69 thoughts on “CHART OF THE DAY”

  1. David Silver

    Question Mr. Savage. Will the current trend favor the US stock market going forward?

    Thanks.

    1. Gary Post author

      The rising dollar hasn’t seemed to have much effect on stocks. The dollar isn’t really getting stronger. It’s not like the supply of dollars is shrinking. It’s just that the ECB is winning the currency war right now.

      1. larry

        Hi Gary,

        Began listening a while back..
        Question: do you have an opinion on gdx price bounce?…Are you thinking a .618 retrace on the hourly to say 15.50 region…Or really just dead cat to say 14.71….or if bars a wide ranging let that guide the retrace extent..

        Any input helpful…thank you

        1. Gary Post author

          Hard to say at this point. Gold is getting close to a final bottom so maybe the miners start to diverge like they did in 2002. If thats the case then they might bounce pretty good out of the impending DCL.

      2. David Silver

        Okay thank you. Now I gotta rethink my US market exposure seems to be ill timing on my part however crude is fading down.

  2. ndmaster

    Gary- with the dollar going up on Fed rate hike speculation? Do you think the dollar doesn’t believe the Fed will raise rates? I ask because you said an actual rate raise will be sniffed out by the dollar and it will go down with a weaker economy.

    1. Gary Post author

      I’m guessing once the Fed actually does start to raise rates then the market will have already priced it in and that will be the top or close to the top.

  3. AlexP

    ….then one should NOT trade precious metals either due to the strong negative correlation with currencies (USD); trading metals is basically trading the inverse of USD or mostly like trading EUR.

  5. AlexP

    eventually I have to return to my former thought on stocks: DC decline with a final target somewhere btw 2040-2055 for DCL.

    Holding my 29.7% stake in stocks (with stop losses in place, of course) + the rest in cash.
    I’ll go 90% long in stocks on swing low. It’s marvelous the DCL comes right after a strong slate of earning reports 🙂

    1. Gary Post author

      One can always find a chart pattern to fit ones bias. If the Fed joins the currency war and Yellen starts talking about putting off the rate hike then we’ll see the dollar reverse course again and traders will have to find another pattern to fit the new environment.

      2. MuffinTop

        One could say the same about ‘Cycle Theory’ Gary my darlin 😉

        Can I make one suggestion? Stop beating on us Chartist. Charts and patterns are very much a part of my strategy and have helped me capture some pretty sweet gains over the past ten years. Same with my Dad and he’s been doing this for over 25 years and pulls money out of the Market 8 times out of 10! And that my friend is pretty f*cking amazing!

        The bottom line is this: There are no guarantees that a pattern will play out but how you combine and apply these techniques to the rest of your trading strategy is what ultimately matters in this crazy game of ours! Your account will let you know if you’re doing it wrong.

  8. Shawn

    The strong dollar seems to be impacting Corp earnings, how much more do you think that it will affect before the Fed reverses course?

  9. David Silver

    Reversing tsking shape:
    Sell crude short for quick profits from Friday and souble down on BYD and the $RUS.

    Will reshort on next crude spike for a better price.

  10. AlexP

    TLT has done it both: produced a low below the previous ICL to confirm its yearly cycle decline and has put its DCL.
    Thus all spectrum of T-notes is confirmed in an yearly cycle decline while having a strong left-translated YC.

    Even though T-notes are set to grow into their new DCH (as stocks find their DCL), THEY ARE A LEADING INDICATOR (BEFORE GOLD AND COMMODITIES COMPLEX) THAT THE INFLATIONARY PERIOD HAS COMMENCED!
    BONDS STARTED THEIR SECULAR BEAR MARKET!

    WE ARE CLEARLY FRESH IN THE SPRING OF A NEW KONDRATIEV CYCLE!!!

    PS: even if now gold lags t-notes, all in all gold signaled the advent of the new K-wave before the Winter of the prior K-wave had ended as gold started to shine first (alongside emerging market stocks) at the end of 2008 when gold started its secular bull market wherein which we still are to be for at least one decade, i.e. until the beginning of the Summer of this K-wave at least.

    1. AlexP

      ….one word of caution: strong negative correlation btw gold-usd and btw stocks-bonds is a peculiarity of Kondratieff winter.
      On the other hand, based on the sole historical data available since Bretton-Woods pegging of gold to usd was foregone by US government, i.e. through part of a K-wave summer and a whole K-wave autumn (there is no historical data of inter-market relationships for prior K-wave cycles), now we should see a shift in character … gradually:
      – gold-usd negative correlation to weaken
      – treasuries and stocks to re-correlate positively.

      these pro-inflationary trends are to be seen in the long-term though, first bonds-stocks inverse relationship will be maintained as bonds will dive deep into their bear market.
      K-cycle spring after 2nd WW was good for stocks so that we can imagine this should be good too despite inflationary pressures mounting.

    1. Jorgy

      We’re the minority here bud… Everyone is just watching at their monitors while a bullish reversal prints! 🙂

      1. William

        Yup, bullish reversal indeed but it needs to hold or better the pattern by the close of the day!!!

  13. AlexP

    aaah! and on continuum with the above, one more word before going to sleep:
    I think USD HAS COMMENCED ITS SECULAR BULL MARKET TOO!

    Gary, I bet you haven’t thought about that 🙂 and that you and 99% of those here think I am insane.
    Except that multi-year cycles (Kondratieff included) and ON FRIDAY THE CYCLE OF 30Y TREASURIES AND TODAY THE LONG-TERM CYCLE OF ALL SPECTRUM OF T-NOTES…..ARE WHISPERING DIFFERENTLY THAN YOU INVETERATELY THINK 🙂

  14. William

    Yup, a metric ton of buying pressure, tick by tick into the miners, could be from machines!!! Heck i don’t care…

  15. Jorgy

    Bullish engulfing candle, swing and a swing high in the USD. Could this have been the setup of a LIFETIME or just another trap? Doesn’t matter to me, I’m in long in size, the trade was instantly profitable and I’ve got stops in so the emotion is out! :-$

  16. William

    Let’s repeat here that a stop, a hard stop, trailing stop or whatever stops, is a must for all your trades. Period.

    This is THE ONLY THING that can guarantee the longevity of your capital! In between trades, you could have made various changes in and out from one trade to the other and made tons of wrong trades, but, nothing really beats NOT having a STOP. Period.

    Cheers.

    2. bhowe

      William,
      Yes, everyone recommends some kind of a stop. Picking the stop point is critical. I have missed many run ups by getting stopped out too early.
      SO, to anyone really, if you were to buy NUGT here at $26.70 where would you put your stop? The low Yesterday of $24.02? That’s a nice 10% loss…….?

  18. nogreedwinning

    Gary, I think you are one of the very few out there with the exceptional combination of trading experience, sentiment and cycles, especially the PM market. The problem is that trying to forecast what will happen in the market is doomed. The whining readers and subscribers will always point finger saying your call is wrong. The fact is that no one has crystal ball to know what will happen in the market. It’s only the probability of certain scenario is high or low or higher or lower as each day pass by. Thus, the best strategy is to respond to what happens in the market with good position sizing, reasoning of entry point and exit with profit. Buy and hold is not working in PM market, which has been proved again and again. But position sizing can really make a win here with your knowledge and expertise. It’s just my humble penny here after months of observation here. I hate seeing people pointing finger saying you are wrong. I think you are right most of the time, just that you always try to forecast the market with exceptional confidence, then you have to patch each deviation from your forecast. People often forget what is the purpose or ultimate goal of trading: preservation of capital and make money. Everything else don’t matter.

  19. AlexP

    William, why do you say I’ve lost you?!! You are a very smart guy……ook…..let’s just simplify all extensive words above: look at the weekly chart of T-NOTES (say via etf TLT) throughout maaaany many years and you can see 2 things:
    1) 200Wma has been a fantastic support (just as for stocks on AUG24, in 1987, in 1991 etc)
    2) bonds are ready to break that support as they dive into their three-year cycle low in the summer of 2016.

    A pivot has formed at this YCH of 128.10 for TLT –> THAT WILL BE THE RESISTANCE OF THE NEXT THREE-YEAR CYCLE HIGH –> TREASURIES WHISPER US THAT INFLATION IS TO KICK IN –> THAT IS BULLISH FOR USD, COMMODITIES REAL ESTATE.

    While gold will spring higher, it will not make a higher high though, i.e. above 1924 dollars/oz.
    It has grown since 2002, i.e. since after the beginning of the last K-winter sniffing well in advance the inflationary period to come as the new Kondratieff cycle was next to emerge.
    Gold also had its parabollic move upwards simply because of this reason but NOT because it had A LONG-TERM relative strength as an asset class.
    It will grow…but it’s shiniest days are over simply because INFLATION IS ALREADY INCORPORATED IN ITS PRICE 🙂

  20. zkotpen

    AlexP,

    Interesting!

    One thing to note: The price of gold has over-incorporated inflation, by simple comparison of the CPI vs. Price of Gold since 1913, hence the ongoing correction. If gold is a true “store of value”, then it needs to store value, not exaggerate or underestimate it.

    1. AlexP

      exactly, Z!
      It was “normal” or rather psychologically market-wise for gold to over-incorporate inflation since it was in a thrust of far-stretched inflation-expectation as world economy had entered the deflationary period of the K-winter on the onset of the 1998 Asian crisis, thrust which inevitably led to the bubble phase parabola in 2011.

      Now that we are already in A NEW KONDRATIEFF CYCLE (30Y bonds had told me that on Friday as I commented), gold is starting to chew inflation more realistically.
      This is why it should also start a new period of growth but at the same time, on a funny note 🙂 , this is also why it will have the turbojet power behind it to produce new buying frenzy, hence over-inflation appreciation of gold is out of the table and its new growth will prove limited, anyway much below 1930 $/oz –> USD’s new BULL secular market (as a result of FED’s attempts to keep inflation in check) will keep gold’s bull in a “rational” check, let’s say.

      Z, if you are American, now it is a good time to buy some American real estate for your kids’ college time 🙂 …an investment both in US and in an asset class that inflation loves

      1. AlexP

        ….forgot putting “NOT” up there. I should have said “[…]this is also why it [gold] will NOT have the turbojet power […]”

  21. Super Mario

    Took a while, but the next deflationary downwave has started. Catch knives like miners and oil at your own risk.

    1. AlexP

      no such thing as deflation.
      deflation has been successfully beaten by money printing – a lesson well learned from the beginning of the prior Kondratieff-winter which started in …Oct 1929 and lasted till 1949, i.e. after the US recession following the home return of US soldiers from WW2 which had flooded the US labour market disrupting it for a while – that disruption was the last cry of that K-winter just as Lehman Bro and in general subprime crisis was the final cry of this K-winter

  23. Hong Bang

    Hi Alex,

    Some gurus like Armstrong & Larry Edelson certainly disagree with you. They all point to some thing like 5000 usd gold.

    All things possibles, you have 50% being right.

    Each play by their own time-frame.

    Interesting discussion !

    1. AlexP

      🙂 Hi, Hong! That many analysts would disagree is also a feature at major turning points.
      The couple of a new fundamental setup and of psychological inertia in the old fundamental setup is a marriage always to be found at such junctures.
      so it can only make me happy that I have one more signal (he psychological one) that I may be right with my observations and thinking 🙂

  24. chris

    It’s so clear that buyers are in big control of the dollar. Weekly, MACD turned up and cut up. Monthly MACD bullish, so many bullish monthly candlesticks during this bullish flag consolidation. Daily MA are all pointing upwards. There is zero evidence, showing weakness. If the path of least resistance is up. Unless dollar breaks the bull flag low, dollar is going up.

    1. Tushar

      I find that $usd will remain flat for about a month and consequently $xeu will rise during the same period. $gold will follow euro higher and hence it’s a long for about a month, may be more as we will hit seasonal strength by late December. Good luck!

  25. Bob D

    Same old BS from Gary, now that his prediction doesn’t come true, he blames “the powers that be” that have manipulated the currencies. He always has an excuse ready when his prognostications don’t come true.

    3. Gary Post author

      Jeez I said I was flat out wrong on the bottom in July. What more do you want? We still made some nice profits on the move.

  26. Hong Bang

    Bob,

    Gary said in recent post that he might be WRONG for calling Bottom in Gold too soon.

    You can non 100% right. We are here to make money not to claim Right or Wrong.

    At least, Gary do make effort !!!

  27. Jorgy

    I think Gary’s call was spot on over the summer it’s just that too many traders caught “the bottom” and were on the “right” side of the trade. The FOMC is and always will be full of B.S. and will likely talk back “Lift Off” between now and December. I l@@k for equities to get punked between now and December and the FED to lose any/all creditability ( as if they had any) with the market. Frankly, if gold swings overnight and can repair the monthly chart by month end then the bulls are back in business! ?

  30. AlexP

    Hong, in line with my reply to you above, the final and strongest evidence whether indeed my new bonds-driven assumptions are correct will come in spring: if USX makes higher highs at that time, then we will have a right-translated 3-year cycle in USD –> the bullish snowball will have already been put in un-stoppable motion.

  31. zkotpen

    AlexP,

    Got your reply from yesterday — cheers!

    It would be great to discuss probability assessment, which is also what I’m concentrating on most these past 2-3 months.

    1. AlexP

      uaau. that’s a finesse topic which I would love to get onto as well. one day I will follow your steps too into this field, Z; calibrated probability assessment would greatly improve my trading-framework drawing as it would to anyone.

  32. Stefan

    How about USD at 120 in approx 2years time (no hurry). The big cycles tells us that is possible … thats one of the reasons why the pm bull is “delayed” or is it a normal pattern?

    1. AlexP

      If indeed K-wave analysis and the recent price action of treasuries alongside their proximity to 200Wma cast the right image on USD that it has already started its secular bull, then 120 for USX is not 2 years away….it is early next year 🙂 –> a spring out of a secular bear market is (even out of an yearly cycle low or an intermediary cycle low) should be forceful.

      From this point of view, Stefan, the spring-shot action of USX since May 2014 (now most likely the low of the secular bear market of USD) stands as additional proof of this idea of mine, while its consolidation since March 2015 makes the feeding period for the next shot of this HISTORICAL BULL which people have yet to recognize — I did not recognize it until last Friday too and came to full recognition only yesterday on TLT’s follow-up of 30Y treasuries at such a close range from the 200Wma.

  34. AlexP

    look at the power of a positive USD-stocks correlation: even though stocks were moving lower today in Asia, Europe and US futures, a powerful USD bull is dragging back upwards the whole world stock market.

    USD though is ripe for a correction into its DCL. As I said above, that will also move stocks into their DCL –> EU GDP reports may prove to be key on Friday

  35. Jorgy

    NUGT held yesterday’s intraday low on this mornings open, now we need the buying pressure to come in and take it about yesterday’s high. Push damnit, push! I want to see this rocket launch! ?

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