42 thoughts on “CHART OF THE DAY

  1. Jorgy

    That is exactly why I think we’re going to get 6-8 weeks of positive gains as shorts get roasted and sideline non-believers watch as the train leaves them behind and they’re forced to buy closer to an IC top than the IC and possible bear market bottom. Many cannot buy when shares are 30-60% off their 52 week lows… Just imagine when they’re 80-100% at gold’s IC top which isn’t due for weeks! ?

  2. Hong Bang

    Thanks Gary,

    I would like to invite you speaking in my country Viet Nam.

    Please tell me when you have time. Maybe in combination with your holidays.


    1. gary Post author

      Thanks for the offer But I rarely fly long distances anymore. An arthritic back makes it very unpleasant.

  3. Jc

    Would it make sense to take partial profits on miners with USD at 93. Either reenter on pullback or multi day consolidation.

    1. gary Post author

      I’m not going to try to get too cute with positions here as I don’t want to get left behind.

  4. TradwithG

    Gary, we are not going to get big ICL till February ? And DCL will be small and not like past /bear dcls?

    1. gary Post author

      We should still get normal DCL’s to scare traders out of positions. That’s what bull markets do.

  5. William

    Watch out for a pull back in miners, gold & equities as DXY is right on its weekly pennant support as of now during Asian trading hours. DXY can rally to 97 without breaking its pennant’s resistance.

    This, however, should be a good opportunity to re-enter (during the week) your long position exited last week!

    Will watch the action close…

  6. William

    Gold price suddenly jumped by $8 and it’s in the vicinity of 1,170 resistance zone…I think it’s about to make a daily swing high.

    A sudden jump during Asian trading hours, more often than not, is not a good thing as the “shorts” would look for an entry during U.S trading hours, bringing miners down with it!

    1. AlexP

      It is unlikely, I think, too early but indeed, If I were now long gold and this would have been a potential ICH, I would have used this strength to unload it all without hunting the high.

      Now it looks like a short respite of 1-2 days is at hand for USD before going back down into its DCL on Thursday/Friday while producing a short-term bullish divergence with oscillators.
      The same is at hand for stocks and gold except that mirroring USD with which now they are highly negatively correlated –> i.e., bearish divergence with oscillators for gold and sp500 alongside a shakeout of VIX below its 200dma by the end of the week.
      NOTE: The same occurred in 2012 after stocks’ YCL and now it is repeating.

  7. AlexP

    Reply for TUSHAR:
    I’m sorry but I cannot help you 🙁
    I cannot call trades with that much precision as you asked.
    That’s why I buy into temporary weakness (but within an overall strength of the market) and sell into intermediate strength…i.e. I try to cushion my inability to make short-term calls via this approach while keeping the breeze of the trend into my wing.
    NOTE: I would not sell a position just because a DCL is near unless it is the first DC after an YC or if I need to re-do my trading framework (as I did last week on FOMC minutes).
    I use that DCL to accumulate positions particularly of very volatile assets immediately after shakeouts, so as to reduce my risk and increase considerably my reward/risk ratio.

    So, this is the approach I would use/recommend in the case of this impending DCL in USD (HCH in gold)

  8. dtrader

    Gary, what’s your opinion on biotech? Are they ready to take off along with stock market indexes?
    I’m long XBI from $64 and planning to hold until it reaches $100.

    1. gary Post author

      If I’m right about the Fed aborting the rest of the 7 YCL then biotech should also be at the very beginning stage of it’s bubble phase. I was hoping it would get pushed down to 250 or 200 during the 7 YCL but maybe 280 is all we’re going to get.

  9. David Silver

    At the open went long the Shanghai, and added 2 more miners.

    Shorted Crude Fridaybnesr the close.

    Holding 2 miners and long tech company since 10/5.

  10. AlexP

    …and things now move as anticipated above before US mrkt open: USD on very-short term recovery while gold and stocks abreast following suite on the opposite side.
    Their highs will get hit there.

    The DCH in gold on Thursday/Friday may come on an exhaustion upthrust touching its 200dma.
    Scalpers and swingers will short gold there big time on the 200dma shakeout and on the bearish divergence!

    1. AlexP

      My pleasure, Hong!
      But please bear in mind that short-term forecasts are not to be taken as calls or anything alike by daytraders/scalpers/swingers because I’m bad at that short-term timing.
      What I’ve shared above is just my view of what may happen by the end of this week based on the historical evidence I’ve come to analyze.

  11. ashram

    Given your analysis, the best trade is to short the US Dollar. While gold is usually inversely correlated to the Dollar, why not prioritize the most logical trade with the least potential for unpleasant surprises: if the Dollar is going down, be short the Dollar.

    1. gary Post author

      I won’t trade currencies in my own portfolio. Why? We are in the middle of a global currency war. One never knows when someone is going to fire off a currency intervention.

    1. gary Post author

      It’s only a trap if today was a final top and the bear resumes. I doubt that will be the case. If I’m right and the bull is back then anyone who bought at the open today just made a poor day trade but is still in at almost the exact bottom of the bear market. 3-4 years from now you won’t be able to tell the difference between an entry here and one at the exact bottom.

  12. David Silver

    I’m a contrarian.

    Added more miners and long Shanghai at the close with my closed out short position profit on Crude at the close.

    Long Nasdaq tech and now neutral on crude (no man’s land).

  13. MuffinTop

    Now is not the time to be adding to any GDX/GOLD position. You gotta wait for the next DCL at the very least. Patience trumps impulsiveness.

    1. David Silver

      Breakout inevitsble as Mr. Savage alluded to and the Elliottwave boys as well today at the close! Oh yeah and me too.

      Thanks for caring and sharing my friend.

  14. AlexP

    Correct, MuffinTop!
    I just took another look at Mrs. HISTORY and: please look at stocks on 24oct2011 !
    – On that day SPX was on day 14; now we are on day 9
    – MFI was arrond 72, just like now
    – stoch was close to 100 just like now
    – RSI was 63 now it is 60
    – TSI was softer at 48 while now it sports a staggering 63.

    So, now at stocks are slightly more overbought than what they were on 24oct2011.
    What followed?
    – 2 pullback days
    – 1 strong upthrust that put in the DCH.
    – strong bearish divergence btw DCH day and 24oct onn all osciallators !!!

    After that, SPX had a vicious decline into DCL because of the dollar which was on the rise, which is not the case anymore because the USD is on a declining IC
    What can we infer from all that? –> everything I had shared before:
    – DCL for usd on Thursday/Friday as stocks top into their HCH
    – DCH for gold too
    – DCL for gold and HCL for stocks next week as USD reaches its next DCH
    – stocks and gold up 2w from now as USD goes into its DCL for 3 weeks from there into mid November

  15. William

    $nymo is at extreme overbought level again and this has to come down as it has always been in the past. Emerging market has already rolled over led by Russia. China will fail its test on trying to fill its weekly gap (as I mentioned in my latest post) although I didn’t state my opinion there.

    Lastly, big bearish engulfing on GDX, expect more downside to come with immediate horizontal support at circa 14.70…

    Too early to long any of these I’m afraid…

      1. MuffinTop

        Agree: $14.50 is roughly the top of September 18th candle and 50% fib retracement. A good ‘text book’ re-entry point – if all goes according to plan of course – and I would also keep a ‘Trailing Stop Loss’ underneath the 50 day MA, just in case 🙂

        Ps: Thx Alex!

  16. William

    And, at $14.50, this would also close the “gap” it created 10 days ago! Accomplishing all that it needs for next bounce…

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