105 thoughts on “PORTFOLIO CHANGE

  1. St. Deluise

    repost since i wrote more than 3 paragraphs:

    “big money” could care less if they raise futures margins. the only people who care about that are “blog money”.

    with the new low in /gc just now my system target is pointing to 1713.5.

    the amount of money that left during the first plunge, as i wrote then, is pointing to the high 1500’s.

    the 233 day SMA is currently at 1482.

    still long UUP calls and GLD puts, probably going to call it a day early lest i do something stupid.

    stocks look like they’re capable of new bounce highs. GDX still looks healthy considering.

  2. Slumdog

    TY Gary. I’m a buyer here at 1811, 1806, also. I see this as the clean out. This is a right shoulder slump pattern. Common. And will bounc.

  3. Gary

    Yes and if it gets filled then we are almost certainly caught in a D-wave. Gold can’t break $1706 and remain in a C-wave especially since this would trigger a left translated cycle and probably move below $1477.

  4. Gary

    A left translated cycle should move below $1477. That could mean a normal D-wave decline to $1200-$1300.

    Before everyone freaks out gold has to break $1706 before this is even remotely possible.

  5. n1tro


    Side question, would you ever consider holding bags of nickels like your junk silver bags given Obama signed legislation this year to change the composition of coins? ie. use cheaper materials so the mint doesn’t lose money

  6. Shalom Bernanke


    I suppose that would work too, but I believe silver is still a cheap enough option for most people.

    But yes, a copper penny could be worth more than a paper dollar one day.

  7. Poly

    I’ve just added to GLD and GDX. The pullback off all time high’s and a “double top” print was predictable and what I expected, which is why I have not added lately. Now we’ve hit the lower rising Triangle trend-line and a natural point to add.

    In major bull markets these flushes are to be bought, not feared. Not to say one should never be fearful, (and we could see further downside) but the action and surprises come to the upside, unless proven otherwise. Eyes open for $1,706, anything above is consolidating and bullish. Early Daily and IT cycle count gives us a green light, as far as probabilities are concerned.

  8. Slumdog

    Everytime gold moves into the mid range of the Bolinger Bands, but for one which reached the top, there’s selling on weakness, blocks of 20-50 keep flashing by on the sell side.
    I left the trade, with a loss in the 10’s.

  9. TZ(8155)

    This is the gold drop I was saying would happen. I initially said last week which was wrong, but that my view could also place it alternately this week.

    Gold has either peaked and now in a D wave…OR…it is going to congest/triangle (as gary is indicating as well).

    Problem is you don’t know which and if you do not buy as it drops towards the 1705 low, then if it *is* triangling you won’t get in.

    In other words if you assume a D wave and a move lower than 1700 you will remain out and end up chasing if this isn’t the D wave yet-which has good odds.

    So…what to do…

    Well, the thing to do in my book is to buy at SOME point before 1705 (and then put a stop at there). The trick is that the CLOSER you can buy to that point, the MORE you can buy(cause the stop is smaller), but conversely the LESS change you will get in. (Cause if it DOES bounce it will bounce before it get’s to 1705, but you dont know where.)

    It is a game of chicken and guessing.

    I have one or two guesses ready to go. They are lower than now.

    On each one I will buy as much as I can (gold futures) with a 1-2% stop. If it holds, then I’m in the game for a rally higher. If it doesn’t hold then I just lose a few percent and then back off and assume a D wave.

    That’s my plan for now

  10. TZ(8155)

    PS: gold miners never did and still are NOT outperforming ‘straight metal’ ( a mix of 50/50 gold and silver using CEF as a benchmark).

    I continue to avoid them until that changes on an obvious and ongoing basis.

    As you guys AGAIN get pummeled by trying to trade them in and out I reiterate this point.

  11. TZ(8155)


    Well, the thing to do in my book is to buy at SOME point before 1705 (and then put a stop at there). The trick is that the CLOSER you can buy to that point, the MORE you can buy(cause the stop is smaller), but conversely the LESS ****CHANCE**** you will get in. (Cause if it DOES bounce it will bounce before it get’s to 1705, but you dont know where.)

  12. TZ(8155)

    Gold miners have been underperforming since ***2004*** and being eternally hopeful that ‘this time is IT’ over YEARS is dramatically less effective than just waiting until they SHOW you the outperformance and then getting in.

    (Unless you think such outperformance will take the shape of a single day or week of vertical spike up and then flatlining for the rest of the bull market.)

  13. TZ(8155)

    >IMO if this is a triangle consolidation gold shouldn’t get anywhere near $1706. It probably shouldn’t drop below $1800.

    It is definitely going lower than 1800 (already has).

    If you look at past triangles it can actually go VERY close to 1705.

  14. Shalom Bernanke


    Pummeled? Not me, nor Alex and a few others here.

    My observation about miners was pertaining to this morning, and miners ARE getting beaten like gold.

    How is it you can’t see that?

  15. Gary

    $1800 is a big psychological number. Just like $1500 was a psychological number that when recovered told me the bottom was in.

    If gold closes below $1800 I’m going to start to get nervous.

  16. McBryde

    I haven’t looked at the forum for a while .. so forgive me if this is old hat:

    If this gold move is a response to a strong dollar, yesterday’s more or less official announcement by the Germans that the euro is is big trouble caused the dollar rise [and euro fall]. But a lot of europeans will be interested in gold … so I think gold and the dollar could well rise together for a while here.

  17. TZ(8155)


    I mentioned a favor earlier that I was hoping you would follow up on.

    Lately you keep saying “I’m buying more miners” over and over.

    The first few times you did this most common people assumed you were essentially in an done. Or at 50% or something reasonable.

    Yet as the “I’m buying more miners here” has continues for weeks and WEEKS, we now have no idea clearly what you buy strategy is.

    It now sounds more like you are buying $3 per day instead of drinking your morning coffee and that your buying really doesn’t have a end point (and also that you have continuing funds coming in from something else to buy).

    May I suggest again, for those who follow you and respect your comments, that it would be helpful if you could give some indication of where your buying level is in relation to “I’m *DONE*…now at 100%”.

    Like when you buy saying “I’m about 2/3 invested in miners here and will only go remaining 1/3 if xxxx happens”.

    Just a thought. Clearly do as you see fit especially if you think this info is private, but the power of your ongoing commentary is now reduced because a person who continually ‘buys miners’ with little or no seeming regard for how invested they are or when they will stop isn’t very useful to someone like me who is reading to get your thoughts (among others) yet I don’t know how to interpret them.

  18. Shalom Bernanke


    For the last time, I don’t focus on percent of account invested. It only depends on expected volatility.

    There is a huge difference in having 100% of ones account in GDX vs. something like GPL. I never check % invested except when you nag me, b/c it is taking my eye off the ball.

    I could be 80% of accounts invested in GDX, or 15% GPL of accounts invested and still experience the same size net drawdowns.

    Your question doesn’t make sense to anybody that know how to manage risk. You keep trying to catch the next $50-$100 in gold, and I’ll keep focused on getting paid over time.

  19. Poly

    Triangles like many trend-lines can be subjective, but for the most part we’re around the point where we should bounce off. That’s still only one scenario, as a re-test of the DCL is also a possibility.
    Just let the cycles play out guys, as they are currently very favorable, regardless of the price movements. We’ve entered the final (C-Wave) period of very high volatility, so daily moves will be confusing nerve racking action that will cost “twitching” investors money.
    When the counts and action (Bull) are favorable as they are now, holding strong and resisting temptation is the sure path to profits. Just don’t overstay the welcome when it becomes clear ($1,706) you’re no longer welcome.

  20. Blindweb

    I’m turning my computer off. Blog commentators are making my mind weak. I’ll turn it back on when we break $1705 or $2000. It’d be highly amusing to me, since gold is breaking every rule, if it were to go slightly below $1705 and then rally past $2000.

    20% SSO
    30% GLD
    50% miners

  21. TZ(8155)

    >If gold closes below $1800 I’m going to start to get nervous.

    I will not be nervous about this NOT being a triangle until we go much closer to 1705.

    I’ll say again that we havent yet even reached my first objective of a buy point yet. I’m still waiting for a first buy.

  22. TZ(8155)


    I never remember you replying the last (and only) time I asked that and haven’t seen anybody else ask. Sorry if you did.

    I fail to see how repeatedly ‘buying miners’ cannot also include concern and monitoring of how much you have bought.

    That simply escapes me and I think I have a pretty good idea of how to trade and manage risk.

    Yes, I’m aware that some of the stocks are more volatile than others and thus have to be treated different for risk purposes, but that still doesn’t give any of us an idea of WHEN you have done the majority of your buying, how FAR along you are, and when you think you will STOP.

    Your reply seems to suggest these are not important which confuses me. You are “buying miners”. I get it. But without knowing those points above I can’t judge anything else.

    I know I’m not alone cause I know somebody else has made the same comment before, but it seems to be a sensitive topic so I’ll drop it.

  23. Shalom Bernanke


    I won’t waste time trying to explain any further to somebody that can’t even admit miners are outperforming metals when GLD is down 4% and GDX down 2.2%, or SLV down 2.8% vs SIL being down 1.5%.

    Do it your way, but I can tell you that you’ll never be able to hold positions for the big move. Your 5x leverage forces you to trade nervous. Take it for what it’s worth, but know I intend to buy miners all through Sept if they give me the oppty, and it’s all based on volatility of the vehicles I trading.

  24. Shalom Bernanke


    I thought it was you that kept asking the same question, so my apologies if it wasn’t you.

    The ONLY thing that matters to me is the expected trading range, combines with the OVERALL loss I’m willing to take (as a % of my portfolio).

    I also only look at % net changes on my quote screen, never the net $ change as that throws people off track, IMO.

    Percents are all that matter, except % of account invested, as more volatile stocks have smaller holdings but with equal total risk to me, as defined by the ATR.

    The better question to ask me is, “how much will you lose SB, if you’re stopped out of the trade?”

    The answer is that I’m currently at 5% total risk to my accounts. That also does not include unrealized profits on positions, as I don’t move stops up. My stops are based on the overall portfolio being draw down 5%, I exit.

    As the month progresses, I expect/hope to get to 10% TOTAL risk on accounts, which is aggressive for me.

  25. TZ(8155)

    >I won’t waste time trying to explain any further to somebody that can’t even admit miners are outperforming metals when GLD is down 4% and GDX down 2.2%, or SLV down 2.8% vs SIL being down 1.5%.

    My comment on ‘outperforming’ is very specific and understandable. I’ll repeat it again for those reading who might not follow it.


    The above is a weekly chart of GDX vs CEF.
    CEF is 50/50 gold and silver bullion. The chart goes back 2 years.

    You will notice a smooth and continuing UNDERPERFORMANCE of the mining stocks (represented by the GDX ETF) vs CEF.

    Yes, you will notice single weeks here and there where GDX runs higher and ‘outperforms’. However you will see that the general trend remains intact. This includes the current week although it too has some outperformance (currently failing…again).

    I believe most here can understand that quoting a SINGLE DAY like you just did to justify ‘over’ or ‘under’ performance is a flawed metric.

    If we allowed single day quotes, then the ‘truth’ of which is performing better will change every few days (or even HOURS). This is a useless argument.

    The proper argument is to use a smooth, weekly, ongoing chart and to allow and wait for MULTI WEEKS (if not MONTHS) of overperformance in GDX before calling a change in the long term trend.

    Finally if anybody wants to expand this chart with a paid subscription to stockcharts and show it going back to 2001 when the bull started, they will see the CEF outperformance (‘straight metal’) has remained since 2004 as I have said. (If anybody wants to do that please use and post it as a LINEAR and not LOG chart.)

    I will rest my case and let people decide on their own. Darwin will take care of things from there.

  26. TZ(8155)

    I will AGREE that it FEELS like the mining stocks are ABOUT to outperform and it FEELS like the change is taking place now.

    I am very tempted myself!

    But the rational side of my brain fights back and tells my ever hopeful (bad) “cowboy trader” side of my brain that I have had that same feeling MANY MANY MANY times since 2004 and have been punished mercilessly by thinking “NOW they are going to outperform”.

    Thus, I will continue to defer away despite this feeling good and wait for the chart to actually SHOW it to me.

    To those who call it right and make extra profit I will congratulate you, but I want to wait until it is more certain due to getting caught similarly in the past.

  27. Shalom Bernanke


    I was talking about today in my comment, although my comment about miners vs. metal applies for the recent past.

    For you to pull out 2 year charts is out of context, especially for a guy like yourself that is only involved for very short periods of time. You see my point?

  28. StupidMovingAverage50/200

    A PBS Nightly Business Report analyst said that the Obama jobs program will be similar to what Carter did. It was all right, but not teriffic.

    The pres of Pimco said on NBR that it is the president that has a lot of options left, and that the Fed has run out of options. His thinking was along the lines of reviving housing. Dealing with forclosures, making loans available, making banks more willing to lend. He questioned under his breath sort of whether congress would allow Obama to to anything. <Obama wants to do everything in liberal doses. Tea party wants what they want. They want it now. No is not an option. Cannot refuse their deal. Kind of like the House with Pelosi as speaker. Only Reps were busy making up their wish lists. Kind of like the origional Congress…

  29. TZ(8155)


    I hope your and others miners buys are profitable.

    I’m staying out for now for the reasons I mentioned – maybe wrong. I’ll monitor and adjust as necessary.

    Remember that I still believe in the entire bull and will still be playing metal.

  30. LowTax

    SB and TZ discussion has jogged a few thoughts – this morning we are seeing strong out-performance by miners and I believe this is due to the stock market’s turn-around. Metals are lagging but miners, as equities, should see support from the general stock market.

    This means that IT MAY NOT be a good idea to focus on the price of gold for the direction of miners in the near term. As long as gold does not enter a D-wave, I think miners will run regardless.

  31. DG

    OA9210: Yes. I started buying EUO at 17.17, added at 17.22, 17.6 and 17.7. I hope/expect to sell in the mid-20’s. I am long QLD, GDX, and EUO.

    I have been posting a lot less because I have been on business in Italy. The rest of September is also extremely busy, so not much from me till October…

  32. TZ(8155)

    Remember that for me the miners have to outperform metal (futures) rather well and clearly to be a buy.

    The reasons are multiple:

    a) gap risk since they don’t trade 24hs like futures.

    b) higher spreads and less liquidity than futures. To be able to get in and out quickly with significant accounts you need to stick with GDX or larger miners.

    c) A & B also mean inability to have tight stops and limit risk in emergency situations.

    d) higher (US) taxes unless you hold over 1 year (which seems unlikely since we are expecting a C blowoff this fall)

    e) specific company/country risk for the miners.

    There are a few negatives for futures such as “exchange may default and go all cash one day” but I don’t view that as high odds for now.

    For the reasons above, futures remain my choice of poison for underperformance of miners, EQUAL performance of miners, and even SLIGHT outperformance of miners until further notice.

  33. Silverhound


    I understand that the relationship that you are discussing between the metals and miners goes back some time, it is only relevant if you entered the trade back at the start of your reference. Looking at the chart you posted you will notice that the metals only started outperforming from July 2010, about the time GDX / HUI started the massive sideways consolidation on their charts. The same consolidation that the miners are attempting to break out of now. If the breakout continues then the trend on your chart is likely to reverse. If this is the case, any trade entered from now will favour the miners…..

  34. Gary

    So far gold and miners are acting like they need to in order for the triangle consolidation to unfold.

    We should get another test of the highs and at least one more dip before the real breakout occurs.

    Now we just need to see how the day closes. As long as gold can hold above $1800 and the miners can stay above 610 everything should still be on track for the triangle.

  35. Dan


    At what levels would you consider re-adding HUI because at this point the PM market really has me stumped. Starting to looking like today was nothing more than a retest of the breakout and PM shares looking really strong relative to gold.

  36. Movax2

    It feels like we are nearing the very beginning stages of a world where QE programs will be initiated after and despite obvious inflation problems have hit. Higher prices of everything and no one able to afford them will have the people begging for some kind of subsidy, whether higher minimum wages or some kind of stimulus handout for the unemployed.

  37. Gary

    There’s no need to do anything today. We have a 25% position, now let’s see how gold and miners end the the day.

    As long as gold closes over $1800 and forms a swing in the next day or two that will almost certainly confirm the triangle consolidation and we will have plenty of time to add back to mining stocks for the vast majority of the move.

  38. MrMiyagi

    The only thing about the QQQ trade that concerns me is the possibility of Steve Jobs umm.. departing this world. That would drop the stock and the ETF.

    So I’m going with a bit of SPY.

  39. High 5

    A good lesson from the Swiss National Bank is that in a pure fiat currency regime deflation is impossible if the issuer wants to devalue their currency.

  40. Hack

    Dumped my APPL (but not before I made 7%) – it’s lost it’s mojo…I’ll be a buyer sometime in the future after it gets pounded into the sand…

  41. marksomething

    Mr Miyagi

    If Jobs does die (he is getting the best possible treatment anywhere, so i hope he continues living) it will be a temporary blip,just like when he retired from being CEO for being Chairman.

    not much to worry about. Rim shares will benefit tho.

  42. MrMiyagi

    Of course the drop would not be permanent but if you have time-sensitive calls or puke easily then it is an issue. Over reaction by the market is common.

  43. Moneyman

    Is this normal?


    I actually like Dan Norcini and this looks weird? Why sell this late?

    But..I must say this before Gary kills me..:-)

    If they try to take gold down..They will lose because the price will spike higher because of higher demand.

    We saw this in corn and wheat 2010..USDA claimed that the storage and the harvest was bigger than it was..It worked in the beginning..But when the price was so low demand was increasing..A lot!!


  44. Joseph Lemma

    The euro shouldn’t be showing such weakness in the face of a stock rally. Fridays are statistically the strongest days for gold so short euro/long gold could be profitable here.

  45. NJ

    Hi Gary / others:

    I am a relative newbie to trading. I am slowly understanding Gary’s rationale to take an initial position on swing lows.

    Now, once an intial position is taken, how do you determine when to add to the position? At the next DCL?
    Thank you.

  46. Harry

    Dec GC 4h RSI oversold. The last two times this happened were the $1706 bottom on 8/24 and the presumed intermediate bottom way back on 7/1.

    So, I’m going to nibble on a contract here @1815 with a stop at this morning’s low.

  47. Ivan

    lately miners does’t act the same way as Gold.If you remember at 1600 Gold,they were going down to 480 and Gold did went up to 1917.
    Gold ,Silver and Miners obviously will made their tops at different time.Don’t you think it is better to look at every one of those (Gold.Silver and Miners) in different separate way instead of looking for them to move always together?

  48. muttonfish

    Silverhound and WW,

    My thoughts exactly. I think the next little bit of road for the Naz is down before up. Call me crazy, but I just took a nibble of an appetizer-size portion of SQQQ for the very short-term.

  49. Moneyman




    Why sell now? Its not impossible that we rally a lot higher here..

    We also bounced at the trendline yesterday. This might be the real deal! A rally here for 2-4 weeks.

    If you look at gold the risk trade might be on here and gold and silver might stand still while the stockmarket rally higher..

    Then it will reverse again..Who knows? πŸ™‚

  50. St. Deluise

    there is now more money in SPY than there was last week at 123.5 or so.

    hard to buy either here.. but if there’s a gap down tomorrow i’m taking it. maybe it gets to 121 this afternoon first.

    /dx hanging tough and /gc still looks like dog poop until it regains the crash bounce at 1850 or so. then it looks more like cat poop or maybe a rancid almond roca.

  51. St. Deluise

    also here’s a conspiracy theory if you’re tired of the regulars:

    that crazy wick on SPY at the highs last week really threw my system for a loop since it’s based on ATRs. i’d really like to know what caused that one.

    in the meantime i’ve had to manually set that high to 123.4


  52. Hack

    This is monkey throw a dart day. Dart days have been lasting about two to three days…and then boom, down to the cellar again…TNA is my pick of the day…

  53. Gary

    That one is certainly meaningless. The only thing that has any predictive ability that I can tell is the SPY and sometimes GLD.

  54. Gary

    Folks the miners were obviously going to bounce off of the breakout level. That was a given.

    What we need to see is what happens tomorrow and the next day. Does gold hold above 1800 and do the miners continue to hold the breakout?

    If gold continues down in the odds are good that the miners will lose that breakout and follow gold. That’s not what I am expecting but I’m not going to gamble the farm on hoping that gold is consolidating and the miners will hold the breakout.

    I’ll say it again, the least risky trade is in stocks because sentiment levels are still squashed down to multiyear lows. The riskiest trade is still in gold. Sentiment is still at nosebleed levels.

    If the breakout is going to hold we will have plenty of time to get back into the miners for the vast majority of the move. Missing a little bit just to make sure that this is going to be a consolidation and not the beginning of a D-Wave is the safest play, besides we are making plenty of money on the QQQ position.

    I don’t care whether I make money in stocks or gold just as long as I make money.

  55. Gary

    They are such a small positions as to be meaningless.

    I’ve seen -200 million positions in Apple that were completely irrelevant.

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