Gold seems to have broken above the downtrend line…..
What’s up everyone, laid off again, can’t wait for the next C wave to start! So you’ll be seeing me on the blog more than I want to be. Think I might do like Mr. Myiagi and start renovating the house.
Sounds like you’re taking it well Haggerty, renovations were rewarding and looked great. Sorry about the layoff though, hope you have some unemployment kicking in.
Haggerty, congratulations! You’re just in time for the next daily cycle!
I don’t want to get left behind so I’m long one contract with a stop at Friday’s low (1718.6), but so far I do not see a break of the daily cycle downtrend line, just a tag this evening.
I was able to see it coming, I’m in construction(Electrician)so the job was coming to an end and there was not another job for me to go to. Unemployment will certainly be in the works.
Thanks for the link. Im not sure what to make of slv… i see the next timing band to be around early march… what is suppose to happen afterwards?>>
Also, the mega green writing is too much… maybe a lighter tone… Love the pictures
The electrical part was my most enjoyable task, I don’t know why folks are afraid to tackle it.
I always considered myself a better carpenter than electrician but so far our new kitchen has not burned down and all the outlets work fine!
I don’t know if you’ve ever been hit before but it’s not a nice feeling. As long as you know what your doing there is no reason not to tackle your home projects by yourself. I love my job, I just wish there was more work.
Yes, I got hit once with 120V, an outlet in the master bedroom that was wired on the main bathroom circuit. This was in 2004. After that I checked the circuit I was working on with a meter all the time.
WW good luck in AM, hope they don’t have to put you under, but know you’ll be in good hands. Pray for ya. Let us know how things are when you get access to computer.
Hey WW wish you a safe procedure and speedy recovery, see you soon (after plenty of rest)!
Bonne chance, my friend. Take care of yourself for the next week .
Sorry to hear about your job. Take care.
The Dollar weakness is now spreading across all currencies. Not only did the Dollar top against majority of commodity currencies and Asian currencies in October, but now European currencies are gaining strength against the Dollar too.
There are only 4 major global currencies out of 24 trading above 20 day moving average against the Dollar. These are Yen, Won, Rupee and Chilean Peso. Every other currency has now regained its 20 day MA against the Dollar.
Furthermore, there is now only 1 major global currency out of 24 trading above 50 day moving average against the Dollar. Its the Japanese Yen. Every other currency has now regained its 50 day MA against the Dollar.
Moving along, there is now only 3 major global currencies out of 24 trading above 100 day moving average against the Dollar. These are Euro, Yen and Rupee. Every other currency has now regained its 100 day MA against the Dollar.
This is where majority of trades and investors are tricked into believe that the Dollar is strong. The Euro holds almost two thirds of weighting in the Dollar Index and is betraying traders who relay on its “higher high and higher low” technical picture.
Finally, three main precious metals – Gold, Silver and Platinum, are also currencies. All three of these are above their 50 as well as their 100 day moving averages. Only Silver has failed to regain its 20 day MA, while Gold and Platinum are above that level.
All of this signals the probability of more Dollar weakness in coming weeks, as the breadth in the global currency picture speaks volumes about Dollar’s downtrend in a broad fashion. This outcome should support commodities as they rally in coming weeks and months!
Correction – Yen is trading below its 50 day MA.
WW, Wasn’t your surgery moved out to 27th? Rest up, rest well.
Haggerty,Sorry to see the work end for now.Enjoy the break and I am sure you will find plenty to keep busy with.
Moved up stop on gold futures near 1730 low of the last few hours and added more contracts. Increased postion but REDUCED the stop loss amount. I think it will hold.
Closer to 5x now.
I have to agree, for certain reasons, with TIHO.
Unlike the US, the Euro mess is showing that the politicians over there are ACTUALLY forcing cuts and reforms in the problem countries.
We are doing exactly ZERO to fix any and all of our budget, pension, and expenditure problems.
Despite the wrangling, protests, riots, and everything else (including dictatorial moves by banks and whatnot), the EU zone *IS* ramming financial austerity down the throats of the masses.
I think is the gamechanger realization that hasn’t quite sunk into the financial sphere yet. That the EU really *IS* tackling financial reforms no matter how messy. The US isn’t.
And if/when that recognition becomes a wakeup call (and If/when the EU actually pulls it off and then the same pattern takes hold in italy, then portugal, then spain and the world see the results)…then that will turn focus to the US and it becomes our turn (but not before out currency sinks and rates start rising).
I could be wrong and the EU flys apart. Yes it would be the correct thing to do which is allow greece to simply default, but the powers that be dont want that. They want their fiat paper debts PAID. And they have decided to bring the entire world into line one by one – starting with greece.
The soros ‘reflexity moment’ or whatever you want to call it will be if/when the financial world collectively realizes IT IS WORKING.
I doubt it like the rest of us, but that’s why this observation is powerful. Cause if we all come to realize IT IS WORKING, then a HUGE shift of money flows results in a relatively short period of time.
It’s the ‘black swan’ of the current situation. Few think this will work….but what if it does?
I’ll rephrase in short:
Tell me *ANY* other govt, political body, or zone of the world that is cutting ANYTHING, reducing ANY pensions, firing ANY govt employees, and raising taxes HARD on the masses.
Essentially only the EU.
And if it works and the finance world players come to realize that the EU is now actually an entity larger than the US in GDP, People, and economic strength…WITH an iron hand over it’s financing…then watch out dollar (and yen next too).
See this upbeat ‘iron lady’ article on bloomberg this morning for an example of the vibe or ‘EU recognition moment’ that I’m saying could be the surprise outcome few are expecting.
WW sorry thought surgery today, well anyway good luck next week.
Tz have to agree with your move in gold futures, but I’ll keep my stops at fridays low.
Riley,Morning. I entered after you did, out with Kids. What did you use for a stop?Thanks
Most people in mkts thing the same most of the time.
Ask yourself what YOU are thinking right now. I bet it is the same thing I am.
EU is a mess. Greek’s want out. Germans are about to say screw you to them. It will never work. What a mess.
But, what happens if it beings to dawn on your that “hey…that looks like it is actually WORKING and they are collectively using applied force to accomplish long needed financial reform and bring all those countries (aka ‘states’ in US) in line with reasonable financial policies.”
See what I mean? You aren’t thinking it and most aren’t either.
That’s the inflection point if it happens and the bet that makes some people rich if they are ahead of the train.
(It also becomes a blueprint for what the financial powers will do in the US when it is our turn).
But always have a stop loss…🙂
Riley, My stop may be too low. It happens.
Gotta place bets and take your chances. The only way I can get large positions is to have small stops.
Often they don’t hold. But it only takes one.
At ease, 1719, but as always if starts moving against me with steady drop could exit earlier, just want to keep the long wicks from whipsawing me. Still waiting for 1741 for an add.
I think WW said the 27th or something like that.
Yes, WW said his surgery was delaied to 27th.
TZ, austerity measures in the PIIGS is just another huge mistake. Those measures will only make piigs debt bigger. Euro zone is a political project that is doomed from the start. It is not good for anyone. German industry is working at full capacity because of the weak Euro and Euro is weak because it is also PIIGS’s currency. Germany “exports” debt to the PIIGS, German workers work for less money, German capital is destroyed in the PIIGS. There is no way out of that chain. There are three solutions, first is the collapse of the Euro zone, second is the creation of some kind of United states of Europe which is science fiction considering the cultural, national, economical etc differences and the third is some kind of a smaller/different Euro zone, some kind of a compromise. That third scenario terrifies me the most because suffering (with a goal of achieving some kind of a closer union) could go on for decades making Europe a much worse place to live in. They should let PIIGS return to their currencies and let them print their way out. If they allow Greece to do it then others will follow leading to the Euro zone collapse. Perhaps they can let only Greece default creating some illusion afterwords that Greece did not make it on it’s own but that they helped them after leaving Euro zone. The truth of course is that they do not care about Greece at all, they only care about themselves and the Euro no matter what the price is. How can they then create some kind of an unified Europe if they do not really care about Greece?
I thought we had a launch out of the 3 week triangle for gold last night, but it didn’t break higher yet and now I’m not so sure my position will hold. Gonna give it some time though.
Living in Portugal, i totally agree with Z1.
Austerity measures are only ate the beginning and already a huge parte of the portugueses have dificulties to pay their bills.
If Troika doesn´t change the way to make things “right”, we´ll surely be next Greece, unfortunately.
Got news for you, people are going to have trouble ‘paying their bills’ regardless of the outcome worldwide.
The losses are already in the system, it is just a matter of when they become ‘recognized’.
Most people are already below poverty line – they just don’t know it.
All the debts (that will never get paid or will get inflated away) are owned by somebody else who has them as an ASSET on their books.
Whether that party is govt or private doesn’t matter.
All of those ‘assets’ (the debts) ultimately are backing ‘wealth’ or ‘pensions’ or ‘payments’ to the masses.
The system doesn’t have some kind of magic balance sheet section whereby anything on that column doesn’t end up hurting people when it goes to ZERO.
Those debts are worthless, they continue to grow and they are backing the wealth and future payments of the vast majority of the world.
Like I said, most people are already destitute…they just dont’ know it yet.
That they continue to believe the lies that those ‘assets’ will pay or support them is the entire game (and the boys at the top help it at every chance they get by reassuring the sheep).
The smart people know those debts and paper will never equal real goods and, thus, the game is to swap any bogus assets or payments that YOU have (or at entitled to) with REAL assets that won’t collapse to zero in the future.
On the WHOLE, since the game is zero sum, EVERYBODY can’t do this. Only the EARLY ones. (by swapping bogus assets with people below them on the IQ chain).
When the general population realizes the game, they have nobody to swap THEIR assets with.
That’s the end point. System reset.
I’ll say again what I said on Thursday… Top-to-bottom the DXY has fallen well over a point. Shouldn’t we be seeing a more convincing rally in gold by now? We’re not even $30 off the low.
It’s a congestion almost a month long (on a weekly closing basis).
It will move and when it does it will be convincing. Likely in the next day or so.
And the direction could still be LOWER and not higher.
I’m watching for a break higher and might go close to 6x with a higher stop on my last purchase.
Things still look good, but I’m not risking more than 2% on this play.
I’m staying 1x until we get an actual trendline break.
Yeah surgery was moved to Feb 27th. Still waiting for gold to break the DC declining trendline to put on a long, wont even consider it before hand.
WW,May I send you an email?
This comment has been removed by the author.
Just wondering what your reasoning for a potential drop in gold prices is? You seemed very positive last week but your tone seems a little more bearish today..
Nice & well articulated description of end game.
I’m down with a gum abscess. Not nice :o(
I’ll trade you Passing kidney stones OMG!
JEFFtheFLEA, that sounds pretty tough
Put you guys together with W2 and you could probably get a discount at the hospital…………..
Best to all the ailing SMTers.
I don’t think WW is into sharing Bertha.
WW, are you there? Good luck with your op. Give ’em hell
Alex, I have a question for you.Can you please send me an email to [email protected]Thanks 🙂
Just back from no cell Service. Isn’t it Tuesday in Greece?
Back and forth sideways all day. Still looks ok with gold, but just waiting for it to crack higher.
Looks like some EU news out now and this might be it.
TZ & Z1,EUR is very important to esp. China and USA.TPTB will ensure that it (EUR)doesnt implode. Austerity is a necessity to give credence to the money printing. However, money printing doesnt help the economies of EUR esp Greece…it just ends up in the hands of the lending banks (haircuts = QE via LTRO). China and US know this very well.Biggest losers will be the big US banks in an default event because of counter party risks which would end up on the shores of the US very quickly.Expect chaos on the streets (EUR)and in parliament. Its an absolute joke.The masses of middle to lower classes are not happy for very good reason. AUSTERITY on face of it seems like a fix but it wont work.One thing is for sure, more QE on both sides of the Atlantic coming soon. Great for the risk on trades, but nothing going to stop the revolution unfolding.
TIHO….luv ur work….have followed the plight of the USD for the last decade…blind freddy could see something wrong with that picture. Agree its seen better days perhaps would suggest seen its high @ .82.
An anticipated event in June ’12 would see some very large cracks appearing in USD. This will be the start another leg down (maybe already in motion)from which it will not recover. The next three years will be hellish for holders of USD’s.
From my interpretations the depreciation in the USD would be closer to 11% p.a not the FED expected 2%.Add to that an increased velocity and it gets vary scary. IMO its gonna lose somewhere north of 30% over the next three years.I dont need to explain the ramifications of a move like that except to say that there is one ASIAN powerhouse out there covertly protecting itself from what is coming. Would be wise to follow what they do.
Looks like someone really doesnt like gold going over 1738ish.Hoping they fail to keep that line, soon.
Everybody (including poly from tweet 2hrs ago) is waiting for a breakout to buy. This is going to be interesting.
(And I’m not sure I’m on the right side for now. 5x+ and holding. Still looks ok, but who knows)
I really want to see a push higher before early morning NY time. If not they have a tendency to try and hit congestion zones like this and get stops just below them.
I should have said waiting for a breakout to ADD. Some people are already a little or a lot long.
Tz moved my stops up to 1729, its either going up or will consolidate which would mean whipsaw to me. WW looks right that break of trend line best bet. If easy my friends would do it.
On a side TZ hard for me to fathom all geo-political, try to follow price action. 2008 was a kick you in face event, now more ninja-like. So I like you watch my parameters and go, but really like it when aline with the cycles(admittedly newly learning cycles) Nice to read your reasons and thanks.
Must add that went long g futures after reading Gary’s weekend report. Now don’t interpret that as advise of Gary. I take full onus for my trades, just liked what he says. Doesn’t hurt that Veronica has a buy in this area. Plus my gut says no.
I think your 1729 will hold
okay i”m adding
We have some ignition!
5x+ and strapped in!
Sorry busted above my add pt. my gut is as usual not looking good. Still my 1741 add hit, now staggered stop, 1729 and other future 1719
2500 contracts on breaking above the downtrend line just now. Late night that isn’t too bad. Everybody waiting for a breakout has to figure out what to do now.
And people (in the US) who don’t trade futures can only sit for the next 8 hours.
Should get a nice run higher this week i think. 4 weeks of gold closing about the same price was long enough. That should have built up some pressure.
My stops are still in risking about 1.5% net worth, by the way, for anybody who thinks I’m too emotional.
I’m just happy to have what looks to be a good entry, but I’ll take the loss if it turns.
WW where do you have the trendline?
Tz you kidding? This is money which can be transforming if treated right. And you of all know what I mean. Place bet non-emotional if hits, become very happily emotional. Kung-fushus-riley
TZ,thanks for the input at crunch time. `Preciate it.
I personally would not go long gold until either Gary calls a serious bottom, or gold closes convincingly over 1805 (the middle peak of its potential Double Bottom pattern). In between is heartache and pain IMO unless you are really that good.
WW, it turns out the books on statistics I have do not cover narrow ‘W’ patterns. Only very wide W patterns which are a lot different. Sorry. Not sure what to say.
Gold is in a long term consolidation pattern that should not exceed August highs for awhile. Therefore, if you do believe Gold will consolidate for awhile, as many other investors do as well, than “buying Gold convincingly over 1805” is probably not very smart at all.
Actually, if you think about it, its bound to lose you money / create a big drawdown during the medium term perspective. You should try and buy Gold in the bottom range of the consolidation and not buy it at the high range. You know what they say – buy low sell high, right?
Added a bit more around dip to 1740 about an hour ago. At 6x now. Done buying.
Risking a bit under 2% with three different levels of stops. I think the first two buys will hold. This one is small and might not.
Tiho. Do you just troll around looking for fights? “Not very smart at all”. What kind of a comment is that? Only a scumbag troll would say something so ridiculously offensive.
Not very smart at all, means not very smart at all. That’s my opinion. Simple as that, I don’t see what the problem is?
Tiho, you’re so inept you don’t even realize when people are talking about long term trades or short term trades. Good luck in your troll endeavors.
Your last 2 comments have no value towards making money in the Gold market. You worry too much about trolling and who said what where and when.
Just stick to the topic and focus on making money – and while you at it tell us why we should buy Gold above $1,805 instead of wait for a pull back within this consolidation period over the coming months?
Tiho, Now you want me to explain things to you? ROFL. Go back and read older posts and find the answer yourself. The topic has been covered.
If one has 100K, how many GC contracts will 1x buy? Assuming a GC requirement is 12K for overnight. How is the 2% risk calculated? Just curious.
dollar has not failed the cycle yet. still going long here?
Stopped out my last buy. Sold a little bit more for small profit.
Back to 5x on gold futures and adjusted stops up a bit (still to levels I think will hold). Overall risk now a bit over 1%.
We are still bouncing around this downtrend line and I have a concern (always ask “what could go wrong”) that this ‘breakout’ could just be a fake and maybe gold is still going to head lower ultimately.
Clearly it isn’t my bet at this time, but I’ve reduced risk some just to be comfortable with a loss if I have to take one.
A gold contract (GC) margin is a bit over $10,000. You could theoretically hold 9 with $100k.
But each is 100x$1740=174,000 in value.
So holding only TWO would control $350kd in gold and make you 3.5x leveraged by the way I calculate it.
By the same example, I would be currently holding roughly 3 contracts making the leverage approx 5x ($500kd gold value with $100kd in your account).
Trying to limit your loss to 2% would mean putting in a stop so you don’t lose more than $2000 of the $100,000.
That would mean a stop of $6.66 on gold. Tight, but possible.
Clearly there is a risk of loss in futures and I am NOT advising or encouraging anybody to engage in them.
Comments are for useless illustration only.
The stop of $6.66 in my example assumes holding 3 contracts with $100,000 in money (making the account 5x leveraged).
$6.66 loss per contract times 100ozs per contract time 3 contracts = $2000 loss or 2% of the 100 in the account.
Since sunday night gold has traded in a range of roughly $6 the entire time (and now seemingly going higher). So something like that scenario is clearly doable AT TIMES. And at other times it can be a recipe for losses. You gotta try to pick places where a security has bottomed or won’t go lower – like with any stop placement.
Again, just useless examples. Buyer beware.
SB, Good article. You previously mentioned some individual miners you own. Could you give me a list of your top 3 or 4 miners?
This is really strange, if PMs were meant to breakout of their consolidation they should have last night with the Greek news. Anyone know what to make of this?
Gold did break the down trend line.
there goes the gold
I don’t have any particular edge in picking individual names, maybe Alex could help you more than me. I think if one picks 7-10 names in total from the GDX, SIL, and GDXJ holdings they should be fine.
Here’s one list:
In my case, I picked a few of the larger names, a few more speculative (explorers), and a few silver miners, and tried to diversify among regions around the world. That’s really it, not much more to it than that as far as selections. Most important is to define total overall risk and be on for the ride. Almost all the names trade together unless company specific news comes out.
I’m up to 14 or 15 names which is unnecessary IMO but kept finding miners I wanted to own. I will trim some in the next few weeks and consolidate down to 8 or 10.
Also, the reason I suggest picking names from the etfs or a money manager like Sprott is that these names are likely to benefit from buying when the general public comes in and buys GDX, for example. Many people are not comfortable picking companies so default to the etfs/funds, so best to have your companies on those lists. 🙂
short gold stoploss 1751 spot leveltarget 1694
Good luck with that.
Lol going short on a breakout? Interesting approach…
Thanks SB, I worry about some of the PEs of some of the miners. Also worry that some of the bigger miners have peaked production. Will look in GDX and GDXJ list, but wonder if, as Dan Norcini speculates, the hedge funds are suppressing GDX. Bottom line, I’m over thinking. We just broke the trendline in gold, early in a new cycle. I should just buy GDX and GDXJ. I already have metal positions.
‘breakout’ pretty muted if you ask me…something is up
Here’s another list worth picking from, Sprott’s holdings ranked by dollars he has invested in each:
I’m not doing any buying today (or selling), as I only buy into weakness until the trend is solidly higher again. Good luck!
first target 1694below 1680 fireworks on the downside!
Sorry, here’s the list as ranked by total dollars invested in each name:
Dan said…Lol going short on a breakout? Interesting approach..”
Heard Paulson was selling gold?
Heard Soros was buying?
Care to elaborate?
WW did you go long? As always trailing my stops now.
SB do you own kinross or gbg? I hold a few but thinking of selling these as finally up. Favorites are GG, AUY, IVN
Riley, How do you use trailing stops. I hate putting a stop in so far below.
Rule #1 never, never, never short a bull market.
It’s one of the hardest rules for novice traders to learn but once you do you will increase your winning percentage by probably 10-20%.
Over a whole trading career that ends up being a huge amount of money.
Long from $1740.
No, I don’t own those names but I also won’t be selling any of mine for at least a few weeks, and even then it will likely only be to cut down the number of stocks I own while I look to reinvest the proceeds into the remaining 8-10 names.
WW, Was 1740 the trendline break?
As I mentioned last week, this D-wave on a daily chart is a classic slanted “W” pattern. Broke the declining D-wave upper trendline with a heavy volume spike, followed by a lengthy consolidation, should now push to test the highs, text book.
WW,Thanks for the chart readings,always follow, also added this morning.Nice day on the miners.
Why are you linking an anti-miner article? I quickly scanned it. “Recent performance is bad, so the miner run is finished”. Pretty simplistic stuff.
Meanwhile, let’s see if gold can hold in the 1750s this time round and make launch toward the 1800s.
First of all, let me just say that I’m following Gary because I clearly can’t make decisions on my own. With that said if if I was looking at these charts I see the trendline break for Gold but miners are right at the top of their declining trendline, so I would be hesitant to jump in miners if I were doing this myself…..which probably means it’s a good move
Because I’m not afraid of alternative viewpoints, even I’m heavily invested in the other side.
Got some info back about the W pattern. A ‘W’ pattern is essentially a sloppy double bottom with really tall sides. In this case one would not take a long position until price closed above 1767.10 (the top of the left rim). If you consider the left rim to be a bit lower at 1760.50 (a potentially valid argument) then on Feb 2nd a long trade signal was generated. However, since price immediately pulled back you would have been stopped out. The next long trade signal will not be generated until price closes above the high of the right rim (1765.90). But to be safe, I would not go long based only on the W pattern until gold closed above 1767.10. Personally, I am not hot about gold’s W pattern. I am more interested in watching the potential double bottom in Silver. FWIW.
By the way, the point of the article wasn’t just that the miners have recently underperformed, it was that they have far outperformed gold for many years prior. There has been a lot of debate here regarding metal vs. miners.
I like simplistic stuff, btw, and will post whatever I want. Feel free to complicate things if you think it gives you an edge. 🙂
A slanted “W” is essentially two cup and handles, much different pattern than a double bottom, a break out of the consolidation zone (second handle) as we are seeing now will form an inverse head and shoulders from, second handle being the right shoulder. I have seen this pattern playout on shorter times frames many times.
William Wallace, God bless your giant brain
Where is your stop on this trade?
I assume below the $1,741 breakout.
WW, In your scenario a long trade signal will not be generated until price closes above the handle top. The handle would have stopped out anyone out who took at trade at the right rim peak. A new long trade signal won’t be generated until price closes above that handle top. Not arguing. Just sharing.
My stops are pretty much always at break even with futures.
PE ratios probably don’t matter. FIrst, miners are growth companies at this stage. Second, they have so much depreciation on the books that earnings look lower than they really are. A price/cash flow ratio would probably be a more useful metric. Third, trading in and out for a cycle is probably too short a time frame to bother with value metrics.
No I hear you, I agree.
Usually if my break even stops are hit, by then half of my position is taken off. I never really buy and hold my entire position. If you noticed this was how I played the move out of the Dec low.
VIX down to 17.9. Seems like a great medium term trading opportunity
It’s always interesting reading the thoughts of the participants of the equity market.
RTH broke out a few months back and all the bears were saying it was because of ‘inflation’.Nasdaq started breaking out and the bears were saying, ‘breakouts are sold and don’t work anymore…’Unemployment dips to ‘8.2%’ and the bears claim it’s because of temporary workers, etc.
Dow breaks 13K…S&P now on verge of breaking out above last year’s highs…
At what point, do people see this strength as a sign of a recovering economy?
Transports breaking down again ($TRAN).
Take a look at AAPL, AMZN & WMT.
Are there better measures of consumer activity/health out there?
“Rule #1 never, never, never short a bull market.”
Gary,Is this a bull market in equity?
Demark with Adam Johnson today at 3:45 on Bloomberg TV
Eric,Of course it is. Maybe not secular but certainly cyclical.
P/E is not a useful measure for miners. If you compare ABX and GG for example then you might incorrectly conclude that the former is a value play and GG “expensive”.
Here’s a good explanation of how to evaluate a mining company:http://www.paulvaneeden.com/How.to.value.a.mining.stock
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