look at the mallards that leave the prairie/pot hole in N.&S. dakota. when they leave for good, most won`t touch down again until they hit arkansas. Try that on your bike.

  18. Bill

    86, WW’s right that drafting saves huge energy – estimates are 30-50%, depending on the grade. Stick to beavers. ๐Ÿ˜‰

    Gary, sorry I just read earlier posts and now also see that sentiment is also a concern, not just the HUI/gold divergence. Forget my earlier question.

    I’ll be offline now reading.

  19. William Wallace

    Eamonn,

    Yeah it was my dog…The dog bit me on the head… I had to get rid of the dog…doesnt that describe its temperment!!

    I had pitbulls that never even bit me, never even tried…and they are supposed to be killers, obviously all dogs of the same breed are not the same.

  20. MrMiyagi

    Gann,
    I have no idea what the vibrations thing is but thanks for the chart, as usual.

    WW,
    Your GLD puts should work out good, don’t get greedy.

    I can see a few days of market rally here and PMs down. I originally thought that they would seal the deal Thursday night but I was off on the day but not the time of day! Of course it’s after hours so people get stuck with positions and the politicos get overtime and meals.

  21. William Wallace

    Bill,

    86 knows the deal…he’s just playing stupid as usual..for goodness sake he runs after beavers all day while getting chased by bears, if anyone knows about drafting it’s him!

  22. Bill

    Gary, really good stuff in your SMT premium. Very cool how you use several hard facts to draw conclusions. Am sure you’re swamped, but perhaps someday you can add a traders log, as it’s be really helpful for newbies like me to go back in history and follow your log on the charts. Anyways, well done.

  23. 86d4life

    Eamonn,
    the higher the intelligence of the animal(W2) the more widely varied are their personalities. Just like people. dobes are not known for sitting around doing long division.

  24. wolf33

    As said last week—A deal would be done. Those vacations, likely some on our $. Most of crap dog and pony show for the news media.

    All the problems worldwide are still there.

    My theory—The markets will do everything they can to prove the majority wrong. Usually does!

  25. Bill

    Hi Miyagi-san, yes I did.

    Sorry Gary I didn’t respond as I should have – I didn’t know what to say because I had already signed up for the monthly before you made your post.

    I’m learning a lot here – about stuff that is well thought out and is actionable – for anyone who isn’t a member I highly recommend you take a peek w/the 1 month sub.

  26. Jason

    Hey guys, I had a 1 month sub last month. Looking to upgrade it.

    Website told me to cancel my current, so I did. Where is the link to resubscribe under a longer-term plan? And what is the 15-month special?

  27. William Wallace

    Eamonn,

    86 made a very good point…that is precisely why he traps beavers, they are so intelligent and personalities so varied that from them he learns a great deal…when in the forest with them he truly believes that he’s in Narnia!

  28. TZ(8155)

    GARY,

    >At some point we are going to see a correction that bounces on the 150 and then violates it.
    >That violation will cause traders to panic because they aren’t expecting it.
    >I’m expecting it.

    Ironic because I was actually expecting the opposite: That a pullback would start and everybody who wanted to buy would get cute and wait for the 150dma “cause it always works” and then get radically left behind when it failed to hit one time.

    So far I think that is what has happened and not the reverse where it goes BELOW the 150 to fake people out. Yes….there was a fakeout, but I think it was the opposite of your view.

    I’m still 4x long gold futures. My stop has been raised to near 1585 in case I’m wrong, but I think we drop little from here and continue higher. I think the bloom is off the rose and the world is starting to realize this train is on crash speed.

  29. Gary

    TZ,
    Yes that is exactly what happened this time and everyone chasing is why we got a 10 day rally.

    But no way in hell the miners should be acting like this if gold was going to take off on a parabolic move.

    With sentiment where it’s at and the divergence in miners and now we are on day 20 of the daily cycle I don’t want any part of this until I either see that sentiment cleared or the dollar violates the next daily cycle low.

    Like I’ve said many times cycles are best for telling us when to step on the gas and when to back off. Now we have four things (sentiment, cycles, divergence in miners and stretch), actually five if you include the COT report, that are telling us to back off.

    I for one am going to listen.

  30. Gary

    Apparently Paypal is having technical problems tonight. Wait till morning before trying to upgrade your subscriptions and give them time to fix the problem.

  31. TZ(8155)

    >But no way in hell the miners should be acting like this if gold was going to take off on a parabolic move.

    You know my opinion on the miners and my belief that nobody should be playing them until they *factually* demonstrate outperformance (as a group) on an ongoing basis (not just a few weeks here and there. And not just a single stock or so.).

    So far they have not since 2004.

    That is long enough evidence for me to listen. Others seem to feed off hope or “they are bound to outperform soon” or entertainment value or whatever.

    Great. Good luck with that. But
    I’m sticking with gold and not using the miners to tell me much more than that I shouldn’t be in miners.

    If gold plummets here I’ll get out with some (reduced profit), but I’m not going to exit at this point for FEAR that it is going to drop when I read current events as being very strong and when I don’t see much of a reason for a top yet.

    I’m willing to live with my call either way.

  32. TZ(8155)

    PS: FRODO…thanks for posting that chart of $hui:cef earlier. I saw you also posted SVM, but one of my other statements during that discussion (months ago if you missed it) was that a SINGLE (or two or so) miner which nevertheless demonstrated some outperformance against ‘straight metal’ was not sufficient because a person would be crazy to put their entire net worth in such a stock (ANY stock). However a person would not be too crazy to put their entire net worth into only gold and silver (insured, allocated, etc.)

    Thus SVM didn’t prove a counter point (and hasn’t even outperformed as of late anyway).

  33. William Wallace

    TZ,

    Gary gave a few solid reasons other than miners divergence for there being near a top…also the TSI is negatively diverging and turning down and stochastics are rolling over on a daily, more than enough reasons for a top…I guess we’ll see how it pans out.

  34. TZ(8155)

    Here’s one for the evening.
    I throw out a challenge topic:

    Give reasons why miners are NOT outperforming ‘straight metal’ so far in this bull market (since 2004.)

    Furthermore, give reasons why they might NOT outperform for a continuing period going forward and MAYBE NOT FOR THE ENTIRE REST OF THE BULL MARKET.

    (All of this contrary to experiences in 70’s whereby they DID tend to outperform as best I know).

    I can think of MANY REASONS, but will withhold them at this time.

    Let’s see how able and willing others are to try to counterargue “they are going to outperform” and also to justify why they are not so far (which is true).

    If you can’t think of reasons then either you aren’t trying or you don’t care. In either case your bank account might reflect that result. Give it a try.

  35. TZ(8155)

    WW, I subscribe to gary and he maybe right. I’m wrong plenty of times myself. I have simply decided that I think that triangle in gold a bit below 1600 will hold and I’d rather hold here with a stop below that than sell out and be left if it continues to run.

  36. William Wallace

    TZ,

    Subscribe to John Doody’s Gold Stock Analyst and you’ll have all the proof you need, he lays it all out and shows how his Top 10 gold miners outperform gold over the last few years. If you want I will email you the july report…BTW I am straight metal for over 2 weeks now, sold all miners.

  37. TZ(8155)

    I’ll start with reason #1 for why miners may NOT outperform as many are expecting (bolstered by the 70’s example), or might underperform until very very LAST moments of this bull.

    #1: Unlike the 70’s and decades ago, the mines and ore grades around the world are a small fraction of the concentration of ages ago. ON AVERAGE, humans have simply found a great many of the “easy” and cheap precious metals discoveries (just like oil) and extracted them. Ongoing production is progressively smaller and smaller concentrations at worse and worse locations and depths. THis will only get worse and worse over time.

  38. TZ(8155)

    WW,

    You and others keep twisting my statement. I have said a MIX OF 50/50 SILVER AND GOLD.

    Please at least start with my correct assertions.

    PS: I’m familiar with GSA. I’m using $hui/gdx in my statments regarding my assertions.

    Such that somebody wants to use a MANAGED/PICKED list that changes somewhat regularly (as per Doody) then that introduces a new element in the discussion.

    You are now arguing JOHN DOODY vs “straight metal”. Not “mining stocks.”

  39. Gary

    From the beginning of the bull market miners have so outperformed gold by such a wide margin that gold isn’t even in the ball park.

    Miners could be waiting for gold to catch up.

    In 08 it was clear why miners where underperforming, the price of oil was going through the roof. Profit margins were being squeezed.

    Miners are underperfroming because they are warning us that the run is over. QE has ended. It was the driver of this leg up in the secular bull market.

    Has that for reasons?

  40. TZ(8155)

    Gary,

    You are making the same flawed assertion as a previous poster.

    Do not say ‘since the bull mkt beginning’ when I am saying since 2004 and 2005. The miners won from 2001-2004/2005. CEF (50/50 gold and silver) beats from there forward. Are you contradicting this statement?

    Clearly if you go back and use the gains from 2001-2004, add them in, and use them to override the underperformance since that time you will have some gains “for the whole bull”.

    Works great except that my broker screen doesn’t have a “buy at 2001 prices” button. In light of such a button it is logical to me that something which has continued non-stop since 2004 until now should not be invested against until it visibly changes.

    That’s just how I see it.

  41. TZ(8155)

    The $hui:cef chart which FRODO posted earlier.

    stockcharts[PUT.DOT.HERE]com/h-sc/ui?s=$HUI:CEF&p=W&yr=10&mn=1&dy=0&id=p59735877573&a=240541833

    Note the chart is LOG which kinda messes up thew view a bit, but clearly 2004 was the peak of ‘mining stocks’ (the best index I can find going back that long) and it has been flat to down since.

    Clearly there are jags and wiggles on the way. If you choose to try to catch and trade these, fine. It’s the same as trying to find a winning table in a casino when the casino *as a whole* is taking money on a roughly ongoing basis.

  42. Cache

    Thanks, Gary. The reason that I am a subscriber is because you have not been afraid to change direction. I form opinions and then bounce them off of you! I have really improved my swing trading by thinking about your calls…Thank you!

  43. notGreedIsGood

    Gary

    do you have any suggestions for people who have entered into the BB Crash Trade for the miners?

    eg. should we really wait up to 15 trading days for the GDX to be profitable or is that too dangerous?

    not

  44. MikeStiller

    Gary-
    SPX is either on week 20 or week 7 of the intermediate cycle, correct? Also, we wont know which it is until we make this daily cycle bottom that should come in the next 10-15 days. If it is week 20, that daily cycle should also mark the intermediate cycle low? Or do we have one more daily cycle after teh current one to prove the 20 weeks is the correct count.

    Thanks

  45. Chrys

    Gary – so we get a Sept/Oct correction in gold. Miners are leading the correction. Do you think miner will lead out? At what level do you expect miners to start moving up on $HUI or GDX?

  46. Brian

    Excluding the 2008 plunge in the miners, which corresponded to the 8-year cycle low in gold, miners are now the cheapest they have ever been vs gold at any point since the 1980’s. (Gold vs XAU).
    A consolidation above $1,600 for a week or two and the miners are set for a possibly significant rally. A meaningful close below $1,600 in terms of price and time, and we will have to be a little more patient ๐Ÿ™‚ Note, USD is trading lower this morning vs EUR, though early days yet.

  47. DG

    Gary: you wrote
    “But no way in hell the miners should be acting like this if gold was going to take off on a parabolic move.”

    Can gold rally and just not go parabolic? Can the miners act this way and gold have a normal rally instead? In March of this year GDX dropped badly after gold bottomed and had its first correction after that bottom, and it meant nothing as they both then bottomed and went much higher.

  48. Razvan

    the short silver trade has been working out well so far. As soon as gold decides to move down there should be some nice profits there

  49. Gary

    not good,
    If you are going to take the trade you have to be willing to wait at least 15 days.

    The Bollinger band crash trade has a very high winning percentage. But when it does have a loser it tends to be very large. So you can’t ever put a large position on with this kind of trade.

  50. Gary

    Brian,
    The gold XAU ratio is dependent on gold holding its current price level.

    If gold starts to accelerate to the downside the ratio could improve even though both are dropping.

  51. Gary

    Mike,
    The extensive interventions into the markets by the Fed is making it pretty tough to determine where the stock market is at cyclically.

    My best guess is what I said in the weekend report.

  52. Brian

    Absolutely Gary. Either gold breaks lower here, or the PM stocks play catch up over the next few weeks. I am undecided but leaning towards your scenario.

  53. Gary

    DG,
    It’s certainly possible. But as you know I’m not basing this solely on the action in the miners.

    We also have the extreme sentiment reading, the stretch to the upper trendline, and a possible three year cycle low in the dollar Along with the ending of QE2.

    All in all there are enough warning signs that I want to go to the sidelines and see what happens as the dollar bounces out of its daily cycle low before making any further decisions.

  54. Cory

    The big components of GDX got hammered after earnings last week. They still have bad looking charts, but AEM, ABX, GG, NEM might backtest and fill gaps at this point before turning lower again and resuming their downtrend at maybe the 10 DMA. The $VIX was up there pretty high too. The junior miner charts are a lot better looking than the big boys.

  55. Gary

    Exactly want I was afraid would happen. Everyone knew the market would rally on the news. The market wasn’t going down because of the debt ceiling. It was going down because a recession is coming.

    Traders used the bounce to unload stocks.

  56. Poly

    European debt selling off, fast. ISM not pretty, I smell ink.

    Dollar and gold sharply rally, July 1st correlation back.

    Expectations and “assumptions” are the mother of all evil.

    Good luck everybody.

  57. Gary

    Poly,
    My only assumption is that gold is due for a daily cycle correction and the dollar is due for a rally.

    I want to see how those unfold before I step back onto the field.

    Right now there are just too many landmines on the field.

  58. Poly

    Gary,

    That’s not a reference to your position specifically. Just stating the market was fixed on a equity rally/gold drop.

  59. deshy

    i think the spx broke 200dma at 1280 but it does not show on TOS. Any ideas as to why–i assume the break is ‘significant’

  60. Bruce

    miners leading the action, again

    with gold & silver getting walloped the miners were green and added to gains

    interesting action

    not involved, yet

  61. ALEX

    I believe the Miners are acting correctly. They bottomed FIRST in mid June and took off , some of my Miners gained 40 to 60% (AG went $16 to $25.5 = 60% , SVM $8 -$12=50%).

    They then led down…retracing 50% of that move , most bounced around off their 50sma last week and made inverse H&S.

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

    and Sentiment ( from my eyes) can do what it did NOV 2009…pegged on the high side, but stayed there for months. Gold went about $900 to $1250 with sentiment where it is today.

    http://www.screencast.com/t/LQqKUMeV1W

    I bought Mid June, and Bought again recently and today.

    The question “what are the Miners telling us? applies now too…they lead up, they lead down, they may be leading the charge to new highs now.

    Miners Now seem to be forming a flag pattern on a 3 day chart, after breaking out from the bottom consolidation. Bought Ag at $22.50

  62. Moneyman

    The problem is that a lot of people sold gold and lost the strong hand.

    Probably Gary will get it right, but if hes wrong and gold goes to 1800..What then?

    Poly told us about a plan to not sell before the last top at 1575 and TZ is also talking about this..

    I sold some half of my gold and got long position in US dollar and it feels fine. I still got my strong hand left..Oki half of it and I can add to it..If we go down hard I sell under 1600..

    Will be very interesting to see what happens now..

  63. Moneyman

    Thanks for the info Alex..Still got some gold left..:-)

    Will be very interesting to follow this..

    Seems like the dollar is due for a rally and we will see how cold react..

  64. TZ(8155)

    As I said earlier, I disagree with those who say ‘this budget thing is just politics’, ‘of course they are going to increase the ceiling’, ‘means nothing…’, etc.

    I have said I believe this is a huge event unlike previous times cause it is now revealing, for lack of better words, that Superman (the US and thus world) is Vulnerable.

    EVEN IF/WHEN we raise the ceiling our actions have shown that the US is as much of a disaster and runaway trains with NO BRAKES as all the other countries of the world who are also heading for the wall.

    As proof I give you today’s WSJ story on that exact topic:

    online.wsj[PUT.DOT.HERE]com/article/SB10001424053111904292504576480142807295216.html

  65. Gary

    I will have no problem jumping back on gold. But not until I see how the daily cycle correction plays out. If you think gold is just going to go straight up and never correct again I suggest you look again at a long term chart.

    Everyone screams if we are late to exit and then they scream if we are early. Decide which you prefer, late or early.

  66. NJ

    Gary / TZ / others:

    Maybe this is a complete dumb question regarding Miners / Gold:

    Given that miners are most exclusively bought in US versus Physical Gold which has global demand, would’nt it be logical that more money flow into gold than miners?

    Perhaps, in 2004 the global demand for Gold was yet to kick in and hence HUI outperformed till then.

    Maybe the global demand for Gold also explains why SoS and BoW on GLD don’t have as much predictive value as the SPY?

  67. ALEX

    Blogger Gary said…

    Alex,
    Sentiment can only stay pegged at those high levels if the dollar is collapsing.

    I checked and , yes, the dollar was dropping at the 2009 autumn run.

    So-If the dollar rises now , AND GOLD rises too in a sort of run-away move…would you expect sentiment to weaken? ( and therfore could become a bullish indicator at some point , reduced bullish sentiment)?

    I know there are prob hundreds of possible scenarios and ‘what ifs’…I dont mean to be that way , I’m just wondering about the issue of sentiment being too bullish, but when I looked at that chart , it seems to have been there before and Gold rallied successfully. thx

  68. TZ(8155)

    NJ,

    I have no idea why you would be so shy or doubtful of your reasoning abilities. Kudos. You are spot on.

    You have just correctly voiced what would be #2 of the multiple reasons that a person could argue ‘straight metal’ is beating and might very well continue to beat ‘miners’ for much of the rest of the bull mkt.

    So I will add your #2 (elaborated) to my #1 starter and recap:

    #1 ore grades in the earth’s crust are NOWHERE NEAR their levels of decades ago. Most of the good stuff is GONE….DUG UP. Scraps remain, just like peak oil. Scraps of something that is gone don’t make much of a good industry.

    #2 Stocks and miners are played by relatively wealth and upscale members of society. The collapse of the *world* reserve currency is going to be a WORLD event. Inflicting damage on many MANY people who live on pennies and dollars a day.

    Our view if skewed. There are BILLIONS who do not and never will have an etrade or whatever account. But they can, will and DO buy metal.

    Years ago people in western companies once marveled that “all they wanted to do was sell a toothbrush to every chinese person” (or pencil, or bicycle…you get the idea).

    Well…what if all the chinese and indians and a billion more elsewhere buy gold and silver?

    I can promise you they will do THAT before they start opening an etrade account and ‘clicking it in there’. And they are. The buying stream of a few billion people just might overwhelm the trading stream of some relatively tiny western daytraders.

    Well there are #1 and #2 possible reasons. There are more. I’ll see if anybody else wants to give a shot.

  69. Greenspansconscience

    I was a bit surprised with Gary’s switch on the miners. Afterall, he had expected GDX to fill the gap on the chart, which is *exactly* what it did. You have many of the miners now set up with the inverse head and shoulders, which Gary also hinted at.

    Yes, one day does not mean Gary’s current stance is wrong, it just seems a little extreme given his prior bullishness (triple top breakout, etc.).

  70. Moneyman

    Alex

    What did you buy today?

    I just bought some more dollar longs here..

    My gold futures is still here also..

    Gary for me its better to sell early..:-) But there are so many scenarios here..Will be interesting to follow..But if the miners will rally here will it change your analysis? If they rally and the stockmarket falls apart..

  71. ALEX

    Blogger oa92000 said…

    AG 50% re-tracement ..need to hit 21.

    Thats true, but stronger stocks retrace less. I use Fibonacci numbers (mostly .382 or .500 or .618)…so check this out.

    Ag went roughly $16 to $25.5 (ROUGHLY)…thats a $9.5 move.

    9.5x .382= $3.63 off the top

    so subtract $3.63 from $25.5= $21.87 target and it hit $21.79 Thursday

    close enough for a 1/3 fib retrace I guess ๐Ÿ™‚

  72. TZ(8155)

    Le Fou,

    In case you haven’t noticed, the hardest thing to do right now seems to be to HOLD long metal positions.

    I was even feeling it last night and thinking about exiting. However the charts do not appear to FACTUALLY show weakness and much of the selling is emotionally generated cause people simply can’t believe it is so strong and seemingly can go higher.

    I think this is a Livermore situation where it is hard to ‘sit tight’ but yet might be the exactly correct thing to do.

    If we go much higher in gold it might very well launch into some recognition/capitulation buying.

    I could be wrong and I bumped up my stops near 1600 in case of so. FYI/Warning.

  73. Poly

    Italian and Spanish debt cliff diving, again. Both 10yr debt back above 6%. This was and remains the driver of the dollar/gold trade.
    Dollar index is rallying, but Yen/Franc are too, don’t be fooled.

    Euro ISM down. Euro firms missed Q2 earnings by the widest margin since 2000. All major Euro nations implementing oppressive austerity. US 9Fed) no longer providing any stimulus, state/local contracting like crazy.

    The slowing (recessionary) world economy and austerity will suck the last growing green shoots our of this world and bring on a 2nd deflationary wave like you wont believe.
    The net effect, a sovereign revenue collapse that will bring a $2T+ Euro “Tarp like” program and multiple central banks liquidity like you will not believe.

    (Obviously the above is not a short term trade/description. I agree, DCL would be great if we want to move much higher. But I’m not waiting for one)

  74. Aaron

    Considering how the commercials (COTs) have NEVER been wrong on gold during this bull market, and how they are quite bearish on gold right now, Im leaning towards a correction myself.
    Bias; Long USDX

  75. Gary

    Alex,
    I think way too many people are misunderstanding sentiment. I think a lot of people are trying to use it like a technical tool.

    Sentiment isn’t an overbought oscillator, it’s a sign that we are in jeopardy of running out of buyers.

  76. Rob L.

    TZ,

    Although I exited my metals position last week, and have no regrets doing so, I none the less appreciate your comments.

  77. DG

    One of the great things about investing/trading is that you simply do not need to swing at every pitch. Imagine a game of baseball where you could take as many called strikes as you want. What would bee the right strategy? Wait for the pitcher to make an error. Just stand there with cash and wait for a great setup, then go heavy (swing hard). I am light right now as things do seem confused to me. Gary is of course right: here will be a DCL at SOME point from SOMEWHERE. I plan/hope to but a ton again then. I was long 50% of my net worth and am now light. If gold rallies higher and then drops and I catch that bottom…great!…wherever it is.

  78. Gary

    Green,
    I was expecting GDX to fill the gap at the bottom of the daily cycle correction. Not before gold had even corrected.

    Now we’ve got even more of a divergence going. Gold is] new all-time highs HUI is struggling to stay above 550 not to mention we probably have a selling climax coming in the stock market.

  79. TZ(8155)

    ROB,

    Thanks. And thanks for putting up with them. I know I have a way of talking sometimes that isn’t all ‘happy feely’ like some prefer.

  80. Gary

    Moneyman,
    I’ve learned my lesson the hard way. I try to control my emotions when something is late in its daily cycle, stretched extremely far above the 200 day moving average and everyone is looking for excuses why it will continue.

    Somebody mentioned the other day that massive call buying is usually a sign of an impending top and we saw that in spades last week. At this point I still have a little bit of GLD in the model portfolio which will catch any more upside.

    But there’s no way in hell I’m going to be stepping on the gas this late in a daily cycle with gold stretched this far above the 200 day moving average with sentiment going through the roof and if it holds at this level tomorrow it’s going to be even more extreme.

  81. ALEX

    MONEYMAN

    I should say that in times like now…a little unclear, I ‘trade’ as much as I ‘buy and hold’ for a bit.

    Today I bought a good chunk of AG just based on a decent ‘trade’ set up ( but I may hold if things keep improving )

    there IS a gap at the 50sma…so I keep an eye on that, but its at the 20sma , volume really dried up the last 3 days down-

    and on a 5 day / 15 minute chart, the bottom was thursday was retested Friday on less selling.

    today broke out and now looks like a bull flag

    http://www.screencast.com/t/rnoWENz2zzm

    notice the MACD didnt support the sell off, now it’s hopefully a flag pattern to work off short term overbought , and resume upward

  82. Gary

    TZ,
    “the hardest thing to do right now seems to be to HOLD long metal positions”

    Absolutely false. Everybody and their cousin is buying gold because it’s the only thing going up. Sentiment isn’t where it’s at because people are having trouble holding gold. Sentiment is where it’s at because everybody is buying gold.

  83. pimaCanyon

    DG,

    Thanks for your comments. Good reminder for those of us who are lighter PM’s than we’d like. We don’t have to swing at every pitch. Instead, wait for a great setup!

  84. Gary

    Poly,
    Yes I think Docs trend line break is probably correct most of the time.

    But gold hasn’t broken its trend line yet. When it made a higher high before closing below the trend line we had to redraw the trend line.

  85. ALEX

    Gary said…”
    Sentiment isn’t an overbought oscillator, it’s a sign that we are in jeopardy of running out of buyers.”

    August 1, 2011 8:39 AM

    Well, as a ‘sign’, …you posted a chart of the history of it. Your charts purpose (I thought) was to say…we were here before..its at a high. Signals we could run out of buyers at this level.

    So I merely say…That same chart of history shows me that “we’ve been here before, at this high, and didnt run out of buyers for months”.

    ESPECIALLY if..the markets liquidate some of the current positions from Spx and re invest in Metals and Miners. Maybe? Maybe not?

    I am new to sentiment reading as a guide.

  86. Gary

    DG,
    Very well said. I have no problem waiting until that sentiment level clears or the dollar shows signs of breaking down before I push this trade.

    When I get all of the I odds in my favor I’m more than willing to stomp on the gas, obviously in my personal portfolio much harder than the model portfolio.

  87. Gary

    Alex,
    Don’t forget that I added that in order to hold at these high levels the dollar has to be aggressively moving lower.

    Yes sentiment can hold at these levels but there has to be a fundamental reason for it to do so.

    And even then there were sharp daily cycle corrections to tease sentiment briefly before the next pop higher.

  88. DG

    I am not new at using sentiment as it is a major part of my work and always has been. The trouble with “lots of bulls” is that we can go to “more bulls.” Sentiment taken in a vacuum is useful only when it reaches a true extreme. In 1978 there were 97% stock market bulls. The economy remained strong, but the SPX went into a bear market because it had too with everyone bullish. Just using that sentiment reading you could short safely. If we ever get to that level of bulls in gold we will know what to expect. We will get to that level at some point, but the only way to get there is to get to THIS level and then have gold keep rallying so the bullish camps grows even more. To me, the fact that this is the highest level of bullishness in the past 3 years is mildly interesting and certainly allows for a decline, but does not in any way demand one. $BPGDM is dead neutral, Hulbert is neutral, and Rydex traders are neutral. We are hardly so overdone that we have to go down.

  89. Poly

    Another opinion on sentiment, FWIW.

    Low sentiment levels have marked every IT cycle low and sentiment does not make it to those basement levels without an IT cycle low. But they have not marked every top. Obviously there is a strong correlation on tops/bottoms so we do need to be careful.

    We had a record 2.5 year sentiment low on July 1st, to not believe that was an IT low but to now talk about the current high sentiment levels as a possible top is rather contradictory, is it not?

  90. TZ(8155)

    GARY,

    How does jason calculate his ‘sentiment’? Cause it is going against what I am feeling and seeing in people I know and people on this board. The urge seems to be to sell or be worried about the downside which is not typical near a top.

  91. ALEX

    Thanks Gary

    I’m sure all of these conversations can seem tedious, but just think of the education that your readers (especially newer ones) can be gleaning.

  92. High 5

    Anyone here have an opinion of the Daily Market Summary and Lance J. Lewis?

    I went ahead and signed up for the free trial after discovering some interesting techniques he uses.

  93. Glenn

    As I look across the gold sites…everyone was predicting gold drop triggered by Washington
    deal….big money short precious metals…gut feeling this is setup for parabolic rise…interesting to watch…only time will tell

  94. Gary

    It looks like we aren’t going to get our bounce and then second leg down. Traders used the bounce to unload stocks immediately. The panic stage is starting.

    I wonder if any of the perma bulls still wish to argue the bull side???

  95. ALEX

    POLY

    That was quite a strong vote for the IT low remaining July 1 , was it not? It certainly seemed like an interesting line of reasoning ๐Ÿ™‚

    and DG

    thanks for adding this..

    “$BPGDM is dead neutral, Hulbert is neutral, and Rydex traders are neutral. We are hardly so overdone that we have to go down.”

    I wasnt aware of those stats here.

    We really seem to be in the middle of no-mans land here.I am SO looking forward to longterm clarity!!
    For now I am back to ‘trading until proven otherwise’

    Out for lunch! Good day all

  96. pimaCanyon

    Gary,

    If we redraw the DC TL using the 7/28 low, then today’s low has broken that TL. So could today’s low turn out to be the DCL?

    (The drop from Friday’s high to this morning’s low was almost $30, not what we would usually expect for a DCL. However, this appears to be a very strong market, maybe $30 is all we will get??)

  97. wolf33

    Neither Bull nor Bear on SPX but if I can catch a trade at about 1270-2 I would likely be a buyer. This is 4th day 2 day rsi below 5. This, I have seldom seen. There are studies am privy to that this is a high percentage trade but there are always excetions,

    That is why I would use a stop if I get a chance to buy. Yes I know that would be below 200 day ma.

    I may not even get the chance as I want more weakness today in SPX.

  98. Blindweb

    TZ,

    reason #2. I actually said something similar yesterday. You have millions of people who lived through WWII, communist takeovers, and who believe the end is coming. They are buying physical gold and securing it. When the traders realize their models are being marginalized they’ll rush back in and drive miners higher. 2008 was the first warning of a new paradigm, this is the second. New models will be made to reflect changing reality.

    DG,
    This is the biggest inflection point since 2008, and other than 2008 the biggest in a decade or more. It seems logical to me for the sentiment to reach very extreme levels

  99. Cory

    I unloaded all my miners and opened some DUST & EUO about 30 minutes in this morning. The candles on SPY IWM just gapped and crapped.

  100. Cory

    I have come to believe that the market is all about the big banks liquidity and ability to margin up. When that is taken away, fundamentals and historical charts/ratios don’t matter.

  101. torero91

    Gary,

    Not a perma anything, but still a bull. We still don’t have a 10% correction off the SPX highs. Selling pressure hit another bull market low a few days ago. We had new 52-week highs in July on the NDX, mid-caps, and transports. Not bearish at all! We are still building a bearish base for the next upleg in this bull. I still feel there is a good chance the Japan lows do not hold. Smart money will enter long just below there. I’m still positionally mostly flat on equities, awaiting capitulation and the next buy signal. Thanks for asking. ๐Ÿ™‚

  102. Gary

    Because gold continues to make a higher highs here is the correct trend line.

    It needs toclose below this trend line before we can start looking for a daily cycle low.

    The further this stretches the more violent the correction is going to be. Didin’t we learn that lesson in May?

  103. Gary

    Torreo,
    I have to give you kudo’s at least you don’t disappear when the market goes against you like Beanie and the many other perma bulls.

  104. TrendFriend

    Alex, do have links to Hulberts gold index and the Rydex traders index that you might be so kind as to share with us/me.
    Thanks,
    Good thinking.

  105. Gary

    I’m much more interested in buying when it’s (sentiment) at depressed levels than playing chicken with a potential top.

    Like I said, we made this mistake in May. Do we really want to make the same mistake twice?

  106. pimaCanyon

    Gary,

    Thanks for the chart with new TL.

    By definition if we are in a new IT cycle that began on July 1, then after we get a daily cycle low (DCL), we would expect the market to head higher and make new highs, right?

    So the question really becomes, once we’re in the timing band for a DCL, how deep does the correction need to be to call it a DCL (instead of just adjusting the DC TL)?

    For example, last night’s low broke the TL that existed before you redrew the line using that low. So the question is: When do you call it a DCL and when do you say, nope, not a DCL, I’m just gonna redraw the TL?

  107. pimaCanyon

    If last night’s low does turn out to be the DCL, then as I said, we would expect the market to move higher (because we’re so early in the IT cycle).

    So the market moving higher does not seem to be a good enough reason by itself to redraw the TL.

    We have to know that the broken TL was NOT a DCL, and how do we know that?

  108. Gary

    PC,
    I want to see a close below the trendline.

    Also we need to keep in mind that a top that rolls over slowly isn’t going to lend itself to trend line technicals very well.

    This is more about sentiment, miner divergence & stretch than technicals anyway.

    Pure and simple, I’m trying to avoid making the same mistake we made in May again. I realize I’;m not going to catch the exact top but I want to avoid getting caught in a big gap down again.

  109. Mr. T

    Gary & PC – the question still holds though no? How do you get high confidence in the shift from one DC to the next? Is it a swing occurring within the timing band with a break of the trendline? I know this is novice sounding, but I have poured over your timing charts, trying to recreate them myself, and it seems more art then science… Simple question: is it possible to mark daily & IT cycles on any chart that displays them ie: GLD? Or does it require sentiment/comparable market analysis ie: GDX for confirmation.

  110. DG

    Hey! Where’s Beanie been? Probably out spending the fortune he made being long the semiconductor stocks he said were going to the moon ๐Ÿ˜‰

    Are we at Dow 20,000 yet?

  111. wolf33

    Earlier I posted that would buy a crash in SPX to 1270-2. that did not occur. Too late in the day sothat is cancelled even if should happen.

    Very defensive in line with Gary.

  112. Gary

    SF Ginants,
    There is an indecision candlestick on GLD from Friday on above average volume, and if GLD closes here it would be a lower close.

    It usually takes a couple of days for the market to realize a top has been put in and then the selling starts to intensify.

    Not that we have any indication of a top yet, just warning signs.

  113. Gary

    None of this has anything at all to do with the debt ceiling. Wasn’t that apparent when the market sold off this morning?

    This is about a recession and another deflationary period.

  114. Gary

    It appears that virtually every daily cycle low closes below the 10 DMA. Gold has not fulfilled that requirement yet.

  115. oa92000

    ” wolf33 said…
    Neither Bull nor Bear on SPX but if I can catch a trade at about 1270-2 I would likely be a buyer. This is 4th day 2 day rsi below 5. “

    Is it 30 min chart you use?

  116. Russell

    Gary,
    I’ll bet you a Burrito that PMs will react to the debt ceiling result. Cycles prevail overall, but news causes significant moves.

  117. Russell

    W2,
    I’m trading wiggles like you with a small trading account. News has provided some nice short term wiggle trades. I’m on the sidelines with my retirement account.

  118. Harry

    I still have a small gold position but I bought a DX contract to “offset” it. I’m mostly in wait-and-see mode.

  119. Gary

    I never said the news doesn’t affect the daily wiggles.

    I’m saying the debt ceiling news has no bearing on the bigger trends of the market.

  120. William Wallace

    I bought GLL at 50.40 hold until we break the 10sma, if we dont then oh well.

    Short gold futures, Holding GLD puts and GLL…for now.

    Im like Anti-Gary Savage (but im really not) ๐Ÿ™‚

  121. Bill

    Good morning from Japan.

    Gary, when you have a change for us, would you post it on the premium site before market close?

    So for today, there’s no action, correct?

    Thanks.

  122. samppa_nyman

    So Gary may I ask,

    have you thought about what kind of annual profit margins are you aiming for with the basic portfolio? Or is it too hard to estimate within any reasonable scale?

  123. Bill

    Yup, saw that. Am just asking if there was a change, would you post it before market close?

    Sorry it’s 4 am here and my brain is still wiped out.

  124. Gary

    If the model portfolio can do 15% to 20% a year it will be as good as the best hedge funds in the world.

    I think those kind of returns are easily attainable in a bull market.

  125. wolf33

    oa

    I also check this with a 120 minute
    rsi—which is in the gutter—that is good. I did end up doing a very SMALL purchase of SSO a bit ago. I screwed up by not doing earlier. Odds maybe 70% SPX closes up on the week. Not sure I believe this, however.

  126. Bill

    OK, OK. I knew that number from your report.

    What I’m asking is, when I wake up at 3 or 4 am out here, if there is no new posting, can I assume it’s steady as she goes? So like if that number changed, or if anything changed, you’d post it before market close, right?

    I just want to wake up and see if anythings changed in a glance, rather than have to read this blog is all.

    Sorry if I’m not clear. My head is mush. Thanks.

  127. pimaCanyon

    Bill,

    Gary always posts on twitter when he makes a change or a new post in the premium site. So you can check there.

    You could also just go to the premium site and check for new posts, maybe check the portfolio post also.

  128. Bill

    Hi pima. Yup, I did that today – went to the premium site – saw nothing new – then looked at the charts – saw nothing new – just wanted to confirm is all. Thanks.

    Some writers post changes after market close.

  129. SF Giants Fan

    Bill

    Directions from a subscriber on how to set up phone notification any time Gary makes a new post.

    You will get SMS (text) messages to your cell phone. I am able to have just the tweets from garysavage1 get texted to my cell phone.

    All I had to do was type

    follow garysavage1

    and send that text message to 40404. This tells twitter to send all tweets from garysavage1 to my cell phone. You don’t even have to have a twitter account, so anyone can do this. 

  130. pimaCanyon

    Bill,

    You don’t have to tweet to receive tweets from others. I don’t either, but I have a twitter account, so I can follow Gary and a few others.

  131. 86d4life

    Bill,
    Check out GGN; 9.28% dividend right now, monthly payouts. With apreciation and re-invest monthly dividends, you should be homing in on 20% a year. Then you can go back to living on the lead free tuna :).

  132. Bill

    Thanks pima and 86.

    Looks like Gary’s scenario is panning out. Gold isn’t taking off – looks t be topping. S&P is still falling.

  133. Bill

    Despite all the drama today, nothing changed on the charts. The only 2 interesting things I see so far are that the yen is topping, and that the 10 yr rates are breaking down lower.

  134. TZ(8155)

    WW,

    >Short gold futures

    You said last night that you were short 4x (the exact opposite that I was touting) from 1615 with a stop at 1622.

    I would assume you were stopped out this morning and have reshorted again?

  135. Gary

    Trying to time a perfect top in a strong momentum move is pretty tough.

    One is probably better off to just take a small position and hold it. Otherwise you will probably get whipsawed so many times that you won’t make any money even when the top does occur.

    That being said I don’t recommend trying to trade the top of the gold cycle. Trade the bottom of it.

  136. Bill

    Had another 30 sec long earthquake last night – same as 2 nights back – this while friggin’ island is about to slip into the sea.

    Gary, do you watch XBI? I know you mentioned bio a few mos back. XBI is at support now; if it holds, it could be a play.

  137. Hack

    Both Friday and today we found out that corrections up or down occur quickly and sharply. This leads me to believe that any uptick caused by the final passage of the debt ceiling agreement will soon be erased by reality. The reality that the bill only saves 7 billion in the first year and then relies on a huge tax increase and a cut in Defense spending in subsequent years. In other words, kicking the can down the road causing a deep recession.

  138. TZ(8155)

    Gold *may* be in a rolling top as gary is suggesting. I’m aware of that and prepared.

    The 1602-1610 range has held for over a week *including* a 1600 push during options ex.

    If that range falls I’m out and waiting for the next entry. Until then I’m holding.

  139. TZ(8155)

    I have a contrary read which fits gary’s assertions. Gold is now in an upward wedge since 7/22. That tends to be an exhaution pattern demonstrating what he is discussing – multiple eager buyer pushing gold up to marginal new highs ,but each time failing to have any follow through. Eventually (usually) they exhaust and you break lower.

    Wedges *can* break higher instead of lower but it isn’t as common.

    I’m pondering it. I have no problem changing my mind and bailing if/when I think the facts have changed.

  140. Bill

    In the PM sector, as Gary noted earlier today, silver is now falling – the MACD is close to turning negative.

    But what caught my eyes is that the $HUI went up, even thought $GOLD, $SILVER and the $SPX all closed lower.

    This may be just a daily wiggle, but a close above 555.85 could mean something. Thoughts?

  141. Bill

    TZ, I like your thinking on $GOLD. No need to sell if it hasn’t broken down yet. You have your hammer ready, so no worries. Surprises also happen to the upside, Gary’s noted before. I expect it will go down, but I also wouldn’t be surprised to see it go up. It’s a bull market, and debt is high, and printing is the only way out.

  142. Troy

    We must be ready to decline into the dcl because…

    (I work as a financial planner and a trust officer.) I just had a person call in to find out how to buy $925 of gold.

  143. TZ(8155)

    Funny thing with me, I hate doing thing partially. Selling half for many means they figure they can’t lose cause one will be right.

    I look at it the opposite and figure I’m guaranteeing that I can’t win and one will lose
    ๐Ÿ™‚

    I usually prefer to go all or nothing. It also helps me clear my head. Going partial on something can still mess with you mentally if you think you should have gone 100%.

    Gold futures closed for 45 min. I can bail at any time. Thinking it through. I have great gains from 1550 and wouldn’t have a prob taking them and just waiting for the next clear shot.

  144. Bill

    Gary, TZ’s comments have made me think about a core position in gold.

    I myself don’t have one, but I think I should.

    Perhaps in one of the upcoming premium posts, or in the core position, you can address this for folks like me?

    Either way I’m going to build one though, as although trading wise gold will likely fall here, long term it’s going up.

  145. Gary

    Bill,
    The best time to add to core positions is at intermediate bottoms.

    Since I’m not sure about the July bottom I think one could wait. One certainly doesn’t have to buy with sentiment at these levels. This bull has a long way to go and there will be many many times when sentiment and cycles line up for a buy signal.

  146. ...at ease

    Bill, you are just antsy you will miss the run. Common feeling if you just joined up and ready to go. Just wait for Gary to tell you when to buy in. He will post it in the portfolio updates. Don’t buy high, buy on the drop in the cycle.

  147. Bill

    Gary/at easy, I was thinking the same thing – wait for Gary’s call at the next cycle low.

    But let me tell you, I’m going to put 1/2 of my wealth in gold bars at that low, because looking at what’s going on in the world, it’s insane.

    I’ll trade the other 1/2.

    Thanks for your suggestions – spot on.

  148. Robert

    This is the article that Eamonn sites earlier–guys there is long way to go with gold this year.

    The Imminent $2.5 Trillion Debt Ceiling Hike Will Unleash A Gold Price Surge To $1,950 And Higherfrom zero hedge – on a long enough timeline, the survival rate for everyone drops to zero by Tyler Durden
    Two weeks ago we presented a chart that shows the uncanny correlation between the debt ceiling and the price of gold. Now that we know the final amount of the next debt ceiling hike, somewhere in the $2.5 trillion ballpark, it allows us to extrapolate where gold will end up as a result of the debt ceiling hike which will likely be voted into law at 7pm PDT. A simple correlation rule of thumb allows us to predict that gold will be at $1,950 by the end of the year if it simply retains it close correlation to the debt ceiling. Should Bernanke announce that he will additionally need to monetize some or all of this incremental debt amount, we anticipate that gold will be well over $2,000 by the end of the year, courtesy of yet another round of accelerated dollar debasement, which also means that real gains in US stocks will be negated courtesy of the devaluation of the currency in which they are priced. The same, however, does not apply for gold, which with every passing day is priced in nothing but itself.

  149. Bill

    TZ, to get a clear head, take a cold shower, and do 50 pushups – it helps me when stuck in analysis paralysis. You’re seeing everything correctly though. If you bought gold below your floor, why worry? If you bought high, then yes you’re right to worry. ๐Ÿ˜‰

  150. Gary

    Generally speaking the right time to buy is when things look bleakest and the right time to sell is when things look the brightest.

    If you are worried about missing the move then it isn’t the right time to buy. If you are sweating bullets about a possible draw down then it’s probably the right time to buy.

  151. Gary

    Of course when gold drops on a debt ceiling increase the conspiracy nuts will scream manipulation.

    Gold has been pricing this in for months. It will just be the typical buy the rumor sell the news scenario.

  152. Bill

    Gary, I think your 5 or 6 reasons to be cautious on gold are all correct.

    That said, is there anything to read into the fact that the $HUI closed higher, while $GOLD, $SILVER and the $SPX all closed lower?

  153. TZ(8155)

    Selling 1/2. I don’t like the wedge and if we still do go higher I believe we will retrace back down to this area anyway on a future pullback so I can still re-enter position at almost no change if wrong.

  154. Robert

    Gary,

    If the jobs report is bad on Friday which it probably will be would that not be a positive for gold since it just increases the odds of some type of QE or what ever you want to call it in the near future

  155. wolf33

    In 2000 Sara Lee spun off Coach. The spin off went on to make investors fortunes. This is a great key to finding big winners.

    Anyone know of a similar situation today? There are no gimmes. There has to be value in both the company and the spinoff.

  156. 86d4life

    TZ,
    Good for you. your 2:19 post had me thinking of Jack Nicholson in `As good as it gets`. When he started steping on afew cracks, he wound up with Helen Hunt. I`d step on a few cracks too. Serious, obsessive/compulsive behavior can be a tough deal.

  157. ...at ease

    TZ, if you don’t have an idea, of which way it will go and you have great gains. Take the gains and step aside for the next ride up.
    There is always another trade, but best to have funds (gains) to play again.

  158. Rob L.

    TZ,

    Amazing. I do value your market thoughts and trading abilities – you just sold 1/2 of your position in gold and a few hours ago I was considering jumping back into gold with 1/2 of my trading funds(I did not, and before coming to GST I always bought near the top). I have a feeling gold is going downnnnn.

  159. Poly

    It passed the house, now we can get that equities relief rally off over sold position and hopefully we can get a clear gold DCL out of it.

  160. TZ(8155)

    I’m out. Back to core holdings only.

    I don’t like the up wedge. Been caught with too many of those in my life. Stops don’t work well on them either cause they frequently drop so fast (when they fail).

    I didn’t notice the wedge until a bit earlier today. It even punched through higher on fri, then failed today. Bounced on the bottom today and made another run for the top line on very high volume and failed again to continue (with all this news and europe and everything).

    There was also that revers H&S pattern which failed to rally higher as well.

    Who knows. I still have a suspicion we are all being faked out here and the strength will continue, but with that wedge and with possible budget resolution soon I would rather take my profit and look for a more certain trade.

    Once I feel like I’m trying to talk my way into something or my certainty is shot I tend to want to get out.

    I could have left my stop around 1600 as I said and used that, but that would be giving up a pretty nice chunk of profit and staring at that wedge I’m no longer willing to do that.

  161. DG

    TZ: I know what you mean about not selling 1/2. I have always been that way myself (to my detriment, I believe) and have been weaning myself off that attitude. Perhaps it works better for you than it has for me. A question, then:

    Do you have a mechanical system for deciding how much to do. That is, if you find yourself at 6 X. If you decide by “feel” then you might as well have decided to do 3 X if the mkt looks iffy as 6 X and, voila, you are at 1/2. If you were looking at something fresh and would do 3 X, and the market haas morphed into a 3 X one from a 6 X one, cutting back just fits the current reality. “Cutting back” is just relative to an arbitrary starting point in the recent past. What am I missing?

  162. TZ(8155)

    Remember that I just made that sell/trade based on the EXPECTATION of the gold doing something instead of gold ACTUALLY doing something.

    From a trading standpoint doing something like that is a good way to get fakedout. Frequently it is better to force the market to SHOW YOU.

    We’ll see.

  163. St. Deluise

    i would guess a rule of thumb with that, sentiment-wise, is to only buy when the “search index” is below 1

    again just a way to chart sentiment, which is ambiguous to say the least

  164. Shalom Bernanke

    As uncomfortable as it is, I remain long gold and some miners. If not stopped out, I’ll be patient until the next rally and see how strong it is before I think to take profits.

    Today didn’t give me any reason for action.

    Good luck tomorrow. ๐Ÿ™‚

  165. Poly

    Gary, I think you’re getting your equities topping pattern you’ve been looking for, but I doubt she goes without a good fight. Sure will be an interesting ride down to the 4yr low.

  166. 86d4life

    W2,
    You asked for before and I delivered in spades, now you want more without covering your last trade. Who do I look like, Mr Margin?

  167. William Wallace

    86,

    I felt no reason to cover the trade yet, at first I was going to make it a scalp but decided not too, especially that we are due for a Daily cycle correction…I put my faith in the cycles and what I see in my charts (negative divergence in TSI, rolling stochastics) Why you giving me a hard time Mr, Margin?

  168. William Wallace

    86,

    You would have told me the same thing when I went short at 1538 before the intermediate cycle correction, I held for days up to 1559.30 high, the next day we entered the correction… I held until Gary called the bottom, wrong trade?

  169. Gary

    Robert,
    Presumably a poor jobs report would change the trend of the dollar, which at the moment may be moving down into its cycle bottom.

    Yes everything that is happening is positive for gold. The problem is that it’s not politically feasible to do QE3 until everybody is screaming for the government to save them. Right now the general public is fed up with the government printing money and wasting our taxes.

    So until that happens a recession is going to be deflationary. The last two deflationary events both took a toll on gold. I’m pretty sure this one will too, especially since we have had a gigantic run out of the 08 bottom.

    Folks, we have had it pretty easy for over two years now. At some point that has to end and gold will enter an extended consolidation to digest those gargantuan gains.

    I suspect it’s probably going to get much tougher to make money for the next year to year and a half.

    My goal during this period will be to mostly preserve capital and if exceptional setups present themselves we will take advantage of them and try to modestly grow the portfolio.

    That means we are not going to have the throttle wide open with gold stretched far above its 200 day moving average, deep into a daily cycle, with severe divergences forming in the mining index, and the dollar potentially set up to rally out of the three year cycle low as a deflationary period takes hold.

  170. Gary

    Poly,
    You can say that again. The Fed is going to fight this bear market tooth and nail all the way to the bottom. I doubt that longs or shorts either one will make any money.

  171. Gary

    William,
    I can tell you that I am not going to take the trouble to go through 2 1/2 years of data and find the shortest cycle for you. The daily cycle before this one though lasted 14 days.

  172. Bill

    Gary, that may be. Are cycles calling for a year to year and a half as well?

    Myself I would have thought that after gold reaches a low in Aug (this month), that gold takes off until March ’12.

    There is no rest for the wicked. And gold will not let countries that live beyond their means live forever. My 2 yen.

  173. William Wallace

    Gary,

    Definitely didnt expect you to go through 2 1/2 years of data, I just took a look at your cycle count charts, it looks like the one beginning 3/25/10 was shortest.

  174. Bill

    On $GOLD’s weekly chart, I just see steady up, up and UP. Nothing overbought there. Nothing divergent. It looks like a stone skipping along the 20w EMA.

  175. Robert

    From James Turk–a different point of view–

    James Turk – Wave of Asian Buying to Crush Gold Shorts from feed/http://kingworldnews.com/kingworldnews/KWN_DailyWeb/rss.xml
    With gold holding above $1,600, today King World News interviewed James Turk. When asked about the action in the metals Turk stated, “Anyway you look at it, Eric, today was a big day for the precious metals. Both gold and silver came screaming back from the low made just before the London PM fix. Here’s what I think happened.

    After a weak start in Asia, both gold and silver then began to climb steadily despite the announcement of a deal on the US debt limit. I think that this strength in the metals may have worried the shorts. So before the London PM fix, gold was taken down in what looked to me like a blatant attempt to ‘paint the tape’ with a low price on the fix. However, it didn’t work out that way.”

  176. Bill

    WWW, interesting. 1559 is also the daily high the week of June 20, so maybe $GOLD backtests the breakout.

    This is all conjecture though. Gary’s 4 or 5 warnings has me thinking that we may see a bigger correction back to the 200d EMA, or the 150d EMA.

    I’d build my core position in bullion if that comes to pass.

Comments are closed.