509 thoughts on “PORTFOLIO CHANGE

  1. Poly

    Gold building a base and the bid beneath it’s wings is evident. While it remains above $1,705 AND below $1,850, we’re in good hands, but we need much more than 7 days to work off the last 30% run, lose some weak spec’s and let the averages work up.
    I’m now suspecting (hoping)we may see a short (through Sep), flat and range bound daily cycle here, allowing for a parabolic run to unfold in Oct and Nov to top off a monster IT cycle and C Wave. Working thought’s still, but the action is encouraging, for now.

  2. St. Deluise

    seems to me we’re looking at a whole lot of choppy nothing from here until tuesday.

    dollar keeps strengthening but i doubt it’s up up and away just yet.

    nevertheless dipping into SPY and QQQ shorts here. 1/3 committed. Q’s in particular seem way over extended and have already tested their 233 day SMA (with a severe lack of buying accompanying it!)

    deluise out see you next week

  3. Tajir

    Poly,

    Your comment at 8:54 am, are you still keeping your call positions or getting rid of them to wait for base to form? Thanks

  4. KAL

    Nice job Gary! I was amply rewarded on that trade. It’s nice to be in 100% fiat for the weekend. I may spend some of SB’s “confetti” on that fam. Have a good and safe holiday everyone!

  5. Poly

    Tajir, keeping my core positions, GLD calls and GDXJ. Only a drop below $1,705 will shake me off. I need a position in case it surprises to the upside.

  6. William Wallace

    Took off NUGT near the highs. Im thinking if the market rolls over for a few days gold may take a shot at 1900 in a couple days, not sure if miners will go for the ride though.

  7. Gann360

    i got this from a Friend:

    Friday we get the non-farm payrolls report and there have been guesstimates for the number all over the map. Shortly after the Philly Fed number came out (August 18th), which was a shocking surprise at the time (-30.7 vs. expectations for a drop from 3.2 to 1.0), I saw a chart comparing the Philly Fed numbers vs. payroll numbers and it’s scary bad. The Philly Fed number is apparently a very good predictor of the payroll report and right now the significant decline is pointing to a loss of -700K jobs!! Compare that to the expectation for +75K. Needless to say, you do not want to be long the market if even a third, or a tenth, of that negative value comes to pass on Friday. The Philly Fed loss was even sharper than we saw leading up to the collapse in 2008.”

  8. David

    Thanks, Gary, for a nice profitable QQQ trade to end the summer.

    Those of us who profited will be sure to remember the Las Vegas Weightlifting team with a little contribution…

  9. Moneyman

    Gary

    Was a very nice trade in SPX for me..Thanks!

    Also the gold trade earlier was nice..:-)

    Gary a man on a mission!

    Still holding some gold and silver here..

  10. MrMiyagi

    Ahhhhh………. what the heck….
    The stupidest bet, NFLX January 35 puts (slightly out of the money you see…). After 2 bad quarters and price increase, market going down and all that, I just “wet my beak” as Don Fanucci said.
    If NFLX breaks below 200$, or by chance goes to 180-150$, it would return close to 10-12 fold. But time is running short and this is not something I do on a regular basis but at around a dime, I figured give it a go.

  11. Poly

    Gann,

    a -700k print would be clearly reflected in the weekly claims numbers. Claims would need to be well in excess of 500k to 600k to come close to that number.

    That said, maybe your friend meant to say -70k?

  12. Poly

    Ver,

    Mainly because besides juniors (GDXJ) should move better than the seniors if it gets extremely speculative, as I expect.

    Also GDXJ actually has a 50/50 mix with Silver juniors, so I like the combination. GDX is much more gold focused.

  13. MrMiyagi

    JG,
    Not much of a model!
    Anyway, past 3 days I bought and sold; GOOG, F, GDX, WJA.TO, ATD.B.TO and holding on to ECA.TO which is a bit underwater here. The rest sold at profit.
    And the NFLX…

    Looking to buy puts on LVS, HOG, AAPL, GOOG, one or more of these if we top out. Otherwise, cash for a short time.

  14. Blindweb

    About a month ago I said, ‘Safehaven buyers are driving the price of gold up. When the more experienced traders, who buy miners, realize there’s new buyers driving the price and a pullback isn’t coming, they’ll pile into miners.’

    If gold can stay flat while the US market goes up and down, and the dollar goes up and down people may finally believe these gold prices are for real.

    25% miners
    35% gld

  15. Poly

    Agree BlindWeb.
    It’s all about believing the bullion price is here to stay.
    Miners forward cash flows are influenced primarily by bullion prices. More certainly on the bullion price provides for higher valuations.

    HUI 1,000 sooner or later, but it will have to come.

  16. MrMiyagi

    WW,
    I took that one a while back!
    If you’re thinking of anything, there’s some interesting LVS September or October puts. If the market tops or the jobs report is terrible tomorrow, the casino stocks usually go down fast as do techs but their prices are higher. I trade LVS often so I am familiar with it, it could go as low as 42$ in 2 days if conditions warrant and it is overbought now. Hog falls fast as well but much less volatility.
    Other possibilities are AAPL and GOOG.

  17. MrMiyagi

    LowTax,
    I just noticed that before shutting the computer off for now. The deal talks with Starz fell through apparently, couple that with the fact that their new release content is dismal and cancellations are up, maybe the fall earnings will drive it down into the abyss. This stock is quite reactive to the direction of NASDAQ/QQQ as well.

    Oh also, insiders have been selling like crazy all year long.

  18. Poly

    Good pick Miyagi.

    I’ve been dying to short LNKD, will do so on the next run up. Come on, $8B valuation, 1,000’s x earnings.

    Been playing around with Google+, it’s a LinkedIN killer, IMO.

  19. Éamonn

    Poly, MrMyagi, I wonder if you should be cautious here given the Fed’s propensity to stimulate with money printing? You could get trapped

  20. Sleeper

    Mr. M,

    I’ve played GOOG calls and puts for the last several years around the key pivots. Made some good money and had lots of fun. Because of its high share price, option moves can be huge!

    With all the recent volatility option premiums are too pricey for me. I’m sticking with ETFs for the next few months, specifically the TNA/TZA trades and just going with the big directional swings.

    …and then of course there’s the PM trades. Go Gary!

  21. SF Giants Fan

    Mr M

    Glad to see NFTX stock getting trashed. They Raised my subscription by 60%. I returned my movie and canceled the service the day after I got the email. I think many did the same.

    There are A LOT of gaps to fill on that stock. Some are as low as 130.

  22. Keys

    Long time thinking….the only thing I can think of is Vortex!

    Sure I am wrong….but that is all that I can think of! Cash for me…gold, still waiting….

  23. MrMiyagi

    SF Giants Fan,
    The Canadian content was dismal. I have seen better choices in the Salvation Army’s VHS bin. I signed up for a trial and could not find one movie to spend 2GB of my monthly 20GB on and since then I keep getting emails about my “membership”.

    Eamon,
    Thank you for your concern, I don’t have huge numbers of options at a given time and mostly it’s 3-6K at a time and out with 10-15% profit.

  24. sophia

    Veronica,

    Sorry for the silly question, but if I remember well, at one point, your system was the other way round, so just checking… Thanks

  25. Razvan

    this guy on CNBC said he was going to try to put a positive spin on the NFP. He goes on to say since the number was not negative it means employers are not laying off people so a recession is not a given.
    This channel is turning into comedy central.

  26. Moneyman

    Gary was warning us for this mess a long time ago..I actually tried to talk to my friends and relatives about this..Soon we are going down..And down hard!!

    They just looked at me……….

  27. Shalom Bernanke

    I might even keep the other half through the morning to see if “the short” decides to cover into this news, but I’m not thrilled and certainly not buying more.

    Other holding have done well, so I prefer to stand aside while there are accounting accusations.

  28. Shalom Bernanke

    I decided not to play games with SVM, all cleared out at around 13% loss.

    Still have EXK +38%, UXG +10%, GPL flat, and NGD +11%.

    Didn’t buy the breakout in HUI as I had other issues this morning. 🙂

  29. Shalom Bernanke

    Michael,

    We can’t know if our exit was the best move until later, but no need to mess with accounting issues as they can drag on for some time.

    There are plenty of opportunities if we stay focused.

  30. Michael

    agreed SB, best to exit when there is controversy and not spend mental energy on it.. focus elsewhere.. congrats on the great performance of your miners so far…good luck..

  31. TZ(8155)

    I’m mostly cash taking no action today. I still have the expectation that last week was a gold peak and that this rally up is just an emotional rebound.

    I expected gold to sell off this week and it hasn’t although there is an alternate pattern which says it can also selloff next week as well.

    GDX is still not outperforming CEF (‘straight metal’) on an consistent ongoing basis and a single (maybe) rally up today won’t change that. In fact usually it is useful to at least let breakout confirm themselves by holding a breakout for at least two days.

    But two days would then bump us to next week (which I think gold could still resume dropping) and also into a period of obama’s speech (which is likely the trojan horse for QE3).

    This doesn’t even count the fact that we have a 3 day holiday so any buying here has reasonable gap risk as well if wrong.

    So….while I feel anxious and like I’m missing something in metals or miners I also recognize that that could just be the market doing its thing here while possibly just putting in a top. Faking people out in other words.

    Buying today would just be me either chasing or trying to force a trade outside my normal pattern and strategies. So I won’t do it.

    I’m gonna see what next week brings and try to wait for a better entry that I understand and can limit risk on.

  32. TZ(8155)

    Clearly I’d prefer to simply be 100% invested and holding and not have to worry and guess about things while a bull seemingly shakes me off and proceeds higher. But that simply isn’t my position at this time.

  33. Greenspansconscience

    There’s Gary’s gap up on the miners…

    Ive had a full position (in HL AXU EXK PZG) since Gary called the low back in July. I have definitley been selectively listening to Gary’s calls on the miners, completely buying into his bullish thesis while ignoring his ST trades :).

  34. TZ(8155)

    I’m wrong (in my view) if we don’t start resuming down tues/wed of next week and do NOT break whatever high we have put in by that point.

    If that doesn’t happen then the bull clearly continues to run and the peak is still ahead for this action.

  35. Frank

    What’s up with NGD? Are all you guys taking profits.

    It looks like SVM recovered. Never liked that company.

    Among the downtrodden, GSS is doing well.

  36. William Wallace

    Long gold futures from 1833, which I believe was a breakout from the last few days consolidation. I agree with Veronica’s system entry of long gold 1861 which is around the open of the last up day before the correction began. I think gold will be putting in a few big up days from here looking to tag $2000before any pullbacks.

  37. Moneyman

    TZ

    Thanks for your thoughts..

    I dont expect gold to turn down here if the miners starts to rally..

    Of course the miners will rally harder then gold and silver but i dont think that gold and silver will fall hard if and when miners rally..

    But who knows?

    Maybe we will get a gap down early next week and go lower?

    For know I did at at 1850 and 42 in silver and got stops there..W8 and see..

    Have a nice weekend!

  38. Moneyman

    One more thing about the dollar..Should rally with market down hard..

    But….If the numbers are bad in US..Everyone expect some kind of QE and that should hold the dollar down for now? Seems that a lot of money goes into PM:s instead of the dollar..

    W8 and see if something happens later on here..

  39. Frank

    I was just kidding about NGD.

    p.s. I had a “cab driver moment” when a cab driver in Istanbul started asking my co-passengers about gold. He prefaced the discussion by “you ladies look like bankers” directed at my female co-passengers, which was nearly correct as they were (Keynesian) economists. It was not a bearish sign because it was about how and where to buy and sell it because of the spread in the physical market. I didn’t follow the conversation because I don’t speak the language, but I interjected via translation that he should buy gold miners on the stock market and he looked a bit puzzled. The bearish sign is when the cab driver BRAGS about owning gold.

  40. Poly

    You’ve got to have a solid core stake in a mature, generational bull market, stretched or not. To borrow, “surprises to the upside”.

  41. William Wallace

    At ease,

    I will be looking for that huge spike I was telling gary about last week ($15-$20 spike within a five minute candle) immediately at the futures open to signal another top. This is what I seen at the recent top and hopefully it will be no different this time around if we put in a new high.

  42. Slumdog

    Thank You Gary and Veronica.

    Gary, that insight yesterday paid my membership 20 times over, no joke.

    Veronica, when you popped that up, I took the position and hit the hay.

    The shorts got trapped and the gap was so large, they had no choice but to capitulate.

    I’m out. 1877. Again, thank you.

    The Great Doubling will now appear, with me in it, after we see profit taking, and my chance to re-enter after the shorts are out and the newbies jump in here.

    What a terrific day.

  43. Slumdog

    And Poly, and you to BB, you guys act as my 2nd minds. Amazing.

    TZ, your caution this time surprised me.

    And, for what it’s worth, silver is still dragging its tired behind along at still way below the prior all time high of 50. Though, to be fair, I believe SI closed at 38.50 on that day; so it’s an interday high.

    Thx to each of you here whose wisdom is extraordinary.

  44. Poly

    @Moneyman “Add some today? Or just keep core?”

    No I’m not adding today, I see a test lower next week, hopefully and will add on a good pullback. Core is big enough to catch these moves and I want to see a parabolic continuation like breakout in order to risk chasing it.

    I added a good amount of GDXJ calls yesterday (don’t normally add calls with miners but playing a HUI breakout)

  45. Slumdog

    One of the rarest chart patterns appeared last night on the 1 hour, set at the 1/2 hour, like Farr Direct provides. (didn’t look at TS).

    We saw a DSI facing up with a dynamite triangle on the hourly chart. That is amazing.

    The targets of that move are:

    2X 1184.1 (high has been 1887)
    3X (this can be coming, and probably is) 1922.

    The top of the dynamite triangle in Dec is 1858.7. It’s not certain but a retracement there is well within historical normal.

  46. Slumdog

    Gary, would you explain your reasoning for your amazing call yesterday afternoon?

    What were the key factors that caused you to call for such a high percentage position?

    Congrats on being a brilliant tactician.

  47. Russell

    Bought small QQQ Sep call. I think the “game the fed” play is on. That should also bode well for miners and gold.
    Now off to more important work…..fantasy football draft prep.

    Have a great long safe weekend all.

  48. Slumdog

    SI has formed a dynamite triangle on the hourly, measured by the 1/2 hour in SI1Z.

    First Bar — 4267 – 4324 57 pt spread.

    A takeout in this half hour of 4308 will create the setup.

    I’ve never seen anything like this, this being at the top of the second pulse.

    As I’ve no historical record patterns for this, not being GS or MS, I don’t know what it will do. It’s not to be ignored. I just don’t know if it’s going to fuel the retracement or further the move into the 3rd pulse.

    If the latter, we could see 175 pts up above the high before it peters out.

  49. Poly

    “Gdx is now one ugly candle, hopefully we don’t end the day like this.”

    Dan, what’s ugly about them?
    These look like real deal all time high breakouts we are seeing across the entire PM space! Volumes are massive considering it’s a summer Friday, before a major holiday.

  50. MrMiyagi

    Glad I sold my positions yesterday, had a feeling about a drop, should have gone with a small put on something or other but hey, that’s the way she goes.

    I want to see if gold breaks and holds through 1900$ this time or will it be like silver’s two attempts at 50$.

  51. St. Deluise

    GDX looks beautiful in my opinion. the dollar too.

    everything else i’m confused about. gold especially- buy volume has not been appropriate for the size of this rebound. stocks immediate term oversold..

    if/when the dollar begins to rocket what are people going to pile into? looks like miners at the moment.. with a healthy heap of bonds.

  52. DP

    Poly —

    “…I added a good amount of GDXJ calls yesterday (don’t normally add calls with miners but playing a HUI breakout)…’

    Gold volatility is high, and you are not worried about over-priced options?

    Not picking on you, just trying to learn from reputed guy in real time.

  53. Poly

    Gold volatility is very high and the GLD calls are ridiculous.
    But yesterday (and last week) they were not so on the GDX/GDXJ options and OctNov DITM (and some OTM’s) were reasonably priced (relatively).
    But the BIG problem is the spread, you can’t just hit the “ask” otherwise you will pay through the nose. You have to entice the ask, especially on decent pullback in the underlying stock. You almost have to hunt the strikes.

  54. DP

    Poly —

    Thanks for answering, it’s very tutoring.

    How do you judge about option pricing — is it through comparing an intrinsic value with time value? Or is it through options value calculators?

  55. coolkevs

    Last post on EWJ vs GDX:
    I brought this trade up to the attention of this board last fall when it was indicated that Japanese stocks would outperform other equities. This was based on DeMark Monthly indicators that recorded last fall and are expiring soon that were good for one year.
    Really, the EWJ trade held up remarkably well until the first of August when the bottom of equities fell out. I was particularly impressed that it outperformed the GDX miners index for so long with the tsunami and the nuclear disaster that followed. But now with the GDX hitting new highs, it is time to bid the trade adieu, but I think the EWJ trade shows that DeMark indicators can and do work, often anticipating unexpected outcomes.

  56. DP

    Frank —

    Yes, I know what the Vega is.

    But for practical purposes, how do you estimate if option is chip or over-priced?

  57. St. Deluise

    233 day SMA is a little under 144.

    if this “D wave” is anything like the others it should tap it. assuming we don’t keep lifting for another few months.

    shrug

  58. Slumdog

    Why would gold drop today? The fear is to the upside. Wiggle the line and the shorts and the newbie shorts will come streaming out of their positions.

    There’ve been only 2 pulses up. There’s one more that’s within the cards, like at the close, as a signing off, screw you, trade until the last moment?

  59. sophia

    Deluise,

    Sold back some PMs as well, booking gains

    W2,

    Well played on your TQQQ sale couple of days ago…I should have followed you on this ome…missed Garys call last night and back to breakeben, I am very very sad….

  60. William Wallace

    Sophia,

    Sorry to hear that 🙁

    There will be another opportunity to put the TQQQ back on, like I have been saying, if this plays out like 08 (looking like it is) the bear market rally hasn’t begun yet, we may see a new low beforehand. Have to see how next week looks.

  61. David

    Not to be a wet blanket or anything, but the miners (as measured by XAU, HUI, and GDX) continue to underperform the metal.

    This on a “breakout” day for the HUI.

  62. Gary

    David,
    The longer that continues the longer this move will last. We want as many people as possible skeptical of the move in miners for as long as possible.

  63. Poly

    The HUI has shown in the past the ability to go ballistic. Not suggesting it will right here, but in a matter of 3-6 months it has in the past doubled! 2003 and 2005 more than a doubled. 2007 some 50%.

  64. Dan

    Poly/jayhawk,

    Whatever you say but the daily sure looks like an upside reversal candlestick right now. I guess one could intrepet it as just back testing the breakout but it’s an ugly tail for a “breakout” and we continue to underperform gold.

    And yes I’m holding miners and added at open so not rooting against everyone, just trying to be objective.

  65. wolf33

    fwiw— gold to me is back on 65 day cycle with 2nd half fireworks.
    we first have to break into new high ground—corrections than mostly intraday. jmo

  66. MrMiyagi

    Markets are a pukefest to the finish, dumpers will come out soon and not hold through the long weekend, my opinion.

    In other news, Labor day Canada/US Monday but European markets are open. Will gold mirror silver’s May mayhem with a surge and then crash on Tuesday?
    I don’t know, all I can say for sure is that Tuesday will follow Monday every week.

  67. Farm Girl

    Great ride, but I’m thinking of selling my NUGT before the close. A three-day holiday is the perfect time for TPTB to do something dramatic in Europe or the US.

  68. TZ(8155)

    Slumdog,

    >TZ, your caution this time surprised me.

    I have a number of methods of picking a top that I haven’t discussed here. (They worked beautifully on silver).

    Those indications suggested a peak in gold last week and drop this week. However, they aren’t perfect (like anything) and can also be read to indicate the starting of a drop NEXT week. In other words there is an alternate interpretation (without stretching anything to ‘make it fit’) that simply moves things a week.

    “Next” week is a single business day away. We are also near (but not above) the previous gold top, so this might be only a retest.

    And as far as today it’s a straight move vertical in gold so if I bought where exactly would I put a stop? Best answer I have is about $50 away or $5000/contract which is huge and would only give me a small position based on risk control.

    I might as well just wait and see how things play out next week and even if I’m wrong and we resume going up to new highs I’ll likely get some kind of better entry than I have fri afternoon here.

    My big score this year was silver. I’ve screwed up gold lately, but the way I trade I only have to hit a few significant trades here and there (at 4-6x) to make up for it. Of course that means I’m out and trying a lot and it also means I might not beat buy-and-hold, but that remains to be seen.

    I just don’t want to take a ‘cowboy’ trade today that goes against my strategy and existing systems of trading.

  69. St. Deluise

    the absolute volume in GDX may look weak but the relative buy vs. sell volume in it is very, very bullish. what we’re seeing at the moment is just a backtest of the breakout as far as i’m concerned.

    also QE3.. i don’t know. the only thing i see ‘anticipating’ it is gold- not the dollar, bonds, or stocks. and my feeling is gold is either wrong or is in the process of pricing it in completely- so if it happens, nada, if it doesn’t, kaboom.

  70. Poly

    Nothing knew to most of you, but while we look for the day trades, there are MAJOR currents that we need to AVOID and some that present lifetime opportunities.

    1. Recession is baked into the cake. Guaranteed.

    2. Margins are at traditional business cycle high’s and now topped as per #1.

    3. Demand will fall further placing pressure on already flat corporate revenues.

    4. Corporations have little cutting room left after slashing to the bone for 3 years.

    5. Zero federal/state/local will or ability to stimulate via spending. They are actually sucking liquidity from the system.

    6. Government tax receipts will fall sharply, again. Sovereign debt models do NOT account or allow for a global recession. Debt to GDP ratio’s will balloon higher.

    7. Financial’s holding sovereign paper (already poorly capitalized) are going to get destroyed once sovereign paper collapses.

    8. Any government centric solution to Europe problems requires approvals from ALL local bureaucratic governments, NOT going to happen. No will from the northern European people to support club med. When the s%#^ hits the fan, it’s every person for themselves. Fear is an amazing emotion.

    9. Only two possible solutions, a) a world wide reset, mass defaults and collapses. b) a MASSIVE , shock and awe like response by the ECB, FED, world central banks and the IMF that will blow you away.

    10. 10yr heading to 1%. Equities are heading to sub 1,000 possibly within this IT cycle. Deflation will suck the system dry. Dollar will rally. Gold’s IT cycle will be right translated and the chart is now projected a top of $2,380.

    We’re not talking overnight, without pauses, rallies, breaks and re-tests. Hitting singles are great, but the money, the real money, is avoiding and/or catching the big ones.

  71. Veronica

    Sophia, sometimes the Short/sell signal would mark a bottom but it got so confusing to everyone that I only post buys and sells right now, and they mean exactly that.Sounds like most here have had a good day,congrats:)

  72. Gary

    This should only be a half cycle low. It should hold above 1100. If it doesn’t then we would have a left translated intermediate cycle developing already, and that’s simply to hideous to even contemplate at this point.

  73. Mean Guy

    I’m thinking many home players are gonna see this downside push today and to move money from equities into PM over the long weekend.

    It doesn’t matter what Big O says Thurs. because Congress is gonna shoot it down anyways. He knows that and when it get shot down he’s has an “I Told YOU So” for the election.
    He wants to say “He Tried” and they want to say “He Sucks”

  74. Poly

    Appreciate it guys, as I appreciate all the work everybody provides on the site, especially Gary.

    The encouraging observation is that the miners recovered a decent part of the drop and closed nearer to the high’s of the day, in spite of equities closing near the lows.

  75. Mean Guy

    Good Call Boss(Gary)on getting out.

    The last 2 moves to 100& Cash were in the zone guy. People have to realize saving capital is just as important as good entry points. At least to me, big down days are hard to be in.

  76. TZ(8155)

    Poly: Don’t exit the bull market.

    …At Ease: Why?

    Poly: It would be bad.

    …At Ease: I’m fuzzy on the whole “good/bad” thing. What do you mean, “bad”?

    Poly: Try to imagine all life as you know it stopping instantaneously, and every molecule in your body exploding at the speed of light.

    Beanie: Total protonic reversal!

    …At Ease: Right, that’s bad. Okay. Allright. Important safety tip. Thanks, Poly.

  77. Elaine

    Had purchased GDX in another account last week, completely forgot about it! Went to add GDX to that account today and was happily surprised.

    Guess I was having a senior moment…

  78. Elaine

    at ease,

    I guess I can make excuses for myself… working full-time, going to graduate school, three teenagers at home, but when it comes to money I should not be that brain dead. Could have just as easily had a qqq position I had forgotten about.

    😉

  79. Blindweb

    Poly,

    Interestingly, I was just thinking about a $2400 target this morning. Many times over the last couple months I’ve had abstract thoughts on why gold would continue to rise to certain levels, and I’d come on here to see you confirm them with more technical thoughts

    I can’t see gold breaking $1500 by much. A 50-60% retracement from $2400 would bring it right to that level. I also see $1750-$1800 as a very strong support area. (It’s also my personal fair valuation of gold at this phase, and will be buying physical on any break of that.) A D wave breaking $1750-$1800 by 10-15%% or so would be logical.

    Like at $2000 people are going to sell out long before the even number. The pushing through an even number, like $2500, before, collapsing has become too obvious on the charts and isn’t going to happen any more. The selling before $2500 should come slightly earlier than the selling before $2000. This time gold will really be over extended, and a D wave will happen. (Have I created a derivative rubber band theory? Gold D waves several times above an even number. So then it has to D wave several times below the even number as people figure out the pattern. In zero sum games patterns that become too obvious become traps.)

  80. Driver

    Gary,

    I remember a while ago you referenced GLD:GDX as an indicator for something. It’s in my charts but I can’t remember what info you get from that ratio. Can you refresh my memory? Thanks.

  81. Poly

    Blind web,

    It’s not a prediction…..yet. I don’t feel as confident about it as I did with getting to $1,770 last daily cycle. $2,380 is one working model, involving a fairly extreme event and obviously a parabolic blowoff (C-Wave top). Two other working models all have probability.
    I see a test of the $1,900 in short order and it being rejected. That should have many screaming double top and hopefully a decent retrace before launching into new all time high’s.
    Stillnhard to say and hard to get to exposed, although we have a stop in place.
    Have a great weekend everybody.

  82. The Angry Hippie

    >>Blind Web said:
    >>In zero sum games patterns that >>become too obvious become traps.

    Deep shit buddy. Game theory trading is fascinating, but I am still not sure how applicable it is. Sure makes a great discussion over a few strong pints though.

  83. SF Giants Fan

    Gary

    Your thoughts on the dollars move. This week saw a swing low, trend break and a big move today. Bad for equities. But could that put a damper on PM’s?

    Have a good long weekend. Thx

  84. SF Giants Fan

    Come on Gary !

    Don’t be so defensive.

    I’m asking you a serious question. Again I’m not trying to poke holes in your trade. You have been saying the Dollar is going to collapse into a 3 year low and this weeks move has not shown that.

    I did take the trade today and am not trying to find a reason to exit.

    Thx

  85. Gary

    I’m not being defensive at all. Just wondering why you care what the dollar does at this point, since gold has shown it can rally along with a strong dollar, as a strong dollar is simply the result of a weak euro.

    If heavy demand is coming from Europe, does it really matter whether Europe is printing faster than the US, or the US is printing faster than Europe?

  86. Brad

    Frank you asked about NGD. It appears to be forming a 3 weeks tight pattern. Here is an explanation from IBD:
    First of all, it’s necessary to clarify that tight areas within the base structure are a sign of accumulation by institutional investors, not just any investor. Institutional investors, such as mutual funds and pension funds, have millions and perhaps billions of dollars to invest, so it may take several weeks or even longer to accumulate a meaningful stock position. These institutional investors prefer to slowly and steadily accumulate shares over a period of time while the stock is in a certain price range. This measured approach to buying is what tight base formations reflect.

    Keep in mind that when a stock is in these tight areas of the base, the chart pattern will not look obvious to most individual investors, who generally tend to focus on the flavor of the day. Also bear in mind that our interpretation of these tight areas within a base structure is based on models of the best performing stocks over the past 50 years. We have observed these tight trading ranges in numerous great winning stocks, and we continue to observe these patterns in today’s emerging winners.

    A three-weeks-tight pattern can be a great opportunity to add shares to a current holding. This pattern, best viewed on a weekly chart, is established when a stock closes narrowly three weeks in a row. In three-weeks-tight, the close of week two is within 1% of week one’s close; and the close of week three is within 1% of week two’s close.
    Even if the weekly price ranges aren’t small, the narrow difference between each week’s closing price is what matters.
    The buy point is the high in the pattern plus 10 cents. It must clear this high in fast trade to make the buy point legitimate. Even if a stock displaying this pattern doesn’t trigger the buy point, a three-weeks-tight can be seen as a sign of strength within a base. Often top-quality consolidations show tight trading.
    This pattern tends to work best with the market’s top leaders: Those stocks with excellent fundamentals and price action.

  87. Robert

    Gary,
    you are always saying that the gold price is not manipulated by the U.S government .i must say you are about the only person who actually believes this –So you want proof here is a cable from the U.S embassy in China -i don’t know how much proof you still need when the U.s admits that it tries to suppress the price

    “China knows that the U.S. government and its allies in Western Europe strive to suppress the price of gold, and the U.S. government knows that China knows, according to a 2009 cable from the U.S. Embassy in Beijing to the State Department in Washington.

    The cable, published in the latest batch of U.S. State Department cables obtained by Wikileaks, summarizes several commentaries in Chinese news media on April 28, 2009. One of those commentaries is attributed to the Chinese newspaper Shijie Xinwenbao (World News Journal), published by the Chinese government’s foreign radio service, China Radio International. The cable’s summary reads:

    “According to China’s National Foreign Exchanges Administration, China’s gold reserves have recently increased. Currently, the majority of its gold reserves have been located in the United States and European countries. The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold’s function as an international reserve currency. They don’t want to see other countries turning to gold reserves instead of the U.S. dollar or euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar’s role as the international reserve currency. China’s increased gold reserves will thus act as a model and lead other countries toward reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the renminbi

  88. Gary

    So let me get this straight. The US is “supposedly” suppressing the price of gold so that foreign Central banks will prefer unlimited amounts of Fiat currency as a reserve rather than gold.

    Furthermore the majority of gold owned by China is held in the US and Europe.

    So if the government suppresses the price of gold that means it is cheaper for China to buy US gold. I guess that means that the US is actively trying to get rid of its gold if it is artificially forcing price down.

    Seriously? Even after watching a 300 point rally in three weeks you still believe in this conspiracy nonsense?

    Okay let me try this one more time. This is simple economics 101 folks.

    In a true bull market with true demand, which gold is, anything that forces price below natural market levels will increase demand. Increased demand will shrink supply forcing price higher, faster, than it would have risen naturally.

    If the government is actively trying to force the price of gold lower (which it’s not) then that is the reason gold is at $1900 instead of $1200.

  89. Tudor

    Gary, the fact that gold is rising is no proof that it is not being suppressed by the U.S. government. Would you consider that part of the government’s “managed devaluation” of the dollar could include an effort to control the ascent of gold so as to not spook people into dumping their fiat? After all, fiat currency is a confidence game, something I suspect you are well aware of.

    The loss of reserve currency status for the buck would be devastating for the USgov. I sure as hell believe they have a vested interest in keeping confidence up in the dollar. Controlling the rise in the price of gold would obviously be a major part of that effort.

  90. Gary

    If the US government is trying to instill confidence in the dollar by manipulating only the price of gold, then they are doing a damn poor job.

    Folks, the fact is every bull market in history is infested with scam artists and con men. Think WorldCom, Enron, Bernie Madoff, etc.

    The gold conspiracy theorists are just one of the scams that are going to hitch a ride on this bull market.

    It’s actually one of the oldest cons in the book. You spot a bull market, make a one-way bet on rising prices, and then blame any correction on the evil manipulators. That way you never have to take responsibility for missing the sharp sell offs, which always occur in bull market.

    Folks you need to be smart enough to understand what organizations like GATA and the National Inflation Association, etc. ulterior motives are.

  91. Gary

    Actually the problem isn’t hiring. I’m sure companies have hired all the employees they need to meet demand. The problem is that we lost two industries. Residential and commercial construction and a big chunk of the mortgage market. Those are jobs that can’t be replaced by companies moving back to full employment.

    In order to get those jobs back we need a new industry. This is what politicians fail to understand. It’s not that companies aren’t willing to hire it’s that we need a new industry to replace the jobs that were lost, first when the tech bubble burst, and then again when the real estate bubble popped.

    Instead of throwing money down a rat hole to prop up insolvent banks, or wasting it on dead end infrastructure jobs, we would be much better off throwing it at the biotech industry so the next new industry could bloom and come online faster.

  92. Gary

    Actually that is the path we are headed down now.

    Historically societies under extreme economic duress tend to move towards socialism rather than letting free market capitalism cleanse the system and start over fresh, because the cleansing process tends to be very painful.

  93. SF Giants Fan

    Don

    Try SIL

    Basket of silver miners if you wish. Less risky than individual stocks. Look at SVM. That stock has been crushed because of possible accounting issues.

    With these miners at high prices, it’s a good time for them to raise cash and have a secondary offerings ( if the Stock market improves) GPL did that earlier this year and hurt the stock.

  94. David

    I would argue that we are already in an oligarchical system a la Putin’s Russia, not a Socialist system.

    In a Socialist system wealth and resources are redistributed downward, from the rich to the poor or middle-class. Regardless of how you feel about that idea, that’s certainly not what we’re seeing now.

    In an oligarchy a nation’s wealth and resources are redistributed upwards in an effort to preserve a corrupt status quo. Right now most of the world’s capital is being poured down the drain to protect a handful of banks — B of A, Citi, Goldman in America and Deutsche and SocGen in Europe.

  95. Gary

    David,
    Give it time. Once we get into the middle of the next recession and the poor and middle class voter base are suffering we will start to see socialist tendencies develop.

    Higher and higher taxes on the rich to re-distribute the wealth back to the poor and middle class. Longer and longer extensions to unemployment benefits, etc., Etc.

  96. Elaine

    Gary,

    IMO the concept of more and more taxes on the “rich” in the US will probably not come to fruition. What will happen is continuing excessive taxation on the middle and slightly upper middle class (earners as low as between $47k – $72k per year).

    Those earners already have one of the most egregious taxes, the Alternative Minimum Tax, in our country.

    Taxation of the wealthy may be a political campaign rally, but I doubt any changes to the tax code will be enacted.

    Warren Buffet is such a huge hypocrite as are many of the “mega wealthy” people of this country. This segment of the population will find was to avoid income tax. In addition, we could essentially tax the wealthy at almost 100% and it would have little or no effect on the deficit.

  97. David

    During the depression of the 1930’s, the dominant populist movement was on the left — Socialism, Marxism, etc. Out of that movement came the New Deal, which was the dominant paradigm right up to the War on Poverty. The 1960s soured the middle class on all that. Now Socialism as a movement is dead. There is simply no energy or organization on the left.

    Now the dominant populist movement is on the right. The middle class is very conscious that the pie is shrinking, and their anger is directed downward (toward immigrants, for
    example) rather than upward. The fact that General Electric pays zero taxes inspires no response — and yet people are enraged about the continued existence of food aid for poor children.

    Add to this the fact that Obama has no chance of re-election in 2012, and it’s hard to envision where “socialism” is going to come from. In a healthy economy we might get a moderate conservative like Mitt Romney, but in a bad one we will get a populist like Bachmann or Perry.

    The net result will be more of the same.

  98. Elaine

    David,

    I am not convinced that Obama has no chance of reelection. He has a very strong base that will vote for him no matter what.

    I hope there are better choices than Romney and Bachmann to oppose him. If there aren’t he most certainly will win.

    If we got rid of 95% of politicians today and replaced them with average people drawn from a lottery, we would have a better chance of something positive happening than we do now with our nonsensical political elite class.

  99. David

    Elaine,

    I agree about politicians. I tend to think this is not because they are inferior as people (though you have to wonder about anyone who becomes one), but because they are all co-opted by a system run by lobbyists.

    If the election were held today, Obama would lose. His base alone is not big enough to win an election. Much of his base sees him as a sellout anyway — witness this week’s betrayal of environmentalists. It is very possible that he will face a challenge for the nomination.

  100. Le Fou

    John Mauldin’s Thoughts on Gold

    The question I am asked the most is some variant on “What do you think about gold?”

    So, let me deal with that question here, as it has been a while.

    First, I do not think of gold as an investment. It is insurance for me. I buy a rather fixed amount of gold nearly every month, no matter the price. I hope the price of gold goes down, because that means I get more coins in the mail to go into the vault. Yes, I take delivery of my gold, and it is near me if I need it.

    My fondest dream is that I will give my gold coins to my great-great grandkids some 70-80 years from now, and they will be rather embarrassed that their “Papa John” bought all that
    much of that barbarous yellow metal instead of more biotech stocks. But as I live in the real
    world, I buy gold, even though I am optimistic we’ll get through this rough patch; because I simply don’t trust the bas*%*ds who are driving this ship with 100% of my money in dollars, or any fiat currency, for that matter.

    Gold to me is a neutral currency. While the metal looks good over the last ten years (and I became bullish on it in 2002 in this letter), over the last 32 years it has not had all that much luster. Bonds have been much better as an investment. It is all about timing.

    If I wanted to buy gold for investment or trading, I would simply buy GLD. (It is an excellent vehicle for traders; however, GLD is not what I think of as insurance.) And if I were
    buying gold as a trade, I would buy it in terms of the euro or yen, which I think are both going
    down against the US dollar.

    For those who want to buy larger sums of gold, there is a program that I like backed/sponsored by the state government of Western Australia, called the Perth Mint. You can buy gold certificates that represent actual bullion in vaults in Perth at reasonable prices.

    While your gold is stored in Perth, you can take delivery if you want and leave the country with no taxes owed. Or you can sell the gold and get cash. You diversify your country risk, have
    excellent and safe storage facilities, diversify your currency risk (if, like me, you think of gold as a currency), and have a different asset class than traditional portfolios.

    You can learn more about the Perth Mint at http://www.perthmint.com. And one of their dealers is an old friend of mine, Mike Checkan of Asset Strategies International. I have known Mike for about 30 years, and he does what he says and shoots straight. He is well-known in the
    investment information world, with lots of endorsements. You can learn more about his outfit at
    http://www.assetstrategies.com or call them toll-free at (800) 831-0007 in the U.S. and Canada, or direct at (301) 881-8600. You can also email them from their web site.

    Where to buy actual bullion? Gold coins are gold coins. ASI is a good choice, but I would shop around. Depending on the amount you are buying, mark-ups can be significant, and there are differences in service and responsiveness. Delivery can be an issue, although I get mine in the mail with insured mail (although we do have to pick it up!).

    Do I think gold is at a high? While I hope so, I truly do, I rather think that gold still has
    some upside because of government policies. When the deficit gets under control and we are on
    the road to real recovery, I rather think that gold will come back down from whatever highs it
    makes. I remember in 1980 there were True Believers who thought gold could only go one way.

    For the record, I think you should own about 5% of your net worth in gold, as insurance, not as an investment. The “goal” and your hope should be to never have a reason to sell your gold. I trust that tells you where I stand.

    Just FYI,
    Le Fou

  101. ALEX

    DON

    I agree with SF about extra risk on individual miners, but I am still playing this with some miners as I have in the past.(PLEASE remember I often JUGGLE)

    SF mentioned SIL and you also have NUGT which has done very well.

    I will try to come back Monday night (mkts closed Mon) or Tues morning and post some charts of interesting looking miners.

    Right now I recently bought GSS, NG, GPL, and XG (may be a tad early on XG…will post a chart)and I have owned exk and RIC since June.

    I didnt like GSS and HL for a year…but noticed this on HL.

    (have not bought it yet, but I may)
    CUP/Handles often retest the break outs-(see wkly chart)

    http://www.screencast.com/t/nkL3tFtN5

  102. Gary

    Agree, both parties are corrupt but I completely disagree with the debt ceiling mess. “Debt ceiling” means that’s where the debt has to stop.

    For the 87th time we had a chance to stop the madness and for the 87th time politicians failed.

    It’s going to take a crisis before politicians finally get the message. One can’t cure a problem of too much debt and too much spending with more debt and more spending.

    And at some point the market will deliver up another crisis since we obviously didn’t get the message in 08. Only this time it will be many multiples worse. This is why I say that 2012 will be one of the worst years in human history.

    It’s already starting with sovereign defaults in Europe. The US is the largest debtor nation the world has ever seen. As the dominoes start to fall in Europe the infection will surely spread into the debt diseased US market at some point.

    And in case anyone hasn’t noticed, there’s no one big enough to bail out the United States.

  103. Blindweb

    $2400 target – I have doubts too; I don’t know what I will do at $2000. At this moment in time $2000 seems barely stretched to me. IMO, there has been a paradigm shift and the 200 dma isn’t a good measuring stick, currently. The physical buyers may be ahead of the pros, temporarily. If the stock market can just stay range bound and not collapse for a while that would be one sign I’d take positively.

    The other possibility I see, is that if gold rises too slowly eventually a falling stock market, and maybe oil prices, will drag it down. $2000 will become expensive under crushing deflation. The sooner gold can break and hold $2000 the more likely it will have another big run.

    Zero Sum Games – I’ve never actually studied game theory, but systems are my specialty. When you define a system, like a zero sum game, there are many inherent things that go along with that defining that you can draw conclusions from. In stock-trading you have a zero sum game and survival of the fittest working. The traders could not exist if they did not capitalize on obvious patterns. It’s a necessary condition / inherent to the system. Although I should have said that a pattern that becomes too obvious would become a trap or a rout.

    Perth Mint – I don’t trust Australia personally. They’re going to be the battle line between China and the US. I’ve been meaning to look for an article I read, by Katherine Austin Fits?, that lists various places to store metal outside the US.

    Socialism – Ferfal’s blog, Surviving in Argentina, has good commentary on economic collapse and socialism. In Argentina the oligarchy bribe the poor with social programs to pass laws to steal the wealth from the productive people. No more middle class there.

    Even Far left commentator Glenn Greenwald says positive things about Ron Paul. Ralph Nader as well. It seem that Ron Paul has a legitimate shot at picking up votes from the far left, if he can get that far in the race.

    For the 87th time – Reminds me of how many presidents have said they would break our dependence on foreign oil. The truth is we’ll never see an energy source as good as oil in our lifetimes.

  104. Elaine

    Mr. M.

    Apple could bail out the US. Maybe they could take over and run the country like they run Apple. Now that would bring some real change.

  105. Blindweb

    Reminds me of an Aleister Crowley passage:
    “You begin with a delightful feeling as of a child with a new toy; you get bored, and you attempt to smash it. But if you are a wise child, you have had a scientific attitude towards it, and you do not smash it. You pass through the stage of boredom, and arise from the inferno of torture towards the stage of resurrection, when the toy has become a god, declared to you its inmost secrets, and become a living part of your life. There are no longer these crude, savage reactions of pleasure and pain. The new knowledge is assimilated.”

    I think the US, at least, will get bored very fast with post peak oil preparations, and smash every toy, even other people’s toys, it can get its hands on.

  106. Beanie

    Gold bugs are inadvertently supporting the republican tea party agenda. Making a few bucks by participating in the destruction of your own country is pretty sad, if you ask me. A real move into Alternative energy will solve all our deficit problems and bring America to prosperity like never before for generations to come; yet green energy is being surpressed by the very people who favor highly subsidized and environmentally (and financially) destructive fossil oil, the very same people who have loaded up gold and silver and is aggressively pushing us back on the gold standard that would hurt the majority of the population.

    Regardless of the twilight zone we’re witnessing, I think we will still get our bull market in green energy as the reasonable people come thru.

  107. Matt

    Wow Beanie,

    You actually believe that spend/tax/expand government is the way to financial prosperity?

    Green energy is a great concept, but do you think its viable without government subsidy? I work in the civil engineering industry and the only projects that are profitable are heavily leveraged by banks/government loans. I have seen it already – as soon as these banks lose interest, the projects fail.

    Not what I would call a stable industry.

  108. jeff

    Beanie, I disagree. The treasury owns the largest gold hoard in the world. Do you think the fact they hoard gold is seriously destroying the USA? No they do I fine job of that in spite of all that gold 🙂

  109. MarkF

    Blindweb,

    Glenn Greenwald is not far left. He was a Constitutional lawyer. His columns are brilliant and represent far more conservative ideals than most so-called conservatives.

  110. Beanie

    Matt,

    Green energy is as viable as oil, which, by the way, is also subsidized. Considering how mature the oil industry, why it is still subsidized mentally blows me away.

    Within 2-3 yrs, Tesla will be able to come up with a luxury car (a SUV) that costs about $35,000 (before the $7000) subsidy. Note that most of us spend about $20,000 (some even more) for gasoline in a 10-year period. The model S (160 miles for single charge) that comes out next year for $57,000 (before $7000 subsidy) is still a very reasonable price when considering the cost of gasoline and regular tune-ups and oil and filter changes. No emissions, no additional subsidies needed to clean up the environment. Considering environmental subsidies and war subsidies it costs about $2 trillion annually for oil sector subsidies.

  111. JG

    David,
    I think your spot on, most of Obamas base consider him a sell out. He came in and really raised expectations after the Bush nightmare and has now shown himself to be an extremly weak leader. His greatest achievement was getting elected and now in office he as no idea! He came in on a platform of ‘change’ and I recall one of the first things he did was bend over for the banks! I think he has pushed alot of center left voters to the centre right, I don’t think he has a hope of being reelected.

    Blindweb
    The best place to hold your gold is Frankfurt or Luxembourg. I actually live in Luxembourg so if you send it to me I’ll hold on to it for you…..promise!

  112. JG

    Beanie,
    You get alot of stick on this blog but I have to say I agree with alot of what you say especially on the renewable energy front. I also respect how positive you are with whats happening at the moment is so easy to be negative although I do think we are in a bear market but you bears are always followed by bulls!

  113. JG

    Because the governments so wealthy over here it doesn’t need your gold! add to the fact that we are one of Europes tax havens so its part of Luxembourgs business model!

  114. smt_troll

    “Making a few bucks by participating in the destruction of your own country is pretty sad, if you ask me.”

    If I already see that the country is going down the tubes (which I obviously can not prevent), then my question becomes “How can I make money off of that?”

    “Add to this the fact that Obama has no chance of re-election in 2012,…”

    “I don’t think he [Obama] has a hope of being reelected.”

    He is still the betting favorite. That means you can make more than 100 percent on your money by betting against him (if you are right).

    It is VERY hard to beat an elected incumbent president. In fact, it has happened only three times in the past hundred years (1932, 1980, and 1992). We will know more in the next few months, but I wouldn’t start writing Obama’s political obituary just yet.

  115. Shalom Bernanke

    SF Giants fan,

    Thanks for the article above, and you’re right about Al Gore being the father of the internet. lol!

    Beanie,

    You might eventually be correct about alternative energy, but I’ll estimate you’re around 10 years too early.

  116. SF Giants Fan

    SMT troll

    Why does obama have no chance in 2012? He will say he was cleaning up the mess from Bush. This problem was not the fault of him. Always blame the other guy…

  117. Razvan

    “Within 2-3 yrs, Tesla will be able to come up with a luxury car (a SUV) that costs about $35,000 (before the $7000) subsidy. Note that most of us spend about $20,000 (some even more) for gasoline in a 10-year period. The model S (160 miles for single charge) that comes out next year for $57,000 (before $7000 subsidy) is still a very reasonable price when considering the cost of gasoline and regular tune-ups and oil and filter changes. “

    The battery technology is not there yet. They are still depending on the Li battery technology that is more than 50 years old. There is big money being invested into Magnesium batteries that have double the capacity of Lithium batteries , not to mention the metal is also more abundant than Li. It is going to be another 10 years before they get it working because they are having a hard time developing a working electrolyte. I have a buddy who works at Toyota’s research facility.

  118. Gary

    That would be a very big assumption. If Ben were to come out Monday and announce a trillion dollar QE3 program the dollar would turn right back around.

  119. Aaron

    Gary, the political climate is way too sensitive. Cycle wise though the odds are favoring the 3 year cycle being behind us. Ben is a wild card at all times.

  120. wolf33

    the internals for PM stocks are the best i have seen them.

    for broad market do not show well

    i do not see any problem with gold going through old high like hot knife through butter.

    jmo—best advice for most—FOLLOW GARY.

  121. Slumdog

    Every short is trapped. But we have two NY Pit gaps (even if not trading today) in a row. Breakaway and exhaustion.

    The last shorts, the Asians, will get out at their open.

    Then there are only new longs, and low volume.

    Will this bust out to The Great Doubling, 2000, or will it drop to 1839 Dec to fill the gap? Gary said the gap there won’t get filled in this run. That 2000 is a heckuva magnet. In July 2010, it was 1000. Amazing. Doubling in 1.5 yrs! Well, that’s real interest for y’a.

  122. Beksachi

    SF Giants,

    Thanks for that cycles site

    I went in big euo ( as well as miners) last Friday and will get out of euo this week. Deploy into miners.

  123. jeff

    500 points? I’m hopeful dow bounces off the trend line crossing at 11k when the big boys come back from holidays.

    Miners in Aussieland up 0.7% today, if things hold they may gap up in the morning.

  124. Beanie

    Brad,

    So a couple of solars went out of business. This is common with companies in new sectors. It happened to oil, biotech, healthcare, transportation, etc.

    Too many people are into headline flavors of the day and not thinking for themselves.

  125. Beanie

    Razvan,

    Why are you talking about batteries not being as advanced as it should be? Clearly technlogy will improve in time. But as it stands, a Tesla Model S ($50,000 after $7000 subsidy) is already costing less overall than a luxury car (BMW for example). Do the numbers:

    BMW 330:

    $40,000 cost of car
    $20,000 (minimum) cost of gas for 10 year period
    $400 a year for oil change?
    $200 filters and fluids?

    Though you may need a new battery after 100,000 to 150,000 miles, you can buy upfront for $12,000 for the Tesla model S…. still cheaper than gas.

  126. SF Giants Fan

    Mr m

    Will be interesting to see how GDX does with the market down so hard. Let’s keep our emotions in check.

    Obama and Ben will save the day. Probably revising their speeches as we speak…

  127. MrMiyagi

    jeff,
    I’m looking at the futures and overseas activity today, you know what that was like. Still have to see tomorrow (tonight)’s Asian/European activity but after today, not much hope there.

    Beanie,
    Screw electric cars, bring back Geo Metros. Mine gave 65MPG.

  128. Gary

    Beanie conveniently forgets about electricity costs to charge your Tesla. Or the oil and coal that is burned to make that electricity.

    It’s far more likely we will see natural gas powered vehicles than electric.

    We have a long way to go before the world is ready to convert to electric cars.

    Beanie is just stuck in the past. Alternative energy was the last bull market. The world will is now going to be in an on again off again recession for years, decades if governments can’t learn their lessons quickly.

    Energy demand will be constrained from now on. I’ve been saying this for two years now and I’ve been right. Even with trillions of dollars of QE oil still couldn’t even get back to the old high.

  129. ND

    Do we still think gold is due for a pullback to around $1800? Everyone everywhere is extremly bullish on gold and bearish on stocks atm.

    makes me think gold may actually be in for a small healthy pullback anytime soon. would like to see it go to 1800-1850’s before breaking the old high, though asian markets may be eager to buy gold tonight.

  130. Keys

    I really hate to say it, but I am getting the feeling that we are going to go through a nasty decade or two. Already we have lost 1 decade, another 10 years sounds about right…pops and drops…

    Bascially the stand off is world salaries are not going to go up, hence prices are capped….but we have too much debt, so printing is a good way to solve that, but prices go up then…

    Man, if this is the third crash this decade, this may be the new norm! Up 100% and then crash 50%….and the long-term term is a net neutral.

    Going broke in style! See what miners and gold do tomorrow! I am also getting the feeling that zero interest rates will be lasting for years and years, as the effective loss in purchasing power becomes the real cost rate.

    What great times we are in! Great great times!

  131. Hack

    An electrical engineer already did the statistics and came up with the simple fact that if >= 5% of our autos were electric then the nation’s power grid would crash. NO ONE will trade their refridgerator and AC for a $60k Tesla that only gets 55 miles on a single charge…(verified by an independant consumer testing group).

  132. David

    This summer is starting to remind me of spring-summer 2008.

    The bear market in stocks was well underway, but gold made new highs in March. Big gold stocks like GG broke out to new highs in summer, and the XAU was outperforming, seemingly signaling a coming breakout for gold as well.

    As we all know, it didn’t work out that way.

    We are still in the early innings of this cyclical bear market, but so far it is shaping up to be even nastier than the last. Bond yields are now even lower than they were then. Swiss bond yields are now negative. The DAX is already down 30%. That’s MEGA-deflation, folks.

    In the early stages of a bear market, there are places to hide — consumer staples, etc. In the late stages, everything gets thrown out the window in a wave of margin liquidations. At some point that’s going to happen to gold and especially gold stocks, regardless of valuation.

    The conventional wisdom is that gold will reverse course when the market rallies. I don’t think this is what’s going to happen. I think that at some point gold will get sold alongside everything else. You will see equities and gold falling side-by-side. And when gold and stocks fall, gold stocks fall hard. If you don’t think that gold can go to $1250 and GDX to $30 in this environment, you haven’t been around long enough.

    When hedge funds like John Paulson’s start getting redemptions (he is long BAC and the banks, BTW) they will sell GLD, and hard.

    Right now gold is 26% over its 200dma and gold sentiment is through the roof. I can’t think of anyone who is bearish on gold. Certainly no one on this site. We are all-in on GDX with no stops in place. What I sense right now is fear of missing the next $100 up, and no fear of missing the next $500 down.

    Gold will certainly take out $2000, but I am quite content to sit this one out in cash.

    While the music is playing, by all means, keep dancing, but have a hard stop loss and honor it.

  133. Alex in Montana

    David,

    Check gold in 1978. This is like 1978 and not 2008 in my opinion.

    In 2008 the rush was to the dollar beginning in March when gold peaked. The rush this time is to gold. So continuing with the analogy, gold will most likely top when stocks bottom maybe in the next 6 to 8 weeks or so.

    Clearly there is bullishness in gold and that is worldwide not just in the U.S. But then, all world stock markets are going down and the safe haven is gold and perhaps the Swiss Franc.

    Could the dollar rise. Sure against the Euro, Pound and other flawed currencies, but that isn’t saying much. The dollar is not what it was in 2008.

  134. Gary

    I try not to live in the past. This isn’t 2008 it’s 2011. The Fed has already done two series of QE and gold is certainly forecasting another one.

    The miners have broken out of a 9 month consolidation. Those kind of breakouts are what lead to huge runs in a very short time span. One could put a stop below the the recent pivot at 560 and only be risking 9% if you were 100% invested, and if you follow the model portfolio it would be less than that as you would only be 75% invested.

    Folks you simply have to learn to control position size. If you don’t then you will be unable to jump on these very rare setups because your risk is too great. Heck you could even take a 50% position and only risk losing 4.5% if the stop was hit.

  135. David

    Alex in Montana,

    1978 was the beginning of the final parabolic blow-off in gold. If you think this is the final blow-off, then your reasoning makes sense. (Personally, I don’t think it is.)

    However, it is not true that the safe haven this time is different from in 2008. The safe haven is the same — government bonds, specifically Treasuries and Swiss bonds. The money flowing into bonds right now dwarfs the money flowing into gold. The dollar, yen and Swiss franc are rising, just as they were then. If anything, it’s as if the years 2009-2010 never happened.

    It’s entirely possible that I am wrong. All I’m suggesting is that you have an exit plan in case I turn out to be right.

  136. wolf33

    is it not about time we stop this. only ron paul would at least try. and american people behind this.

    in july there were 22 us soldiers that comitted suicide—half here and half over there. i am a viet nam era vet. why did we let them get away with it again and again

    http://costofwar.com/en/

  137. Hack

    Forget about 2008. Let’s look at our leadership instead. When Carter took office in 77, gold was $120 and when he left it in 81 it was $580. Gold was $800 when Obama took office. If we compare the two presidents, who are cut of the same cloth, we can all do the math. Folks there is a crises in DC and it starts and ends at the top.

  138. KHC

    E,

    A Gold Miner, Randgold Resources (US: GOLD or UK: RRS.L), that accounts for 4.57% of GDX, went up 0.97% in London market on Monday by closing at 6735 pounds or ($67.35 * 1.6115 (pounds to dollar exchange rate) = $108.53 in US Dollar compared to its $108.00 closing price on Friday in U.S. market.

    RRS.L (Randgold Resources) is one of the component in FTSE 100 index. Given FTSE 100 index dropping 3.58% on Monday, RRS.L actually holds up very well by going up 0.97%.

    Hope this helps.

  139. KHC

    I forgot to mention that the gold miner RRS.L (Randgold Resources) is the ONLY stock (out of 102 stocks in the index) that’s in the GREEN on Monday in FTSE 100.

  140. Gary

    One has to ask oneself what has been the response to every crisis for the last 10 years?

    The answer is to cut rates and print money. Does anyone think that when we get into the middle of the worst depression since the 1930s that Bernanke isn’t going to print more money? Does anyone believe that Bernanke won’t print once it becomes obvious that the economy and asset markets are tanking? Or maybe you think he will just stand aside this time and let everything crash. This from a man who apologized for the Fed’s actions in 1937.

    I think if the S&P breaks 1100 Bernanke’s going to get an itchy trigger finger.

  141. High 5

    The big difference between now and the seventies is government debt. Both periods gold bull markets were a result of currency crisis but Volcker was able to increase interest rates and thereby confidence in FRN.

    Increasing rates today to the levels needed, at least 12% on the ten year, would increase USG yearly deficits by more than $2,000,000,000,000.

    In the end the USG will do everything possible to save the government. To hell with the rest.

  142. wolf33

    just a matter of time before 1100 is broken. maybe not first or second time but will happen imo

    i know i will keeb bear etfs until hit the first time.

    if get a bounce lilely buy back as long as banks getting hammered

    but in the end will rely on internals and Gary.

  143. Hack

    Bush was President for 8 years. Gold has more than doubled under Obama and we still have until 2013 before he walks. So don’t worry, he’ll get us to $4000 before he goes…

  144. Razvan

    This Obama guy better take advantage of his perks while he can. Come next year if things dont improve drastically he will be going into early retirement.

  145. High 5

    No human being alive has the knowledge and wisdom to properly manage the modern USG. The problem is that the government has grown too large and is literally unmanageable by even God himself.

    Hopefully a massive hatchet is about to butcher this overgrown behemoth down to a manageable size and then we can all get back to being productive again.

  146. High 5

    To prevent misunderstanding, the massive hatchet I refer to is economic collapse and starvation of the beast…..not armed and violent revolution.

  147. Beanie

    Oh, by the way, this equities selloff is just another great opportunity to buy stocks. Corporations are increasing dividends at record pace.

    And the green energy super bull market is coming right after this correction.

    It costs $3-4 to fully charge a Tesla Model S which goes 160 miles per charge. Still cheaper and less air polluting than gasoline. And once we get solar power in every home? whooowheeeeeeeeeee

  148. Gary

    Yes all bear markets create rare opportunities. The trick is to buy near the bottom.

    That won’t occur till next summer or fall.

  149. Beksachi

    Chuckling about comments that Obama will be gone next year.

    Abe Lincoln was a disaster apparently in his first term but he got re-elected. In our case, Obama may be the only buffoon who comes across as an ” adult” and may get re-elected because it will be slim pickings ( Michelle Bachman anyone?)

    Anyway for us this gold bull will ride much longer till we get a “generational” crisis

  150. ckpc

    “Obama may be the only buffoon who comes across as an ‘adult’.”

    Obama? The guy who walks out of meetings in a huff because he didn’t get his way?
    Thanks for the laugh!

  151. High 5

    Lincoln was one of the worst Presidents the US had to endure. 650,000 dead is no great record no matter what your level of indoctrination/brainwashing.

  152. wolf33

    likely a good key to tomorrow is to watch silver closely. if silver is up-ie not treated as industral commodity during blowout- than gold could have a 50+ dollar day. the internals on miners are so good —-just maybe they fight the trend.

    if gold and $ start advancing together—really curtains for the economy. jmo lots of possibilites
    to make for ineresting day.

  153. High 5

    I think it takes a special kind of fool to not realize the US has been and will continue to default and a special kind of slave to enjoy it.

  154. Gary

    Beanie,
    No just someone who understands how to protect themselves from the stupidity of politicians.

    Don’t you ever get tired of making the same mistakes over and over?

  155. Beanie

    Miyaki,

    I think we jerk around and will be done with the nonsense by late september, but the bottom was already in a few weeks ago.

    There is a lot of weird sheets happening lately, as though some people are manufacturing our collapse…starting from the debt debacle and then the usa downgrade.

    I sure hope i’m right about the bottom; if not we’re headed to spx 1000….as a break of spx 1100 will put us in bear market territory.

    I’m still of the opinion that this is just a 20% correction within a bull market.

    Again, gnarly stuff going on here politically. Had the debt debacle never happened, the charts would not have broken down this bad and this fast.

  156. wolf33

    Beanie said…
    It takes a special kind of jerk to back up the truck on gold and calling for America to default. What do you think?

    September 5, 2011 7:39 PM

    personally i prepare for the wost but pray for the best.

    gold/silver are insurance.—-someday we will pass the point of no return. i think we have. you do not know i do not know but i think we are soon to find out one way or the other.

    i personally think we need to start now—why i like ron paul—-calling it a night.

  157. High 5

    Phil

    Google it and you will see the Civil War started three years before the proclamation and:

    President Abraham Lincoln issued the Emancipation Proclamation on January 1, 1863, as the nation approached its third year of bloody civil war. The proclamation declared “that all persons held as slaves” within the rebellious states “are, and henceforward shall be free.”

    Despite this expansive wording, the Emancipation Proclamation was limited in many ways. It applied only to states that had seceded from the Union, leaving slavery untouched in the loyal border states. It also expressly exempted parts of the Confederacy that had already come under Northern control. Most important, the freedom it promised depended upon Union military victory.

    Slavery would have ended anyway and without the useless slaughter of 650,000 Americans.

  158. Beanie

    Don’t ya think ron paul is a jerk for wanting to default america, yet at the same time been loading up on gold? Now, if he calls for default of america and move to gold standard, and he didn’t own gold, I’d respect that thought, though I still think it’s a stupid thing to push America to.

  159. Gary

    Beanie,
    Ron Paul voted against raising the debt ceiling. That vote was in direct conflict with his investments in gold mining stocks and gold.

    By raising the debt ceiling for the 87th time it was made clear that Bernanke would keep the printing presses running and that was the fundamental driver behind the 400 point rally in gold.

    Ron Paul voted against his own best interests.

    Seriously, are you really this clueless?

  160. David

    Not all gold bulls are tea party.

    Gold is a global asset. People buying gold in Europe right now don’t give a damn about the tea party. They want an asset that is no one else’s liability.

    Gold has always had and will always have a place in the monetary sphere.

  161. Beanie

    Let’s say we live on an island made of ice. The ice is slowly melting and eventually everybody will drown. But Penron Paul has a great idea. He says lets melt the ice quickly and asap and get on our boats. Let’s live on boats because it’s better and the ice will eventually all melt. But not all of people have boats because there’s just not enough resources to make boats for everyone, and most will drown when ice melts.

    But who cares, right? Penron Paul is a great man. He will save us.

  162. Beanie

    Gary,

    It’s pretty obvious debt ceiling will be raised since it was raised 87 times already.

    Ron Paul, after all, is a politician. And isn’t all politicians about 2 faces or 3 faces?

    It’s simple. If you want the gold standard, show me that you’re really concerned about the country and its citizens by not owning gold or silver. Be the captain of the ship. Make sure everyone else have a life jacket before you. Before you make a momumental decision that will dramatically affect every body’s lives.

  163. David

    A US debt default, which is what Tea Party candidates like Michelle Bachmann have advocated by refusing to raise the debt ceiling, would certainly be good for gold and bad for the United States.

    If you want to balance the budget, then pass a balanced budget. There is nothing stopping Congress from balancing the budget tomorrow. The idea that you have to force a default to balance the budget is ridiculous.

  164. Beanie

    I love listening to Ron Paul when I get the chance. Reasonable man. However, the gold standard crap and him owning a bunch of gold miners make me scratch my head and bleeding. Is he really noble? He obviously isn’t the “captain of the ship” (he has a bunch of gold yet hundreds of millions of Americans don’t have an ounce), and hence he is not for the people and not the defender and protector of the masses.

  165. Gary

    Beanie,
    Your iceberg analogy is completely ridiculous.

    Here are the facts. Never in the history of the world has printing money or debasing the currency created prosperity. In the short term it sometimes works, but not once has it ever worked in the medium or long term.

    Those are the irrefutable facts, and they have not changed in the last 5000 years.

    Apparently our politicians and Federal Reserve are so ignorant that they can’t even pick up and read a history book.

    There is one way and one way only to get out of the hole we have dug ourselves into. The cure is to allow the free market to cleanse the system of debt. That means that many banks and uncompetitive businesses will go bankrupt. It also means unfortunately, that unemployment will spike much higher for the next couple of years.

    There is no way around this, we can either do it now and try to control the process, or we can wait for the market to force a crisis on us.

    Again history is crystal clear, every single country that has gotten into this situation and accepted reality instead of denying it, taken their medicine, and allowed creative destruction has suffered two or three very painful years, but after those painful years are done every single one of these countries has grown at tremendous rates.

    Countries that fight the cleansing process create depressions that last for decades.

    Again these are irrefutable facts, they have never changed in the history of mankind. And they aren’t going to change today.

  166. MrMiyagi

    Gary,
    A question about QE, would it not cause or entice hiring? If the money that flows into the markets lifts equities, their borrowing powers grow as their valuation gets larger. In turn, they would hire new employees for R%D, marketing, production, etcetera. I imagine that rising market news being flashed to the masses encourages spending as well versus doom and gloom news.

  167. Beanie

    Here’s what gold standard essentially means, from my perspective:

    It means getting rid of social security and medicare/medicaid. Why? Because they cost a lot of money. You might as well start euthanizing those above age 70 or 65. And they just might, on the poor (there is no middle class).

    It means substandard living for the majority of Americans but great living for a few gold buggers.

    It means forget about economic expansion and promoting new technologies. No funding for things alternative energy, of course. “You can’t spend what you don’t have” is the motto.

    It means going backwards in time — the Middle Ages.

  168. Gary

    First off its highly unlikely we will ever go back on the gold standard.

    But we absolutely must get control of our debt.

    I’ll tell you what is going to happen if we don’t. At some point the bond market will break, just like it broke in Greece, and Italy, and Spain, and Portugal, and Ireland, etc. Then we won’t have any Medicare, or Social Security, or funding for alternative energy. We will have a very substandard way of life. As a matter of fact we will have a depression probably much worse than the 30s.

    So if that is the outcome that you want then just keep raising the debt ceiling and keep going deeper and deeper into debt until you break the system and the market forces reality on you.

  169. David

    Beanie,

    Who the hell is advocating going on the gold standard?

    And what does that have to do with Social Security?

    We were on a gold standard before 1971, and we had Social Security then.

    You’re making a lot of spurious illogical connections here.

  170. Gary

    Mr M,
    We’ve had two periods of quantitative easing now and all it did was save the jobs of a few bankers and give a brief reprieve to several uncompetitive businesses.

    If quantitative easing was going to improve the job market it would have done so by now. It’s glaringly apparent that printing money cannot create prosperity. Only real productivity can do that. For that to happen we need a new industry to be created and brought online.

  171. David

    Gary,

    Raising the debt ceiling has nothing to do with whether the budget is balanced or not.

    If you refuse to raise the debt ceiling without passing a balanced budget in the prior fiscal year, you default.

    Simply refusing to raise the debt ceiling doesn’t automatically bring the budget into balance.

  172. jeff

    Beanie you realize the US holds the most gold of any person or state why would it be unpatriotic to own gold?

    In fact, you must be sad because the treasury doesn’t hold any of your alternative energy stocks.

  173. Gary

    Raising the debt ceiling means you’re making no attempt to control spending.

    What we needed to do was hold the debt ceiling where it’s at and cut spending to balance the budget.

    The fact that we refuse to cut spending is the reason we have to keep raising the debt ceiling.

  174. Éamonn

    Gary, yes, I was thinking gold too. I was just thinking of the huge colossal amount of money that would pour into gold if it left the US bond market…incredible

  175. Gary

    Beanie is never at a loss to rationalize why losing money is a good thing :~)

    I prefer to make money rather than make excuses for losing it.

  176. David

    Raising the debt ceiling is the symptom. Failing to balance the budget is the disease.

    If you don’t want to raise the debt ceiling, you have to pass a balanced budget in the prior fiscal year.

    The only way to balance the budget is through a negotiation between both parties. That inevitably means closing tax loopholes, reforming entitlements, the works.

    If you aren’t prepared to negotiate in good faith, then you don’t want to balance the budget. And if you don’t balance the budget and you refuse to raise the debt ceiling, then you are voting to either default or have the Fed monetize the debt (which is probably what would happen in that scenario).

    The strategy of the GOP is to force a default in order to force the country to repeal Social Security and Medicare. There is no real desire to balance the budget on the GOP’s part, which is why they refuse to negotiate in good faith.

    Both political parties are parasites; the GOP is a parasite that kills its host.

  177. Gary

    Completely ridiculous. Both political parties are exactly the same. The debt ceiling was passed once enough perks and pork was put into the bill to satisfy everyone.

    The exact same thing will happen with Obama’s jobs program. They will fight it out for weeks or months until everyone gets all the pork they want and then the bill will be passed.

    No Republican would ever get reelected if Medicare and Social Security were repealed. So it’s completely ridiculous to think that Republicans are trying to shut down the welfare state.

    They are just doing what all politicians do, and that is to look out for their own self interest.

  178. Hack

    The US has already defaulted. The Govt already spent the limit of money released by this last debt ceiling increase. This means that the Super Committee will meet and by law will have to cut 1T from the budget. Dick Durban talked about this last night. So the market will naturally spiral downward because everyone knows that the congress will screw it up again. And how ANYONE can blame the Tea Party for this mess is beyond the pale…

  179. Elaine

    David,

    If SS is repealed what do you expect to happen? Will your contributions get refunded, will employers stop collecting and paying SS taxes? I think not.

    I agree with Gary, neither party wants to abolish SS. The closest anyone has come to even thinking about change was Bush II when he proposed that people be able to make their SS contributions into self managed plans. Look what happened to that.

  180. David

    Social Security and Medicare are extremely popular programs. They are also extremely unpopular with Republicans, who see them as vestiges of the welfare state. Republicans could never abolish these programs through the normal political process, but they can create a manufactured crisis that would “force” them to be cut and/or repealed.

  181. David

    Elaine,

    No, your contributions will not be refunded, because they have already been paid out to existing retirees. (SS is structured like a Ponzi scheme — there is no trust fund.)

    Yes, employers will stop collecting and paying SS taxes.

  182. ALEX

    HEY DON

    Sorry, just a couple of charts tonight…I was going to draw a few up tomorrow pre-mkt but I just got the call that my good friend needs a babysitter in the A.M. – No time for charts AT ALL, lol.

    As I mentioned HL and GSS and a few others fell out of favor with me, but they are starting to look like they may take off. Here HL retested the breakout and could move well (wait for a breakout out)

    http://www.screencast.com/t/nkL3tFtN5

    So now NG took off VERY WELL last Summer $6-$16, now retested the break out too.

    http://www.screencast.com/t/RyRay5oX

    I posted a buy for RIC here…

    http://www.screencast.com/t/SAx60S7Q

    Now Its here, I would add if it retests the $10 area breakout (10sma)

    http://www.screencast.com/t/ZPlhqHp6

    AND DONT FORGET “NUGT”- the AGQ of miners

    http://www.screencast.com/t/Pzq3dml2mLg

    I bought GSS and NG and GPL last week- but I trade often until things start running more consistently.JAG hasmoved impressively for an old dog, but I dont own it.

    Best wishes!

  183. JReality

    Gary,

    Cullen Roche of PragCap keeps making it sound like the USA’s situation won’t become as bad as Greece, because the USA is a currency issuer versus a currency user, and we can just “spend more money into existence at will rather than defaulting” and he says the debt ceiling is an artificial constraint. He claims that there is no external constraint on spending because the government creates the dollars themselves. We have a so-called monopoly on issuing our own currency, and our spending is supposedly not really funded by foreign countries buying our bonds, since the government can, after all, create new dollars at will by authorizing more spending. In other words, we supposedly don’t need China or anyone else to buy our bonds. I still think what he suggests, even if true, just ultimately leads to massive inflation even if there is no actual default

    What do you think of the MMTers like Cullen of PragCap. Are they delusional?

  184. Beanie

    I don’t think many of you realize what the tea party agenda is and how far they’re willing to go to meet their objectives. That includes defaulting America. One has to be pretty crazy to go that far, but several republicans have already stated since last year that they’re willing to go as far as defaulting America to get their objectives met. Now, think about this for a moment: If you’re willing to default America, you’re more than willing to kill off Medicare and Social Security. They really want to cut “entitlements” to the bone. People living on social security could barely make ends meet. What more do you want to cut?

    Most of the spendings are in:
    -Medicare/Social Security
    -Oil Subsidies

    They wouldn’t touch oil and move to alternative energy. No way no how.

    And just last month they threatened a bond default and forced corporations to stop hiring. Also, govt employees were let go left and right because the tea partiers objected to further spending. That’s why the jobs number was so shocking.

    This economic contraction is manufactured, not by the fed this time but by a political party.

  185. Beanie

    It is true that the debt ceiling was raised 87 times, but it doesn’t mean it was bad.

    The debt limit should be raised as our GDP gets bigger, no different than a rich person getting access to more credit than the average joe.

  186. Dubbelito

    The biggest problem the companies face and one of the major reasons why all stimulus won’t work is the lack of solid ground to stand on. Nobody really knows what kind of new tax scheme that may or may not come and how it will look like and how it will affect corporations. Not only corporporate tax but all other tax which affects their bottom line.

    If the government could just nail down a 10-year (minimum!) tax regime it would go a long way to convince all those companies who sits on large coffers of cash to spend it on expansion plans and new research etc.

  187. Frank

    Ron Paul has owned gold miners for decades and in the period 1982-2001 it was a huge money losers.

    He is not like other politicians and that is why he has no real chance of becoming President. His son is more pragmatic and dropped some libertarian principles to make himself electable on a statewide basis. Rand Paul could be a Trojan horse libertarian President of the future.

  188. Blindweb

    Beanie,

    The 30 year trend has been debt increasing at an exponential rate with GDP growing at a linear rate. It’s basic math. It’s not hard to figure out what the outcome of this is.

  189. andybuji

    Yes, stunning – the Swiss came out swinging hard with a short to medium term game changer that closed the door on the frac as the safe currency haven, printed a high on the US bond, turned a threatening SPY swing low penetration into a healthy retest, knocked the dollar back off the ladder again, with enough volatility left in gold for the CME to bring the hammer down again, this week perhaps, hard. In other words, Party on Garth, risk is back.

    This week is big. The Aussies left their central rate alone – if the Brits and the ECB do the same, AND the German court doesn’t pull the plug on the legality of bailouts, then a couple of dovish statements from the Feds, a strong statement by Ben hinting of at least for the Twist for 9/21 and the final unexpected Fearless Leader grand move for Thursday – Obama lays out the most ambitious reconstruction plan EVAH; national refi all GSE held paper greater than 4%, and massive amounts thrown at “real” job programs. This guy’s been pushed into a corner and has lost face among the faithful, he no likee, he’s coming out strong and the market’s gonna love it. It will be LEGEN…DARY.

    The stars should be aligned in Gary’s favor by week end. New Swing low, intermediate degree bottom in, retest of the 1-2-3, miners rallying heavy with the rest of the market as GLD gets sent to his room for a timeout so the other children can play. 5 weeks to the next employmnet report – where it all turns to crap with a sub zero number. Add in a dysfunctional Committee To Do anything and the bear will roll.

  190. elad

    Beanie,

    Can you not see the strife going on in Europe with the failing of their welfare state and the problems they are having with richer having to pay for the poorer?

    Yet this is the same storm you want the US to charge headlong into?

    And your snarky remark about American Thinker – can you refute any of the claims in the article which you probably never even read since it is not from one of the State sources.

    Get real!

  191. Poly

    At ease,

    Hopefully a convincing drop down to shake some off. From the DCL, the assault on new high’s was too quick for my liking and a little more consolidation is a good thing. Maintain a core to capture any upside surprises.

  192. Shalom Bernanke

    And now the Swiss are trying to support the Euro. More people will continue to realize the fiat scams are all tied together, and choose to ignore the dollar index, except vs. gold.

    I still have plenty of confetti to move out of, and will be looking to buy more miners. If not today, then quite likely into the end of this week.

    September might offer up some great volatility to capitalize on, if a trader can stay with the bull.

  193. Gary

    This would be the opportune time for the triangle consolidation to begin. If miners hold the breakout during the consolidation that would be a huge plus.

  194. Dan

    If we end up today that will be a clear confirmation of the HUI breakout. Although we could still get a retest of the breakout, it should be clear skies from here…

  195. Dan

    PM stocks are FINALLY outperforming gold this morning and this with the general markets being down over 2%! Really hope this holds through the day….incredibly exciting action.

  196. Gary

    I think for a retest gold will have to enter the triangle consolidation. If it doesn’t then I doubt there will be a retest soon.

  197. Elaine

    David,

    The Republicans are not cutting the SS tax, Obama is. He has already decreased by 2% for this year the amount withheld from employee contributions. He wants to extend that 2% reduction into next year.

    That was a ridiculous thing to do.

  198. Frank

    Never mind Beanie’s idiocy with the CHF news and current market action.

    But the oil industry receives a paltry $4 billion in “subsidies”, which are mostly tax breaks that any industry sector receives. And the source is calculations by CNN Money, which is as mainstream as you can get. So this is 0.2% of the budget deficit.

    Then at the same time the Federal gasoline tax is about $30 billion per annum, so the US federal govt nets about $26 billion just counting the tax on gasoline on the revenue side vis-a-vis the oil industry.

    Who is this guy? What’s his problem?

    Sorry, I am in the wrong time zone to keep with the discussions here.

  199. Gary

    trader,
    Why not wait for a swing before adding. Right now you are just trying to catch a falling knife.

    Wait for a sign the half cycle low is in before jumping in front of this.

  200. High 5

    I think Beanie is claiming that all US military spending is in fact oil company subsidies. The brainless fool cannot even understand that insuring easy access for foreign oil actually hurts US oil companies by keeping prices lower.

    Everything out of this idiots mouth is nonsense and I will no longer read his maddening posts.

  201. wolf33

    high 5 makes 2 of us—waste of time. the B definitely obam guy

    Everything out of this idiots mouth is nonsense and I will no longer read his maddening posts.

  202. Silverhound

    the breakout level on the HUI was 500, we’ve just spent 9 months back testing it. I can’t see too many more pullbacks from here if this uptrend is to hold.

  203. Shalom Bernanke

    Silverhound,

    I agree with your analysis, and although I am patient for pullbacks, they will not be large or last more than a few days (2-3) I suspect.

    I might add sooner as I have good marks.

  204. Highlander

    Those ragging on Beanie should lighten up. Having differing outlooks and opinions is what allows a market to exist and perform.

    I am always interested in opinions that are against the prevailing wisdom. You don’t want this comment section to become an echo chamber, do you?

  205. Shalom Bernanke

    It won’t be long before money managers are forced to increase exposure to miners, being the group is increasing profitability and thus the only game in town worth playing.

  206. wolf33

    The SNB has once again clearly indicated that the so called safe haven currency that is the Swiss franc is set to be debased alongside the dollar, the euro, the pound and all fiat currencies. Gold’s volatility is often overstated and the moves this morning are purely a function of massive volatility being seen in the international currency markets. This volatility is likely to continue and increase in coming months as the ramifications of QE1, QE2, further quantitative easing and injections of trillions of dollars, euros, pounds, yen and Swiss francs into the global financial system are felt.

  207. St. Deluise

    a lot of unusual buying and selling in SPY at these prices. either it’s about to REALLY crap out here or we’re nearing some turning point or another.

    leaning ‘oversold’ so sold my SDS. also my GLD puts are now worth more than they were friday. dollar rally looks legit. GDX looks good too.

    otherwise might be a pretty boring day with all the huge gaps.

  208. St. Deluise

    WOW 2.5mil spy buy order just went through.

    also i like beanie’s posting too. plus he’s been pretty right on for the last few years re: equities and i’ll give him credit for sticking it out.

  209. Gary

    What Beanie neglects to tell you is he got caught in the last bear market and is still trying to get back to even. Now he’s caught in the next bear market and set to lose it all again.

    Perma views are not good for anyone’s portfolio. If one wants to make, and more importantly keep your profits, you need to be able to recognize the cyclical swings in the market.

    Beanie he has demonstrated a complete lack of ability in that department.

  210. JReality

    Good point, Gary. Beanie is constantly talking about buying opportunities during a bear market, and he talks about buying the whole way down. That strategy would work great if someone had infinite capital to keep averaging down, but in the real world, that only leads to a blown account.

  211. Gary

    Gold is holding up really well considering the strong dollar. We still have the possibility for the triangle consolidation. So nothing has changed.

  212. jlinks

    Beanie

    I used to respect your posts, it had insight and was more respectful than most contrariens here. Until your ignorance about Ron Paul started showing and you started mixing moral values with supporting a corrupt government.

    How is owning gold unpatriotic? I love America, the country, very much. But unfortunately the captains of this ship are economic ignoramus. That’s why I’m buying gold.

    And for the record, Ron Paul has not changed his position in the last 30 years, he warned of our current mess in 1980 already, and published numerous articles and books in favor of gold. He has been urging people to buy gold for as long as I can remember. In fact, he was most instrumental in repealing the law against Americans owning gold, and got the Treasury to mint gold coins again.

  213. Aaron

    Odds are favoring the USD greatly. the swiss franc has been pegged to the Euro, which means less competition for the dollar. This rally is not a head fake me thinks.

  214. Gary

    The HUI just got really stretched above the 10 day moving average and may need to test the breakout before continuing higher.

    I imagine you also have too large the position size.

  215. Gary

    Looks like the HUI tested the breakout. If it comes back by the end of the day that’s all the sign I need to be convinced the breakout is for real.

  216. Shalom Bernanke

    I added a sliver into that pukeout. Still prefer a couple days down, but will also add the same amount again today if the breakout holds.

    For sizing, I only added 10% of my basket, so nothing big at all. Helps to keep focused on what we should be doing, which is buying selloffs.

  217. LowTax

    SB – Right there beside you. Nibbled on AGQ and some miners. It always feels rewarding to give others a helping hand by buying the shares they puke out!

  218. Shalom Bernanke

    I’m also not too concerned if the HUI trades back below the breakout (around 610), it’s more of a range than a specific price level I’m focused on. If prices should drop t0 $HUI 590, I’d still be a very comfortable buyer while all the top callers come out of the woodwork.

  219. LowTax

    Agreed. Frankly, I’d like to see GLD close its gap tomorrow, after Obama’s latest plan to save the world (tonight’s jobs speechs). I wouldn’t mind dipping into margin just a bit…

  220. Gary

    Joseph,
    You need to quit trading intraday. The volatility is going to break your account. Change your charts to weekly so you can concentrate on the big picture.

  221. trader

    Gary.

    I hear you. Its just the way ive learnt to execute my trades when velocity to the downside is sending retail for the sell button. I was inclined to wait for just before the close on some weakness but the panic selling on open and then the resulting strength was enough for me to enter near the daily lows. Volume now will be the key. Trust me i do listen to you but every trader has their own twist/style.

  222. Joseph Lemma

    Thank you for your advice Gary.
    I did over 300 trades last week and it exhausted me. I’m a young guy. I’m very tempted to go cold turkey here with GLD and wait for the big top.

  223. Gary

    300 trades? You are massively overtrading. You will make your broker rich but destroy your account.

    Reduce your position size drastically so you can hold a position and let it run. The breakout in the HUI is intact. If it fails I will let everyone know and as long as your position size is reasonable you will only incur a very small loss.

  224. Gary

    Why would you do that? GDX is where the breakout is. It’s not stretched above the mean and miners are terribly undervalued compared to gold.

    Gold is still stretched above the mean and probably needs to consolidate for a few weeks.

  225. Joseph Lemma

    Gary,
    90% of breakouts I’ve tried to catch this year have lost me money so I’m not getting on board this one even though you are most probably more market savvy than I am. I also need gold to hedge my substantial cash position just in case the SHTF. The main problem I see with miners is their lack of political clout. Shell, Exxon and Total are backed by their respective governments whenever something goes wrong in a 3rd world country. If Kinross has problems with the natives in Mauritania I doubt the Canadian government will come to the rescue.

    100% gold in my trading account is my neutral position, not cash.

  226. Frank

    Hopefully the Japanese central bankers follow suit and start printing like madmen too since I spend about 60% of my time here and it would reduce my day-to-day expenses.

    I bought corn on the cob for $2 an ear today. It was actually much tastier than any corn that I have eaten in the US. It was from Hokkaido so hopefully not radioactive. (But a lot of things are actually very reasonable here, e.g. fish.)

    Goodnight!

  227. Dan

    Joseph,

    That has to be the first time I’ve such reasoning and fortunately for all of us that risk can be eliminated by purchasing am ETF.

  228. MrMiyagi

    Joseph Lemma,
    I daytrade and I don’t come anything close to 300 trades a month! That’s too much, you can make more on a good trade than 10 mediocre trades.

  229. ver

    Anyone buying/adding GDX as it retests the day’s lows? Seems like it the $HUI wants to close the gap / backtest 610. Perhaps it’s wise to wait until the close today.

  230. MrMiyagi

    Joseph,
    I don’t know how long you have been trading/investing but I think this is the first time I see your profile here. I suggest you stick around and read and read and time entries and exits better.
    No charge!

  231. trader

    Joseph Lemma

    I havent done 300 trades in 7 years and it will probably take me another 7 to get there.

    Your brokers must love you. Dont bother day trading you have the same chance playing roulette.

  232. Dan

    Everything looked real nice in the morning, sure hope we move back up otherwise the chart is back to looking real ugly again.

  233. Aaron

    The whole this time is different crowd needs to be careful. In a liquidity crisis (dollar rally) everything will get sold, that includes miners and gold…initially anyway. What happens after that, is key.

  234. wolf33

    U.S. Postmaster General Patrick Donahoe on Tuesday will ask Congress to take drastic measures to prevent the Postal Service from becoming insolvent and going out of business as early as this year.

    Never before has the Postal Service been in such dire straits: the agency is so low on cash that it may not be able to make a $5.5 billion payment due this month for retirees and could have to shut down entirely this winter unless Congress takes emergency action, reports the New York Times

    likely more $ dwn draib. or massive layoffs.

  235. wolf33

    The USPS is often mistaken for a government-owned corporation because it operates much like a business, but as noted above, it is legally defined as an “independent establishment of the executive branch of the Government of the United States”, as it is controlled by Presidential appointees and the Postmaster General. As a quasi-governmental agency, it has many special privileges, including sovereign immunity, eminent domain powers, powers to negotiate postal treaties with foreign nations, and an exclusive legal right to deliver first-class and third-class mail. Indeed, in 2004, the U.S. Supreme Court ruled in a unanimous decision that the USPS was not a government-owned corporation, and therefore could not be sued under the Sherman Antitrust Act.”

  236. MrMiyagi

    Then I guess the feds won’t let their own go bankrupt?
    Unless they privatize it.

    So I was a tad off on the -500 DOW day, at this rate, we may get a bounce tomorrow.

  237. Blindweb

    Mish: Gold Hits New High of $1920; Miners Should Follow

    He annoys the crap out of me. But he has a very large following of amateur investors. Seems like a confirmation sign for this being the last run for this phase. Amateurs being late to the party.

  238. Dan

    Good to see the relative strength in PM shares holding up with even with everything else in red, hope we continue getting back some of todays gains into the close.

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