Gary, what is your exit plan, if there is any?
I mean, what if you are wrong? Whatever the fundamentals or technicals, what is the situation(s) that will make you admit there is something going on that you cannot control, or if you make a mistake, and exit the position?
You know…. that xGuru (Atilla) guy you were mocking all the times, holding shorts from SPX 750? I just hope you are not following his path by recently declaring your return is top of the world better than all mother Hedge Funds combined. 🙂
I do hope you and rest of us here are right, and retired richly. But sometimes, you have to be prepared. What is your preparations? Thanks
I plan to exit as close to the top of the next intermediate cycle as I can.
Could it be that cycles have somehow morphed, what with all the Fed intervention and all? Missed a beat, like an irregular heartbeat, an irregular cycle? Maybe the cycle top happened somehow, and we’re going to the next bottom?
Gary, we are still far from a bottom in the metals. I can’t believe you plan on holding all the way down.
It seems like almost every chart I look at is broken. That says a lot about current sentiment. This is usually the most bullish year of the Presidential Cycle. Despite how bad things look & feel right now, I can’t imagine policy-makers and fed officials allowing things to fall apart without a fight.
“I plan to exit as close to the top of the next intermediate cycle as I can.”
What IF, Gold went straight down to $1000, and GDX to $30?
Every experience trader/investor should have a stop loss, to cut losses and preserve capital. Apparantly you do not have any exit strategy for unexpected circumstances.
That’s the problem I have with investing in gold & gold stocks until they start showing some relative outperformance. At least equities can rally if the dollar moves higher. That’s a harder case to make with GLD & GDX.
Once gold forms a daily cycle low then we can move stops up. It doesn’t make sense to stop out 25 days into a daily cycle though, and I don’t just place stops willy nilly. That’s just asking to get whipsawed out of a position.
in my experience, stops are useful when you are buying momentum. a lot of other times they are going to work against you.
gary is buying cheap, and thats probably much better than any stop you can have.
The daily RSI(14) for GLD and SLV are now < 30, and GDX was there a day or 2 ago, so maybe Gary’s right about gold being at/near a bottom. The low of the outside upside reversal in GDX earlier this week is still holding, too. Gary, maybe that low could be your floor?
$SILVER w/a 28 handle.
$WTIC w/a 96 handle.
$GOLD w/a 15 handle.
These are all weekly closes.
Wow, never would have thought a month ago.
Looks like Sell in May all over again.
If so, PM’s could continue to trickle or melt down until August.
Today has been the 10th day in a row that dollar rose which hasn’t happened since 2008.I believe that we have seen the low at 1575$ which was my target for gold (ok, 1573.75$ was the low) and that dollar should now go down.Also to point out that gold hasn’t been this oversold since 2008.This is it guys, i don’t believe there will be another chance like this any time soon
Gary will either look like the biggest moron or a genious very soon….I’m hoping it’s the latter
I have faith it’s the later, although I’m braced for one last puke. It would be nice to have something definitive. Not only does it give the little buy confidence, the bigger players will take note too.
.. give the little Guy confidence..
The 80wma held and I’m quite confident we launch off here, but after the beating I’ve taken the past 6 weeks I think I’ll wait for confirmation
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Dont sweat it peeps…China to the rescue…gearing up again for another onslaught. Just when you thought the whole world was going to cave in…they ramp up…and bring it back to life.Commodities (metals) still holding…demand is insatiable…supply is very tight.Bodes well going into the northern summer.All we need is for the Political Elites and Political Class in Europe to sort out their differences….and BEN to wave his magic wand….then we will seen green everywhere.Perhaps a good time to be contrarian and to take advantage of(dabble with) bearish sentiment and use Gary’s advice on cycles. All of this is coinciding with one helluva bounce. Always good to have some extra cash on the sidelines though even after times like these.Remember no one picks the bottom….NO ONE.
Quotes from Jesse Livermore….
“Well, you know this is a bull market!” he really meant to tell them that the big money was not in the individual fluctuations but in the main movements that is, not in reading the tape but in sizing up the entire market and its trend”.“Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance”.
Jesse Livermore died a broken man, alone in a hotel room… completely penniless. The only money left was locked in a trust for his family that he could not touch. Otherwise he probably would have lost that money too. RIP
He actually blew his brains out.
@dannowow .. never knew that … i guess he sat tight too long
DannoThanks for the bio…..Dont analyse the man, read the words and how they may apply to this blog and what Gary’s recent entries relate to……!!!
Lessons in there for any trader.
Livermore made multi millions during both 1907 and 1929 nothwithstanding his losses after making those sizable gains. He obviously got part of the equation right. No one makes that sort of money without being able to understand the market.He also wrote….” The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor”.
Refer my entry 9.5.12 2.49am…AGREE with U… 😉
Found it, thanks for the reference. I must have read your other comment backwards.
Dollar still on its way to 92 on the index. I expect heavy “printing” in 2013, not sure if it will work yet. I still think Gold stocks look cheap and have probably discounted a Gold move to $1250, which I think has a 90% chance of happening.
No, gold is not going back to 1250 ever again.
That is just 20% away James. In a total global asset meltdown, the only asset which has not lost value on the banks balance sheets, which will certainly be sold to meet margin calls CANNOT go down 20%? 1 Mid to large EU country selling its gold to reduce its debt could push Gold down that much.I have started buying small amounts but I am heavily long dollar and short some high beta stocks, so Gold going down in a meltdown works fine for me.
what makes you think that is going to happen?
The Fed is really looking backwards at inflation measures and the election timing makes it unlikely that they would do something. A simultaneous deflationary crash in Europe and China would likely put immense pressure on asset prices with USD rising as a result. Other than CAD I would not touch (be long)any of the components of the USD index with a 10 foot pole. Japan with 230% debt to GDP. Australia with twin crashes of property bubble (about 3X that of US) and China hard landing looming. Euro in disarray and CHF being pegged to the Euro. And you think the USD could not go up 15% in this environment?
I think the Fed is printing just as fast as everyone else or the dollar would have already gone up. It’s starting to get late in the intermediate cycle so its running out of time.
Gary when is the last time that the Fed printed? I do not think you understand money printing. Operation twist is not money printing. It is reallocation of the Fed balance sheet. The corresponding decrease in long term interest rates changes the risk free return in model portfolios and consequently pushes asset prices up. But that works till equilibrium is reached. The fed has stopped it’s traditional long term QE some time back. But these things act with a lag. For me the CAD is the strongest sign that the USD bull is just beginning. 2 blockbuster employment reports. 85,000 and 50,000 in 2 months in Canada. That would be the equivalent of 1.35 million jobs in the US in 2 months. The CAD could not rally on either occasion for more than a few hours. I find it strange you keep saying that the Fed has prolonged these intermediate stock market cycles (up up up) and yet you seem oblivious to a longer USD cycle possibility
Japan has been doing QE since year 2000 to lower interest rates and spur the economy. And they have just started another round. In addition they are now buying equities to support the Nikkei and economy that is in deflation (equity purchases is printing money debasement unlike QE).
That would be reason enough for the dollar to rally. But the dollar strength has more to do with investors fearing the global slowdown (europe, japan (in deflation again), and now China) and moving into US dollar and US bonds. If the dollar turns over next week, it is not Bernanke’s printing press, it will be because investors are back to the “risk on” trade and selling dollars.
I disagree on the USD/ UST strength.A stronger dollar will absolutely crush the US economy.USD/EUR will battle it out to the very end of the fiat monetary system.Any strength in one or the other is typically limited to no longer than 3-6 months.Too much at risk for both economies.The FED is caught between a rock and a hard place.It cannot/will not risk deflation from setting in.Its only means of attempting to stimulate the economy is by trying to encourage exports.In order to achieve this they issue more debt in the form of QE.Debasement will continue to affect the dollar as the reserve currency and the world (EUR/China/JAP/ME/STH AMER)is waking up to the fact that dollar induced inflation is not good.The FED is putting too much stress on the financial system. It will persist until the system breaks/implodes. The FED will remain relentless in its efforts…and this will bring about the demise of the once mighty USD.
I don’t quite get which part of ” FED will do whatever it takes to avoid deflation” some of you people don’t understand?How can one believe in strong dollar when the mighty FED have stated and showed repeatedly they will not allow deflation even if it takes destroying dollar?Why would somebody then ignore all of this and fight the FED, that’s really puzzling to me
Saif …announced as QEX or not, isn’t the broad measure of money supply evidence that the Fed has been printing right along – regardless of labels and the sideshow curve manipulation?
eri …I agree that the Fed has shown that they are willing do whatever they can to avoid deflation. Afterall, they didn’t even wince when commodity inflation caused hunger and revolution in North Africa. But the market has priced in the current level of monetary crack. We need more to get high, and most are now trained to expect more. Now that we have been trained and expectations have been set, it is more dangerous.
Anyway, I’m still expecting more Fed ease – and hints of that fact sooner than June expectations.
@ LM,No a stronger dollar will not crush the US economy, it will be the result of a weak economy. Big difference. A point is reached where every ease by the Fed is counterproductive as speculative money increases oil prices and based on US oil imports, every ease actually reduces US GDP.@EriI don’t quite get which part of ” FED will do whatever it takes to avoid deflation”. They will fail. Their actual strategy depends on everyone acting ahead of them, acting that they will devalue money to that extent.The ECB has a smaller printer than the Fed? They bought Greek bonds since 2010. Their Greek related QE on a GDP adjusted basis was higher than that of US. Yet, Greece bonds went to zero (practically speaking). They are not more powerful than the bond market. Sure they can create hyperinflation, but they will not. US economy will start a collapse loop far before that due to oil imports. @johnBroad money supply can rise due to money reasons. The rate of change in debt acquisition is one of them. That cliff is arriving as the ROC of Govt date is sharply negative in 2013.
@saifYes I realise that a weaker $$ policy is inflationary…but thats exactly the key to kickstarting the US economy. Higher inflation implies interest rates will need to move higher. It is also the last resort for the FED..they have run out of options.With interest rates moving towards/finding “normal” market levels, capital is reallocated. Business grows, employment increases and the economy grows.So far that hasnt worked for the FED…as Bernanke has testified. They didnt count on speculation (commodities)or overseas markets adjusting to allow for inflationary impacts (Oil).So a stronger dollar will do exactly what ?? Apart from the obvious it will be DEFLATIONARY. Again one needs to revert to the words of the FED Chairman to see what he is particularly concerned about. HE DOES NOT WANT DEFLATION. Amongst other things deflation will cause massive loss of wealth…and put the banking system (already under stress)….even more so. Deflation also implies that money supply is diminished. The FED cannot afford to withdraw money at this juncture…considered suicide.My point is..the FED is trapped. A Stronger Dollar and a weak economy ??? The Dollar is backed by the Government. A government that is bankrupt….and lives off budget deficits. Trust in the dollar ..therefore the central planners, is waning. All the while the economy sinks.How do we achieve a stronger dollar under that plan ??You are calling for a much stronger dollar (based on a higher USDX). Something wrong with that equation in my book.
Just change all your USD comments to Yen for the past 20 years.
and here Eri,This one still cracks me up.http://goldscents.blogspot.ca/2011/12/gold-is-on-verge-of-moving-into-bubble.htmlAt that time everyone on this site was cheer leading Gary’s Gold is going to go up because whatever voodoo he uses told him that it would.At that time I said“Eri,One swallow does not make a summer. Look at other indicators, including GLD holdings, Sprott ETF premiums, demand for one ounce coins, Call/Put ratios on GLD.Those do not suggest we are even close to a bottom.”Granted we got a 8% bounce but we are now below those levels 5 months later.
The bubble phase will come when the dollar moves down into a three year cycle low. The next one isn’t due until the fall of 2014. The one after that in 2017. I think we are probably just about to begin the next C-wave but the mania won’t arrive until we get close to that three year cycle low.
Just slow down a bit and read the articles carefully.
Actually neither of your scenarios came to pass. USD has gone sideways for 6 months and Gold has gone down.
Every C-wave is followed by a D-wave correction and an A-wave advance. That’s what has been happening the last 9 months. Now the COT report is at a max Blees rating of 100. Not once during this secular bull market has that not signaled an impending intermediate bottom.
Plus its 19 weeks into an intermediate cycle. Gold has run out of time for a significant move down. As I said in the weekend report. Operation Twist and LTRO have flooded so much liquidity into the system that the stock market hasn’t been able to generate a normal intermediate correction and gold’s d-wave has been the mildest of the bull market so far. Barely retracing 38% of the prior C-wave. Both have formed sideways consolidations rather than true corrections.
Lol Gary. In the “Secular” bull of 1970-1980 Gold topped in Dec 1974 and the bottom was reached in Aug 1976 a full 80 weeks later. There was no intermediate rally then. The Dec 1974 high was exceeded another 90 weeks after that. But I guess that fell outside your regular ABCD stuff.
Saif , i believe you wrote “Dollar is on the middle of massive up cycle” on December 15th, 2011.Dollar was around 80 back then,and that’s exactly where it is right now. It went from 80 to 81 in that “massive up cycle ” of yours.
You have also said the following: “Eri,One swallow does not make a summer. Look at other indicators, including GLD holdings, Sprott ETF premiums, demand for one ounce coins, Call/Put ratios on GLD.Those do not suggest we are even close to a bottom.” So , you’ve said we are not even close to the bottom when gold was at 1570$ and only week later gold was at the bottom on 1525$ and then jumped to almost 1800$, while dollar fell to 78.
And you are telling me and Gary that WE were wrong?!?!
Go back and read all my comments around that time. I was LONG a number of stocks at that time including Statoil. You asked me how could anyone be long oil and long the dollar. My trade actually never went against me as even though the USD dipped a couple % I was always in the money. In Any case, Reality is ultimate decider. We will find out soon enough, how everyone praying on Bernanke’s alter is about to have their asses handed to them.
secular bull market==
Gary, At what point would a rethink of this thesis be necessary?
When Gary’s subscription renewals have 3 90% down days or a intermediate left translated cycle 🙂It is a secular bull market Mika Zman, just will throw a lot more people off first. BTW a correction like that in the 70’s would cause Gold to drop just under $1000.
It is a secular bull market Mika Zman==
Hmmm,.. obviously I’m looking at different charts.
Saif, if i may ask, what do expect for Gold and Silver in the near term (days/weeks) ?
Not sure shorter term. I expect them to start outperforming the stock market very soon though. Outperforming may just mean they go down less. I think Gold will form a bottom between $1000 and $1350 in the medium term. That is a wide range and I am buying small amounts in gold stocks already. Long term I see the case for Gold like everyone else here.
saif, yu really don’t know whats going on.. don’t forget to pray east.
What a doosh.
..directed at ILUV
@ILUVPMS,ohhh that is so sweet. Now when you say you LUV PMS, is that Precious MetalS or PreMenstrual Syndrome?
I don’t know saif, ill leave that to your disgusting imagination. God knows what your thoughts are on that topic.
John, I can be as much of a doosh as Id like.
I did not realize Premenstrual syndrome was more disgusting than ad-hominem attacks. That said I have just two qts for all you brilliant analysts out there on this blog 1) “How is Operation Twist “”Money Printing”?” s) How much will the next round of QE be and will it be enough?”I will give you my answers and leave you guys to figure it out.1) it is not by any stretch of anyone’s imagination.2) Assuming all the Hawks on the committee are shot by Bernanke, it maybe as high a 1 trillion. It will not be enough (may buy 2-6 months)as it will not offset the trillions of asset sales coming down the line from Europe.In any case earliest significant printing will be in 2013 IMO.Gary I would still like an explanation of 1974-1976 cycle if u have one.
1)Op. Twist doesn’t add to the balance sheet of the Fed….so is not considered money printing.Its motive is similar though to QE….movements in ST and LT interest rates by swapping ST maturities for long ones.Fundamentally there is little difference between QE and Twist. Perception that QE is more powerful is of itself self fulfilling. Reactions to the the event lead to interpretations of higher inflation. Do not underestimate the power of the Twist operation.2)How has the market remained where it is without liquidity injections. They (the FED) know how the market works…and so too all MM, HF, Equity Funds, Sovereigns. Stabilility is the key. If it falters then the cascading effects are enormous, triggering numerous CDO’s and margin calls. Instant Bank destruction. Freeze on credit markets. 1 TLN is not even a pinch of what is exposed. But that is not the question you pose. The market is all about liquidity. You turn off the tap and the cogs stop working. Its not about the size of the next injection either…..its going to be about the number of times it will be required. At this point that number goes to infinity bcos there is no other alternative.Forced asset sales coming out of EUR implies money needs to find a home. You cannot have debt reduction/destruction either without DEFLATION. It, by necessity, implies lower prices. This is a concern for those without sufficent capital. Holding up the market is paramount. Anyone looking to ambush the FED will lose. As they say “dont fight the FED” …they have a bottomless source when it comes to money creation.
. “Perception that QE is more powerful is of itself self fulfilling. Reactions to the the event lead to interpretations of higher inflation. Do not underestimate the power of the Twist operation.”That is definition of a bubble. Equivalent of people buying because they expect that someone else will buy it from them higher. In the end it simply does not work.How much did the Fed buying much down long term rates by? 1% 0.5%? Why are long term rates just as low or lower in Canada, Germany and Japan? Canada and Germany have not done any QE and Japan well they have tried everything to get Hyperinflation but just cannot succeed. They will though sooner than the US. Did you ever consider that the Net Fed buying actually might have pushed rates up by increasing inflation expectations?Did you consider that even if the Fed openly monetized 50% of US debt issuance (about 800 billion a year), not QE as in it is on their balance sheet, real printing, even then most likely Japan will go under first? Their debt to GDP is almost twice the US and if the Yen appreciates by 10-15% that resulting final shockwave would result in a snap back lowering of GDP, Govt revenues and then soon Hyperinflation or default. Regardless good luck with your trades.
Thats the Fed’s play…not mine. Try and put your case to them…but dont shoot the messenger.We all know the result of the debt monetisation….and what the expectations are of the FED.Yes they have failed and miserably so. AND Psychology is a wonderful tool if it works in your favour. But even the FED are not convincing enough with their mind games, to move the economy.BUT…what else can they do….they dont know what else to do…bcos their whole framework is based on pure Keynesian economics….Stimulate like there is no tomorrow.The market is distorted, rates are distorted, values are distorted. Certainties are hard to find. There may be some depending on which way the sword falls – play on the side of the deflation or inflation arguments.HyperInflation is effective default btw.At this point thats the best the FED can try to achieve. Destruction of the currency gradually over time. (Look how long it took the USD to get where it is today…..losing 97cents in the dollar since the FED’s inception). Time I’m afraid is quickly running out…they dont have another century to allow that to occur. Few years at most…but it seems unavoidable. Debts will become worthless, new currency is born, reset switch is hit and we start all over again…with a GOLD backed currency.
watching apmex … buying slowed tremendously in semi-numismatic coins (koalas, kookaburas etc…)
That is a good contrarian sign.Gold market tops are usually connected with buying frenzy and record sales of PM in coin shops.
Sunday night “EVIL” posts over at Slope Of Hope: http://slopeofhope.com/2012/05/the-calm-before-the-storm-evil-plan-610-by-bdi.html are fun! 🙂
From the latest WSJ:NEW DELHI—Global gold prices have declined more than 10% since the end of February, but that hasn’t whetted the appetite of the world’s largest gold consumer.
India accounts for 27% of the world’s demand for gold jewelry and investment, according to the World Gold Council. Gold is widely purchased before weddings and festivals in India.[COMMOD1] Associated Press
India is the world’s largest gold consumer. Above, a bride last month.
But protests, boycotts, new taxes and, most important, a decline in India’s currency, the rupee, have kept domestic gold prices high and consumers on the sidelines. Such weakness in Indian demand weighs on world gold prices.
A drop in the rupee is the latest factor that “may keep interest in Indian gold jewelry at bay” and ripple into the international market, HSBC analyst James Steel said. Last month, he cut his 2012 average gold-price forecast by 5%, to $1,760 a troy ounce, citing slack demand from India, among other factors.
Last week, Finance Minister Pranab Mukherjee agreed to roll back a newly introduced domestic tax on the sale of gold jewelry. The proposed tax had led to protests that included gold merchants shuttering their stores in opposition to the tax for 21 days. When the government increased taxes and jewelers went on strike, the effects percolated into global prices, said Harish Galipelli, head of research at JRG Wealth Management, a commodity brokerage firm. The strike ended April 6.
Though that tax-related upheaval is out of the way, consumers still must contend with the fall in the rupee, which is helping keep local prices high even as global gold prices drop.
The front-month gold futures contract has dropped 12% to $1,583.60 Friday from $1,790.50 on Feb. 28 on the Comex division of the New York Mercantile Exchange. Gold for immediate delivery has fallen 11% to $1,591.60 a troy ounce on Friday from $1,786.75 on Feb. 28.
In the past, Indian buyers have seized on lower prices to buy more gold, but this time they have been undermined by the weak rupee. India’s currency was trading at around 53.57 per dollar Friday, down about 9% from around 49 rupees at the end of February. This means gold importers get fewer dollars for their rupees when they exchange money to buy dollar-denominated gold.
“The weakness of the rupee is countering the fall in the dollar price of gold and is likely to act as a drag on demand in the world’s biggest market,” said Jeffrey Rhodes, the Dubai-based global head of precious metals at INTL Commodities DMCC. “For me, the key to gold demand in India is the price in rupee terms.”
On top of the weak rupee, gold importers are dealing with higher taxes. While the government removed the tax on gold jewelry, it kept a gold-import tax of 4%. Until December, the import tax was 1%.
The currency and tax factors have supported domestic gold prices. Gold in India was quoted at around 28,315 rupees for 10 grams Friday, down only 5% from its peak of 29,800 for 10 grams in December.
Such high prices will keep demand at bay, even though the usually busy wedding season kicks off next month. “There will be some increase in purchases, but volumes will be small,” said Girish Choksi, an India-based bullion dealer. “The situation would have been totally different if Indian prices had fallen in tandem with global rates.”
Weaker demand in India leaves more supply on the global market.
According to Prithviraj Kothari, president of the Bombay Bullion Association, India’s import demand this year will be no more than 750 to 800 metric tons because of high prices, down from 969 tons last year.
“We will be happy if it crosses 800 tons this year,” said Pradeep Unni, head of research at Richcomm Global Services, a commodity brokerage in Dubai.
Nothing to do with India or China. GS, MS control all commodities futures..
LONG approx 2x gold futures early this morning.In around 1570ish.I think we are finally ready for a bounce.Risking 3%.
Spot gold down $20 in Asia’s evening, Europe’s morning – now at 1560
Gold is still melting down folks
… but when it bounces, I fully expect it to rise $100 on the 1st day
Yes, but from what price?
The June contract is testing for the third time the 1573 monthly support. It will probably bounce from here but I do not think it will hold.
The next support on the monthly chart is at 1500 where a triangle is formed.
Here is a chart:
dollar has broken out and is headed to 86… not a bottom yet people. euro could go to 120.
There’s our 40.99…time to buy buy buy!
40.99? what’s that ericH?
You are buying the dollar break out on an 11th up day n the row. That has only happened 3 times since the Dollar got floated in early 1970s.
Maybe a European country will default today and he dollar will fly high, while everything crashes. But maybe this whole thing is overdone right here within the next few hours or days… we will soon enough.
Not that I would buy here, but how many times has a country exited a monetary union since the 1970’s?
XAU/HUI in bear market type oversold condition, scary indeedgold hit bottom of golden triangle, hopefully this is it!
I noticed cycle interpretation could vary. Someone could mark a low and claim a new cycle and someone might call it a stretch.
HUI can go to 360 or lower based on Head and shoulders complex pattern.. the broadening top took a while to complete, the bottoming will take a while too.
YOu think its a good idea to cash some gold and buy miners? I do my own DD but an opinion would be nice.
I’m not a shorter term trader nor an expert in movements of price based on next few months. For example, certain traders will claim that Gold Miners are extremely undervalued relative to Gold. They will also claim that upside potential is therefore much higher for the miners.
My view is that in a commodity bull market, commodities always outperform equities, including commodity equities too. So from start in 2000 until the finish, whenever that is, Gold will outperform Gold Miners by several fold. It happened in the 70s too.
I own commodities, mainly Silver and am looking to buy Agricultrue. I do not own raw material producers or miners. But that doesn’t mean Miners will not rally just like post 08 bottom and outperform Gold.
HUI 360, yes target for H&S … we’re also at %50 fib retracement on HUI
Heard one of JPM’s terrible hedged trades was Gold? and maybe Oil?
Nope it was credit spreads to force junk bonds lower. The size of their position moved the market by lowering yields but now they are getting squeezed. The only good news is that this may force the SEC to do something about JPM large positions in the PMs. But there is too much bad reporting about their position to make sense of what is true and what is conspiracy.
Does it bother you that smart money bullish percent is only at 42% for stocks? Maybe this correction still has some power…
So where is Gary? Still massively buying the massively-undervalued GDX GDXJ till the last drop of house penny?
I am buying some today. But getting uneasy about the promised land.
He’s fully invested now. I’m just wondering if there’s an exit plan if the trade continues to deteriorate.
Oh Bernanke! Where art thou?
$HUI at 390, who would have imagined.
In additional to the RSI(14) < 30, the 60 min HUI chart shows strong pos. divergence setting up in the MACD. I wouldn’t be surprised to see the bottom here, or “a” bottom, as it could just be a counter-trend bounce, as the trend is clearly down.
If I owned GDX, I’d be looking to sell into the rally if it happens. But I don’t have cycles telling me to load the boat. It’ll be real interesting to see if cycles work on this or not. They must be running out of time.
Gary, for gold, at what point does one conclude that the cycles are hosed? 1300? 1000? 0? 😉
Gary, just joking around w/you man, but seriously, what sign/signal would lead you to conclude that cycles aren’t working for gold?
Man, we are so close to gold’s Dec low of 1523.90 that I can’t see gold going up w/out a test of that. Perhaps an overshoot.
Uh, sorry for so many posts, but 1 more thought: for gold can this still be a B wave? We’ve retraced more than 50% of the A up from the Dec low. I don’t know the rules for ABCD waves, but on the surface I think this still looks like a D wave continuing. If the Dec low is pierced it’s confirmed, isn’t it?
Gary seems to be MIA all of a sudden
You need to stop posting so much f-in bullshit. HUI 360 is a possible outcome due to the head and shoulders on the index. Also, gary may still be right as he is buying this bottom. It is the bottom but will be a capitulation. He is not wrong at all as it will only last a feww weeks. Give it up and stop being a dick.
Ha ha ha, it’s amazing what folks can write but won’t say face to face.
So what specifically did I say that pissed you off?
ILUVPM’s, is your comment addressing when I said, “$HUI at 390, who would have imagined.”?
Well, by that I just meant that today we’re at 390. I wasn’t addressing your earlier comment on HUI going to 360 or your H&S. I just woke up (in Japan here) and saw HUI on a weekly chart, and saw it at 390, and was just surprised at the fall it’s had, is all.
I don’t want to be offensive at all. However, we need to work as a team and stop beating up on each other. Gary may be right, we are bottoming as his cycles told him. However, we can be in for one hell of a ride before we bottom next week. You can’t time a bottom to the T, you just got to buy going down.
You “don’t want to be offensive at all”? Ha ha ha. Re-read your post to me, man. “You need to stop posting so much f-in bullshit.” “Give it up and stop being a dick.” Man, is that you not being offensive? ‘Cause that’s how it looked to me. Good thing I don’t get physical unless it gets physical. Then I clean house.
Regarding what I wrote, so it’s the “how low will we go Gary? 1000, 0, ;-)” stuff?
Well, I was just kidding. Truly just kidding. I think the world of Gary. I just don’t get this cycles stuff, and now a position w/out a floor. *But* you raise a good point, that there are a lot of folks who take jabs at Gary and mean it, and I can now see how my post might have looked a bit like pouring gasoline on the fire. So, point taken. Thanks for that, and I’ll be more careful on that.
ya, it just seems that your taking a host of jabs on the guy…
Anyways, has anyone looked at the SPX.. its broken down from its head and shoulders top pattern. Also, has anyone looked at oil. Keep an eye on it, it may be forming a right shoulders to a LARGER bearish HS. This may be 2008 all over again.
The cycles don’t get hosed. They just get “re-phased”.
The only way we get hosed is if the bull market is over. Even then, there should be a pretty powerful sucker’s rally coming soon.
If the bull market is still on, then this is a moment you’re going to look back on with regret that you didn’t go on margin to buy mining stocks (which I don’t advise).
We are almost certainly going to take out the lows, which makes this a D-wave, which is a beautiful thing, because it means an A-wave is coming to bail us out of this.
Gotcha on re-phasing of cycles. Gary has tried to explain this to me many times. I’m still stubbornly expecting “cycles” to be like the tide, seasons, etc. – something regular/predictable. As a math/physics guy, any time I see variation I’m hard wired to think “error”. Thanks for that.
And I agree w/you that we’re in a bull market, and that GDX is close to a bottom. Just as a trend trader I prefer to wait for a trend change, or if bottom picking to put in a hard floor. Once it turns I’ll be a buyer along w/you all.
There have been a dozen trend changes in the last 12 months. All of them have been fakeouts. The only real “hard floor” is going to be a violent rally that will probably afford you few pullbacks to get long.
The truth is this isn’t going to be easy. If you’re out, well done. I wish I was too.
I totally agree w/you that for GDX. So actually truth told, at the moment I only trade GLD, SLV and CEF (and QQQ). GDX is too volatile for me.
Everything that Gary’s been saying about GDX is all correct, IMO. Gary’s smart, and while I don’t what he’s saying on the Member’s blog, he’s very experienced and very successful and very flexible.
The strong positive divergence on GDX’s 60 min chart tells me that odds favor a heavy bounce up – perhaps your hard rally. I hope so as this meltdown is way way overdone. Daily RSI(14) < 30 on gold, silver and HUI. Very rare. Gary’s right that we’re near/at a bottom.
David, I just noticed that the weekly $HUI chart has RSI(14) < 30 now as well. That’s really rare. The only other 2 times were when the bull started in 2000, and in 2008 ahead of the March 2009 S&P melt down. So given that, GDX is a screaming buy. I can’t imagine it going much lower. Good luck w/your trade.
Bill, maybe with the 5 period RSI but not the 14 period.
Every indicator is at historic levels at this point. Valuation, sentiment, RSI — everything. And they have been for weeks.
I rode out the whole 2008 thing, which took many $10+ down to pennies and back again. As violent as the declines are, it’s hard to believe that they can rally just as hard, but they can.
Added gold futures.A bit over 3x now.
Very good odds we saw the low at 10am this morning (1555).I raised the stop on part of my existing position to keep my risk still around 3%.
TZ, you need to look at GDXJ, GDX, SPX, BXK, and every other pattern. There is nothing buy head and shoulder breakdowns… look at oil now forming a larger right shoulder. If it breaks the neckine of 85, its going to 40.
i think 40 is the fair price for oil.
I’m not buying miners.
Miners haven’t been in a bull mkt since 2004.
The continued desire of people to play them instead of simply avoiding them if and until they show continuous outperformance seems, to me, to be the height of lunacy and stubbornness.
Gold however is still in a bull and multiple signs indicate it will bounce imminently (by that I mean within the next 12hrs or so).
I may have found the bottom or not, but I think this is a reasonable trade.
Went ahead and upped to 4x with a stop on about half my position near the 10am morning low. The other half position has lower stops.
Things look good here for a number of reasons and I think a bounce (if not a low) is imminent.
Whether I’ve called it right or not remains to be seen.
Morning low taken out.
Stopped out my extra speculative buys. Small loss. The 10am lower earlier today didn’t hold.
Still holding 2x for an expected bounce in the next day or so.
I have to say these continuing declines don’t look good. Everybody should have a stop level where they are out and on the sidelines.
We will have one as soon as the Daily cycle bottoms.
Gary, you sure you got an intermediate bottom for gold.. I’m noticing lots of breakdowns across many sectors… what makes you think that we will rally from here? Just wondering.
We don’t have a bottom yet. But the daily cycle is at 26 days as of today. That’s getting pretty late, so a bottom is due any day.
Looking at the action I find myself agreeing here, very short term. A gap down open tomorrow would be very buyable.
Well maybe tomorrow we will get the huge gap down.Not buying until I see that.
Still no Gap…so no buy….Taking some profits in USD. This cannot go on forever.
For iluvpms, we are having breakdowns because thats usually how these type of bottoms are put in the market. All of the support and resistance that gets preached a lot most of the time means nothing, supports are usually breached late in the declline and shorts get sucked in just in time for a new upleg.
We can always go lower, but the odds dont favor it now.
well i guess we wil lave to see… Gary how long does a cycle last for?
The average timing band for a daily cycle is 18-28 days. Today was the 27th day. The weekly cycle averages roughly 18-25 weeks. We are now in the 20th week and unless the intermediate cycle runs long it should bottom along with the current daily cycle.
The gold drop this morning at 2am (all times EASTERN like the US market…unlike this blog) was within parameters and did not take out my 2x gold futures stop.
Gold should rally today and I will be exiting for a profit on a bounce at the appropriate point as planned.
I will almost certainly NOT be holding my position for a ‘we are in a bull going up’ play since as I have previously mentioned gold has triggered my “something is wrong, get out” 2008-type warning indicator.
If we return back lower and I’m stopped out then I’m simply out and will be sidelined until gold and the markets no longer look like 2008.
You should be happy when you are stopped out. It means you are following your rules and your odds of success are greatly improved over the long run.
Fine gary. Comment deleted.
TZ(8155) what will happen if gold breaks 1545?thanks
I would simply say that 1545 is the last line in the sand for gold before it would move substantially lower (sub 1500).
Most technical guys would tend to say 1520-25 (the previous lows) would be the trigger to break, but I would argue otherwise.
Thus I will back away from all longs well before 1520-25 breaks.Hopefully neither of those points will break and we go up from here. We are triangling at the moment and it will go one way or the other. Being long 2x I hope and expect it to be up.
With the way GDX is dropping, I now expect a low of mid-to-low $30s, simply from the glance of chart. That would be like 50% off the highs! wow.
Reserve some buying power for later.
Not sure if you guys noticed but dollar is breaking out… UUP, triangle formation is breaking out big time.
Yes, but statistically that triangle already reached its average trading target. The pattern is far less potent now and can essentially be disregarded. Any big players who traded off that pattern have moved on. The same can be said for the identical pattern in $Gold which met its downward breakout target already….
This all comes at a time when the $HUI Rounding Top has nearly reached its trading target.
In other words, the likelihood of a counter rally in PMs is growing by the day.
I see you still have 340 as a target.. you expecting that to be reached. If so, the dollar is still getting stronger ?
That would be the ultimate average trading target. In other words… I would not bet on that target being reached but it is statistically possible (if I did my homework correctly – you would want to fact check my references).
OT: man did they hype facebook for months!! most facebook accounts are 3rd world, try monetizing that!
do you have data to support your statement?
top 10 countrieshttp://royal.pingdom.com/2010/08/12/the-top-countries-on-facebook-chart/
Gold is moving down into a yearly cycle low and the CRB is moving into a three year cycle low. That is why this has been so brutal. The good news is that the rallies out of both of these major bottoms are the most powerful. More in tonight’s report.
This will have to be the Mother-Of-All-Rebounds to even start making money..
How is the CRB making a 3-yr low with oil at 95?
Selling is miners is simply relentless… it has all the earmarks of a major liquidation to me.
I’m out.Game over for me.I’m in the bunker at this point.
About at 3% loss.
Just say it:2008.
CB’s have made it clear they aren’t going to allow another 2008. We are just putting in a yearly cycle low in gold and probably stocks. And a three year cycle low in commodities. That is why this has been so brutal. The rebound once the selling pressure is released will be just as vicious.
Like they made it clear that Greece would never default? or that Greece would never leave the Euro-zone? or Japan’s pledge to prevent deflation now on going for 20 years?But they are going to try with everything they got. You have that right Gary.
When the going gets tough politicians will always opt to print and avoid the short term pain.
When you are wrong on a trade, you are wrong. I was wrong. In way too early here.As they say, trades gone bad turn into investments.
I think you all are putting too heavy of a burden on gary, its very difficult to buy the exact bottom or sell the exact top. All you have to do is get close enough, it sucks being down 10% on gdx like I am, but I would rather be long GDX here (yearly low) than at multiyear highs.
No burden on anyone. I make my own trades.
VIX is high and options expiration is fri.If the FED were to make a move on Wed or Thurs it would crush the put buyers and bring in a load of profits. They have done it before under similar circumstances.
Note, however, that I’m not betting money that way. I’m just saying for the sake of discussion.
We did manage to sidestep the first 28% of the decline 🙂
The bottom just became too complex and too stretched for me to pick it perfectly. Yearly cycle lows can be a bitch like that sometimes. But they are always followed by a rebound every bit as powerful and vicious as the decline. This next one will probably be even more violent because I suspect it will be driven by either a confirmation of QE or the expectation of it.
so whats the target then? because this is ridiculous…when will someone just say it, the bull just got slaughtered
The bull most definitely isn’t slaughtered, but he is going to kick off almost everyone at this bottom. That’s just how bull markets work. The emotionally weak always get kicked off during these cleansing processes.
This bottom will set up the next leg in this secular bull market. And this leg will almost certainly be the leg of the miners.
So are you saying that this first 28% of the decline is just about done and should rebound, or, the next violent one that you suggested is about to follow this 28%? Thanks
He’s saying from when he got out until when he got in again.
In the Spring of 2005 the HUI dropped from 225 to 165(29%)while gold was down around 5%. The HUI then rallied back to ~200 within 6 weeks and then continued up to 380 in a choppy fashion by May 1, 2006. I am not going to mention the gold price in May 2006………
It looks like this is setting up to be THE major bottom in gold and silver for years to come.And the last best buying opportunity for those who are not yet fully loaded
A few folks contacted me and were interested in the day trading futures course I took. It’s definitely helping me offset this “trade” losses. Here are the links in case anyone else is interested in checking it out for a free trial:
Free trial trade room – http://www.feltontrading.com/register/?e=SPECIALTH5
Free webinar – http://www.feltontrading.com/webinar/?e=fromSiteTH5
been hearing that for a while, likely story
Gold falling like a stone… breaching $1550 decisively.Charts show clearly that the next stop $1500.
I’m selling gold heavily – have made back all the previous trades losses and then some!!!
something is seriously wrong here. are we due for a bounce, yes. but wasn’t the Dec low the yearly low? so if we make a new low here then this coming dec or jan should be lower, no?
I thought at the time that it was too early for a yearly cycle low. That being said it’s probably a toss up as to whether gold can break $1523 or not before a final bopttom. If it does it will only be marginally and quickly reversed as the rally out of the yearly cycle low begins.
how is 11 months too early for a yearly cycle low? yet 16 months isnt too stretched for one?
I think itsabout time you give all your subs a refund
Give Gary a fucking break. Everyone knew this wasn’t going to be easy. This is my biggest drawdown ever and I’m as cool as a cucumber.
Faith in the cycles Master 🙂
The yearly cycle low for 2011 came last January. This year it looks like it is going to come in May. Whether or not that drops below the December intermediate bottom is anyone’s guess.
I should give everyone a refund because gold doesn’t want to bottom in the time frame you want it to bottom in? Really?
Just curious how leveraged are you? Because the model portfolio isn’t even down that much. Certainly not enough to create the kind of emotional outburst you are exhibiting. Usually that happens when someone ignores my warnings about leverage. And if that’s the case, which I’m pretty sure it is, whether or not you want to publicly admit it or not, then the only one at fault is you. Not me and not gold.
you should not only give refund but also pay every one monthly to read you
just kidding — just kidding
I am all in with a firm grip on the bulls right ear and not letting go!
me too! lol
“… a toss up as to whether gold can break $1523 or not before a final bopttom. If it does it will only be marginally and quickly reversed ….”
Gary, $1 million dollar question here about your assumptions on price and time mentioned above — what IF, Gold break $1523 and never look back, i.e. break down straight to $1300?
Or what if, Gold break $1523 and did not rally quickly, but instead spent the next 2 weeks lingering between $1500 and $1400? this is against your time assumption of reversing quickly.
Basically, what IF your preferred scenariosss are all wrong? What is your EXIT strategy, if there is any??
Your claim to beat 99% of hedge fund out there on risk adjusted basis. But the problem here is, I don’t see you have any 1 iota of risk control with an exit plan!!
An account can blow up in 2 spectacular ways — 1) Leverage, but also equally, 2) Without an exit strategy or risk control.
I think you know very well that I am waiting for gold to form a daily cycle low before placing stops. I have no desire to stop out one or two days before a bottom.
Even assuming the gold bull is over (it isn’t), you will get a massive sucker’s rally to lighten up into. So selling here is just an emotional blunder.
Well said David
Gold futures down today….
Jim Rogers saying that he sees a strong possibility of a 40-50% drop in Gold as Asian countries reduce buying – India may even ban imports! Talk in Europe about Banks also selling their Gold and associated positions to offset falls in the Euro.
Folks, IMHO this is NOT a normal fall – we’re looking at a huge risk-off play here with the big players liquidating positions. Be careful!!!
Guys if ECRI is right and we go into recession, like 2008, Gold ,Silver and Miners are going to tank. This is the only time since the gold Bull has started that Gold is below the 150 DMA- other than 2008. That is a huge Red Flag. Rick Off! Dollar Treasury’s and shorting in play.
Gold has been an underperforming asset for a long time
gold miners have been underperforming gold for a long time
people chose how they play and they pay the price if they are wrong and quite deservedly so
there is trading an asset and there is saving in an asset. I doubt anyone who complains about gold being weak is saving in gold. That leaves trading in gold
As for trading, whoever trades an underperforming asset is basically trying to pick a mid to long-term shift not only in price but also in broader market dynamics — it’s bottom or top picking not only in price but also in relative performance
take a look at UUP, your notice the same thing going on,except it broke to the upside from its formation
I did see this triangle in $USD that originally had a bearish breakout, but the pattern ‘busted’ and broke out to the upside. When this happens, it can trigger a fairly substantial rally. Of course the same thing could happen with $Gold and that would be a fairly enormous rally. Right now though there is only a bearish signal on the $Gold pattern.
Jim Rogers was bearish on gold in 2005 before it ran up big …. he’s dreaming up possibilities … like india stop buying gold, selling their gold …
I’m still waiting for the inflation trade to start hahaha!
aren’t you in silver and agriculture? shouldn’t you be saying i’m hoping for the inflation trade to start?
maybe you disagreed with gary on this blog, but you sure made bets along the same lines
Come on now, it’s just a joke. Pain is universal these days unless you are in US Dollars, US stocks or US bonds. Own none of those…
USD! USD! USD!
can you explain your charts. I know some other people here have asked you to as we don’t know what we are looking at… It would be greatly appreciated.
DOLLAR RISING – ECB news out now.
Euro plunging !!!!!!!!!!Gold plunging !!!!!!!!!!
Cycles matter more than news. The low is in.
Ok relax dude, you are panicking!
Nope – Gold will take out $1525 by the weeks end.
Some people are down 20% on this last trade!Gold can easily fall to $1500 and then $1400 from here, look:1. All PMs are in a major downtrend2. The Euro crisis is going to run on for months and everyone will flee to the dollar pushing it up to new highs.3. Banks are starting to unload gold in Europe.
If we use what’s happened so far in the Euro crisis as an example, things will most likely ‘lurch’ along and sway between good and bad for many months. One defining climax may not actually happen. Prepare to get jerked around a great deal before this is over, or not over, or finally over, and not even started yet, or over now, or maybe not over yet, or over for sure now… See?
Oh and opinions aside, I am short Gold and making money as it makes lower highs and lower lows (that’s a DOWNTREND folks)
At the earliest, the turning point for gold will come when Greece exits the EU and if the conclusion dawns that this will be a very good step for the EU as it might help stabilize the rest of the Euro Zone while Greece will temporarily go up in flames. The Euro might decide to recover and gold along with it. If that step is, however, dragged out much longer and/or if at the time of the exit it is clear that a severe contagion to other European countries can no longer be averted, then this decline in the price of gold might continue. I feel that just as gold was the last sector to falter before the 2008 collapse and the first one to rise from the ashes, it is now the first sector to go down pulling the rest of the markets with it. This also means that it’s leadership role is lost, as leaders usually end their cycle by giving up first at the end of a bull. I became skeptical of the bull when silver could not take out the nominal high of its last bull high. To crash prior to taking out that target suggested that the silver bull run was not as strong and durable as widely believed. This being said, I am still holding a physical silver core position, which I bought at 10, ran it all the way up to 50 and down to where it is now. Not going to sell, regardless. There will be more to come at some point, but I think speculating on timing makes little sense, and I don’t see prove for anything in cycles. PM miners, in my opinion are a game as speculative as blackjack. The companies are not good business in general, not particularly well run, and their stock prices move rather randomly. They are a sure way to lose your shirt unless you are simply lucky. It would take a real capitulation into much lower valuations to get me excited about miners. SLW went all the way from $20 to $2.50 in 2008, so it took a lot more than were it is now to make it a great buy.
“PM miners, in my opinion are a game as speculative as blackjack.”
Evidently you’ve never heard of the MIT blackjack team.
Too pessimistic on PM’s.Europe has an issue …cant work out whether it is in a deflation.In my book….money printing is INFLATIONARY.Greek issue is sovereign and ultimatley potentially destructive in terms of debt w/offs.But as we saw the last time around, ECB found some cash to pass through to those affected by the debt w/off = equilibrium. Some took a hit and weren’t saved(compensated).This time around they will buy more time, push more funds into the CB of Greece, so that debts to EUR Banks can be repaid under the guise of LTRO # 2. Greece can then leave….without so much as a wimper and fend for itself.All the while…new money creation will do what it does best….PUSHES UP THE VALUE OF GOLD. Look out ahead….Gary’s call will be spot on. Some serious money going to be made pretty damn soon.
Dollar sentiment is extreme. Gold and silver sentiment is extreme. The intermediate bottom is near. The question is to if, but when and by how much? Maybe it will all end in 5 days from now, but in those 5 days Gold could stop at $1530 support, it could do a margin shake out and recover…. or it cold CRASH.
I wouldn’t be betting on a crash, but from oversold positions it’s possible. Sentiment is so negative that you are ripe for either a super contrarian reversal or a crash. You can look like a genius or a an idiot in a matter of days from now. If Greece explodes and debt contagion spreads across EU, the ECB will not be ale to stop it.
Than everything will crash in days and THERE IS GOING TO BE WAR!!!!
can’t see whats funny about war? you’re weird.
so what your saying is that we win either way HAHAHAHAHAHAHAH!
can we get an oversold bounce here??
$INDU Megaphone Top
Word on the street is a big hedge fund is dumping GLD on rallies.
All those betting on this being a cycle low, I hope you know what you’re doing. But consider this – what if you’re wrong? Where will you get out??
at zero. LOL
Anyone heard of Bob Mariarty? He is claiming perfect gold + silver timing records.
Real or scam? Thanks
Real, I follow him. he’s a straight cut kinda guy. Does mix with all those so called silver and gold gurus. He called the top for silver and the bottom now. 321gold.com is his website. check him out.
Charts and setups
Ok, so what now? I’m ready to puke.
If I had to guess, I’d say the first opportunity for a PM counter rally will be when silver tags 26.15 again. The $INDU Megaphone does not suggest a very large fall in the markets (just yet) and $USD may encounter some heavy resistance near the area of the left rim of its Rounding Bottom. But if $USD explodes past that rim, or silver plummets beyond 26.15 all bets are off in my book.
$USD Rounding Bottomhttp://scharts.co/IYM7XP
$SILVER Symmetrical Trianglehttp://scharts.co/IYMYro
Sorry but anyone can share how to view 200+ posts?
Just click “Load more…” at the bottom.
My system’s buy point is falling like a rock, and will be relevant with a bit more strength.
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