47 thoughts on “CHART OF THE DAY

  1. Herman

    weak NFP this Friday could result in a short-term price reversal, especially if followed by small or no hike Wednesday next week.

  2. MuffinTop

    Personally, if I wanted to mess with the shorts, I would break $1000 to push everyone to call for $900, grab all the ‘stops’ and slingshot back up like a bat out of Hell πŸ™‚

  3. Kevin

    What do you expect bonds to do (TLT)? If commodities are going up, can we expect interest rates to fall and TLT to rise? Thanks

    1. Gary Post author

      I’m not really a bond guy but I am of the opinion that the 30 year bull market in bonds is probably over. So price should fall and interest rates rise over time.

  4. AlexP

    agreed.
    liquidated my UUP and DZZ at the opening as I has said –> 100% cash
    wating for a signal to enter:
    – short 3-7y treasuries and even
    – long gold after FED rate hike next week if price action is encouraging and most likely it will be.

    yes, long usd and sjort gold are no longer safe trades; it is worrying to me that USX is struggling moving forward; it doesnt mean it cannot move higher, actually I think it will move above 100.72 on a dovish ECB statement or even a larger European QE program, but that has become risky to trade.

  5. JaninWales

    I have the same thoughts about the copper, iron, coal miners.

    I wonder if, just like we had that big spike up in oil in August, whether the big boys will now decide to pump and dump the base metal miners in the coming weeks.

    Give us a big rally simply because the sector is so beaten down and will allow them to make big gains in a short period of time?

  6. AlexP

    Victor, replying to ur question.
    I infer you expect interest rates to grow in the medium term and your question is about buying later to hold as the US recession looms in late 2017 into 2018.

    Yes that will be a good strategy, safer than being long in stocks but until then I personally find SHORTING TREASURIES a fantastic opportunity to come in the next days.

    SHY – the etf for 1-3y t-notes, set its all-time high on SEP28 and it commenced its yearly cycle decline while now IT IS SET TO BREAK DECISEVELY THE 50WMA where it has been consolidating.
    SHORT-TERM AND MEDIUM-TERM TREASURIES ARE IN A FREE FALL, THE OPPOSITE OF BUBBLE, JUST AS CRUDE OIL FELL IN JULY!

    IEF – the etf for 7-10y, is striving to prove its muscle above 50wma and to print a right-translated DC and to show it is in a fresh intermediary cycle but … that WILL MAKE A FANTASTIC SHORTING OPPORTUNITY SOON because I expect the intermediary cycle decline to come soon and to last.

    Shorting treasuries (the closer the maturity the better) is the safe trade to run now until stocks reach their ICL in the first half of January

    1. AlexP

      …treasury notes are in an early left-translated yearly cycle which started in JUNE and put its YCH in late SEP.
      Thus, the above mentioned new intermediary cycle uptrend in IEF (7-10y etf) should soon resume its principal trend (i.e., SOUTHWARDS) in line with the yearly cycle decline to last until …summer πŸ™‚

      1. AlexP

        πŸ™‚ thank you, Victor! You are too kind.

        two things with a high probability to occur:
        1) stocks to move higher this week –> that will be LAST CHANCE FOR BULLS TO GET OFF BEFORE THE INTERMEDIARY CYCLE DECLINE RESUMES IN EARNEST.
        2) longer term bonds (etfs IEF and TLT) are close to getting to their DCH but, considering how they’ve moved today, they are to set higher highs at the next DCH –> there oscillators will diverge and there will be the moment to short bonds as I expect next daily cycle of t-notes to fail quickly leaving the current fresh intermediary cycle left translated. –> so we will have to wait a little bit longer for the safe short treasuries trade!

        1. JoshuaF

          I like this blog because I see other traders who put their money where their mouth is, and I get ideas that I would never have thought of………Thank you Alex P!
          So my contribution is this. I am long miners and therefore naturally interested in the POG. I was long also last September, and went short NUGT when GDX was above $16. The ratio was 5:1 GDX:NUGT based on stock value. If your GDX is worth $500, you sell $100 worth of NUGT. That worked very well except that I covered my NUGT shorts way too early! Bad mistake. I should have held on till the market became very oversold. If that did not happen and my NUGT short profits evaporated, it would not matter. I am still long. Holding on until the market becomes ridiculously oversold enables you to use those profits to buy more miners.
          Now if you are on the side lines, what do you do if the miners open with a big gap up? You have Volume on GDX and COT data indicating what the smart money is doing. If interest rates go up, the Smart Money already knows that and while everyone expects the POG to fall if interest rates go up, I think shorts could be in for a very nasty surprise! Falling interest rates have been deflationary. Maybe rising rates are inflationary because they encourage banks to lend out.
          My only worry is that some indicators on the weekly charts are not oversold. So we could be in for a dead cat bounce. If a bounce is coming be nimble!

          1. AlexP

            hi, Joshua!
            yes, you are right, gold’s current rise may only prove a dead cat bounce as USX corrects potentially into a very early intermediary cycle decline –> strong signal about this has occured in Asia and Europe today so far with a rising wedge standing ready to be broken on the downside.
            With USX today on day 7, such an intermediate decline in USX could last into Dec16 FOMC, i.e. for another 12 days.

            This correction in USX would translate into a deadcat bounce for gold EXACTLY AS YOU’VE MENTIONED.

            Let’s see if the lower trendline of the rising wedge in USX is indeed broken today and follow-through comes tomorrow, then indeed we will confirmation that USX has started its intermediate cycle decline and if so, I’ll go long gold too tomorrow into FOMC πŸ˜‰

  7. MuffinTop

    WARNING! DXY is forming a ‘rising wedge’ on the Daily chart which has bearish implications written all over. And even though I don’t have a crystal ball; I’ve seen this scenario play out countless times.

  8. Tom

    More of the same: stocks to remain going higher, metals and miners lower.

    Fed rate hike not good for metals. Probably a good two years before miners find a bottom. Although Gary has guaranteed on two separate occasions that they had bottomed this year–once in the spring and once in the fall….whoops.

    1. Gary Post author

      I’m not sure what you are refering to “in the spring”. I did think gold had formed a final low in July, but once it reversed on the last FOMC meeting I took profits and got back on the sidelines. That proved to be the correct move.

      I haven’t made the call for an intermediate bottom yet this fall/winter, although after looking at the latest COT report we should be getting very close.

      1. victor

        Gary, those who at your forum everyday see your the same explanations to those who try to find your “gold bottom” in previous posts, despite that you called “close if ” some conditions are met…, they don’t care to read/remember it, so, you don’t bother too, ignore it, don’t waste your time, people tend to blame others for their mistakes …

    1. Gary Post author

      I tend to think once gold finds the final low it won’t matter whether thedollar goes up or not. Gold had no problem rallying 180 points last winter as the dollar rose from 88 to 95.

  9. chris

    My scans show many Inverted HS across different leading markets. The IHS is across multiple time frames, some have IHS over longer time, broke out, and forming smaller IHS at smaller time frames. So what does that tell you?

    So please ignore what cycle, bicycle or tricycle theory. Price is the only arbiter. Cycle is only a guide. When price action shows weakness, then you concur that cycle is at play. Never jump the gun.

  10. Jay

    Perhaps the only the smart move is to place orders to buy GDX in the single-digits and then walk away until the orders eventually get filled. πŸ™‚

    1. MuffinTop

      And the order would get filled.. in Narnia! Where you belong with all the other wonderful creatures πŸ™‚

  11. Carlos

    It’s true that the public was betting on $2,000 Gold, but remember, the price went parabolic the last two months before the peak. GLD made a beautiful Double Top on the daily chart which was the final peak. Don’t forget that Silver had peaked in May 2011 with an insane parabolic move as well.

    That said, Gold and Silver didn’t just reverse course. Both had parabolic runs before there peaks. You should also consider that a good shakeout needs to happen in order for the long-term downtrend to change course.

    A quiet bottom could happen, but at the very least, I DOUBT SILVER WILL TURNAROUND WITHOUT HAVING A MELT DOWN FIRST! This is why all this talk about bottoms for metals is premature.

    1. William

      I think the “consensus” is not talking about a bottom in commodities…most headlines are flashing more downsides etc etc…people on this blog can not be construed as consensus at all!

  12. Hong Bang

    Tradabale rally in Gold & corection in Usdx.

    Gold buying at 1030-1057 the last order is at 1055. All position in Gold in profit now. Take profit shorterm at 1090-1100 but keeping small position after1100 in case 1052 is ICL.
    Usdx position begins to have profit.
    Stock still losses.
    Interesting time

    1. William

      You’re welcome Hong…USD 1,100 is the immediate resistance. However, that would be just 3.3% from current level. Given past rallies in daily breakout of at least 5-6%, i expect a bit more too here…perhaps until USD 1,120?

      We’ll see…but be nimble in getting out!

    1. Carlos

      Would be interesting to see it rally to at least $1,200-$1,250. I like to DB on the weekly. Lets see if it can get moving!

      1. William

        i think it’s a bit far fetched as usual on the weekly chart, unfortunately!
        But, one step at a time…shall we?

        1. Carlos

          Far fetched or not, nothing is ever 100%. I do like seeing the DB on the weekly for it just adds probability to the move. Does it not?

  13. Carlos

    SLV 10 year weekly is an interesting Descending Channel. It’s in the middle of it’s channel($13.44 now) and still fighting to stay off its lows. If it were to touch the bottom channel again, it would have to touch $10. Not saying its going to happen, but don’t exclude the idea. Silver $ has psychotic episodes at times and a crazy drop like that near a bottom wouldn’t surprise me one bit.

  14. Jester

    The US dollar is cooked. Everyone is long that trade, and so much so, that its now going the other way.

    They say the Chinese being part of the IMF and SDR basket is only symbolic, but thats just western world propaganda. The real reason the FED NEEDS to raise rates, is because by the time it does do it in earnest the dollar will be dropping like a rock. No wait. Boulder.

    The problem for the US, and everyone who has chased stocks here, bonds here, and every US dollar denominated asset class here, is now things are SOOOOOO overvalued, and everything else WAYYYYY undervalued, that identification of risk is very obvious for those who choose to open their eyes.

    Risk in everything dollar denominated asset class is huge, with significant downside, since as usual everyone chased the WRONG ‘safe haven’. Commodities haven’t been dropping bc the US dollar has been strong- they’ve been dropping bc the world’s biggest borrower (after the US) is China, and China’s $29 trillion debt funded expansion, consuming most of the worlds resources up to now, is pretty much done for at least the next few decades. Their build out was unprecedented, and essentially the equivalent of what the US embarked upon in 100 years, they got done in under 30 years. Gold can climb with rising US interest rates, and maybe not as fast as it did up to 2011, but no matter what happens from here, rest assured the dollars days are numbered.

  15. AlexP

    yes, William, you’re right: FED rate hike the other week not next week. I had dec16 on my mind but for some unknown reason I was thinking at next week πŸ™‚ maybe because I look forward to its coming ;;) to place some trades: long gold, short stocks and see how things develop for shorting treasuries (even though Ts will be ripe for shorting only arround Christmas)

      1. AlexP

        πŸ™‚ indeed
        still expecting SPX not to move above 2104 as it goes higher this week.
        USX breaking[or not] the rising wedge on the downside and SPX being capped to 2104 maximum [or not] this week are my shows this week

Comments are closed.