THE D-WAVE BEGINS

It’s taken much longer than I originally expected, but we now have confirmation that gold’s D-Wave decline has begun.

A D-Wave decline is a normal, regression to the mean, profit-taking event that occurs when gold gets too stretched above the mean. It is not a take down by an anti-gold cartel. Anyone with a modicum of common sense can look at the long-term chart of gold and tell that this is not a manipulated market. This is just a normal secular bull market, and it is acting exactly like a normal bull market acts.

Folks, these conspiracy theories are now bordering on the insane. I even heard the other day someone blame margin increases for the drop in gold. I guess they completely forgot that we’ve already had two margin increases in the last two months that had virtually no effect on gold.



Every bull market in history has its share of con men and scam artists. Think Bernie Madoff, Enron, WorldCom, etc. The gold manipulation nonsense is just one of the many scams that are going to hitch a ride on this bull. Actually it’s one of the oldest scams in the book. You find a bull market, make a one-way bet on rising prices, tout these “to the moon” prices to suck in subscribers lured by the reward of gigantic financial gains, and then blame an invisible cartel every time a correction occurs that you don’t foresee. It’s a great way of not having to take responsibility when subscribers get caught in a normal corrective decline.

Needless to say I don’t play those kind of games. I try to get subscribers out ahead of intermediate declines. Yes, I’m usually a little early. I have the same problem with tops that every other human being in the world has. They are virtually impossible to call in real time. Subscribers to the SMT newsletter have sidestepped all of this D-Wave decline and instead have been 100% invested in the dollar index. The only asset initiating a strong trend higher.

Actually there is a fundamental reason for a D-Wave decline besides just a normal regression to the mean, profit-taking event. The dollar has now moved into the aggressive stage of the rally out of the three year cycle low. Deflation is starting to take hold in the world again. In a deflation defaulting debt collapses the money supply. There is a growing shortage of dollars in the world. That’s the reason why the dollar index is rocketing higher. As the value of the dollar rises during this deflation it takes less and less of them to buy an ounce of gold. You can see this same process unfolded as the dollar rallied out of the 2008 three year cycle low.

On a much shorter timescale gold is now in the timing band for a daily cycle low. My best guess is that sometime over the next 1 to 2 weeks gold will move down to tag the 200 day moving average. That will trigger short covering and a very convincing snapback rally. However it’s still too early for an intermediate degree bottom. There should be one more daily cycle down into November before the D-Wave puts in its final bottom.

I suspect the next daily cycle is going to be a volatile nightmare that will chew up bulls and bears alike before a final plunge down below the 200 day moving average somewhere between $1300-$1400. As all D-Wave declines have retraced at least 50 to 60% of the previous C-wave advance that would be a minimum target for the November bottom. At that point we should see a very powerful A-wave advance triggered by the extreme oversold conditions generated at the D-Wave bottom. More in the weekend report…

For the next week I am going to open a special $5 trial subscription. You will have complete access to the premium website, archives, model portfolio, etc. You can sample the premium newsletter for a week. If you decide you like the content your subscription will automatically renew on October 1 as a yearly subscription. If you decide you don’t want to continue the subscription just follow the directions on the home page of the website to cancel your subscription before October 1.

Click here to go to the premium website then click on the subscribe link on the right-hand side of the page. You will see the special offer at the bottom of the subscription page. Offer has expired

403 thoughts on “THE D-WAVE BEGINS

  1. ร‰amonn

    looks like Greek default talk is gaining momentum amongst the European officials. The word “default” is no longer a dirty word amongst them, even in public.
    Anyone care the guess the sequence of events that would follow a default?

  2. High 5

    “If you want to put an end to government spending, don’t pay our
    president, senators, and representatives a salary. Give them 10
    percent of our tax refunds every year. In three months, the entire
    federal bureaucracy would be run out of a windowless basement
    in Georgetown, by a ninety-year old guy named Frankie with an
    unlisted rotary dial phone.”

    Dennis Miller, Humorist

  3. High 5

    “Some people actually believe government can create jobs by taxing and
    borrowing from people with jobs and then giving that money to people without
    jobs. They call this demand stimulus. It seems perfectly natural to some that
    government would tax people who work or companies that are successful only
    to give that money to people who don’t work and to bail out losing companies.
    The thought never crosses their minds that these policies are the very reason
    why our economy is in such bad shape. Irving Kristol was correct when he
    wrote, “It takes a PhD in economics not to be able to understand the obvious.”

    From the latest Dines Letter. What Beanie needs to understand.

  4. Danno

    For those stuck in PM long positions there might be an opportunity to sell covered calls at the height of the snap back rally and use that money to buy puts on PMs or calls on UUP. Just a thought. But I’d only sell the covered calls if you can sell them at strike prices near the price you originally paid for your shares.

    You might not get a lot of income for the covered calls, but you may still receive a couple hundred dollars or more (depending on the volatility of your PM shares) per covered call. That’s not so bad for free money and an opportunity to buy calls on the dollar for free.

  5. Harry

    Anyone have any thoughts on the Dines Letter? I was thinking of subscribing but it’s so expensive I can’t imagine it’d be a better from a cost/benefit standpoint than Gary or Doc.

  6. Robert

    Gary,
    Get real there is intervention in all markets as the past few weeks have shown.You name the market and the Fed, central banks ,and god knows who else come in to manipulate the markets.Our government has admitted in comes in to push the markets higher ( PPT )Last Thursady the dow was down over $500 with twenty minutes to go and out of the blue they rally for over two hundred points.Just look at the currency markets ,could any market be as manipulated as they are ,where have you been ?
    To say there is no manipulation in gold/silver is just nuts–as I said all markets are manipulated ,there are no free markets anymore .

  7. Gary

    The Fed certainly prints money with the intention of inflating asset markets, but the Fed can’t direct where that liquidity flows. It’s why commodities continue to rise, to the Fed’s chagrin.

    But there is no active manipulation in the precious metal sector other than what might occur on a very temporary basis around options expiration.

    But if you feel the need to fall victim to the con men and scam artists so you have an excuse for why markets act the way they do then be my guest.

    I prefer to just deal with reality and accept that a bull market is probably going to act like a bull market and trade accordingly.

  8. Danno

    I agree with Gary that these sharp pullbacks have little or nothing to do with manipulation. Would governments (or whomever) like to see the price of gold suppressed overall as long as possible? I don’t know. I suppose that is possible. But these occasional profit taking sell offs are not manipulation. Anyone here who sold their PM positions before or during this plunge actively contributed to the fall in prices. So are you are a dark seed minion of the cabal? Of course not.

  9. St. Deluise

    if europe decides to default vs. print that would put the kibosh on this dollar rally, in theory. right now the dollar is assuming they’ll print.

    regardless i’m still not convinced this rally in the dollar will play out like 08 in terms of its affect on asset classes. when even the swiss are kneecapping their currency, a rally in the fx markets does not necessarily translate to asset deflation.

    here is what you should be looking at: http://bpp.mit.edu/usa/

    you’ll notice a very steep dive in the ‘synthetic cpi’ beginning around 9/08. THAT was deflation and it took everything down with it.

    but what was happening during the 12/09-6/10 dollar rally? the CPI *gradually* dipped for a few weeks then continued to rise, stocks went nowhere (well they rallied at 10% at first then lost it all in the flash crash), and gold lost about 10% in its d-wave but by the time the dollar finished rallying it was up ~.4% from the tippy top.

    not to mention that this rally in the dollar is starting from a lower low–and not a higher low–than the previous one.

    so i would not be so quick to assume any assets are going to be falling much further until we see the CPI fall and legitimate deflation return. and that remains to be seen.

    in particular, while i think gold still has some ways to go to revert properly, since stocks are BELOW their 233 day i think they have considerable upside potential at these levels. again, when the last dollar rally hit they were some 19% over their 233 day and STILL gained 10%. currently they are 10% below it. not that they won’t even make a new low here.. but there is an active buyer out there who has been loading up.

    again, this chart which i will scream from the rooftops night and day- /es on the left and /gc on the right with effective volume in the subgraph

    http://i55.tinypic.com/2ewi5co.png

    it correctly predicted problems in gold at the second peak.

    it even predicted the dollar rally via the accumulation all through august http://i55.tinypic.com/10qw0zq.png

    now it is predicting a rally in stocks.

    just my 5 cents or however much that took away from your life! i know it sounds bonkers but something is afoot here.

  10. Gary

    I have to say your volume strategies just plain haven’t worked. You might want to jettison that strategy and try something else because it is just causing you to lose money.

    That being said stocks are moving into the timing band for a rally. We just need to get the “news” that they have been discounting. I don’t know whether that will be a Greek default or a negative print on the employment report or something entirely different.

  11. SF Giants Fan

    The twist is the Margin increase. How and when during the C wave when it might trigger a selling event (May for silver) or when it can push it over the edge.

    The fuel is there. Sometimes you just need a match.

  12. Beksachi

    DINES letter

    I am a subscriber and honestly, I don’t even read the reports.

    You reminded me to make sure they don’t auto charge me.

    Their report is hard to go through and has a maze of individual stocks and companies to choose.

    The reason I went for it was for uranium and rare earth strategies but look at how they got decimated (DNN).

    Who has time to pick one and watch it carefully. SVM anyone??

  13. Slumdog

    Rob L, you asked where I learned what I know about charts.

    I learned one chart pattern via a commodity broker which was used by a client of his. I didn’t believe it could work. I backtested by buying all the tick data then available, 20+ yrs ago, having software written for me which allowed me to read it (now, it’s all free from outfits like Trade Station, with overlays, too), and I printed out the S&P and Gold in every time frame I could stomach looking at, most valuable being in the 5 min chart. Years of time, all in front of me, and then I printed them multiply until I could see every pattern over as much time as then tick data had available.

    Then I classified them by pattern, pattern being 3 to 4 ticks, and then 7 to 10 ticks, and in every way I thought there might be a pattern. I looked at them from the point of view of percentage move based on the then value of the market. This took months and months of full time effort. I still couldn’t believe them.

    I studied and ascribe to Fibonacci. But those are just goals, with no reason why any retracement percentage would be more compelling than the next.

    With Gary’s and Alex’s and the rare cycle posting by Poly, I get an indicator of which percentage may be the target. But I’ve no ability to trust anyone with any decision involving my financial welfare; recently I carped that I surrendered my decision to influence by Gary and he lashed back. That was bracing, and cauterizing. I then promised I’ll play my own game my way and own the consequences.

    My advice to you? Look at the data without anyone’s influence. See the patterns (I’m ADHD, so I have an advantage) if you can. Look at cycles; look at their patterns; they repeat. WW says he knows the fruit tree pattern. You can see the precollapse of gold on the right shoulder slump pattern on the one hour chart which is what he probably saw, too.

    Find a few things that have high probability based on back tests. Then add those, plus Gary’s and Poly’s and those of 2-3 others here. And use those as checks against your own belief, but merely as checks. What you will know, you will know.

    I want validation. But I’m cauterized. I just like to post what I see. I don’t often read the responses. And I’m right only when I see clear patterns I know and state them here.

    Hours and weeks and months of study will IMO yield maybe 10 approahces, be they cycles rules or patterns you trust. Gary shares his in the Premium site. I no longer have time to do what needs be done, a backtest of his statements. If you have time, backtest those.

  14. Gary

    By using the Dow instead of the S&P Tim comes to completely wrong conclusions. The secular bull ended in 2000. PE’s ratios began to contract at that point.

    This will be the third leg down in the secular bear, not the second. And there is a very good chance the low in 2012 will mark a secular bear market bottom.

    Tim is making the same mistake a lot of people make by trying to compare the present with the past. This isn’t the 70’s and the fundamentals are completely different.

    Tim missed virtually the entire run in gold the last couple of years because he was trying to compare stats from other periods and ignored the fundamentals driving the gold market.

  15. Veronica

    Think only scientists can come up with bio breakthroughs? An excerpt from this article shows what scientists could not do in 10 years and gamers could in 3 weeks.

    “When someone whines that your playing video games is a waste of time, tell them you’re doing it for science. Researchers at the University of Washington have successfully leveraged the power of gamers to solve a biochemical puzzle: the structure of a complex protein related to the development of AIDS. By playing an online game called Foldit, teams of average citizens were able to make a breakthrough discovery in how this protein was shaped even though scientists had stumbled over the question for more than a decade. A combination of computer-created predictions and human 3D spatial reasoning transforms simple game playing into a mighty problem solving engine.”

  16. gideon

    gary,

    first thanks for your work, I think highly of it.

    With regard to tim wood, I must come to his defense. Tim’s conclusions are primarily based on the fact that both the dow and tran made new highs in 2007, and therefore based on dow theory that could NOT have been part of a secular bear market. Thus, 2007 was THE top of the old bull. I am NOT saying i agree with this, but within the context of Dow theory, he is correct. you can of course disagree with the theory. Personally, I see 2000 vs 2007 as similar to the duality of light(wave vs particle). In some ways 2000 was the top(PEs, gold bull began etc) and in other ways 2007 seems to be the top. It is similar to discussing whether 1975 or 1982 was the bottom of the prior bear, one could argue both ways and I think it is both.

    Regarding manipulation, I do not invest based on it, as I do not think the primary trend of a substance can be changed. However, in the short term, bia afterhours SPY action and HFTs, equities are manipulated, and I think GATA has some very good evidence of central bank manipulation of gold, which pronounced the prior bear in gold i think. Please keep an open mind as when you read their stuff, they are NOT lunatics, much of it seems irrefutable.

  17. Gary

    If a con doesn’t seem irrefutable then no one would believe it ๐Ÿ™‚

    The government has no need to manipulate gold. It is irrelevant. What they need to manipulate is oil. They can’t do that either though.

    The fundamentals behind a true bull market will overwhelm any manipulation attempt other than in the very short term, which of course is meaningless unless you are a day trader.

  18. MrMiyagi

    Gary,
    “That being said stocks are moving into the timing band for a rally.”
    What timeframe do you figure on this because, unless I am wrong, you were expecting a decline closer to the 1100 mark before a bounce.

    A note to those who are thinking of subscribing, the 5$ offer is a gift, a steal.

  19. JEFFtheFLEA

    A broker told me someone in England was/is trying to cornner coco and is getting crushed right now
    Supposedly he owns 15% of the marke

    He should have followed gary

  20. Mษ™tuลกรฉlaแธฅ

    The price of gold in US dollars is tied to the perceived value of the US dollar. This also interconnects with the price of oil in US dollars. The US uses its military to install and prop gov mafia regimes amenable to selling their country’s oil in US dollars (Central Bank welfare/warfare model). The US gets this oil (and not just oil) basically for free, because its basic expense in paying in US dollars is the cost of the paper or digital credit. It would be very easy to disrupt this arrangement by simply undermining the corrupt regimes that sell their resources and transact in US dollars, or undermining the US military and it ability project imperial power.

    The “con” is the perception that US petrodollar imperialism is invincible. US propaganda hegemony and therefore military and economic hegemony is coming to an end. Sooner than what most people might think.

  21. jeff

    Gary in a D-wave is there a price level that the price will not rise above as it works it way down (that is the last peak 1930s or the last DCL print 1705)? Asked the question on the premium site if you want to answer there.

  22. wolf33

    Sf

    Should re read Gary’s bio on his search for holy grail. we would all be better off to stop searching and read/follow Gary.

    I took PG once—a big mistake.

    g/l

  23. gideon

    gary,

    For kicks, try writing to a letter to a central bank or two inquiring about gold, gold swaps, gold leases, or gold storage etc and see what they say. I assure you they will say national security, no comment or ignore you. They act REALLY weird when it comes to anything gold, and that in itself is highly suspicious to me.

  24. Neo

    About Miners, does anyone know any reason for the impressive correction of NG, in adition to Golds correction? Very scary fall of NG!!!!

    Thks

  25. Arive

    “Art of short term damage control and perception management”

    Or

    “9/25: King World News cheerleaders vs Cycles theory” continued….

    Been waiting till Sunday to see how KWN news would squirm out of last weeks PM “mess” after having consistently touted (James Turk) of >2100$ in summer and Oct.

    Well, talk about sophisticated communications and sales technology- here are the summary strategies that one can apply to any situation:

    1) Acknowledge immediately “the mess” but not necessarily you had been wrong SHORT TERM.
    Then immediately divert attention to another ongoing crisis (Europe) and emphasize the big picture (“system is broken”)

    2) Attribute “mess” to something everyone is familiar with (volatility) and discuss specific past example (tech bubble volatility).

    3) Re-emphasize at least one key message that you have been touting /no one can deny and why it’s all the more important now (“dollar cost averaging in PMs”).

    4) Throw in some brilliant and catchy analogies to stir up imagination “world is like wobbling top just before it stops spinning” and “T-bonds are as safe as Pearl Harbor”).

    Throw in an additional line to stir the emotions (“manipulaton of PMs” for extra icing and keep the paranoid crowd hooked.

    5) Throw in SPECIFIC details that perhaps only yourself (European residing James Turk) has access to (German government risks) to maintain confidence that you do indeed have frontline data.

    6) Ratchet up and throw in a profound projection (“this may be worse than 2008”)

    7) …with a profound BIG PICTURE explanation which is inline with your agenda (“2008 was a liquidity factor – this time it will be a “safety” factor)

    8) END with a short term projection that has high probability of being met (expect a “sharp rally in metals this week”)

    Disclaimer: I am James Turk customer (goldmoney) and reason for my obsession with monitoring these guys is partly for fun but also ever since Gary mentioned “scam artists/sophisticated marketing”, I am trying to see if KWN falls into that category.

    Personally, I felt good after the clip but let’s see if gold breaches the 200dma in Oct/Nov.

    http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/9/25_James_Turk_files/James%20Turk%209%3A25%3A2011.mp3

  26. Shalom Bernanke

    I’d add that I’m very interested in buying almost any commodity when the CRB pulls back to around 285 or so, or when copper gets below 2.90

    For now, it looks like I have some rough sledding ahead with my miners. I’m holding firm, but don’t see much to do until we washout to those levels.

  27. paul

    SB, are you holding the miners or do you have stops in place that will you get stopped out if miners reach those levels?
    What levels can we expect for the HUI/GDX?
    I hope we get a small bounce this week in order to sell a part of my miners. I’m sitting on a large pile of losing miners now, too many for holding through this D-wave, I guess.
    I was surprised to see miners take such a hit, as they hadn’t gone up like gold did.

  28. Liquid Motion

    Gary,

    Good call on GOLD.

    Dont agree with your call on USD though. Coincidental that the USD began its appreciation at abt the same time as the sovereign debt situation in EUR became viral /widespread with the stock markets recognising same and destroying wealth through that mechanism. At this point there is no debt destruction only an implied one through default. USD appreciation is the equivalent of EUR depreciation. Fix the debt problem in EUR and the USD resumes the downward trajectory. Granted the bounce off the 3 yr low is a cycle trend (read needed to occur), the CB’s and the western govts will be hell bent on protecting their interests and that of the elitists. We cannot discount money printing in this environment from the ECB or the FED or both. Deflation (destruction of money supply) will not be possible or feasible when the “ONLY” desirable outcome is inflation and lower currencies. Although politically difficult, the master B will have his finger poised to press the start button.An engineered “market” adjustment is taking the same shape as what it did last time around. Let the market falter, ring the bell. time to print.
    I have no doubt that the path ahead is an inflationary one.
    We all know that debt destruction is one solution to the world financial problems. Inflation is another solution.
    You cannot argue with the point that inflation encourages growth and therefore stimulates interest rates. AND YES we all know that the last 2 attempts at QE achieved ZERO. Deflation on the other hand is destructive. In an environment such as the one that exists in the world today, you have limited growth out of the US and little to none out of EUR (except GERMANY). Asia is steaming ahead. An abrupt deflationary environment does not bode well for western economies when the base is already very weak.
    A key to the US stabilizing is the housing market. The stimulus for growth in the USA will only be achieved once housing has a solid foundation. The US economy is 75% consumer based. Free up the consumers from their debt burdens and voila…..growth.
    So dollar rally, money printing, dollar decline, stocks up.
    We cannot discount the amount of external debt the govt is carrying. Nothing there has changed. So the value of the USD needs to fully recognise that. So too does the price of GOLD. You cannot tell me that the US in no less likely to default than the periphery of Europe.
    Agree very volatile times indeed.
    Your thoughts and comments are always welcome and taken on board with other insightful data.
    What is clearly evident is wealth/capital preservation and staying liquid to avail of opportunities or to simply ride out the market gyrations in preparedness for better times.

  29. Gary

    Actually inflation does not equal growth. That is one of the basic flaws with Keynesian economics. We’ve just seen two years of inflation and it created no growth. It just created commodity inflation which destroyed the economy once it got too high exactly as I predicted it would over two years ago.

    This is the same process that played out in the 70’s.

    It’s simply not possible to “print” prosperity. The world doesn’t work that way.

    Trust me this is not an engineered take down. This is an expected move down that cycles told us was coming, and that I have been predicting for months.

    The dollar rally is because deflation is taking hold again. The global economy is rolling over into recession. That is massively deflationary. That is the reason for the dollars rise and deflating asset prices.

    The summer of 10 the dollar rose mostly because the Euro was being debased although we did get a mild whiff of deflation. This is entirely different.

    This is a global economic contraction that is getting underway. Trust me the powers that be will do everything in their power to stop it and they certainly didn’t initiate it. It is ultimately going to cost most politicians their job.

  30. Danno

    To holders of 2x EFTs. Just a reminder..

    If the underlying commodity moves 50% in one day, your 2x ETF could go to ZERO. Or so close to zero that they might shut down the ETF and your position would still essentially be wiped out.

    So if you’re going to mess with 2x ETFs, I would suggest carrying some kind of bet the other direction (hedge) because a stop loss may not save you in an event like that.

    A rise or fall of 50% in a commodity is very unlikely in a single day. But are you willing to bet your account on it? I’m not.

    The danger is even worse for 3x ETFs.

  31. Blindweb

    Manipulation: Central Banks may manipulate the price of gold, unlike oil, because it is one thing they can all agree on and therefore manipulate; albeit with temporary success. Everything is temporary in this world; they only need enough time to cycle to some next phase. Didn’t Jesse’s Cafe just post a quote from Volker about wanting to manipulate the gold price? Personally, I don’t really care since it’s not worth my time delving into all the details to prove manipulation either way.

    KWN is obviously obviously a gold permabull. There are a handful of people I like there. Jim Rickards is one of the best macro analysts out there IMO. He was talking about operation twist 6 months or a year ago saying there would clearly be no QE3, with an in depth explanation. Places like this were saying QE3 was coming in August. Hathaway, Fleckenstein, and Rick Rule are also good.

    I’m going all in on a break below $1500. I believe the A-B-C-D pattern will break with or without this being the final phase of gold. This is no Nasdaq or housing bubble. People are slowly recognizing this might be as bad as the late 70s to early 80s. Then comes recognition that its 1930s bad, and finally collapse of Rome bad. Currently hold a small gold long position and stock short position in my trading account.

  32. royboy1979

    WW, I’m going to be looking at that 1577 mark as well…nice battle at 1630 for quite awhile tonight until it gave it up just past 9:15 PST. Nice drop has transpired. Hope all is well.

  33. Hack

    The market still hasn’t broken down yet. When I see AAPL, AZO and MCD at near all time highs then I suspect we have more downside. But who knows, maybe the Fed will step in with their PPT and prop up the market…

  34. Liquid Motion

    Gary,
    Let me get this clear.

    You say the powers that be, have no part in the market movements ?

    AND

    The USD rally is the result of deflationary forces ?

    I want to pose some further observations here.

    If the fed (actually Ben) categorically state that their intervention via QE was to prop up the market (preserve wealth), then cant we assume that knowledge of its unwinding would have the opposite effect. Isnt that tantamount to manipulation ? Call it action or inaction ….in either event you have culpability.

    Concurrently once the printing press is put on pause, doesnt that in itself project to the market that asset prices are not being supported. Market was in denial until the death knell (no QEIII).
    Also tells the market that USD freefall is done (needs to put in a low). The chart of the USD coincidentally rhymes with the “FACT”.

    Here we have a confluence of market forces.

    Dollar rally was inevitable when the FED (and congress)said NO.
    Dollar rally when “Sovereign debt” becomes a real default proposition.
    Market support ended when the FED said NO and default on the agenda.

    Agree that the printing of money was not in itself stimulatory in its effects. The side effects (commodity inflation) was IMHO a known. You cant print money and hand it to the gamblers without them gambling.

    Here is some food for thought. Money goes to Banksters on precondition that same is used for the commodity play. Who is the biggest user/consumer of commodities (excluding USA)in the world and who holds the most US external debt?

    What is evidently clear, aside from the monumental failure to arrive at any sustainable growth, was the capitalisation of BANKS and through that, the opportunity lost/misplaced/misdirected. The governments and CB’s still haven’t found an acceptable way to funnel the money into the hands of the consumer while simultaneously reducing their debt.

    What is patently clear is the undeniable distaste to accept debt destruction and deflation.

    When such is presented to ruling powers, the clear path to resolution/finality is inflation. Deflation, as you point out, may be short term, but going out two years from now the bond market is saying that we are in for one helluva hiding on interest rates and inflation. If its one bubble that has fallen under the radar then the BOND market is IT. Lambs to the slaughter all over again.

    Currency debasement is not entirely off the agenda. Lets call it “fall hiatus”.

    The Euro, USD, CHF ,JPY ,GBP all being debased for the “good of all”. This will get ugly. Currency wars lead to trade wars lead to protectionism. The non participant….RMB/CNY. They dont want to party with others, they have their own party that is going on in their part of town and they are keeping it tight.

  35. TZ(8155)

    Stopped out less than 1% loss. Very weak here. There should be SOME boucing, but we just aren’t getting it for now at least. Surprising (of course not based on gary’s comments, but I’m doing my own thing here a few times…and paying for it a bit.)

  36. Harry

    Dec silver contract got all the way to 28.06 already. I was planning on waiting a few months to start buying physical again, but at this rate…

  37. TZ(8155)

    You know, the consistent mercilous drops here make me think some funds are blowing up or something. Bodies may start floating to the surface soon.

  38. TZ(8155)

    It looks like one or more entities are hemmoraging and HAVE to get out at all costs. And I’m sure the bullion banks are chasing them down. Wow.

  39. Rob L

    WW,

    Is this falling fruit pattern an actual name for the pattern? I tried Googling it and all I found was trees that had falling apples.

  40. TZ(8155)

    Miner open tomorrow is going to be a bloodbath if these prices hold. Not only do you have the overnight drops, but you also have the slowpokes who got crushed last week, but didn’t do any selling (and got the chance to think it over over the weekend), who will now panic like crazy at the the open.

  41. Vonda

    It just keeps going. Incredible!

    I remember months ago thinking I’d buy silver at $26, following the D-wave. That’s 15 cents from here! (Probably breached whilst I write.)

  42. William Wallace

    Rob L,

    The falling fruit is a name I have applied to a certain type of pattern that I found trading and watching futures for hours upon hours, day and night for several months. Its best seen in a 5 min chart, but unfortunately I seen it form on a daily chart, being this top and drop, this is what made me pull out of miners before the stops were triggered and I haven’t been long futures since. It plays on simple moving averages and obeys them immediately.

  43. Vonda

    Nice one, AKA!
    Maybe this is a Z wave.

    Glad you got stopped out, TZ.

    Oh my, I should to bed and be ready for the show in the a.m. So bloody nice to be in the balcony, and not on stage for this one!

  44. William Wallace

    Gold is bouncing now, first red candle on a 5 min closed on the 150sma and the following green candle has now bounced right of the 150sma on a daily. This will not hold unless the 10sma on a 5 min chart swoops below this bounce and supports and confirms a bounce, if the 10sma cannot get under the move it will fail for sure.

  45. TZ(8155)

    WW,

    I agree with you that we might now actually have a bounce point. The drop got emotional and I was just starting going ‘wow’ and completely unwilling to buy anything.

    That’s usually a sign.

  46. William Wallace

    TZ,

    We are bouncing off the 120 but if you plan on buying wait and see if the 10sma on a 5 min confirms the move higher. If it moves above the 10 and then breaks down we will make new lows.

  47. TZ(8155)

    WW,

    I’m not buying anything. My previous buypoints broke WAY too quickly and I’m gonna watch a bit.

    As they say…when you don’t know what is going on (or when what you are doing isn’t working). Get out.

  48. NJ

    Gary:

    Is this drop in Gold unfolding much faster than you had imagined? At this rate, it looks like the D-wave be over sooner than mid November! Blood on the streets – thanks for getting us out!

  49. Slumdog

    Gold did the 100 pt drop. and it’s setting up now on the hourly for a 90 pt run to 1723 or a drop to 1450.

    Does anyone know what the direction will be over the next few hours?

    I’ve posted the high probability numbers, above. But I can’t see which way it’s going. On the hourly, the market has reversed off of 1535. But I can’t see clearly. That gap in the GCPit on Friday is a delicious target. So, that’s where I think it’s going today, as soon as the panicked weakhands leave. I think the market will mark time for the next 3-4 hours waiting for the US traders to awaken and panic out. Margin calls, etc. But the direction is a recovery bounce when the weakhands are gone.

  50. sophia

    Thanks Slumdog!
    I have missed the bottom this morning ( school run) and I am pretty frustrated as you nailed it on Friday!
    Good trading to you and thanks for your help

  51. Slumdog

    Gold 1612, price isn’t moving though on the 30 min, there’s huge pressure to the upside. So, morning I’ll guess will find the market diving back to a double bottom 1535 range leading to the bounce with nobody on the rise. Excellent clock cleaning for the newbies and overeager traders. That’s my guess, double bottom and that will panic the herd, making profits free as soon as they’re gone. Gotta hit the hay. Biz done in China, free to rack out for 4 hours.

  52. Danno

    Silver 2011 is still tracking silver 2008. If that continues there could be 4-5 counter trend rallies before the ultimate bottom is discovered in about 2 1/2 months. Some of the rallies in 2008 lasted over 2 weeks each, including one monster rally (the 2nd rally) that lasted 2 1/2 weeks.

  53. Shalom Bernanke

    paul,

    Yes I’m still in my miners. My stop is based on overall portfolio drawdown, where if I lose a certain % on all combined positions I will be forced to sell them all.

    As bad as things look, and the fact I look primed for another drubbing today, I’m staying Old Turkey. Only way I’d change that is if I thought something had really changed, other than prices.

    I’m hoping I have the fortitude to see this through the next several weeks, but selling here is not an option for me. If anything, I’m patiently looking to dial up my total risk another 2.5 to 3%, bringing me to my max 10% total risk.

    Good luck out there!

  54. Gary

    Considering that silver reached $25 overnight, and that this is just getting started, I wonder if Basil believes me about the low 20s on Silvers broken parabola now? ๐Ÿ™‚

  55. SF Giants Fan

    Looks like John Townsend over at TSI trader has been doing a lot of emotional trading.

    Got crushed on TNA. Lost 30%
    Sold DZZ at 4.55 last week. Lost 11%
    Bought NUGT on Friday. WTF ?

    The guy has a pretty good track record but since the drubbing on TNA looks like he is trying too hard to make it back. No way I would have sold DZZ

  56. Dan

    SF giant,

    “No way I would have sold DZZ”

    It’s always easy to say stuff like that hindsight regarding other people’s trades.

    I think John’s blog is great and it’s free so dont think anyone has any right to complain.

  57. Joseph Lemma

    I’m seeing capitulation even in the physical market. Just bought 1.5 kilos of silver coins for 25% under spot.
    The bottom in silver can’t be far when even stackers think the bull in metals is over.

  58. William Wallace

    Sophia,

    Sorry I missed your last post, I went to sleep. I have mentioned many times before that when gold puts in a short term bottom it almost always retraces back to the 150sma on a 5 min, before I went to bed I noticed the 150sma was at around 1630ish…so my answer to you would have been that. I see that gold did exactly as expected. Again, sorry I missed ya post.

  59. Gary

    I find it’s a lot easier to see the what’s really going on with the weekly charts.

    Look at those and then decide if you want to jump in front of this.

  60. sophia

    Thanks W2! please do not apologise, and thanks for coming back to me as soon as this morning!
    I missed the bottom of the overnight session as I was doing to school run, but I am now sharpening my pencils for further volatility.
    Tough market though, we need to stay focus.
    enjoy your day my friend!
    Sophia

  61. Keys

    Well silver is firmly out of the “old turkey” level….not that I won’t buy it, just not with “old turkey” in mind. At this point only physical gold is at my “old turkey” level…and then we scale down…Glad I got out of silver back in April, but was really wondering if this was going to be the first parabola that wouldn’t break down.

  62. Poly

    Resist the urge to catch (trade) these moves in Gold/Silver, in both directions. We’re witnessing the mother all of all bear traps here. Prices and Sentiment will be so depressed that one can make a small fortune, if they avoid blowing their capital until then.

    I’m amazed at Silver’s collapse. I thought possibly $25-$26 at the final bottom. Yikes.

  63. Gary

    Folks remember the open is all about emotional retail traders…as we have just witnessed. The close is about smart money and smart money almost always trades in the direction of the larger trend.

    They love when the little guys get all excited at the open. It gives them someone to unload on or buy from as the case may be.

  64. Gary

    Folks this isn’t about price levels this is about time. It’s going to take time to correct a 2 1/2 year C-wave.

    People are assuming because of the prices we saw just last week that there has to be a downside price limit.

    Real estate investors have been making this same mistake for 5 years now. Not that the D-wave will take five years, but it will almost certainly take another 5-6 weeks.

  65. CMT

    FWIW, I was up almost 50% for the year by late March. Then I sold all my AGQ with silver at 48.

    Smart, huh? Then I tried to pick the bottom and gave back 80% of my profits. I TRIED TO PICK THE BOTTOM.

    Something about catching falling knives, seems to apply now.

  66. Shalom Bernanke

    5-6 more weeks is gonna feel like eternity to me! lol

    I put limit orders to buy/add below the market prices into that 10 am selloff, but didn’t get filled on much. My intention was to turn up the dial on my total risk another 1/2% (would’ve gone 1% but early Mondays are not usually the best time to trade, IMO)

    I didn’t get filled on most of my basket, just dinky shares here and there. I suppose I’ll keep them out there the rest of the day and see what happens.

  67. Gary

    That’s just what emotional retail traders do. They are always trying to spot trend changes.

    Professionals on the other hand ride trends until the trend changes. This is why cycles are an invaluable tool to help us spot trend changes.

    Much better than emotions or chart patterns. In case one hasn’t figured it out yet charts will always say an asset is going lower at a bottom and higher at a top.

  68. St. Deluise

    choking up stops on my QQQ longs to the LOD. “we’ll see”. p/l on those oscillating around zero here.. there’s still a lot of fear and panic out there so anything can happen immediate term but my jazz still says there is more demand than supply.

    if NFLX can break and hold 138 that might protend to a heck of a jump.

    gold looks like a good bounce play too, to 1700 at least.

  69. Gary

    I’ll say it again. It takes time to correct a 2 1/2 year C wave.

    We may or may not have put in the daily cycle low, but the left translation of this intermediate cycle has high odds of completing the move below the last intermediate low and spawning a true D-Wave decline that retraces 50%-62% of the prior C wave advance.

    This is why I use cycles in the first place, so that I don’t get distracted by technical chart patterns. It’s also why I use sentiment. The sentiment in gold still has quite a ways to go before reaching truly oversold conditions. And the bounce out of the impending daily cycle low will almost certainly slow down this process.

    Bottom line, intermediate degree bottom isn’t do until sometime in November.

  70. TZ(8155)

    Gary,

    I’m gonna make a few thoughts here and hope you respond in kind.

    I wish make an argument that gold has bottomed overnight. THE bottom.

    I’m aware that might not be true, of course, but hear me out and tell me your thoughts (I’m still mostly cash so I’m not putting money behind this as of now).

    1) For those who believe in the “previous intermediate lows hold except for 8yr selloffs”, then we pretty much went down to almost hit the last INT low. If that rule is good, then we’ve seen the low. You are arguing against this rule for this D drop.

    2) The gold market character is changing (as you have noticed too).

    As more people come in it appears to be adapting to trade like the stock market and not like ‘old gold’. In other words the tops are rolling over instead of spikes….but that would also mean that bottoms will also change to become…SPIKES instead of long drawn out recovering bottoms. No? Not possible?

    3) Your “C waves usually retrace X%” is a valid observation to gauge the expected pullback here (I think you are suggestiong 1300-1400), HOWEVER, unlike all the previous C waves, the measurement of where this one ‘started’ is much more fuzzy (or has some problems).

    By that I mean that the 2008/09 crash and recovery (by which you then gauge where this “C started”) is only a SINGLE data point on the chart. We have multiple “C waves tend to do X” observations, but we do NOT have multiple “C waves AFTER 8 YEAR CRASHES tend to do X”. Since we only have one I can think of some ‘gotchas’ in this situation:

    A) the “C low” after 2008/09 crash is NOT where it normally is. Meaning that for some reason right or wrong we all find out that you measure the “C wave start” after a 8yr crash at a DIFFERENT POINT then usual. Perhaps 1150 zone for example. I’m aware this breaks the rules of the ABCD type draw, but maybe that is correct “after the 8yr crashes”. Since we only have one how would we know?

    B) perhaps the D pullback after a previous 8yr “D crash” follows a different rule. Perhaps it follows an alternate ‘greater/lessor’ rule such that because 08/09 D pullback was SO MUCH the pullback THIS TIME is LESS than previous expectations. Perhaps the greater number of people causes it to fall faster, but recover quicker and more shallow?

    4) Finally 1300-1400 simply seems like a huge gift after hitting 1900. I find often that when any price seems like an easy buy the odds are you will never get there for that exact reason. Markets don’t make things easy. Easy buy points are usually not reached cause the price stops at the higher up points that nobody wanted to touch.

    So like I said, I’m in cash waiting, but I have some arguments here that the market (as markets do) might throw us a curve and not behave as per previous “D selloffs”. Your thoughts?

    PS: also I should note that I believe this is the final selloff before gold now takes off and enters the massive public participation mode of the rally. One of my beliefs going forward after this bottom (whereever that is) is that the ABCD pattern will also breakdown – just like it did near the ending year or two of 70’s as well (by my read).

  71. Gary

    There is no ambiguity as to where the C wave started. It started in April of 2009 at the D-Wave bottom of $860.

    Way too many people are assuming that the magnitude and duration of the last C wave will prevent gold from correcting extensively. And that is the exact wrong assumption. The further anything stretches in price and time the more violent the correction tends to be when it comes.

    The rubber band theory.

  72. William Wallace

    Gary,

    Charts are good for short term trades, definitely not trying to catch long term trend bottoms or tops, and anyone who thinks otherwise is making a big mistake. Although I can spot short term bottoms (and have many times, riding them back to the 150sma on a 5 min for atleast a $15 move or better) as I called last night… it would be impossible and irresponsible for me to say whether or not it was indeed anything other then a short term bottom.

  73. Gary

    And since gold has shown no ability lately to fight a rising dollar, when that bear flag breaks lower in the stock market it’s probably going to push the dollar through that 79 resistance level.

    That would suggest that any oversold bounce here probably still has another leg down along with stocks.

  74. St. Deluise

    to be honest i don’t even know what a bear flag looks like. diagonal trendline analysis is complete bunk imho. you can always draw something that supports your thesis.

    all i see is that day by day, there is more buy volume coming in than sell volume.

    that could very well change but it has yet to.

  75. Gary

    I use technical analysis that confirms what the cycles and sentiment are telling me.

    If the cycles and sentiment don’t confirm that patterns are just lines on a chart and are meaningless to me.

  76. Joseph Lemma

    Gary, what do you think about platinum’s inability to breach the 2008 high? Couldn’t it mena that the fall in metals will be much worse that anticipated? Maybe silver in the teens and gold close to $1000?

  77. Gary

    TZ,
    I fixed it. I think it’s the length of your posts that is triggering the spam filter.

    You want might want to break your posts up into smaller comments.

  78. St. Deluise

    now that’s what i call bear fail.

    if anyone cares, new SPY system buy target: 116.2 with stop 113.7

    that should be it for me today, good luck everyone. things may not be as they seem.

  79. Frank

    TZ, I expressed similar sentiment on the premium site’s blog. I also don’t buy into Gary’s call for 300 on the HUI, even though he characterizes it as a guess.

    I think 1300 is possible if we get a complete breakdown of the stock market a la 2008-9. So it might be prudent to hedge using the broad stock market or XLF. Or some French banks.

    But even if people are sold on this analysis I repeat that people should start scaling at some point if they have no PM exposure. Like below 1500. GDX at 50. NGD at 9 or 10.

    This is the ultimate and finaltest of the ABCD gold cycle theory going forward.

  80. Gary

    Frank,
    The HUI chart was just to show trajectory. The miners will bottom when gold puts in its intermediate bottom. I have no idea what level that will occur at or where the mining index will be at that point.

    My thoughts of how this should play out over the next six or so weeks are in the nightly reports.

  81. Poly

    IT cycle lows don’t “touch” overnight and come roaring back. They also do not take a mere week to unfold from near all time high’s to IT lows.

    They are resetting events that need to punish and expel speculative tendencies, positions and sentiment. They generally form lows when many have given up hope. We’re not there by a long shot.

    TZ, the only qualification for this being an IT low would be to ignore July 1st (and what i wrote above) as the previous ICL, use the 1/24 week as the last ICL and mark today the ICL of a stretched 35 week cycle. Not impossible, extremely unlikely, IMO.

    I say Gary has the marking spot on, a DCL at any given day here, a decent rally back to $1,720ish area followed by 20-30 days of unpleasant torture for those ignoring to believe.

  82. William Wallace

    Yesterday my wife says to me “poor little squirrels, they are dead all over the place (because they are running all over hiding food right now for the winter and getting crushed by cars)…I said “yeah I know, thats because they all got their nuts buried in the ground”

    She looked at me all googly eyed…lol

  83. William Wallace

    Poly,

    Definitely on point…having seen this pattern countless times it never ends in a V return to new highs…more like a drop marginally lower then a major level, then retracement to that level, at which it wrecks shop while it bounces around that level before breaking out.

  84. Frank

    That’s the nature of leveraged ETFs. I am surprised that you are surprised. I don’t touch the things with a 30 ft pole. Volatility is going to kill you. Look at how SKF and other leveraged short ETFs under-performed in 2008.

    I think that I am going to reduce some miner exposure if we get a bounce into the 1700s.

    Another observation is the weakness in juniors. At first glance I thought the silver component was weighing on GDXJ, but GLDX is doing as bad. I think people should think about scaling into GLDX for the long term if they don’t want to risk specific junior exposure. The problem is that you are buying a lot of junk along with the good stuff.

  85. Silverhound

    David / Jenny

    Sorry for the late response, I had logged out for my weekend before you posted and came across it when I was catching up on the discussion.

    Yes I will happily post the chart I sent to WW on friday amongst all the chart bashers on here today ๐Ÿ™‚

    A couple of comments to go with it:

    – I focus on the blue waves and correction size, anything smaller is just “wiggles”

    – I don’t trade these waves but use them as a “potential road map” and wait for price to confirm them.

    – I do trade the chart patterns I see as they offer an entry price, a target and an exit price if things go wrong.

    – The abc wave 2 isn’t a target, just an indication of a bear rally once price completes wave 5 down.

    – I think we are currently in backtest mode of the broken neckline. I’m expecting to see some capitulation selling and positive divergence on the MACD to mark the end of this move down.

    – The bear is still young so once wave 2 is complete it should give some more info to help project the rest of the move and may mean a redraw.

    – Lastly, please don’t send the boys round if I’m wrong ๐Ÿ™‚

    SPX Chart
    .

  86. Dan

    AGQ and ZSL are still red, this is really is bizarre. Actually a little scary to be honest.

    A lot of people have said many times that if the SHTF these etfs are not reliable and today’s action seems to be validating those arguments.

  87. Danno

    Dan,

    I think the closing prices of AGQ and ZSL will tell the tale. Or at whatever time their prices are ‘reset’ to match the underlying. I should know how that works and I’m ashamed that I don’t. I contacted ProShares today and am awaiting their response. Maybe someone else here can enlighten us as to the ‘reset’ procedure or whatever it’s called.

  88. William Wallace

    All this money coming out of Gold may pour into stocks at this daily cycle low, wonder if we will see the dollar rally out of its DCL with stocks rallying also, although I cant see the dollar rally hard with stocks rallying.

    Gary what do you think about that?

  89. Rob L.

    Poly,

    Although I totally agree with your overall ideas about IT cycle lows, the last one, in July, didn’t act as would be expected.

    It also came off the low like it was shot out of a cannon instead of gradually moving higher, which is often the case.

  90. St. Deluise

    action in stocks today is absolutely ridiculous.

    just halved my longs to something i don’t have to watch every hour. “in theory” /es 1102 should hold but i feel like i’m driving a formula-1 car blindfolded right now.

  91. Rob L.

    WW,

    I was kind of thinking the same way.

    Poly said:

    “They are resetting events that need to punish and expel speculative tendencies, positions and sentiment. They generally form lows when many have given up hope.”

    The last cycle low did the exact opposite – it punished the patient investor initially, and then threw many off early, after the initial run-up. Although, I remember Poly screaming that it would go further.

    You gotta give credit where credit is due.

  92. Harry

    By the way, to anyone long equities here, I should point out that we’re still in the early part of the timing band for a DCL. Also, DXY appears to be making a textbook bull flag. I took off my stock market shorts on Friday and I’m not messing with stocks here, but I would not be surprised to see another leg down.

  93. David

    Silverhound,

    Thank you for posting the chart. It is along the lines I expected, except in a longer time frame. That helps me alot.

    I also appreciate expecting a possible divergence on the MACD to mark the bottom. That would help pinpoint the bottom.

    Don’t worry about the boys. They will stay in line or….

    Jenny

  94. Poly

    Thanks for the shout out Rob L.

    Yes the last IT cycle low (July 1st) didn’t do that (the resetting piece) for all that long because (WW points out) it was leaving as many behind for that final launch to a major top. I had seen that behavior with pretty much all of the blow-off tops in gold so far. As I was certain the July 1st was a ICL very early and the action out of that low was so explosive, I was fairly confident we had a blow cycle to come.

  95. Danno

    I downloaded historical prices for AGQ and ZSL. A quick calculation of closing prices since 12/04/08 shows that ZSL on average has under performed AGQ by roughly -34%. I should double check that figure but I’m pretty sure it is in the ball park.

  96. Gold Lion

    Blindweb said..
    “I’m going all in on a break below $1500. I believe the A-B-C-D pattern will break with or without this being the final phase of gold.”

    I personally think that is a smart move. I for one don’t think anything has changed that makes me want to be long the DX, even for a trade. I did some buying today my self (silver).

  97. William Wallace

    Rob L,

    Yup, I was one of those patient investors waiting to see a bottom on the 150 as usual, and when it didnt I waited for confirmation at a break of 1550 to finally enter. I did get shook out of my big DGP position a bit early by Gary, but like Poly and with Poly’s confidence and help I did see us going higher and stayed long futures into the 1800’s, while trading in and out (long and short) of futures straight to 1900, my last short being put on at 1900 and being taken off in the mid 1800’s.

  98. William Wallace

    Rob L,

    Whats funny is that I had called the low in July, and certain members even bailed out of puts on my call, but I refered to it as a pause and bounce of the 100sma as I had noticed with all the previous IT declines. Unfortunately I didnt think it was a low as I mentioned earlier.

    Poly without doubt basically knew the blast out of July low was going to spit out a parabola, he couldnt have been more right…and he maintained that mindset until the end. Much respect for that man ๐Ÿ™‚

  99. Frank

    GDXJ has a lot of mid-size juniors and silver miners. GLDX has real juniors in the exploration phase.

    I think GLDX is down a even more than GDXJ since its inception in the fall of last year.

    I am not saying that it is going to make more money but if you want true exposure to junior miners then this the play. Eventually the majors are going to run into a wall, but they continue to be under-valued vs. gold.

    One junior that I might pull the trigger on soon is SBB (Toronto listed). It’s now 50% off its peak. It has a property that should make it an acquisition target for a major.

  100. ver

    I’m stil not convinced the dollar put in a daily cycle low two weeks ago. The low was in the exact timing band and the move out of it was obviously strong, but the 5-day RSI never reached oversold as is typical with daily cycle lows. If you look at the dollar’s big move out of the daily cycle low in May, it looks quite similar to now with a surge up, a more shallow correction to backtest the 50-day with mild damage to RSI, another strong push up, and then after a few sideways days it moved into a proper cycle low. Add to this the fact that it looks like stocks and PMs are ready for a relief rally and it could very well be that the dollar corrects for the next 1-2 weeks until stocks and PMs rollover again.

    Now that said, there seems to be enough strength in the dollar rally now that rather than giving all the gains up, we’ll probably chop around sideways and maybe retest the 200-day / breakout region before the next leg up.

    My two cents.

  101. ALEX

    I did some buying this morning…to play a bounce that I think is coming. I bought NUGT $29.50. I DID NOT play with sharp objects as a kid, so I thought I might try one now ๐Ÿ™‚ I just feel a bounce is due…here is what I emailed a friend last night

    “This was what I looked at this wkend

    Notice how This chart shows
    1) every breakout from consolidation (blue *) was retested (orange ^)

    2) Each low was at the 140MA (blue arrows)

    3) The bottoms also came near RSI 30 area

    http://www.screencast.com/t/a095pR4JUKBY

    And to be fair, this doesnt look to be so un reasonable for a larger consolidation that GARY calls the D-Wave

    http://www.screencast.com/t/kyMXrm6YsBD

    and trendline support

    http://www.screencast.com/t/EVBsrm9d

    I also look at the $BPGDM and below 50 is nearing a low, below 30 is really approaching a low.

    So I expect at least a bounce ๐Ÿ™‚

    I WILL ADD…My 1st CHART I drew that last (or top) BREAKOUT AREA off a bit…the line should have come down at an angle from the first high to the 2nd..and we retested it last night.

    I DO NOT RECOMMEND BUYING HERE..I AM TRADING ๐Ÿ™‚ “RISKY”

  102. St. Deluise

    well kiss my grits, knew i should have stayed long. gap fill in .80 SPY cents, about a sure-fire thing as they come.

    would not short the dollar but its next immediate move will probably be down.

    would continue to avoid PMs but that’s just me.

  103. Mean Guy

    Bought AGQ this morning sold @ the close for 9%. Afraid to hold anything overnight anymore. UUP faded end of the day but held in pretty well for such a big rally.

  104. gold silver troll

    if the past is any indication, today may have been the low of the decline…those are some nice tails on gold and silver

    the retest will be very ineresting…

    PS: I didn’t buy…i’m hoping for a retest (or break lower) and for us to be in the timing band

  105. Harry

    Hal, I don’t know what the ‘megaphone’ pattern indicates, but I don’t think it has anything to do with the ‘megaphone topping pattern’ that Gary has mentioned previously. If I had to guess I’d say it represents steadily increasing access to financial markets by larger and larger numbers of people.

  106. Poly

    Interesting statistic off my charts today, Silver in the overnight AH took out the Jan 28th Intermediate Cycle low. So that’s taking out TWO past IT cycle lows.

    No doubt we will revisit $26.15 on Silver at some point in the near future, I’m sure it will be during regular trading hours too.

  107. thedocument

    The last intermediate low at $1478 really shouldn’t be violated unless gold is ready to dive into its 8-year cycle low. Perhaps this round will deliver an exception, but I think it’s much more likely gold’s intermediate cycle plays out as a triangle consolidation. If so, last night’s panic low will prove to be the low of the move and the cheapest price for gold in quite some time. The best course of action, though, is to hunt the end of the cycle within its normal timing band, whether we see a triangle form or not.

  108. Keys

    I do have to say, I have a hard time believing the recent fall in gold is it. If we surge upward from here, and hold, it would do nothing for what the recent decline was suppose to do, curb out the appeal for gold. Since nobody really got burnt, there is no change in opinion on the metal, and we simply rally to 3k in short order….and the bull very well may be dead.

    So without looking at charts, I don’t nearly see enough negative action to warrant a sustained rise from here. This drop needs to purge out a good portion of gold being a safe haven traders…if gold rallies from here in a sustained fashion, it only fuels sellers into thinking they were stupid for selling and adding leverage into the mess to play catch up. In otherwords people need to be scared to touch gold, otherwise we hit the last bubble stage and it is game over.

    That being said…IF gold were to rally from here, and rally hard, break through the mess at 1800, I would most likely consider the high prob. that gold is entering the final phase.

  109. Robert

    for the ones that believe in intervention etc–Gary always says its profit taking–sure at 2A.M New york time-i’m sure all traders are wide awake at that hour

    Jesse’s Cafe today has an interesting perspective, as well.

    “As an aside, I think that anyone who thinks this is just a routine market correction, based on the charts, is not looking at the actual market action, which is highly suspect from any number of dimensions.

    But in particular the unloading of large amounts of contracts in the least liquid periods of the 24 hour trading day is highly suspect, and there are far too many ‘coincidences’ occuring for an intelligent person to blithely dismiss. I do not mind anyone ignoring such information but to dismiss it in the most haughty of manner is not becoming.

    And of course for the ‘I told you so’ crowd that comes out on every correction, well, what else can one expect.

    But we are in a currency war, whether one realizes it or not, and this has been a ‘shock and awe’ exercise I think along with other dramatic fiat currency adjustments, especially the Swiss franc.

    The Bankers will have their way, until they do not. So let us please exercise caution. I have said, ‘wait for it.’ I hope that now this lesson is embellished in your memory. “

    http://jessescrossroadscafe.blogspot.com/

    September 26, 2011 4:01 P

  110. St. Deluise

    jesse’s blog is getting more and more unreadable.

    anyone watching the buy and sell volume in /gc would have been tipped off that the second peak was not bought into.

    that was almost 2 weeks before the margin hike, opex, etc.

    one of the absolute best parts about gary and this blog is that he doesn’t fall for that conspiracy horsepoo. price, volume, and sentiment will tell you everything you need to know.

    otherwise i think the bounce “DCL” or however you want to phrase it was probably this morning.

    HOWEVER, every single signficant correction has gone back to test its breakout in terms of gold/$usd (here gld/uup)

    http://i52.tinypic.com/inwldj.png

    this one still needs to fall ~10-12%. so gold could fall 10 percent and the dollar rises 2, or the dollar rises 6% and gold falls 6%.. etc.

    IF this turns out to be a “big” correction like 08, well that one fell down to the 2nd breakout point. you don’t want to be sitting old turkey through that one.

  111. thedocument

    paul,

    I haven’t followed the ABCD thing in a while. I think the nature of the market changed after the 2008 liquidation, and those wave counts aren’t as clean as before. Besides, cycle theory should get me trading at the right times regardless of wave counts.

  112. thedocument

    Ivan G,

    My view of oil’s intermediate cycle calls for at least 8 more weeks before we can look for a low. I suspect oil will continue falling along with stocks.

  113. Frank

    Document, on your public blog on Sep 22 you more or less echo Gary’s position possibly extending the pain to the new year. Are you also seeing a dead cat bounce from here and then a bigger plunge? Or have you modified your views based on recent action in gold and silver?

    Even in 2008 we saw a GDX low in October with an unsuccesful retest. However, some juniors were successfully retested in early December. I remember buying more NXG and NGD for less than a $1 in early December.

    I am usually critical of “seasonality” but for the past 10 years we have either seen lows or breakouts for miners in late October.

  114. Nike Boy2008

    Both Gary and Doc are expecting the next intermediate cycle to end in the normal timing band…

    does it really matter if it is a triangle or a d-wave? It doesn’t to me

    All that matters is that we should be ready to buy in the timing band

  115. Christopher Green

    Question for all of you to help out an Aussie trading SMT suggestions on the ASX:

    What are the most comparable quality gold ETF’s to trade on the ASX for this service? Silver? Currencies?

    Chris

  116. Frank

    If I were an Australian, I would open an account with Interactive Brokers. It will give you global access to markets, including the important Canadian market if you want to buy specific juniors.

    Another option is Swissquote, which is the number one online broker in Switzerland. Their commissions are a lot higher but has the advantage of where it is domiciled. There should not be any issue for an Australian to open an account there. Americans are persona non grata.

  117. MrMiyagi

    UUP was up a fair bit after hours however US$ index is down, perhaps UUP’s rise was earlier.
    Futures don’t bode well for US$ or bears, not sure what to make of PMs so I have stayed clear since August.

  118. Christopher Green

    Hi Frank,

    I should have clarified, I’m an Aussie American. I don’t want to trade on IB. I’d like to use a brokerage here in OZ since that would be the most convenient.

    I’m not looking for a trading platform, but have already done my DD on that. Mainly, I’m looking for info. on the “equivalent” ETF’s that are used on the ASX as they would be by SMT.

    Thanks!

  119. Frank

    Chris,

    I could only find Australian ETFs for the actual metals. And they trade at a premium to NAV, which is not good.

    I would try to find an Australian broker that allows you trade internationally. I understand why you would want to avoid IAB. You could get an account with Swissquote with an Australian passport. Another option is a Canadian online broker if you have an Australian passport. That could be your best option.

    Otherwise I guess you could buy Newcrest as a proxy for GDX. And build your own portfolio with Aussie juniors.

  120. Keys

    Now we have something real interesting.

    PM’s surge! I am not touching that with a 10 foot pole so to speak.

    We were expecting a bounce, but this is pretty impressive. The strength of this sharp bounce only goes to show that the recent drop did nothing to scare out the gold fever, in fact the gold fever probably picked up right now…since everybody believes a major low is in.

    So one needs to believe that the final bubble phase is in, or this is a massive sucker rally.

    There is no way we should break through 1800 in gold, not with the amount of choppy action there….I will need to look at things again if the market simply does the unexpected.

    That being said I think this will be a great sucker rally…it is really convincing if one is only looking a price!

  121. thedocument

    Frank,

    Views are always modified as the action progresses. Stubbornness to one point of view will get you killed in trading. In any case, I still see the commodity complex declining further to set a 2.5-year cycle low late this year or early next. As for gold, a comparison to the 2008 sell-off should be performed with caution, as the prior period represented a decline into an 8-year cycle low. Gold is not ready for such a decline… another reason I believe it will resist the general commodity decline to an extent.

  122. Gary

    The fact is that the vast majority of intermediate cycles last about 20 weeks. Gold is currently starting the 14th week of its intermediate cycle.

    For sure every once in a while a cycle will shrink. However you can’t bet on that. It would be like hitting on 17 in blackjack. Sure sometimes you will win, but you can’t ever make that bet because in the long run you will lose money.

    So while it’s possible an intermediate cycle bottomed on week 14 the odds are heavily against it. So one has to expect that gold will have one more left translated cycle before this decline has finished.

    That should mean that any rally here is a suckers rally that will roll over and make a lower low.

  123. Visitor

    Hello Gary,
    I know you don’t believe metals are “manipulated” and the reason for this post is not to argue that. (I don’t have a strong opinion, nor do I really care as either way, it would not affect the macro argument for owning gold)
    I’m just curious if you can explain why the huge drop in off hours trading. – I can’t come up with the answer to this.
    Also, how does this affect your decision how you determine your cycle lows? Are these odd hour prints used in your analysis?

    Thanks for your response.

    This chart (from ZH) of gold hitting 1540 and silver hitting $26 http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2011/09/Screen%20shot%202011-09-27%20at%205.41.28%20AM.png

  124. St. Deluise

    about the same money in /es right now than at any point since the plunge. should retest the bounce highs eventually.

    potential trend day today if the dollar can’t bounce soon.

  125. Gary

    Sophia,
    I’m starting to wonder if we shouldn’t reconsider Aug 29 as the last cycle bottom. That would mean the dollar is now on day 20 and moving down into it’s daily cycle low.

    I don’t think a three year cycle advance has been aborted in only 2 months. That would suggest there will be no three year cycle low for commodities and no 4 year cycle low for stocks. That I just don’t buy.

  126. sophia

    Gary,

    I have been following you for long enough so if you are not worried, I am not going to get worried…Will go for a swim more often this week to avoid being in front of a PC and getting tortured.
    Thanks for spending some time answering my question.
    Take care

  127. David

    From inter-bank reports I have read, traders are heavily short euro and pounds, so a squeeze higher is highly likely. However a bank report on August 12 confirmed that all their clients were bearish on euro and commodity currencies. Their view was confirmed 15 or so days later. I take these reports seriously b/c these banks control a vast majority of the order flow in currencies, fixed income and equites and the consensus then was REAL MONEY is de-risking. There have been no reports that suggest real money is taking back on risk and most remain bearish throughout the rest of the year.

  128. Neo

    Anyone understand ZSL´s movement. Seems to have is own way. It doesn´t reply 2x silver´s movement.

    Crazy stuff atleast !!!

  129. St. Deluise

    you’ll have to read as to what index agq/zsl actually track.

    the /si contract is up a lot bigger than SLV as that dramatic move lower was during globex overnight.

    imo trading PMs is almost impossible right now unless you’re looking for a long term bottom to go old turkey.

  130. Gary

    Sophia,
    What is there to be worried about? We have a stop below the last correction, and we entered very close to that pivot, so our risk if the stop is hit is less than half of 1%.

  131. St. Deluise

    tangent: anyone have a gut feeling about NFLX? it’s continued weakness here in light of everything else is sending off a lot of alarm signals for me. any and every little pop gets beaten back down immediately.

    i don’t own it but a lot of my friends do. i thought for sure it’d have at least attempted a bounce by now.

  132. Neo

    St. Deluise,

    The same happens to AGQ. But AGQ is up 12%, ZSL down 21%!!

    That´s why i don´t understand these moves.

    Thks anyway.

  133. Shalom Bernanke

    For those that are interested, this Old Turkey is now back in the green on my overall miner trade.

    I won’t be making any changes today, staying long and looking to add into pullbacks, especially on the weekly charts. I’m hoping Gary is right about this D-wave so I can get some juicy prices.

    I think I’ll go put some new “eaters” on my 4×4 for the winter. Good luck out there.

  134. Frank

    Thedocument,

    Thanks for your input. I wasn’t clear about 2008. I was looking at how gold and particularly HUI performs in the fall and the trend has been that it tends to bottom in mid to late October or takes off from a consolidation. And my point was that even in 2008 HUI behaved it like this. I am trying to square this with Gary’s forecast fire and brimstone through end of Novemeber.

    But I generally don’t like seasonality. A strong believer in randomness.

  135. Harry

    Dollar trying to bounce off the 10 DMA. I’d like to see one more push lower before I start shorting anything. Gold and stocks are late in their cycles by oil is looking like a very juicy short right here ๐Ÿ™‚

  136. St. Deluise

    man i don’t know why everyone is so bearish on oil! vs. PMs or stocks it’s the only asset with any legitimate fundamentals supporting it.

    even if beanie’s tesla cars become 100% ubiquitous, people are going to need plastic for all the crap inside it.

    /cl heading to 90 imo

  137. David

    It would not surprise me if the es broke up through resistance at 1225 only to fail at the 100 or 200 DMA,before turning lower again.

  138. Gary

    The stock market is just chewing up bulls and bears alike.

    Several months ago I said I expected something like this but I really had no idea just how bad it was going to get.

  139. Harry

    St. D, oil is on Day 34 of its daily cycle which often runs over 60 days. It’s also on Week 32 of a left-translated intermediate cycle. Additionally, CRB is falling into its multi-year cycle low. Combine that with a looming global recession and Ben’s failure to print last week and I don’t know how much more bearish I could get on oil!

  140. Rob L.

    Gary,

    A few days ago you mentioned that the rally out of the daily cycle low in gold would be fierce in order to bring in a lot of unsuspecting people before rolling over. Would the 50 SMA in gold be a reasonable target before it heads back down or do have a feeling that gold could go even higher before rolling over?

  141. Gary

    I do think the daily cycle low is probably in for gold. But the intermediate cycle is still short. The odd say there should be one more daily cycle down into the normal timing band before this is finished. That would theoretically correspond with stocks moving down into an intermediate degree bottom in November also.

  142. MikeStiller

    Gary-
    I count 13 weeks into the gold intermediate cycle. That would suggest we have 2 more daily cycles left? Average gold intermediate cycles run about 20 weeks?

  143. Poly

    Gold DCL is in place, high probability IMO. Should be good for some 3-7 trading days to $1,740, before peaking, but certainly not one I want to trade. With this volatility though I try not to predict daily cycle moves, rather whippy.

    Any trapped longs will be presented with a final escape hatch up there, before a light’s out grind to $1,500 and ICL starts in earnest.

    A solid core will keep us in the game, in case the bull decides too many are onto him, it’s a mature 11 year bull after all.
    Riding down to $1,500 with a core may sound counter intuitive, but that’s only if you purchased it at the top. If you’ve been riding one for many years, you don’t want to lose a core position no matter what, IMO.

    As the probability of a move to $1,500 and a significant ICL are relatively high, placing a small hedge on the core position when gold hits a daily cycle top here is prudent. It’s a smart hedge because a) it’s cheap b) the projected move to an ICL is deep, the hedge will pay. c) any unexpected bull move to the high side will negate the cost quickly.

    Over all though, the obvious play here is the coming gold ICL, I’m focusing my energy and capital on it. If you could only make two trades per year, the ICL gold buys are it, IMO. You can make enough on these to take the rest of the year off!

  144. intelliblue2000

    Poly said “As the probability of a move to $1,500 and a significant ICL are relatively high, placing a small hedge on the core position when gold hits a daily cycle top here is prudent.”

    Poly, enjoy your post. What do you think would be an appropriate small hedge? Some inverse Gold ETF?

  145. Harry

    I’m guessing this daily cycle rolls over and bottoms at the end of October around the 50% C-wave retracement ($1400 or so) and then one more daily cycle to take us a bit further down to 61.8%.

  146. coolkevs

    Demark stuff from Kevin Depew at Minyanville – 9/27/11:
    Crude oil qualified a break of its WEEKLY DOWN level yesterday, implying continued weakness there into the low 70’s/barrel.
    Interestingly, the Dollar, did not qualify its WEEKLY UP level, so crude can go down while the Dollar weakens somewhat???
    German DAX – qualified a WEEKLY DOWN break a few weeks ago – Resistance at 5730.60 – disqualified UP level
    Gold – recorded a TD BUY Setup 9 yesterday and held its disqualified DAILY DOWN level at 1616.60 We will get a Tuesday-Friday upside reaction here, but 1616.60 is a critical level to hold
    for the bull market to resume
    SP – on bar 12 of 13 of a DAILY Sequential BUY. Need a new low BUT the list of individual stocks that have recorded DAILY TD Sequential 13 BUY signals over the past week is very long (signals are good for 12 days). Here are just a sample: STJ, AON, APA, COF, DE, DGX, DOW, FCX, HAS, JDSU, K, TAP, UPS, A, ADM, DIS, WFC
    There are also many stocks that have recorded bar 12 down of a potential TD Sequential 13 and are in deferral, meaning they need to reach a new low necessary for a 13.

    Depew’s bottom line for today: We are nearing the end of the 4 MONTH SELL Setup in the major indices and many stocks have already bottomed, a messy process that may not allow for the indices to make a new low in the SP 1047-1076 area that was expected!

  147. Natanarchist

    Gary,

    I had asked you the similar question on the premium site as Mike. That if we expect a normal IC, then based on today’s action holding, we could expect two more daily cycles before the final low in Mid November? Frankly if that turns out to be the case, I can imagine that would take Pm sentiment to very bearish levels, taking into account some failed bounces to keep everyone on board.

  148. Rosabarba

    For those wondering about AGQ/ZSL apparent tracking errors, understand that the reset point for these ETFs is not the New York close but the London fix, which takes place at 7 a.m. Eastern.

    I had wondered the same thing myself last spring and thought the ETFs were broken or had done a distribution. Turns out I was operating under a faulty assumption.

  149. Neo

    Rosabarba,

    I read what you wrote about AGQ and ZSL. But compare these ETF´s with SLV. They close ate the same time. But the correlation between them broke (AGQ = +/- 2x SLV and ZSL = +/- -2x SLV). Look at them today.

    Thks.

  150. Poly

    A gold IT cycle should run 18-22 weeks.

    This current DCL just hit, which makes next week the first of the 3rd daily cycle. That’s week 14!

    Daily cycles run 5 to 8 weeks, to expect two more daily cycles, especially after a failed daily cycle, is to expect a stretched IT cycle. Unlikely IMO.

  151. Gary

    If the cycles run a normal duration then the daily cycle will run 20 trading days. This one lasted 21.

    One more daily cycle of roughly 20 days would end on Oct. 24-25. That would end the IC at 17/18 weeks. Definitely a possibility.

    That would line up with the Oct. 08 bottom.

  152. LowTax

    Very interesting SoS numbers. Yesterday ended with big selling in some large caps. Today is seeing heavy sellinging in what appears to be the muni space. And look at the number for GLD!!

  153. Harry

    …and another daily cycle of 20 days after that would get us to Thanksgiving, which will be Week 21. Not stretched at all.

    There is still too much bullish sentiment that needs to be flushed away, as evidenced by everyone here. I’m expecting this to get much, much uglier. I’ll go with the flow and admit anything is possible, but for now I’m sticking with my prediction of this new daily cycle bottoming late next month around $1400 and then another failed daily cycle taking us into the $1200s.

  154. Poly

    Harry,

    You’re suggesting 3 straight 20 days gold daily cycles (This past one and two more). My stat’s show that would be a MAJOR outlier.

    We just put in a 20 day cycle (likely), expectation on averages would be for a 30 plus cycle, this gets you into Nov and a 21 week IT cycle. That’s exactly in the timing band.

  155. Gary

    We do have a swing low today as long as gold doesn’t drop below yesterdays low before the close…which seems pretty unlikely.

  156. Harry

    I’ve had burritos that were much more than $5…

    Poly, fine, go ahead and tack on two weeks, that only gets us to 23 – still within the timing band. The intermediate cycle fully contained within the ’08 D-wave was 26 weeks.

  157. intelliblue2000

    Joseph – Gary subscription is a steal, even at full price. Once you are subscribed, you will cancel most of the other subscriptions.

    Disclaimer – Gary didn’t pay me to say this. I am just a happy subscriber.

  158. TommyD

    The good times are back! Operation Twist is deemed a success. Next we should see 12 million new hires and housing construction starts up.
    This has been a test of the emergency broadcasting system. If this was a real emergency you would be directed by your local officials.
    Please increase my taxes for 2011 and beyond. I want to help…

  159. St. Deluise

    cut some of my QQQ longs here, down to 25% position. obviously what will happen now is that they will explode higher any second.

    but hopefully we get one last bear trap tomorrow morning so i can reload.

    think the dollar bounces soon. but also think that eventually neither gold nor stocks will care that much.

  160. Harry

    I’m trying to restrain myself from shorting anything until we get a clear bounce on the DXY but oil is looking juicier and juicier by the minute.

  161. Gary

    Despite the poor showing in miners I do think gold has probably put in the cycle low. Rather than being a true reversal candle I suspect today’s candlestick on the HUI is probably an indication that miners are about ready to move higher.

    I still think it will be temporary rally though followed by another leg down later next month. I wouldn’t even want to gamble on anything more than a 5-10 day rally before another leg down begins.

  162. wolf33

    this is way too wild to play other than Gary’s position. In cash or a little in covered call writing.

    Salivating for the day can play natural gas—not now. sold gdxj and gdxj. little shorting into strength,

    all i know you better not pay-up. bite you iin donkey.

  163. ร‰amonn

    Speaking at the same panel, billionaire Wilbur Ross, chairman of private-equity firm WL Ross & Co., said that Ireland will likely be the first country to recover from the debt crisis.
    “The reason why I like Ireland is because unlike what I call the Club Med countries it doesn’t need reforming,” he said. “My leading indicator for Ireland is pub sales.”
    LOL

  164. ALEX

    FWIW

    I sold NUGT today , in yesterday @ $29.50- Out at $32.

    Its not that I think the upside is done on a bounce-

    I went in pretty heavy and it went to $34 , but as it reversed I wanted to lock in some gains and wait and see whats next for another trade.

    I also noticed that while NUGT was up 3% at one point, GDXJ was up 5+% and my core position of RIC was up 12%…

    So I wanted to lock in gains and re think this bounce…
    and if it drops hard again…MORE RIC?
    ๐Ÿ™‚

  165. Matt

    Harry,

    Good call on the CL. (Oil that is…) I am right there with you. Nice kiss off the 10sma today. Looks to be heading back down.

  166. William Wallace

    I am going to try and keep this simple…

    Everyone knows by now that I use and rely on simple moving averages to trade gold futures (along with mainly the time & sales tape, amongst other indicators). I mentioned the other day to Slumdog that being I watch and trade gold futures day in and day out, day and night, I have certain patterns imbedded in my mind that always repeat. I am able to recognize in the time & sales tape from having watched it constantly, along with 5minute candles, patterns that basically allow me to clearly spot short term bottoms (they may actually turn out to be long term ones. I dont like to try and be a “predictor”, and try to only post what I see and believe to be correct, the reason I posted Monday night “The bottom is in”. I also tried to layout in real time for TZ what I was looking for on a 5 min to confirm that the move out of the bottom would indeed push higher, and not fail almost immediately and move to new lows (I pointed this out one day in real time also). I described this as a move out of the low and break above the 10sma and it acting as support…if the 10sma swoops down, turns up and under the move out of the bottom, but fails to act as support, the move 99% of the time fails…it breaks the 10sma to the downside and almost certainly moves to new lows.

    Now I will apply it on a daily. If Mondays bottom, which basically tagged the 200sma (I have successfully put on longs at the 10 & 150sma on a 5 min for a $15 move or better countless times, and we know how gold loves the 150&200 on a daily also), was indeed not only a short term bottom (reason I noted “for now” when calling the bottom), but a long term one also…confirmation for me to go long gold (and possibly confirmation of an ICL being put in at 35 weeks) will be when I see the 10sma on a daily swoop under this move out of the bottom and support it. The 10sma may not act as support (may be resistance) and that may be where gold reverses and continues to new lows or a d-wave bottom…or Gold may break through the 10sma on a daily and just push higher. But…what I would like to see as ideal is, after a break of the 10sma (at 1730 now) gold pulls back down to it and it acts as support, this for me (next of having entered on a tag and bounce off the 200) would be a perfect entry. My stop will be right below the 10sma.

    BTW, the 10sma will not be at 1730 when gold tags or breaks it…also we may see gold break down from here to new lows, but still all that I mention applies from that bottom.

    Sorry for the long post, hope that all makes sense.

  167. Gary

    WW,
    Anything is possible, but at 35 weeks cycle is not probable. And if it turns out to be the case then I’m going to miss this intermediate bottom.

    Although if the dollar starts making lower lows we will have a very big clue that that was indeed the case.

  168. Liquid Motion

    Gary,
    You hit the nail fair and square on the head…..NO THESE ARE NOT NORMAL MARKETS.
    What is evidently clear is that trading in this environment is taking on more risk every single hour of every day. You get it wrong by 10 mins and you can get whipped. Its dog eat dog out there.
    First rule is to never…EVER…lose money.
    Capital protection is the “new” old GAME.

  169. chrisb

    William… I have been watching the gold futures for a couple months now, trying to pick up patterns with some success. your commentary is very interesting and helpful. thank you for sharing! you are speeding up my education process.

  170. Gary

    LOL You’re not the only one that’s confused. This is the toughest market I’ve ever seen.

    Too much intervention in the currency markets equals extremely volatile and indecisive moves in the rest of the markets.

  171. intelliblue2000

    At Ease, – glad I am not the only one confused ab out 3 trades and how they are related and the 3 different sets of cycle counts.

    I am glad Gary can read the markets better than me though. Whew.

  172. ...at ease

    So at this point, just pick some ETFs to throw darts at and sell when they are profitable. Already in two trades, considering a third, but wondering how stocks will react to gold. So confusing. LOL

  173. Robert

    Just another view—

    A note from Dave from Denver…

    “Hate to say the bottom is in, but it sure feels like, barring a complete market collapse, we may have seen the lows in gold/silver. China is closed next week so that may give them window to hit the metals again unless India kicks into high-gear, which it could.”

    The Commitment of Traders Report

    Silver

    *The large specs reduced their long position by 8,794 contracts and increased their shorts by 1,681.

    *The commercials increased their longs by 5,652 contracts and reduced shorts by 10,794.

    *The small specs decreased their longs by 7,862 contracts and increased shorts by 1,471.

    By any account, this is one of the most bullish COT reports on silver I have ever seen!

    Gold

    *The large specs decreased longs by 31,086 contracts and decreased shorts by 8,358.

    *The commercials increased longs by 5,200 contracts and decreased shorts by 25,745.

    *The small specs decreased longs by 5,909 contracts and increased shorts by 2,308.

    By any account, this is one of the most bullish COT reports on Gold I have ever seen

Comments are closed.