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Nice interview. 😉
Nice interview Gary!
Guess I’ll move my comment to this new post.9 day displaced moving average is now giving gold support as it dipped underneath today but closed above.It dips down into a low next week and moves up thereafter and hopefully will continue to support on a closing basis.
“Haven’t we figured out by now that the past is not predictive of the future” – Gary Savage
Gary this statement is just plain wrong. W.D. Gann would tell you the same thing infact he said
“By Studying the Past, We Can Predict the Future” – WD Gann
So who do we believe WD Gann or Gary Savage?
Gann predicting the future? — whatever
all one can do is use the past (statistics) and model the future (probability) — and that is true in every field and not just the market
that’s all there is: probabilistic models, and as G. P. Box said: all models are wrong, but some are useful
only the delusional knows the future and that, sadly, is just that
I’m not sure we are talking about the same thing. Obviously no trend continues indefinitely. In that sense the past is not predictive of the future.
Bill has watched miners underperform for so long that he can’t conceive of that ever changing. But it will change. Liquidity eventually finds its way into undervalued assets. Sooner or later the downside momentum will be broken and value investors will start accumulating mining shares. That will be the start of the next huge rally.
We saw this exact process play out at the bottom in 2008. It resulted in a 300+% move in two years.
I don’t think the GDX Bollinger Bands (20,2) have been this tight since sometime in 2007.
LONG 3x gold futures.
Why do folks continue to mess with these broken investment vehicles (Miners)?
Is there something wrong with the miners?
It’s down a little bit.
But I think it is about to turn around.
Looks like a good value. No?
I think it has strong support at 35.
Because we are very close to a major bottom and the upside potential is huge.
Bottom dropping out.
It’s just a flesh wound.
Where is everyone? I’m used to seeing 200+ comments here. Gary I think you are right, the miners are nearing a bottom. An intraday reversal would be nice confirmation or even a capitulatory day. My only concern would be that if they are leading the market down in a similar fashion to 2008 then the drop could be much bigger than anticipated. I’ve been waiting for this drop and will be buying GDXJ, and adding to my SLV position today or tomorrow.
Confirmed bearish breakout of HUI Rounding Top. http://scharts.co/JgYFLc
Very good chance GDX see 40.
For those who expouse ETF’s, you might wnt to consider this from Jesse’s Cafe Americain..
ETFs – The Next Accident Waiting to Happen?
By Golem XIV
May 3, 2012
Where will the next point of instability be? Not what will trigger the next liquidity and credit crunch and cause the next landslide of panic selling and losses. We can already see many candidates for the trigger. But what will be the mechanism by which it is amplified and spread?
I think that in a couple of years, unless something alters the current trends in money flows, we will come to know ETFs the way we already know the securitization and packaging of sub-prime mortgages into CDOs. I think the signs are already there to suggest ETFs are where the instability and risk is accumulating. If I am in any way correct then ETFs will be to the next stage in our on-going state of siege-mentality crisis what CDOs were to the last…
Read the rest here.
I completely disagree. There are ETFs which are completely inappropriate not just for the mom n pops of the world but also for institutions and experienced traders–those utilizing leverage, swaps and futures, and inverse relation to name a few. But the asset class ETFs, market ETFs, and sector ETFs are here to stay and will wipe out some high fee mutual funds.
miners will bottom when HUI is at 360;
That’s about 40 for GDX.
Ya, GDX 40, GDXJ 15… SIL 15 … bad omen
“Every movement in the market is the result of a natural law and of a Cause which exists long before the Effect takes place and can be determined years in advance. The future is but a repetition of the past, as the Bible plainly states” WD GANN
`”The thing that hath been, it is that which shall be; and that which is done is that which shall be done, and there is no new thing under the sun.’ -Eccl. 1:9.”
SPY 50% retrace 138.8
Because we are very close to a major bottom and the upside potential is huge.”
Agree with gary
NUGT is just crazy.. From 42 to 10 in 8 month..
Dust is amazing – anyone who shorted miners instead of trying to pick bottoms along the way would have made a killing.
Actually that’s probably not true. There have been so many violate counter trend rallies that very few people could have held the position. Most would have fallen into the pattern of selling low and covering high.
The only way selling short really makes money for the vast majority of people is as a Monday morning quarterback looking at historical charts. In real time it’s never that easy.
Yeah. Much easier said than done.
True but trading is never easy.
And trading with the “trend” is always easier than trading against the trend.
You may have finally won Tekoa over as he remarked he is now buying some miners.
Today’s $GOLD:$XAU reached 10.56. Can it go any higher?
Do you think Bernanke may let the markets tank after all to justify to Republicans implementation of QE3?
Hey Gary. Above you wrote, “Bill has watched miners underperform for so long that he can’t conceive of that ever changing. But it will change.”
Actually, that’s partly true. True that I can’t conceive of it. But, I do think it’s possible.
The problem I have w/miners is a multi-headed dragon:
– Gold has gone up in price, yet miners have not reflected that – unless they are the target of a massive short raid, it means that the market doesn’t value miner companies as much as bullion
– Mining companies is a dirty business. Dirty meaning the environment. Lead in rivers, air. Environmentalists are the only reason why this earth isn’t worse off. Massive, and I mean MASSIVE holes in the ground. More and more countries around the world are enforcing stricter environmental measures to keep mining as clean as possible. We all focus on gold or silver, but does the end justify the means? We’re no longer pulling nuggets out of riverbeds. We move the river.
– Labor and energy costs are rising.
I know that net net, all these reasons I list can be mitigated. Except for Mr. Market. Mr. Market has decided that gold bullion has more value and growth than gold mining shares.
So since I’m just a follower of trends, I favor bullion over miners. If however miners start to show some strength, I’d flip 180 and start buying GDX. For now, I focus on GLD and SLV.
Sorry meant mercury above, not lead.
FYI it’s notable that while GDX has put in a lower low, that GDXJ has not yet, and in fact if it turns up, it’d be a higher low.
One more thing: for the life of me, I can’t understand why NatGas is $2. Seems too cheap. But Mr. Market has decided that. I fear the same for the HUI. Yet, I’ll just follow the trend. Right now the trend for GDX is DOWN. Buying now is a hope and a dream, and is not smart business sense. It’s trying to catch a falling knife. IMO.
Natural gas is easily explained. Fracking has brought tremendous supply to the market. That’s what happens when price rises to $15, it creates gigantic incentive to discover more supply.
The same process played out with oil in the 1980s. Surging price and demand put in place the incentive to drill and bring online the North Sea oilfields.
Could be, but it wouldn’t surprise me if natgas was also the target of spec’s shorting it. Same as what took WTIC from 80 to 145, then back down to the 30’s. I don’t know.
Assuming your right on natgas, then why is the HUI beaten up so much this past yr as compared w/gold?
That one is easy. The miners have just developed into a massive momentum move down. Humans have never been known to be rational. Selling begets selling.
Eventually though value investors will start to enter the sector, just like they did in 2008. The same thing will happens this time to because liquidity eventually finds its way into undervalued sectors. It can’t be stopped anymore than one can prevent water from running down hill.
This is where cycles become invaluable. I understand that the sector is moving into an intermediate degree bottom and that huge money will be made on the long side when that turn comes. A technician just sees a historical chart and assumes that what has been will always be. By the time he notices something has changed he will have missed half the move and probably be entering at a short term top. He will then get knocked out by an immediate draw down. This can happen multiple times on the way up.
This is how bulls lose money on the long side in a bull market.
I think this is dead on correct.
So that said then, why the interest to pick a bottom? Why not wait for a trend change?
I’m thinking that your answer would be the dollar and cycles and such, but the fact is, GDX is still running downhill.
When it does turn though, I agree it would likely go up a lot, your rubber-band theory.
Value investing has been out of favor for some time….out of favor meaning it has underperformed growth investing. I don’t think value investors will find their way into mining stocks especially since the yields are not as high as compared to other non mining companies. Miners are underperforming the market, but catching the timing band down will yield good results. Long term the bull market in PMs is still intact.
2 more things about GDX I find troubling:
1) Cramer backing EGO, then switching to AEM, then switching to GLD, telling folks to stay in gold.
2) The GLD ETF sucking up a lot of liquidity that used to go to NEM, etc.
Net is, it could be that GDX has underperformed GLD because uninformed investors are happy to just put 5% of their Schwab/etc. portfolio into GLD, “covering” that sector.
Then I wonder, what if GLD has no gold? F’d.
That’s why I am now actually focusing on CEF for TRADING, and physical for CORE (if I can just figure out how to store it).
Dang, I hate it, ’cause gold is just a rock, and money is a concept in the minds of humans, and does not actually exist. But all the cheaters and liers of the world is driving me to be a gold bug. I hate it, but I have to protect myself, my family.
One last point about GDX.
The whole mess the world is in – massive debt, massive unemployment, overpopulation, and lying/cheating leaders (companies and politicians) – means that the dollar is going to debased (since it’s not backed by gold). History shows this.
The clear and direct anti-dollar is gold.
GDX is a trader spin on how to MAKE money, rather than PRESERVE wealth.
I’m more in fear of my dollar loosing value, than in making money, so that’s another reason why I focus on gold rather than the HUI.
If GDX goes up 300%, and I’m holding that in dollars, to me that is MORE RISK than owning gold bars, that went up only 50%, but I’m holding gold. That’s just me.
Rome is burning.
As gold goes, so go the miners. Miners also have profits, dividends, and growth. The charts showing ratios and relationships are nice and can give direction. Like oil, natty, copper, or even corn, the companies are the better investment however. I agree that miners are the better play overall at this point. As we move toward currency crises, severe inflation, end of the world stuff, then perhaps physical possession of precious metals would be the better play…..my 2 cents!
Gold futures system stop in play again; it will be at 1625 tonight/tomorrow.
My stop is a bit higher, but close enough.
If we stop out and go lower I expect mid to high 1500’s being the next buy point.
Yep. $1588 happens to be the 75 wma.
A near term bottom is in play as suggested by my time cycle charts. Also worthy to note that on the 8th May Mercury enter Taurus which should also be bullish metals – an astrological period for “material things”
Thanks Veronica for the update 🙂
$Gold triangle within a triangle. Kinda interesting.
Gold +25 or -25 next couple of days
If I had to guess I would say that the dollar will drop to its 200 ma (based upon the bearish downward breakout of its Symmetrical Triangle) where a major rally could begin. This might give the HUI the strength to leap up to its 50 ma, before rolling over and plummeting down to the target area suggested by the confirmed Rounding Top pattern. But this is only a guess. Just taking it one day at a time. I think Gary may have picked a bottom here. I’m just not convinced it is Thee bottom. One thing being in gold since 2004 has taught me is that the gold bull can take much longer to develop than gold bugs would like. Back in 2004 we all thought it would be over by around 2010 at the latest. Now here we are pushing 2013 and we may potentially have years left.
Gold came within a buck and change of my system selling last night. If this low holds the price movement last night “threaded the needle” for an add on buy for next week sometime.
I said my stop was a bit higher and I got stopped out for 1% loss. Very close indeed.
My stop was picked based on a sample set of over twenty other similar scenarios of this type of trading. NONE of them ever pulled back this much and then went on to break higher in the triangle (but sometimes it took one or two days for them to break lower after a weak bounce like what we may be getting right now.)
I don’t know what to make of it yet. (Dollar also came withing a hair of a swing high.)
My best opinion right now is to sit and wait and see how this plays out.
It would seem that gold *IS* heading lower and this is just a weak bounce.
That’s my best guess.
My best guess is that gold is heading lower.
1575 or so
Agree on the direction (but don’t know the price).
S&P is finally correcting it seems, so maybe Gary’s earlier scenario of the S&P taking down the PM sector is playing out. Oil down too. At that time Gary said that the PM sector would bottom ahead of the S&P, so I guess we just wait for that.
If we are going to head lower, the mkt (including mining stocks) doesn’t realize it yet.
Lotta hopeful people are long both gold and the miners thinking we are at points that will hold.
It is gonna get nasty *IF* we go lower and that recognition sets in. I worry about everybody here loaded up with ‘no stop’.
Well, most of the cycles guys and others ‘realize it’ cause gary and poly etc are all saying it can happen. But reality is always different than just thinking it through. And of course many people are long NOT based on guys like gary and poly who are throwing that possibility out there.
PMs held up extremely well Friday in the face of monster dollar strength. The $USD MACD and MACD Histogram crossovers gave the dollar an extra boost Friday. Now that they have spent their magic I believe the bearish breakout of $USD’s Symmetrical Triangle could act like a tractor beam to pull the dollar back down to the 200 ma. I feel it is within reason to believe the dollar may run out of steam by Tuesday or Wednesday and begin the process of rolling over.
Just wanted to add that I’m not a strong believer that the potential PM rally will be the beginning of something big. My charts suggest the rally, if it materializes, could peter out around the area of the lower (broken) trendline of the HUI Megaphone. And if a PM rally does NOT materialize soon the HUI could simply head straight down to 380.
I am keeping an eye on a potential Megaphone Top (aka Broadening Top) in $INDU. These ‘tops’ can actually break out either direction. Seems that we’ll either see a test of the lower trendline… or price will bounce right here off the 20 ma (Bollinger Band mindline). Guess we’ll see.
Possible alternative USD cycle: http://likesmoneycycletrading.wordpress.com/
Tuesday: Gary calls the inflation trade on. On Tuesday all inflation assets top and start selling off hard…
By Friday: Crude Oil is in a mini crash (down almost 10% in 3 days), with rest of inflation trade assets getting smacked bad including Copper, Palladium, Silver, Aussie Dollar, New Zealand Dollar, CRB Index etc etc etc.
You just couldn’t make it up…
In case you haven’t noticed I don’t try to time perfect turning points. It’s almost impossible to do.
If you had read and comprehended the article you would know why I think the inflation trade is now on. Because the dollar has reversed the pattern of higher highs and higher lows. The dollar was late in it’s daily cycle when I wrote the article. If you will notice I even drew the dollar chart to show an impending bounce and gold moving down into a short term low.
Just slow down a little bit, quit jumping to conclusions, and pay attention to the details.
BTW gold is due for a bottom in that correction any time now. If it can penetrate below the April 4th low it will confirm that the intermediate cycle is bottoming now instead of on April 4th. Intermediate bottoms are the best buying opportunities.
I’m assuming that now that the dollar has begun a new pattern of lower lows and lower highs that it will continue and so the dollar should not rise above 80.17.
Now if you can see the future and know that is incorrect let me know and I will change my mind about the inflation trade. As of Friday it looks like the CRB is trying to move below the Oct. low. That would suggest that it is trying to put in a slightly stretched 3 year cycle. The assumption is that it should rally strongly out of that major cycle low for the rest of the year.
Gary I agree with this explanation. And I did take notice not once above did you mention about how Ben is printing madly to destroy the dollar and bolster the markets. It baffles me how you can say that when the dollar cycle fails that Ben was obviously running the printing presses to destroy the dollar. But that when the dollar rallies you don’t mention his printing presses. I think if you eliminated that conspiracy theory about Ben’s mysterious printing press from your writing it would be sound more credible and logical. Cycles are a great predictive tool and they don’t always work. I don’t think you need to blame Ben’s printing press when they fail.
Does anyone know anything about Backwardation? In doing some research on bubble theory I came across these circumstance via research by Professor Antal Fekete. Just curious if anyone has any thoughts on shortages in the futures market and how that could effect ETF’s when “the scare” finally get’s here. Disclaimer: I’ve been a subscriber to the premium site since 2010. Thanks.
Do you believe that this is the start of a major decline for the dollar as your article states… one that should last for two years?
Hard to say. We are stuck in the middle of a currency war so all kinds of goofy things can happen. As of right now the dollar has formed a left translated daily cycle. In normal times that almost always indicates an intermediate degree decline has begun. It probably won’t be a plunge though. More likely a slow grind lower.
If the dollar were to rally back above 80.17 then I would have to reevaluate.
I guess it’s almost time to reevaluate. Dollar broke the 80 barrier
It has to break above 80.17. But even then it could still unfold as another left translated cycle. `But to your point, yes it is tough to trade expectations in the middle of a currency war. There’s so much manipulation going on it tends to throw a wrench in most of our most dependable tools.
What manipulation? Please explain because I don’t see any. I just see dollar buying as a flight to safety due to European Debr Crisis. And when the EU Crisis intensifies, investors sell the Euro as they discount / price in further ECB balance expansion.
It wold be interesting to find out what manipulation you are talking about. It is usually traders who are constantly caught on the wrong side of the trade, that use excuses about manipulation and volatility.
All central banks have been debasing their currency, with the US as the worst offender. BTW I think we are on the same side of the trade as we are both long precious metals. You apparently in silver, I prefer undervalued miners. You are a buy and hold investor, I prefer to trade during periods of consolidation like gold is in now.
Yes, that’s correct.
This is a question for everyone:
Has anyone ever worked with or met JOED from Market Geometry?
This is either the dollar’s last hurrah (short term) or the beginning of something big. I’m leaning toward last hurrah, but I guess we’ll see.
wow, dead here
That is where we’re at.
Can anybody suggest a place to buy bullion in Seattle area?
I’ve never been, but it’s one of the largest dealers in the US – located in Auburn:
Gold system stop is oscillating between 1625 and 1626 the last few days. Being at 2 straight losses, and not having more than 2 consecutive losses this entire bull market, I’m hoping the stop is not hit and we go up from here. If it goes to 3 losses I’m really not sure what to expect, but something a little bit different would be happening. Maybe a deeper correction than we all think and followed by the final blow off move?
Thanks Veronica. We definitely seem to be nearly a crossroads of some kind.