105 thoughts on “PORTFOLIO CHANGE

  1. sophia


    If you are around, would you have the kindness to send us a copy of the US Treasuries that you gave us couple of weeks ago with the Barclays long 20Y+? I cannot remember the level to watch…Merci!

  2. Danno

    Doubt we can use miners as a barometer here. They’re just going to get knocked around by $USD & $SPX. I wouldn’t trust any ‘signals’ they are giving. Just MO.

  3. thedocument


    In response to your inquiry in the last post, we will know for sure that a DCL occurred on 12/29 if gold quickly makes it back above $1644. In that case 12/15 would be eliminated as a DCL because once a cycle fails, it cannot move back to a new high, and 9 days is simply too short to be considered a daily cycle. Therefore, a move above $1644 would prove those 9 days were part of the cycle which formed out of the Nov low.

  4. William Wallace


    The circumstances are different this time around. For one, the 200-day moving average usually trends higher when the cross occurs.
    But the 200-day moving average has been trending slightly lower. A cross can still occur even if the 200-day is moving lower, but caution against placing too much significance on such a development.
    The direction of the moving averages many times can be more important than the actual crosses.

  5. St. Deluise

    as for stocks i’ve found the SPY/IEF ratio to be fairly interesting as a macro bull/bear barometer.

    use it alongside your favorite MA. 377 seems to work well in my opinion.

    (it and i are currently aligned bearish)

  6. thedocument

    People give the 200DMA too much credit. It simply cannot be applied universally. Try experimenting with different MAs to see which are meaningful for each prices series. A quick glance over the life of this gold bull shows that the 200DMA is insignificant to gold’s behavior. The 150DMA is the one to watch on the daily time frame and 80WMA on the weekly.

  7. sophia

    US DATA PREVIEW: Steve Barrow of Standard Bank points to upbeat
    news in the form of Intuit’s small business index (survey rose to 95.84
    in December from 95.58 in November, with 55k new jobs created. The Dec
    results compares to a 70k rise in Nov (revised up from 55k), he notes.
    The latest results are similar to the NFIB survey, which showed that
    small firms hired new employees for the first time in 6 months in
    November. “Although the linkage between small firm employment and big
    firms is not always close (payroll data is from large firms) we still
    believe that the risks to Friday’s payroll data lie to the upside of the
    150k consensus (MNI headline median at +150k/range +110k to +200k),”
    Barrow says

  8. William Wallace


    I agree, but before this advance out of the 08′ low the 150dma was insignificant. A number of MA’s need to be tested and used in real time, its a mistake to place any real significance on any one or two, even if having marked a number of ICL’s over the life of this advance. The 100dma and 75dma worked just as well in “slowing” the decline of every IC decline during this C-wave, the 100dma actually marking the July low. New advances over the last ten years have been born on the 275dma and 300dma. Right now the 300dma, and on a weekly the 75wma, are on my radar.

  9. William Wallace


    My best friend who went of to become a SEAL, who I was going to go with before my accident, had a tattoo of a kiss on his butt cheek…that’s what made me say that..LOL

  10. SF Giants Fan


    Any guesses on the weird up move in gold today? Meaning dollar up, SPX down, PM’s down.

    My first thought is “what games are the big money boys playing?”

  11. William Wallace


    When gold bottoms it could care less whether or not the dollar and stocks are up or down. We’ll see what happens when stocks move into a DCL and the dollar pushes higher how much pressure it puts on gold.

  12. William Wallace

    These deep gold corrections are a “regression to the mean, profit taking event”, literally. I dont just use that phrase to describe D-waves. The question is, what “mean” will gold regress to when the “profit taking” is finished, if we look at a 10+ year chart its pretty clear what “mean” that may be. Being gold found support on basically the same moving average at the bottom of every major correction over the last ten years, it obviously didn’t matter what the dollar and stock market were doing on the day gold bottomed.

  13. William Wallace


    Time and testing. You need to have a sense or intuition of everything that is going on in the markets also, its not as simple as just looking at lines on a chart. There is no way someone who doesn’t day trade could benefit from MA’s consistently by just using one or two. But as significant as that major one or two can be at certain times, there are many that are just as significant at different moments and in different time frames. Which makes many of them more significant and more frequently used to benefit consistently.

  14. William Wallace

    When I talk about gold possibly bottoming on the 300dma, this is not just some MA that I pulled out of my butt crack, anyone who takes a look at a 10 year daily chart with a 275dma and a 300dma applied can see that. I said it before, and I will say it again, with SMA’s penetrations dont matter, they are based on the close. How often do we here about
    price “crawling” an MA, that doesn’t mean price has to tip toe every day directly on an MA for the indication to playout. It is diligent to plan around and not to ignore such indications.

  15. Poindexter

    MACD and stochastics are ways of analyzing moving averages. In other words, you can rampt the TA indicators up to chart 250 vs. 300 DMAs, and … (you know the stich). Instead of doing that, I just look at the weekly charts.

  16. Veronica

    Gold closed just over the 9 day displaced moving average, and got support today at the 9 and 13 day MA also.Didn’t gold just form a 2b reversal also, and will have a 4 day corollary with an up move tomorrow?

  17. gideon

    veronica, not every 2B is a major deal. This one was legit, but on a very short time frame(the time b/w the 2 lows was only measured in days). It also came with a Doji reversal candle. I think gold will make it to mid 1600s before turning back down for its final and probably worst leg, to the low 1400s or so.

  18. TZ(8155)

    We still have what I believe may be a bottom in gold (enough certainty at least to bet on in with a limited loss absent new info that changes things).

    Doc appears on my side. Poly and Gary seem to expect lower.

    We’ve pretty much gone straight up from last week. Since I didn’t buy that low there hasn’t been an entry for me since. I tend to buy pullbacks and it hasn’t given me an opening so far.

    Should we get a pullback towards the low again I will likely place a buy. I didn’t buy GDX and have only been sitting on a core position so far.

  19. William Wallace


    We will know if we have a permanent bottom if gold doesn’t crack under the pressure of stocks moving into a DCL, if it doesn’t resist you risk buying into gold’s move into a DCL and not a new DC. You would be better off waiting until stocks bottom, get in at gold’s DCL no matter what the price is at the time so your close to a bottom.

  20. riley

    I’m going with Gary on gold this time around, since stopped out early last week. Sometimes patience a virtue in futures market. Will wait for SPX DCL.

  21. William Wallace


    Keep in mind also that if the dollar still has a couple days of downside before moving out of a DCL, allowing gold to push above the 12/21 high ($1643.70), the last 3 trading days will be considered a new DC that started on 12/30, and the 9 days after the 12/15 low will be considered part of the last DC (making it a 27 day cycle). When the dollar begins to rally out of its low, gold may reverse (bull trap) and top in the mid $1600’s in another left translated DC, and if stretched again could land gold in the $1400’s. So again, its best to buy a DCL and dont try to buy just any decline here.

  22. SF Giants Fan

    It seems like EVERYONE is waiting for gold to hit the $1400’s. Not just this blog but many others (except doc). And you know what happens when everyone is waiting for the same thing. It never happens. I hope I’m wrong…

  23. riley

    Getting lonely on top of that mountain of money. I know stops to close, these quick reversals leave me skittish as pssible reversions to mean come quickly also. Not losing money so can live with it. Always learning. I am long DX and plan on holding through this ICL.

  24. William Wallace

    Took off 25% of the remaining 50% gold futures position from the 300dma ($1546) near the 200dma ($1625). Moving the stop on the remaining 25% position up to the 220dma ($1610.

  25. Danno

    Since mid December the dollar has been rising while its indicators (RSI, MACD, Stochastics) have been falling. This is a clear divergence. What it means I’m not sure. Not a divergence expert, but it may be notable.

  26. andybuji

    Actually the French auction was not so good. Yields were up, and bid-to-cover ratio which indicates demand was off substantially. The euro cracked a line in the sand of 1.2860 and is now printing 2 yr lows. Looks like the swing is in for the market – unless a real beat shows up on Fri pre-market with the monthly employment number. Italy bond auctions next week are important, along with the possibility of S&P releasing a downgrade of France now that their 8 billion funding is behind them and they can crunch the numbers adequately. That should happen during this unfolding SP decline into its DCL.

  27. William Wallace

    The 220dma ($1610) stop for the remaining 25% gold futures Long position off the 300dma ($1546) has been triggered, also triggering my gold futures short position due to a break to the downside of the 20dma and 220dma support.

  28. Gann360

    There’s a Negative Divergence on the $NYMO as well which Could/Should be More Troubling for the Bulls Short Term,Then AAII Survey


  29. thedocument

    Dollar up strongly again this morning with minimal damage to stocks and commodities. I may be a lone voice the topic these days, but I believe a major high will be printed on the DX in the next few sessions. I’ve been writing about a dollar peak in my letter, and I also believe that once the peak is set, stocks and commodities… especially commodities… will explode higher, and the nature of last week’s low for gold will reveal itself.

  30. sophia

    thanks Doc, for your post…It is a great blog, lot of ideas being exchanged, which makes us think and revisit constantly our positions. Thanks Gary and Doc and all SMTs for guiding us thru this.

  31. 23t870


    If you expect a major dollar top in the next few sessions, what is you view on how that will play out with stocks approaching the timing for a daily cycle low.

  32. Danno

    I guess it might be helpful to define ‘major top’. You’re not talking about the ultimate dollar top, which could still be upwards of 85 or 90, but a shorter term top that might allow the S&P500 to work its way up to 1320 area before (potentially) rolling over?

  33. Shalom Bernanke


    You are not alone in your thinking. Regardless of where the dollar goes against other fiat, if commodities hold somewhat firm, this is a loud buy signal, IMO.

  34. sophia

    Markets down, dollar up because of UNCONFIRMED reports that North Korean troups are moving! Come on guys, stop the paranoia! The King has just taken his throne, what the heck??

  35. Shalom Bernanke

    MON results will likely encourage commodity bulls.

    I haven’t done any buying or selling in weeks, and still have too much confetti that I need to park in real assets or companies that hold them. I hope to own zero USD by mid-February at the latest.

  36. kmisak

    I see no true negatives in holding a core of miners at this juncture; I reduced mine yesterday into strength, but have a hard time believing that all cash at this point, or piling into the dollar, is the best move, at least for me. My core is pretty big (40% of total purchasing power).

    In Gary’s timeframe, we could be quite far from the buy setup, but from my observations about price, we could be a whole lot closer. I am pretty sure some of my miners have bottomed already, unless the coming gold low causes yet another pukeout, into which of course I would buy hand over fist.

  37. sophia

    I think that the stockmarkets are not holding too badly, at least the US…and the Treasuries are not safe haven anymore…So this North Korean thing is to take with a pinch of salt

  38. Shalom Bernanke


    Wise words, agree wholeheartedly.


    I’ve thought about energy but was leaning towards agriculture to diversify, however it looks like I missed the buy in MOS and MON already.
    I also have no fear if I should have all my brokerage assets in miners eventually, if that ends up being the case. Miners are likely to be less risky than cash over the next few years.

  39. Gary

    All cycle tops resist at the beginning of the decline. I wouldn’t put to much emphasis on today’s action. If this is the top then it’s going to get ugly as we still have quite a few days for it to move down.

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