The following is a reproduction of the weekend report.


With Friday’s employment report a few things began to clear up. The first one is the correct cycle count on the stock market. With the break to new lows it’s now apparent that April 10th formed either a very stretched, or very short daily cycle. I tend to lean towards the very short cycle interpretation based on the the trend line breaks I have illustrated in the chart below.


But one could make the case for one very long, extremely stretched, daily cycle driven by LTRO and operation twist. No matter how you interpret the last two daily cycles it’s now apparent with the break to new lows that April 10th did in fact form a daily cycle bottom. That puts the current daily cycle on day 37 and now deep in the timing band for a daily (30-40 days) and intermediate (20-25 weeks) degree low. As the intermediate cycle is now on week 34 it’s apparent just how far LTRO and Operation Twist stretched the stock market cycle.

I suspect sometime next week we are going to see a narrow range day and a large buying on weakness data print on the SPY ETF. Then once a swing forms it should mark the bottom of this intermediate cycle.


I have mentioned before how news mysteriously seems to coalesce around intermediate turning points. I suspect this time it’s going to be another round of quantitative easing by the Fed (although it won’t be called QE) or a gigantic LTRO in Europe to bail out Spain and Italy, or a combination of both. Either way it’s now late enough in this daily cycle that we should expect a bottom very soon (probably early next week). The fact that this intermediate cycle has stretched extremely long raises the odds massively that the next daily cycle bottom is also going to be an intermediate and yearly cycle bottom.

Once we have printed the intermediate low we should see stocks rally back to at least test the highs. If the market becomes convinced the next round of money printing is on the way then this could be an explosive rally as traders have now been conditioned to expect QE to drive big market rallies.

In the chart below, the first scenario is the most likely in my opinion and would be what I would expect to happen if more QE is introduced. The second scenario would play out if inflation surges high enough and quickly enough to topple the already weak global economy. In that scenario the stock market would move to marginal new highs, allowing smart money to offload positions to dumb money buying into the breakout. What would follow would almost certainly be a 1 1/2 to 2 1/2 year grinding bear market as the slowly deteriorating fundamentals fight ever larger infusions of liquidity from global central banks. Unfortunately liquidity is exactly what would be driving commodity inflation so central banks would actually be making the problem worse rather than better.


That being said stocks, especially tech stocks led the last intermediate cycle. I doubt hot money is going to jump back into that sector again right off the bat. No, I expect the stock market will rally fairly quickly back to the old highs but then run into a brick wall that will require considerable consolidation before any serious breakout.

This intermediate rally is almost certainly going to be led by a different sector. As a matter of fact the new leaders are already starting to show their true colors. (More on that in the gold section of today’s report.)


An intermediate bottom in stocks (and commodities) should also correspond with an intermediate top in the dollar. I suspect the reversal on Fridays employment report is going to mark not only a daily cycle top, but probably an intermediate, and possibly even a three year cycle top on the dollar index.


I say this because the CRB is now due to form a major three year cycle low, and I don’t see that cycle low forming until the dollar index has topped. Since this three year cycle has already stretched slightly long it’s unlikely to stretch for another complete intermediate cycle. All that means is that the CRB’s three year cycle should bottom along with the yearly cycle in stocks and gold (which already bottomed slightly early two weeks ago).


Once the dollar has topped the CRB will stop falling and begin moving back up, into what I think will be a parabolic spike much bigger than what occurred in 2008. That parabolic top should come sometime in late 2014 as the dollar moves down into its next three year cycle low. Or as was the case with gold in 2011 momentum may carry the parabolic move slightly past the dollars bottom.


Since the CRB’s three year cycle is already starting to stretch slightly long I am confident that bottom is going to occur right now as gold and stocks all put in their yearly cycle lows. As long as the CRB, gold, and stocks don’t stretch their yearly cycles any further, and I don’t see why they should, then the dollar’s rally out of the three year cycle low is on its last legs.

As I mentioned last week sentiment in the dollar index has reached levels not seen in the last 12 years. This is exactly what one would expect to see at a major three year cycle top.

Chart courtesy of sentimentrader.com
So conditions are now in place for major reversals in stocks, commodities, precious metals (already bottomed), and the dollar.


I think it’s safe to say that Friday’s action took the short cycle scenario off the table (as well as the D-Wave continuation). Gold not only broke its intermediate trend line, but it also formed a weekly swing. I think we have all the confirmation we need at this point to conclude that gold’s intermediate cycle bottomed two weeks ago.


As I pointed out in the dollar section above, this should also mark a yearly cycle low and a B-wave bottom in the gold market. I’m about 99% positive Friday’s rally was the kickoff of a brand new C-wave advance. That being said I wouldn’t expect gold to rally straight up to new highs this summer. It may test $1900 during this new intermediate cycle but I think gold is still going to have to consolidate for most of this year before it can breakout to new highs. My best guess is probably next spring before any sustained move above $1900.


This means I think the bear market in miners has probably ended. As everything starts to rally out of its yearly cycle low (and the CRB out of its three year cycle low) the biggest gains are going to be made in the  sectors hardest hit during this correction. Without a doubt that was mining stocks. At the lows two weeks ago miners had reached levels of undervaluation only seen one other time in history. That was at gold’s eight year cycle low in the fall of 2008.

As you can see in the chart below miners rallied over 300% as everything came out of that major bottom in late 2008 and early 2009. I have little doubt we will see something similar this time as the CRB begins moving up out of its three year cycle low and gold begins its next C-wave advance. Hot money is going to start looking for sectors with the potential for big percentage gains.  No sector has that kind of potential more than the mining stocks. As a matter of fact I expect the gains in this sector to be absolutely mind blowing over the next 2 1/2 years.

For our purposes all we need to know right now is that gold is on week two of a brand-new intermediate cycle. In those two weeks the HUI has already rallied almost 19% from the trough to yesterday’s close. Keep in mind this occurred while the stock market was still going down and gold was moving sideways. The outperformance in mining stocks is a subtle hint for anyone that cares to take notice, of what is going to lead the market out of this major bottom. It’s the same hint that was given in late 2008 right before miners launched into a 300% rally.

If you like the weekend report you can try a $10 trial subscription  for the next week.

87 thoughts on “WEEKEND REPORT

  1. Dan

    I guess under your scenarios that the ECRI will be proven wrong and there will be no recession? Time will tell- watch the tape.

    1. Ken

      Good stuff G-Money! :-$

      Here comes the sun, here comes the sun. And I say it’s all right!

      Little darling, it’s been a long cold lonely winter Little darling, it feels like years since it’s been here Here comes the sun, here comes the sun And I say it’s all right.

      Little darling, the smiles returning to the faces Little darling, it seems like years since it’s been here Here comes the sun, here comes the sun And I say it’s all right.

      Little darling, I feel that ice is slowly melting Little darling, it seems like years since it’s been clear Here comes the sun, here comes the sun And I say it’s all right.

      Here comes the sun, here comes the sun. It’s all right, it’s all right! 🙂


  2. Liquid Motion

    I think you may be a little premature on the USD call…
    Key for the USD making a top and the stock market a low will be the EUR zone and the politicians there making some tough decisions. We all know from history that they have a predisposition for procrastination. I feel that Greece and Spain being settled will be paramount for markets settling down.
    The call on miners (as I said recently) went under the radar. If one cares to analyse they can see that MM’s liquidated gold longs whilst shorting the hell out of miners. The shorting stopped when the liquidation wound up. So as the miners in fact have lead the PM in the turnaround. In between all of this we have the Eastern CB’s contunuing their buying of physical. The smart money has already positioned itself only to draw in the dumb money…when the “after the fact” is realised….needs to gain momentum and this will only occur to the degree that you mention when the market settles and forms the 3 yr low.
    The CB’s are now walking a tightrope while it is on fire. There is too much reliance placed on the CB’s acting in a timely effective manner. If they are not careful and prudent in their actions they will be forced to do a MAJOR injection of funds after the event. Critically this all comes back to my earlier comment. No resolution = delayed topping /bottoming of USD/Stocks.

  3. eri

    Only thing that i don’t understand from your view Gary is that you expect huge parabolic move of gold bull market that will end in 2014 and yet you don’t expect gold to move any higher than 1900$ this year.

    Are you expecting gold to quadruple in just 1 year?

  4. McBryde

    Nice report, gary. And congrats on your conviction to hold your position against the trolls….

    If I were ben I’d try to avoid a dramatic reversal. Perhaps there will be a gradual leaking of slightly encouraging comments which will start the reversal, and a controlled release of comments up till the FOMC.

    I think some time, sooner or later, a major crack in the derivatives market will appear. JPM was the first ray. When that happens I think that will be the cause of the next stock market drop … and that will be spectacular! I wouldn’t be surprised to see that later this year.

  5. Gary

    Sorry buddy you don’t get to weasel out of the bet. I was prepared to admit I was going to be wrong but the market turned around and proved me right.

    We can make another bet and you can try to get back to even, but as of right now you owe me a burrito 🙂

  6. Gary

    The ECRI has been trying to call a recession for over a year now. Eventually we will roll over into a recession but it will be a slow process driven by rising inflation and slowly compressing profit margins.

  7. Gary

    I’m not at all expecting the secular bull to end in 2014, although it’s possible.

    I think the more likely scenario is for gold’s next 8 year cycle low in 2016 to mark the final correction, to be followed by the bubble phase of the bull topping in 2017.

  8. saif

    Continuing from the previous discussion,
    Gary…it is obvious u do not understand options. It is a derivative product. So it means my options moved with December 2010 Futures not with the front month that u are gazing at. So in 2005-2006 my options did not move up much nor did they move down much, as the front month WTIC went all over the place, the Dec 2010 did not.
    Second there was actually a slight increase in the implied volatility (look that up).
    Third, it was a all or nothing bet so yes I was willing to withstand the drawdown ( was peanuts).
    Lastly as I said, in real time I have been posting here and beating your arrogant trades.

  9. Bob loves Hawaii

    Hey Gary, I agree with your assessments. Nice courage of your convictions.

    I have been trading for over 17 years, and trade options quite frequently, and I about spit out my coffee when I read the post about the results of some of these guys blasting you, quite implausible.

    Your results absolutely mean revert over time, and you definitely live and die by the sword of leverage.

    For all of you who follow the exchange between Gary and these other posters, Gary’s service is a bargain for the info and guidance you receive, and for the record, Gary told us all last year he’d be surprised if anybody made any money until this C wave starts again.

    I am renewing today.

    Also, my weekly post, enjoy.


  10. Dan

    Gary said…

    The ECRI has been trying to call a recession for over a year now. Eventually we will roll over into a recession but it will be a slow process driven by rising inflation and slowly compressing profit margins.

    ECRI stated in Sept 2011 that a recession was coming-not a year.. OT and Litro are sure to have delayed that call. If we get QE again it may postpone longer not sure but without it look out below.Everything is slowing. This market has not proven itself since 2008 that it can advance without stimulus- not healthy. So better hope we get more QE or 2008 here we come or worst.

  11. Gary

    I think we all know the markets can’t survive without an endless QE drip. But neither the Fed nor the EU has shown any inclination to find out what will happen without it. So I think one has to assume that they will continue down the path they have chosen until the unintended consequences of their actions come back to bite them.

    In this case I expect it to be surging inflation over the next two years as the CRB rallies out of its three year cycle low.

  12. Le Fou


    That yellow print on an aqua(?) background is nearly unreadable on my computer. Will you try a different color scheme please?

    Le Fou

  13. Le Fou


    That yellow print on an aqua(?) background is nearly unreadable on my computer. Will you try a different color scheme please?

    Le Fou

  14. Gary

    Heads up,
    My goal in writing the newsletter has always been to help as many people ride the bull market as possible. I often run a special when I think we are close to a major turning point.

    The depth of ones pockets isn’t an indication of how much emotional control one has.

    The unfortunate fact is that any time I mistime an entry or exit there is going to be whining. Why? Because many traders overleverage despite my warnings, or they are new to the system and they don’t understand how cycles work. So they can’t envision any future where the trade turns around.

    This invariably happens, and its often long time subs, or especially the Monday morning quarterbacks that some how think they could have done better, or that they have a better system. And maybe they do, but that doesn’t mean the system will work for me.

    So for the most part I just keep trudging along because I’ve learned over the years that even though it isn’t perfect my system is good enough to have made me a small fortune and if I stick to it I expect it will turn that into a large fortune before the bull is over.

  15. saif

    There is room for bounce in the markets and Gold/Gold stocks but larger trend is till down.
    At these interest rates (1.46% on 10 yr bond) QE will have very limited impact on absolutely anything.
    Still Gold stocks should outperform the market for some time (as in go up more or go down less, not necessarily go up in absolute terms)as they have gotten really cheap.
    After a USD correction then it is bombs away on the downside.

  16. Gary

    It’s 14 weeks into the intermediate cycle and sentiment has reached levels more extreme than any other time in the last twelve years. It’s too dangerous to be betting on the long side of the dollar any more.

    I think it’s pretty clear the daily cycle topped on the employment report and I suspect the intermediate cycle did also. plus one would have to be crazy to bet long dollar with the stock market dropping like this. The Fed has stepped in three times now to force the dollar down when stocks got in trouble. They’ve made their position very clear. They won’t stand by and let asset prices deflate.

    To bet the Fed is all of a sudden going to change its strategy given this history is craziness.

  17. Gary

    And taking a leveraged bet on this low probability event is how one could lose an imagined 70 fold gain in the blink of an eye 🙂

    No body in their right mind should be playing in the currency markets in the middle of a currency war. Look what happened to owners of the Swiss Franc last year.

  18. Shawn

    “No body in their right mind should be playing in the currency markets in the middle of a currency war. …”

    Gary, if you cannot achieve it, don’t claim all the rest of the world could not achieve it either.

    Remember, the supposedly “collpasing-dollar-destroyed-by-bernanke” has successfully put a huge dent in your so-called 90%-hedge-fund- beating record. 🙂

    Learn to be humble, after the lesson.

  19. saif

    Yes Gary I am crazy.
    U making a ton of assumptions there.
    A my bet is leveraged ( iahev not deployed anything yet).
    B the Fed will succeed.
    C your “suspicion” is more accurate than mine.
    Asset prices are most affected by 2 things . The price of competing a assets and the CAP rate or the risk free rate in some cases.
    The risk free rate is now at 1.47%.
    So that rate is already doing maximum to push asset prices UP.
    The fed will not be able to do anymore.
    What most of you do not realize is that Fiscal not Monetary stimulus was responsible for bulk of the gains in 2009 and 2010.
    You equate correlation was causation. The fed “printed”, the market went up, hence the Fed printing caused the market to go up.
    BTW risking 2% of one’s account to make a 100% gain on the entire account is not “risky”. It is less risky than every tactic you have espoused. I have a built in stop loss. And that 2% is split among 4 different bets over 2-3 years. If all are wrong I lose 2%. If all are right I double my account (well the exact amount would depend on how right I am). Very risky Gary 🙂

  20. Gary

    Not much of a dent at all. By the time we close the current trade I expect we will be so far ahead of 95% of the hedge funds in the world that they will have no chance of ever catching us.

    But what you failed to recognize was that I was pointing out how unstable the currency markets are. Making a leveraged bet on any direction is extremely risky.

    How many funds do you think blew up when out of the blue Switzerland decided to peg the Franc to the Euro?

  21. Shawn

    “How many funds do you think blew up when out of the blue Switzerland decided to peg the Franc to the Euro?”

    For 9 that failed out there, I would guess 1 is successful? Someone has to loss and the money got to line someone else pocket, doesn’t it?

    Agai, if you cannot achieve it (as you claim you are not that type of aggresive round-the-clock investor), then don’t make bogus claim that no one else in the world can achieve.

    Don’t assume everyone else has the same or lower IQ/achievement as you.

    Again, learn to be humble. That will help you a long way to gaining more long-term and stable subscriptions.

  22. Gary

    You just can’t seem to get it. It doesn’t matter if one has an IQ of 200 they couldn’t see into the future and guess that the Franc was going to be severely devalued on such and such a day.

    That’s what currency traders have to deal with right now. Out of the blue surprises. No one can trade that successfully unless they have inside information, and even then one doesn’t know how the market will respond to a central bank created shock.

  23. Veronica

    My dollar system went to a sell today.Things are lining up well, and in a zero sum futures game I’m ready to take $ from all the gold bears here:)

  24. Veronica

    Silver has formed a bar inside of a bar on the weekly chart, and I’ve seen this pattern extremely explosive once it breaks out. It would be nice to see this week be inside of last week’s also,consolidating further.I have never seen silver form this pattern in this bull market yet.

  25. Wiseguy

    Looks like oil is signaling the end of this drop in equities…or atleast a nice bounce soon. Technically, oil should bounce alteast another $5.

    Miners had a fantastic finish on the day as well. Probably one more puh higher for gold in this daily cycle.

  26. Steve

    Silver also seems to be close to the 9-day deferred MA. Not sure if you use that for silver, but it seems to have been meaningful over the last couple of years.

    I look forward to your 4000 contract trade in /si 🙂

    Steve in W

  27. Bill

    Interesting ideas. Could be, could be. We humans just can’t resist predicting the future, even though fundamentally no one can. These things in this report might come to pass, although I have 3 comments to share.

    One, on the $GOLD and $USD daily chart, while the 2 are often times negatively correlated, this is not always the case. On Gary’s chart, for the 1st 6 mos of 2010, $GOLD was going up, and the $USD was going UP, too. So, I wouldn’t myself put too much into the current situation of the dollar apparently topping, thus gold must go up. They are loosely correlated. Not reliable for me.

    Two, Gary I wonder if you have thoughts on the $TYX and $TNX, hitting record lows. Many have said that the interest rates are the true anti-gold. If rates are at all time lows, wouldn’t this suggest to you, using your logic that things oversold eventually snap back to the norm, wouldn’t this suggest that interest rates are due for a bounce, and if so would that not impact gold to the downside?

    Three, I’ve been thinking this for years but have seen few articles on it – wouldn’t Germany insist that the countries that have gold (France, Spain, Italy, Portugal) sell their gold, or put it up as collateral, for further bailouts? And if that happened, wouldn’t that force the price of gold down?

  28. Bill

    So I’m just saying, no one can predict the future, and also that there are real, possible events that could impact this scenario. Although it sure looks like the probably or likely outcome will be as Gary is saying, at least to me.

    Just trying to stay neutral and open to changes seen and unseen.

  29. Bill

    On the $GOLD daily chart, there’s pretty strong horizontal support resistance at 1620-1640. If we clear that then I’d agree we’re going up for the mid-term.

  30. Bill

    One last thing I don’t get is why $SILVER isn’t following or leaving $GOLD up. The $HUI is up, as is $GOLD now. And today $WTIC, $COPPER, and $CRB all looked like they bottomed. But $SILVER went down 1%. Also RGLD had massive WSJ SOS numbers today. We may not be out of the woods yet.

  31. Shawn

    “Out of the blue surprises. No one can trade that successfully unless they have inside information, ”

    Gary, didn’t you say all the information is in the chart? News are used as an excuse?

    So now you claim news are insider info and your system cannot handle that? Funny when you are right, you credit 100% to your own intelligence/achievement, and news are just EXCUSE.

    But when you cannot handle it, you said it must be insider news.

    FYI, even major currency intervention policy will leak easily, considering how many politicians/bankers working on it. The intervention news will reveal itself much easily and earlier on chart than other type of news.

    It seems like you just don’t have the courage to admit mistake, as simple as making bogus claims.

    grow up!

    Beating 90% Hedge funds out there? and now look at you using one-time event/news for excuse.

    You are just slapping yourself and did not realize it. Admitting mistakes — being truthful and being humble will improve your paid subsription business.

  32. eri

    Shawn, what is your problem?
    Gary was referring to manipulation that currency traders were subject to, not him.
    Twisting words ,are we?

  33. DerekJeter

    “By the time we close the current trade I expect we will be so far ahead of 95% of the hedge funds in the world that they will have no chance of ever catching us”

    You aren’t be suggesting that what you do has any relation to what hedge funds do? Thats like batting .300 in a rec league and comparing your BA to Derek Jeter. Let me key you in on a little secret. All small traders should be able to outperform large funds because of the advantages you have. Hedgies don’t have the luxury of being uninvested for three months at a time. They can’t put all their capital in one trade for a reversion to the mean move. They can’t invest in large directional bets without needing to hedge their books. It is also much easier to return 25% on $1 million then on $1 billion don’t you think. Kudos to you on your returns but comparing those to large hedge funds is just silly.

  34. Caleb

    I do not think Gary is saying that in order to trade currencies you must have inside info, I think he was referring to EUR/CHF specifically. I trade currencies for a living and have been for 3-4 years. As long as you have a PROVEN edge and trade it with discipline and take the necessary losses, in the end one can come out ahead but few will.

  35. Caleb

    FYI, I was lucky enough to be long USD/CHF when they pegged EUR/CHF. No inside info, just taking the trades when they show up. It will be interesting to watch eur/chf over the next few months. Everyone is long, interbank reports suggest that there are 5billion plus of stops under 1.20 somewhere. That will be a site see if they ever get tripped.

  36. Bill

    Gary, in your cycles universe you speak about cycles in the dollar, gold and the S&P. Do cycles work for interest rates?

    As you know, the rates are at historically low levels, and also separately from that some believe that interest rates are the anti-gold, so I’m hoping that the interest rate picture confirms your bullish cycle outlook on gold. Thoughts there? Thanks much.

  37. Gary

    Bond cycles kinda sorta follow the stock market. That being said I don’t trade bonds so I haven’t actually studied them much.

  38. Dragonfly

    saif: That was an excellent call in your comment from May 2nd!

    saif said…
    The dollar is setting up for the most amazing rally. Every currency other than CAD has already topped for the year against the USD. I am long some ABX as I think it is too cheap here though.
    May 2, 2012 8:41 PM

  39. Gary

    LOL Do you really think anybody believes that some random trader remembers what you wrote back on May 2?

  40. Bill

    Gary, good call on cycles and GDX. The bull rescued your position, as you expected. I don’t have the kahuna’s for that. Am waiting for a small pullback to get long.

  41. Dragonfly

    Just to clarify, today I was reading through the posts and comments and looking at charts to see how various forecasts turned out. I thought I would commend “saif”. Anybody who wants to can look back and see saif’s comment which I have quoted here.

  42. Veronica

    Hereiwth very interesting article

    The Banking Plan That Could Be A Game-Changer for Gold
    Tuesday, 5 June 2012 – Melbourne, Australia
    By Dr. Alex Cowie

    The Banking Plan That Could Be A Game-Changer for Gold
    Inside JPMorgan’s Magical Fun Palace

    In today’s Money Morning:…poor US jobs data…the prospect of QE3 …a banking change that could send gold higher…risk management, regulators and banks…

    The Banking Plan That Could Be A Game-Changer for Gold

    Gold soared 4.1% on Friday – its biggest one-day jump in about 10 months.

    This massive move in gold was on the back of a lousy US jobs report. I mean really lousy. Just four months ago, the US economy created 243,000 new jobs in a month. This has fallen steadily to the current pace of just 69,000.

    In a country of 311 million people, 69,000 jobs don’t even touch the sides. So the unemployment rate actually climbed for the first time in a year, creeping back up to 8.2%. Traders took one look at all this, and decided that the US Federal Reserve will have no choice but to print more money. Gold rose the last two times the US Federal Reserve did this (QE and QE2), so traders loaded up on gold in a big way to profit.

    The trouble is, there’s a much bigger reason to own gold. And it could be the game-changer that sends the gold price soaring…

    The Game-Changer

    The Basel Committee of Bank supervision, who dream up the rules that govern banks, are looking at turning gold into a ‘Tier One’ asset.

    This means the banks can carry gold as capital at 100% of its market value – instead of the current 50%.

    This gives gold a huge increase in status, and effectively turns it back into money at the top level. It would also give the banks a strong reason to hold gold.

    Consider that banks hold around $5 TRILLION in Tier One capital today.

    Just 2.4% of this capital would absorb the ENTIRE annual output of annual gold mine production.

    That’s a pretty incredible thought.

    Gold turning into a Tier One asset would be a total game changer. If the bankers were incentivized to transfer even a fraction of the Tier One assets into gold, we wouldn’t need to pay much attention to Indian import levels!

    A quick look through which countries are on the Basel Committee, and amongst it you will see many of the central banks from countries that are behind most of the recent buying; countries like Russia, Mexico, Turkey, and China. Note that China’s central bank buys plenty of gold – but they only report it every 5 years or so.

    Other countries on the committee are those that already hold the world’s largest holdings like the US, Germany, and France.

    To top it off, the Basel Committee is based in Switzerland, which has one of the largest gold bullion stashes of all countries!

    You can see the committee countries all have good reason to improve the status for gold to a Tier One asset. And even more reason for the price to rise much, much higher once they are all set.

    There hasn’t been much mainstream press about this – banking regulations hardly make the sexiest copy.

    But if the Basel Committee gets this done, it will be the biggest reason to buy gold in years.

    Dr. Alex Cowie
    Editor, Diggers & Drillers

  43. oa92000

    Gold may continue to trade sideways until Thursday’s testimony from Bernanke and ECB decision. I expect ‘buy the dips’ will be a continued theme.

  44. Gary

    I knew it would, just like I knew the trolls were going to be wrong again and crawl back under their rock.

    It never fails, whenever we mistime a trade, and it happens to everyone from time to time, a whole new crop of naysayers will pop up. Then as always happens the cycles reverse and they don’t look so smart anymore. That crop disappears until the next time when a new bunch of fleas crawl out of the woodwork 🙂


    Gary good call on the bottom.

    Just wanted to let you know that Im still holding my shares 🙂 ALso added some to the blood bath…



    I know you don’t listen to other analysts, but whats your take on Armstrogn and a gold high in 2017?? I can’t wait that long for this bull market, I’m liking it to be over in the next 3 years….

  47. Tiho

    To hold risk assets at the current business cycle is to assume a default within a Eurozone will never occur with any country nor any bank. The current business cycle is now overstretched so one has to assume that a recession will never happen and China will prosper instead of experiencing a potential hard landing crash.

    Since I do believe we will soon have a major default of some kind and that a global recession will follow, especially affecting Asia, I then also believe risk assets from equities to commodities have not yet bottomed. Only a maor deflationary event will force central bankers to act above is current level limit and increase the QE dosage towards multi trillion dollar programs.

  48. Tiho

    I am long Silver. i even bought more in middle of May as posted on my blog previously, I even bought some yesterday as already posted on my blog too. However, celebrations are premature in V trough oversold bear market rallies. The bottom in 2008 occurred during a recession and during a bank default, both of which capitulated all risk assets and started a bottoming process.

    Today we have none of those events as tail winds, like in late 2008, but only as headwins. In other words, they are coming front on. Therefore, you will be doing a lot of blah blah blahing soon enough when systemic risk, which is alive and well as a bank defaults within the EU system, forces you to panic out.

    One needs to recognize the difference between a downtrend and an uptrend, and the difference between a bull rally as opposed to a short covering one. I will be selling in coming days, weeks or months – depending on how things develop as I believe can kicking is just about finished…

  49. James


    Are you still expecting a 1:1 Dow:Gold ratio when gold has it’s final parabolic blow off top? Also, will you take profits along the way at DC or IC tops and try to add at bottoms, or do you plan to ride the bull the entire way?

  50. JC

    Well gary now market rescue you out of your position. So now you take credit and go back to being cycle superstar. Sometime better to be lucky than knowledgeble. Never mind all us with much better entrys and sleep over last 2 months.

  51. MikeS

    I’m not a Gary cheerleader by any means, but you guys riding him all day is even getting on my nerves.

    Seriously, you hve nothing better to do? Hit the bricks man, hit the bricks

  52. Mark

    I think Gary deserves credit for a gutsy call that is working. You don’t have to catch the very top and bottom, just make money on the rally.

  53. JC

    Gary bring it on himself calling other peoples fleas, trolls and crawling under there rocks. If he gives it out he should take it too. Gary say everyone too leveraged,positions too big,emotions too weak,everyone else is alway wrong. He is been doing it long time and is going to make large fortune. If hes wrong he blames Fed or currency manipulator. Smallest market is gold is not manipulated but largst, most liquid market in dollar is? He taunts and then wonders why people troll him.

  54. JC

    Mark what is gutsy call? All momentum traders in miners today. Gary bought downtrend and then make excuse about complex bottom. Fine it happens to all but we admit mistake and look to buy again. Noone picks bottom or top with consistent trades. Not gary though he prefers to blame complex bottom, fed, leverage or morning quarterbacks.

  55. Gary

    The truth is that instead of getting whipsawed in and out multiple times and using up all of our metal capital I recognized early that I wasn’t going to be able to pick this particular bottom with any degree of accuracy. So I just decided to take a position and hold it until the bull rescued the trade.

    At some point gold is going to move down into a DCL and everyone is going to pile on and blame me for not timing that trade perfectly too. (You can go ahead and start now if you like)

    So let me be clear I’m not even going to try to avoid that draw down. The intermediate trend line has been broken, and a weekly swing has formed, plus gold has rallied long enough to form a right translated daily cycle.

    I’m convinced gold has put in an intermediate and yearly cycle low and will continue to hold positions until I think the dollar has put in an intermediate bottom.

  56. Bill

    Looking at the weekly chart of GDX, it does look like Gary nailed the low. I didn’t want to believe it at the time because GDX just kept going lower and lower. I don’t yet believe in cycles but Gary nailed this one.

    We have a nice daily reversal candle in GDX so far. As long as we stay above last weeks low of 42.72 I’m looking to finally get long.

  57. JC

    Gary I agree with miner and metal trade too and am long in both. Noone time perfect trades all of time and have never go red. We all do. But you never say bad or early or try again. You just taunt, ridicule or blame something else. You not getting my point so I will not make comment no more.

  58. Gary

    Not taunting. I’m just responding to the trolls who love to pile on whenever I mistime a trade. Most of them don’t even have a subscription so they don’t even know what’s actually going on.

  59. Bill

    Something else I’ve learned on this trade as well. Before when I was a sub, Gary used to wait for upside reversals and TL breaks. This time it seemed to be a pure cycle and sentiment trade, again because there were so many false breakouts. So another aspect of Gary’s trading style here is to be flexible.

    Anyways, I’m just a trend follower, and don’t try to catch bottoms, but I am impressed by Gary trusting cycles to this degree. Makes me take a 2nd look at cycles.

  60. Bill

    Yup. It’s been a very messy bottom. Plus GDX was going down for like a year, since last Aug. Plus before that it just up/down/up/down since Nov 2010. I don’t get cycles yet, but it’s pretty amazing that he called this bottom after a year and a half of absolute chaos. And now holding firmly in the black. It’s better than I’m doing.

  61. EricH

    Gary missed the lows by 20%….i don’t know why you would classify it as a low with his entry between 46-47.

  62. Gary

    I basically missed it by 10 days. Sure I wish I had a crystal ball and could have seen it coming like so many others here seem to have. BTW any one know where I can get one of those?

  63. Bill

    EricH, well, the math might be right we all saw what happened w/GDX, right? I mean it was steady steady down, then a bunch of false breakouts. My own system gave a buy on Mar 23 at about 44.50, but I didn’t believe it because of the many previous false breakouts. When did you get long?

  64. Gary

    BTW I don’t recall anyone saying they were buying right at the lows so apparently no one actually does have a crystal ball.

    And no you can’t tell us after the fact that you bought at the bottom. Only real time posts count.

    All I see is Tiho claiming to have bought some calls the day after the bottom but that was right after he just posted he was still waiting for the inflation trade to begin ha ha ha.

    So I’m not really sure what he actually did.

  65. Tiho

    My blog shows what I did in real time. Every post shows what I have done, if anything. It’s upto you to believe or not believe. That doesn’t impact my funds NAV.

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