115 thoughts on “CHART OF THE DAY

  1. Herman

    or maybe the cycle theory does not apply here any longer, because the bear market rally is over and gold resumes its downtrend…

  2. zkotpen

    Gary,

    Technical question here: Why is the Oct 4 low a half cycle low?

    I have been referring to it as the cycle low for almost a month now… what’s the distinction?

    1. Gary Post author

      It occurred way too early to be a full daily cycle low. Golds daily cycle has evolved into a 28-40 day cycle and that bottom occurred on day 15.

  3. AlexP

    Again, it solely depends on the figure to be thrown out by the Empl.Sit.:
    – if >200k, then USD goes higher while stocks and gold lower
    – if <200k, then USD starts its daily cycle decline (and most likely also its Yearly Cycle decline) while stocks and gold trend upwards into new daily cycles.

    Trying to make a resolution now and to open a position on a bet is coin-flipping gambling, not trading.

      1. AlexP

        I’ve done that in the past and lost money. FORECASTING IS A DANGEROUS BUSINESS, especially in trading!

        I forecast solely to play out scenarios with various degrees of probability and then ACT SOLELY ON PRICE ACTION AT SPECIFIC, RIGOROUSLY SELECTED MOMENTS, i.e. when my entry signals get CONFIRMED BY PRICE ACTION!

        Taking action before price action or, alternatively, delaying an exit when price action dictates otherwise, is LONG-TERM ASSURED BANKRUPTCY.

        1. Johan

          Well, I must say I don’t like trading on news for sure.

          In my experience charts often tell you in advance if the report will be strong or weak, or at least what the market interpretation of the report will be. When the report is out the bots will be faster than you acting on it.

  4. Raj

    Hi Gary,

    Readers of your material have doubtless also been reading all the talk about the bearish COT reports on the PMs which argue that the bear market in PMs is not over. Would it be fair to say that you don’t place as much stock in the COT reports as those other market observers?

    Thanks for your ongoing contributions to the PM market dialogue.

    1. Gary Post author

      I’m saying that if the bear market is over then it’s going to take much higher COT levels before intermediate cycles top.

    1. Gary Post author

      That is one of the things that makes me think the bear may be over for gold. If oil has put in a 3 year cycle low then I doubt that gold will diverge for very long and will eventually follow oil higher.

  5. Mark

    God only knows how glad I would be if Gold would resume its mini bull trend from august,but I’m very skeptical….
    Probably the only positive signal is precisely the extreme bearishness around us.
    But the COT report and the weak rally from the august low means probably that we will test the lows and easily go down from there.

  6. Johan

    Hi Gary,

    To answer your question on reports, I don’t really follow gold specifically but to me if I look at those charts it still looks like a bear market to me, ie prices have still not broken out to the upside from the down sloping channel. It is close, I acknowledge that, but it still has not happened.

    1. AlexP

      I think Gary threw a good point up there [as usual πŸ™‚ ].
      And that is particularly important because this goes beyond specific entries/exits –> IT CUTS THROUGH THE VERY FIBER OF BEING A TRADER IN REAL TERMS or a gambler who just happens to do his gambling in stocks/commodities/fx arenas.

  7. AlexP

    Gold has just hit my target of 1125 I mentioned here 2 weeks ago (in a reply to PAUL, if I remember well) while USD has proven its audacity to fulfill its cyclical responsibility of DRAWING A CLEAR NEW YEARLY CYCLE VIA A MONTHLY SWING HIGH ABOVE 98.44.

  8. AlexP

    my 1125 target set 2 weeks ago was based on fib 62% retracement which, incidentally now happens to mark also the weekly trendline.
    because of this, I expect that gold to show extreme resilience as USD continues to move higher this week above 98.44 (under my former scenario which has proven to have larger and larger probability by each day), so that any fall below 1125 to prove short-lived, shakeouts, until Friday at least when clearer trends emerge.

  9. Jorgy

    Unfortunately the bear market for gold and oil is not over and I’m afraid it’s just a matter of time before the USD works up and out of the bull flag consolidation. Global central banks are coordinating to lower the Euro/Yen and strengthen the USD as the 1% take profits in western equity markets. Both gold and oil will make lower lows for no other reason than to put massive financial pressure on Russia & Iran for their support of Assad in Syria. Needless to say, the USD is and will continue to be used as a financial or economic weapon. The drops in TGD and RBY today are representative of how this will turn out for 99.9% of gold mining and oil exploration company shares. Equity investors get wiped out, bond holders get converted and everyone looses. De-risk and get liquid while you still can. ?

  10. David

    This is exactly what happens when buying an asset in a bear market. Why do people even bother to trade it on the long side? When Gold was at 1160, Gary said to get in since Bear market has bottomed now at 1122 it hinges all on the jobs report. If Jobs report comes in strong…then what? Gold could easily go down another 50-60 dollars to test the lows.

  11. Jorgy

    Gold broke its intermediate trend line this morning meaning that the IC has topped on week #12. The probability of good things happening has gone down exponentially. Nimble traders might catch a slight 5-7 day pop out of the daily cycle low if they’re lucky; otherwise they’re riding the slope of hope on the highway to hell! ?

    1. David

      Triangles! Trendline! Voodoo dolls!
      It doesn’t matter. Short Gold and Long equity is still in play.

  12. MuffinTop

    As previously mentioned..

    Everyone is anticipating a break of the triangle trend line.. but Gold could also momentarily tag the rising channel trend line [bottom of July 20th/Oct 2nd] at 1120 and bounce back up from there on Thursday in anticipation of the employment report.

    I would be more concern – in the short term that is – if Gold breaks that channel support, then expect a retest of the lows under 1100.

    Ps: Gary also did mention that this type of psychology would and needed to happen before Gold hit rock bottom on its DCL. This is what climbing the wall of worry looks like during a trend change.. some of you still don’t get it!

  13. Paul

    Hi Alex

    yes that was your target and we are there now. Roll on Friday. What time will the works report be released please ?

  14. AlexP

    Lady Market is capricious and confused at the moment: she cannot decide to what type of USD-SPX correlation should she give way: positive or negative ?!

    Since we’ve been in positive-correlation territory for 7 days since Oct22 and yesterday was a zero-correlation while stocks are already in a right-translated daily cycle, I can figure out with a significant probability that she will let the correlation cycle move into negative… i.e. stocks down eventually while USD is up.
    This negative setup of the correlation is the usual one at Empl.Sit. dates.

    1. Chris

      Alex, if I listen to your highly convicted calls days ago, Nasdaq or spx abandoned baby, exhaustion gap etc, i am going broke already.

      Nasdaq gap was the first gap, first gap is often breakaway gap. I think another guy caught tis and questioned you. Bottom line, trend is your friend. Market is showing strength on all time frames. ie. Monthly, weekly, daily, 4,2,1 hour time frame. So please save the people here from all prophecies .

      1. AlexP

        You or anyone would not have had any reason to go bankrupt since I have never mentioned anything about SHORTing stocks market (not even the gold down to my 1125 target) but on the contrary: ON FRIDAY OCT23 I CALLED TO STAY ON CASH because it made no sense riding a very risky daily bull with SPX beyond 2077.

      2. victor

        Chris, “shoving strength” what market? look what show you strength – just a few largest companies.
        Amazon, Netflix …, and look at Russell 2000, lagging, no money. Just wait and see where spx going to be next week…

  15. zkotpen

    Gary:

    “Did the chart of gold last month tell you that the report would be weak?”

    Yes! A fond memory indeed — I went long GDX weekly calls in the last 15 minutes of trading October 1 πŸ™‚

  16. Anthonyo

    1) Look, the US dollar is poised for substantial new gains in the weeks and months ahead. The chief reason: The plunging euro.
    Euro has now broken some minor technical support at the 1.10 level, and should continue to move lower, reaching as low as 1.04 to the dollar by year-end. Then, even lower into the first quarter of the new year.

    2) DO NOT think for a minute, and under any circumstances be deceived into thinking the US stock market is going to continue to rally and simply rocket higher in a new bull market bubble phase. Nope. That time will come – but not until the market shakes out all the excesses of the past six years with a scary and swift decline that gets everyone bearish.

    1. Jacob

      Completely agree, how do you think it will play out? To me it has to happen this year, then helicopter money away

      1. Anthonyo

        Jacob, hard to tell, every time this stock market begins to fall under its own weight the hidden hand of market manipulators and government stocks governor regulators(as in a team of cash infusers to control the flow of money in and out of the market) swoops into action and saves the market from itself. Now, like any regulator, it allows certain range of fall to occur, but beyond a certain point, it stops the leak and then some. Prime examples: October 2014, and November 2015 in stocks.

        So, it comes down to this: at what point in time and price will the market gather enough mass to fall under a large enough force of gravity which is greater than the plunge protection team force that is pushing it up. Plus the fact that the PPT has help from scared foreign money rushing into US stocks as well.

        1. Anthonyo

          It used to be(before the 90s really) that stock market direction was a function of fundamentals, earnings, the health of the economy, technical analysis, and real and genuine market forces. But gradually that changed and government entities increased their manipulation of the market until it has become the new normal now.

          So, in a chronically government manipulated up market, can any of the said factors that used to drive markets hold any significance or relevance anymore? Ask the directors of this show just how much smoke and how many trillions of mirrors it will take to make things appear normal.

          But just like everything else now, in a culture that has replaced substance and real value with pretty facades and good appearances, it is the symptom of times at work in the financial markets, too. In a culture that is intolerant of pain, the proverb “No pain, No gain” is meaningless.

  17. Anthonyo

    Gold’s rally is now fizzling out. The middle of this month marks a potential major cycle low for the precious metals.

    What we need to see now is for gold to continue lower into the middle of the month, breaking the prior low at the $1,073 level. If so, we may see the end to gold’s interim bear market. If gold does not move to a new low in November for its bear market, then there is the potential that the final low may be stretched out into the first quarter of next year …

    1. JT

      If it closes down here yeah, not good. But as others have mentioned, the fate of the metal will be accelerated up or down on Friday’s NFP report.

  18. zkotpen

    AlexP

    I’m with you mate, concerning miners — looks like GDX is consolidating the latest move down.

    Best action is to wait.

    1. AlexP

      Hi, Z! πŸ™‚ I’m sorry, man, I do not know much about miners…actually nothing πŸ˜›
      yeap, cash is king

  19. Gregor

    It’s amazing how the intensity of opinion over the end of gold’s bear market reaches itz zenith, right before gold fails (again), and unsurprisingly confirms that it’s still in a bear market.

  20. Frank

    I am getting more a more nervous in this market and getting eager to sell as I am afraid gold $1000 is in the cards after the failed attempt to break $1190 resistance what was very bearish.

    Some friends of mine are short since yesterday and looking for $1000 gold.

    Or do we need one more final capitulation as several analyst continue to mention. Maybe a sign that the bottom is in as I do not believe in bull anymore as Gary stated.

    1. Gregor

      For those of us who were in the gold market 15 years ago, and traded it profitably last decade, the lack of any fundamental thesis for gold now is stunning contrast to back then. I know, I know, for new entrants to the gold market all the beliefs remain the same this decade. Let me tell you: this decade is different.

      Technically, there is precisely zero reason to believe the bear market in gold is over. Fundamentally, gold has also lost its grip on any thesis or reason to enter a new bull market. (You can’t tell this to believers, however, they won’t listen).

      As I’ve been saying for months: turn your back on gold and use your time and you brain to trade other markets.

  21. Braden

    The risk is to the upside. All dips going forward should be bought.

    Everyone is so scared because we have been burned past 3 years if you are a permabull.

    Miners will eventually go much higher.

    Buy dips and sell rallies and stay net LONG. You will get paid if you ride the rollercoaster.

  22. Trond

    The rally last weeks was covering from the huge number of shorts that had been betting on 1000$ gold, with massive covering after the Oct 2 very bad payroll report. When the short covering was over, air pocket..

  23. David

    Only folks making money on Gold are the newsletter writers. I’ve been watching Gary for some time and it’s the same thing over and over again. Make a bottom call on Gold. If Gold bounces, lure people into subscribing, if it doesn’t then he’ll use “Manipulation is back folks, nothing i can do”.

  24. Frank

    I agree. Now that gold is going down again all news letter writers are jumping the bearish bandwagon again. Robert McHugh now sees one more decline to $ 1000 and then, the big rally will start, the same comment he stated already weeks ago,…

    And Gary thinks that in this current bear move, the shorts will not win as always.

    Make me laugh! Cot reports were bearish and $ is bullish, so gold can only go substantially lower!

  25. benwood

    Thanks, Gregor. FYI, It was October 7th when Gary said he was “….99% sure that the gold has also finished its bear market.”

    http://blog.smartmoneytrackerpremium.com/2015/10/chart-of-the-day-155.html

    Could still be true of course. Doesn’t look very likely to me now, though. What I thought at the time is that we saw something similar last year from November to mid-January in 2015. I would guess there was a similar 99% belief, or perhaps 99.44% belief, that the bear market was over.

  26. ted

    Screw gold! The only game in town are stocks. Really amazing force this rally. And it’s not going to stop for a LONG TIME!

  27. William

    hey folks, i just woke up from my Zzzz suddenly and realized what i have missed here…and noticed that GDX’s Put / Call ratio is 0.48 now versus 1.0 yesterday…what a change in one day!

  28. William

    Gold is looking to test its weekly support line from 1999 at 1,100 by the look of it…HUI or GDX, tricky..

    1. Jacob

      People would be crazy holding any commodity miners right now. There has to be a bankruptcy period coming up

  29. William

    Like i’ve shown before, the uptrend support line from the bottom of 1999 is a potent alternative one to follow rather than the one from 2000/2001 (where almost everyone on the street is using). As such, 1,100 would be a tough one to test!

    And, given the quick change of put / call ratio overnight by such a big margin, “someone” out there is looking to “trick” the masses i am afraid…

    Stay watching for now…

  30. tom

    So the consensus on here, except for Gary, is that gold is still totally bearish. Keep that in mind folks, just a little piece of the puzzle.
    As to stocks, I’ve continued to believe that SPY goes to newish highs and then we have a very trade-able shorting opportunity, A few of the other pieces of that shorting opportunity puzzle are now taking shape. IWM at 119 and now above its 9/27 rally high. IYT continuing to lag. And my favorite index the DJ Composite continuing to lag- now I’m watching for the next potential short term selling wave with heavy volume to show that the quality sellers are back in the market, ie distribution coming back in. Then I start legging in by shorting into rallies, Lets see what unfolds here. Just as the IWM beautifully set up the last rally with its accumulation area from 9/29 to 10/1, lets wait for market to “speak”. But this is an area now to watch – my antennae are back up.

  31. Stefan

    Wow all intelligent investors jumped out of the woodwork at the same time, I’m impressed πŸ™‚

    HUI is down -0.75% that is really scary …

    Here are the fundamentals for gold and this is really scary:
    http://www.usdebtclock.org/#

    red, if europeans is pathetic, what about US government debt load on American families, $806158, I guess it isn’t a problem bcos the recovery is strong !?

  32. Jonathan

    I talked about the XOM and CVX beat on Friday after the reports. It’s a big deal. It’s not only good news for these two oil giants, it’s also good news for the energy sector, and for the whole market.

  33. William

    Technical in perspective, whenever RSI is below 40, bearish momentum sets in and it will bearish until such time it turns up again above 40. Gold alone is below 40 for on today’s huge down but HUI is still firmly above 40 at 45-ish…

    I would expect miners to take the lead though not gold…

  34. tulip

    Im understanding gry to say in the chart today that gold could reach 1180…
    Im ditto… that he says it must get to 1190 in order to be out of the bear…. nothing less..
    so- 1180 is not good enough & we prob go much lower..nearer 1000….

      1. Bill

        Ted will be speechless when the hammer drops and no where to be found, only to show up again when its green.

        1. ted

          Oh yes Bill. But maybe in 2017 or so. By then I will rode one of the greatest rallies of all time, and sold before the big bad bear gets here. You will be on the sidelines for the next two years complaining. So sad.

  35. William

    If 2 continuous days of bashing on gold can’t keep miners lower than they were on last Friday, what do you think it is going to happen next? Food for thought…

  36. Bill

    This market is a train wreck waiting to happen and its gonna take a lot of smiling faces down with it real soon. Of course no one notices the RSI divergence signals reminiscent of 2008 correct? The market hitting old highs with over a 200 point move in the S&P in the past month………..This is with a number of large players missing either earnings or revenues………Insane
    The Nasdaq is completely out of control even though a majority of the stocks are trading under their 200 day average…

    The real economy is getting worse every day. Companies that manufacture products, retailers, restaurants and distributors are all starving right now. Healthcare costs are exploding taking discretionary spending out of the economy.

    Europe is imploding with their immigration crisis… Everything is up-side-down and turned around.

    Nothing makes any sense anymore, none the less Im adding to my core longs…and my miners are green.

    End rant

  37. AlexP

    William, what do you think: SPX to draw a shoting star today ? πŸ™‚

    PS: NYA150R just kissed its 150dma and aroon(25) reached 100 out of …. 100 for all broad indexes.
    stocks have usually topped at that level of aroon or have been close to topping at worst.

    1. William

      Alex my friend, no shooting star here…too short a timeframe, besides, am only looking for a short-term top here until the annoying report on Friday!

      1. AlexP

        ya awak betul, William. Or maybe the market gives us a spinning top :):) at least that she could. Com’on, My Lady!

  38. William

    Expect GDX to “outperform” SPY again starting tomorrow…will show you why later in my post! For now am gonna Zzzzz for another 2 hours before heading to work!

    1. AlexP

      yes, indeed an inverse spinning top in gdx’ weekly.
      i cannot see a shooting star on $usd’s daily though, just a standard candle , but with a rather long top wick

  39. AlexP

    unbelievable, it’s 5.23 am in malaysia, you’re formidable, man.
    i’m already asleep and it’s just 23.23 onmy chair πŸ™‚
    my wife is rushing me to sleep πŸ™‚ i would have to listen to her, she is the boss
    zzzzzzzzz

  40. chris

    Victor, you criticised that mkt is led by Amzn, googl, msft etc. But who cares? We play index right? So given how up the arrow is, even if it’s led by one stock, the right side of the market is still to be long it. With 100 dma, 50dma, 20dma, 10 dma all pointing upwards, even the 5dma also haven’t point down, yet many here still trying to prophecise a drop. Tis is not professional behavior, tis is just trying to be smart.

    And Alex, with all MA pointing up, staying long means enjoying profit. Your attempt days ago, on exhaustion gap, meant missing the run. And your conviction on SPX plunging to 1960 etc could be you looking at 2011 chart. That it had a big 61.8% retracement. But please, yes it could be like 2011, but it could also be like 1998.

    Bottom line, with an ascending 5dma, there is no way the market is going down. I am no permabull, but neither a permabear. I just prefer to stay on the right side of market.

  41. Trond

    William, the sudden large drop in the put/call ratio came because all the in the money puts cashed in on the massive present profit. (‘In time’. It’s quite natural). The sellers of those puts have been short in order to delta-hedge (avoid losses) on their position, but now when the puts are not longer outstanding, they cover the shorts, i.e. buy. And that buying pressure may in fact explain much of today’s relative GDX strength. Interesting.
    Put-call is often considered a contrarian indicator, but not in all cases (maybe not just now).
    Possibly the PM’s stabilizes before Fridays payroll report because of an expectancy (or hope..) that the weak numbers of last month will repeat.

  42. chris

    I noticed someone’s at it again. After NASDAQ bearish abandoned baby, now talking about spinning top. If only they would listen to Gary’s comments days ago, that the easy money is to ride the uptrend. As long as the breakaway gap is not filled, tis market is bullish like hell for the bears, and bullish like heaven for the bulls.

  43. Trond

    “…calls days ago, Nasdaq or spx bearish abandoned baby”.
    Chris, the abandoned baby was saved & nursed by some jungle-animals, now it’s already swinging higher from (tree-) top to top brimming with half naked muscles roaring yaa-iya-yiyayiaaa played not by Johnny Weissmuller this time but starring Dow Jones πŸ™‚

  44. chris

    Another laughable argument by people who missed a rally is that the rally is on low volume. Huh ? You can’t bring volume to the bank, but you could bring price to the bank. Price is king. Market can rally on low volume for extended period of time. Bottom line, only price pays.

  45. AlexP

    Clarification to those who look only at the reward side and miss the risk part of trading –> the kind of people who go bankrupt long-term :
    I’m not concerned about missing trades. I would be very concerned though being in trades that do not make sense on a reward/risk basis for my trading plan (i.e. convergence of Lady market’s and individual stock’s setups so that my average profit or, when I am on a position already, my anticipated gain from now through the next 2weeks-4 months depending on where SPX lies in its intermediary cycle, are always 2x my average loss per trade –> which is very small, less than 5%).

    On this continuum, I am very happy to buy the same stock at a higher price than the one at which I have sold it (IT CAN BE EVEN +50% HIGHER without blinking) as long as at the moment of the new entry the trade makes sense, the trade is my trading-plan-wise, so to say.
    TRADING IS ALL ABOUT MAKING MONEY WHILE MANGING RISK EFFECTIVELY ON A LONG-TERM BASIS.
    The rest is fairy tale and bankruptcy is just a matter of time.

  46. chris

    There is no risk when one is riding the trend and observing good stop loss. On the contrary, many took profits too early, trying to catch tops and bottoms. EG. NDX. If you look at the 60min charts since ndx is 300 points lower, say 4400 ish, it is now 4700, it did not even closed below the 50ema. Furthermore, it has been making higher highs and high lows. So why try to predict the top?

    A trailing take profit strategy would be wiser. In fact, a close examination using trendlines on shorter timeframe would clearly show an accelerated uptrend. Ndx has been trading above certain shorter term trendlines and never falling below those lines. So instead of accelerated drops, ndx could accelerated its rise!!

    Bottom line, bankruptcy will not occur if you observe good commonsense at understanding trend. Go read up Brian Shannon’s books to learn more. And I think Brian said picking tops and bottoms is a fools strategy.

  47. Gary Post author

    David,
    On the contrary we are up 15% in the metal portfolio this year. And I think we can get that up to 20% or better before year end even if this does turn out to be another bear market rally. We are massively outperforming gold and miners so far this year as they are down for the year.

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