25 thoughts on “CHART OF THE DAY

  1. zkotpen

    Gary,

    I agree with everything you’ve written about gold.

    My question for you: Will we get a weekly swing low in gold & GDX before the FOMC meeting? Before the end of the year?

    Thanks for all you do ~ Happy Thanksgiving!

    1. Gary Post author

      I doubt the intermediate trend will get much traction to the upside until after the FOMC even though it may bottom before that.

  2. Gary Post author

    Price acts like a pendulum swinging back and forth on either side of normal. The further it gets stretched in one direction the further it tends to swing beyond the average in the other direction once the regression begins. As an example look how far above the mean the CRB rose in 2008, and then look at how far below the mean it dropped in 2009.

    Another example would be the 09 low in stocks. Look at how far in the other direction they have gone after the crash. And I’m not convinced it’s over yet. We may still have a bubble phase similar to the 2008 CRB ahead of us in the stock market.

    These kind of manic swings are a direct result of central banks trying to control the business cycle and now asset markets. If markets were allowed to move freely without intervention then we would never see these kind of irrational over extended trends.

  3. David Silver

    Crude: From last Friday (why did I switch my stance into the weekend? Apparently someone was accumulating and knew of Opec’s Monday suprise:
    Elliottwave boys have called a bottom in crude:
    Today was a strange narrow trading for crude and it was indicative in her tape action which illustrated possible accumulation activity as seen before from my historical observation
    Last four trading days exhibited bullish inverse candlestick wicks:
    Gold (It still can sink to 1025 from here right?):
    Still think my original theory displays credence after Friday’s session in gold and one must revert to it:
    Gold is in a redundant cyclical 8 month downturn and has 7 more grueling months to go.
    Target 956.20 mid June 2016.
    1025.25 logocally seems too high of my original bottom calculation given the current situation of logistics.
    Obviously mild peaks along the way but no where near our recent October highs hence her redundant cyclical 3 month top.
    Call me crazy but after recently stumbling upon the Doc’s sentiment, I think my call may very well have some validity.

    1. David Silver

      More detailed vision:
      Next gold intermediate bottom Jan 2016 i.e. 1025.25 which makes total sense now.
      Then next intermediate top mid March 2016 i.e. 1146.42.
      Then intermediate/final bottom mid Jun 2016 i.e. 956.20.
      All figures are derived from my theoretical timing bands.

  4. MuffinTop

    Which means Gold and Miners could churn sideways for many more months allowing the long term MA to slowly catch up before delivering one final blow — to $500 an ounce!!

    That’s right folks! You heard it from me first.. In fact, I just got off the phone with Goldman Sachs and told them straight up: Let’s drop her on her ass all the way down to $500 just to scare the heck out of everyone.

    I’m totally F*cking with you. I just got off the phone with me Mum 🙂

    1. David Silver

      William I whole heartedly agree:
      YINN is yo yoing around and meandering about (get in cheap).
      Shanghai is about to breakout!

  5. Anthonyo

    Gary,

    In the last chart, you wrote “Mining stocks are just about as extreme as oil …” Did you mean to write the mining stocks are as extreme as GOLD?

    1. Gary Post author

      No I meant the miners are about as extremely oversold as oil. Both are over 50% below their 200 week moving average.

  6. AlexP

    Morning, Gary!
    I also agree with you, except that USD and gold will not start that mean regression before DEC16 –> it is safe taking advantage of trend inertia until then.
    After DEC16 … i dont know how things will look like other than that I’ll sit 100% in cash waiting for that ICL in stocks in JAN.

    PS: I sense of welcome change of tone on your perspective on stocks –> you’ve forgone the high-to-the-sky wording into a next mid-year range-bound price action 🙂 With this change of yours, our views on stocks start converging.

    1. Gary Post author

      This cat looks anything but dead 🙂

      Barring more intervention I’m also looking for an ICL in January or February after a test of the all-time highs in Dec.

      1. Al

        Gary, have you noticed the trend lower in junk bonds ( Risk outflows) which is replicating the previous crash in equity markets which lagged by a approximately the same time period then?

        It’s not definitive on its own, but I think you’ll see what this market is really about sometime in December and whether this final leg is correct or not. Just something for you guys to have a look at.

      2. AlexP

        then it gives me pleasure that we are basically on the same page with stocks 🙂
        it’s just me that I am too fearful and prefer to get on board at the ICL which is nearing us.

  7. zkotpen

    Gary,

    As mentioned above, I agree with ALL of what you wrote about gold:

    It would take several years for gold to reach [$800 or $600]

    How do you reconcile the fact that
    (1) CPI is up about 24x since it was invented in 1913, whereas gold was $20 per ounce back then and now it’s just under $1100 with
    (2) gold as a store of value?

    If gold is a store of value, then it needs to accurately store value, not exaggerate it.

    I believe it WILL take gold several years — a multi-year bear market rally — before gold moves more in line with the CPI. That rally could be sharp, as you suggested in one of the weekend charts (with red lines projecting a move to $1900 over the next couple of years), but it may also be more sideways: a flat or triangle.

    1. Simo83

      there are billions of people outside US. United States are not the centre of the world. hundrends and hundreds of people are not so poor anymore and now can afford to buy some or more gold

      price under gold standard were fixed and not reflecting supply/demand balance at all

  8. zkotpen

    I’ve been reading the wikipedia article on Black Swan Events today:

    https://en.wikipedia.org/wiki/Black_swan_theory

    One thing I found particularly amusing:

    Taleb states that a black swan event depends on the observer. For example, what may be a black swan surprise for a turkey is not a black swan surprise to its butcher; hence the objective should be to “avoid being the turkey” by identifying areas of vulnerability in order to “turn the Black Swans white”.

    😉

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