Gold is being capped at the 1071 level. This may or may not lead to one final attack to drive it to 1030 before the paper shorts get out of the way and let another bear market rally begin.

61 thoughts on “GOLD 1071 CAP

  1. harry

    interesting Gary, yesterday you posted that gold will rally and bottom in and today you post it may or may not fall one more time to 1030. Which is it, would be helpful if you put your technical analysis aside and picked up a dartboard to decide.

    1. Gary Post author

      I explained it in the video. When the weekly stochastics are oversold don’t worry too much about trying to time a perfect bottom. The bullion banks won’t allow you to do that anyway. They will whipsaw the market too many times. Just get long and then sell when the weekly stochastics get overbought.

      But above everything else, no more than 10% of your portfolio in metals until we have confirmation that the manipulation in the metals has been broken.

      1. harry

        I understand, get in and hang on in spite of gyrations. I guess you close out long when gold dives below 1030, or is there another level at which you abandon the long.

        1. Gary Post author

          I would never stop out this late in an intermediate cycle with the weekly stochastics oversold.

          This is why you only use 10% so you can hang on if gold goes lower than you expect.

        2. tim

          all depends on what you bought and if you used more than 10% of your funds and how much of a gambler you are. When things are not certain, as in what something appears to be sometimes is the opposite, you are guessing if this is close to a bottom. if you bought gdx you can hold forever. if you bought nugt then you could lose most of your money if gdx goes down 30% from here.
          it’s a good chance that gdx or any good miner stock doubles from here in 2 years but it is an excellent chance you either double or lose most of your money in nugt within 2 months

        3. Gary Post author

          One should never buy NUGT other than for day trades while we are still stuck in a bear market.

          1. Mark

            Unless you buy DUST !
            Anyway it would be GREAT to buy NUGT near the bottom!
            Then you could also hold it umtil the new bull (am I insane…a NEW bull in PM????)will come.
            Gary…would you dare to tell all of us when to buy either a 3xsilver/golds etf or NUGT on miners? πŸ™‚

          2. Gary Post author

            It’s not possible to buy NUGT until we have confirmation that the manipulation has been broken. That won’t come until we get a violent rocket shot out of one of these intermediate bottoms.

            I have no idea how to call a final bottom because I don’t know at what point the market will break the manipulation. All we can do for now is take small trades when the weekly stochastics are oversold and sell them when they get overbought.

            The only sector one can make a big bet is in the stock market at intermediate cycle lows, because the powers that be will protect that trade. No one is going to protect your trades in the metals.

  2. David Silver

    Mr. Savage is correct:
    Keep minimum in metals/miners
    Have 12.5% in SA max
    Tempted to go into Nasdaq tech with technicals looking strong across the board
    Meantime still long crude till 40

  3. AlexP

    nice! USX just produced a shakeout above its 50dma and is en route to being rejected by it
    If rejection stays, then I will add a little bit more to the long gold position.

    I am on hold with the short SPX I opened yesterday morning –> i will add to it when stocks reverse and SPX returns to 2055 in the enxt days.
    SPX will definately move lower dragged by USX

    1. AlexP

      …i.e. I plan on adding to the long gold in the last minute of this trading session provided that USX will be below 98.22 at that time, in 1h8′

  4. chris

    Yes, the high odds move for stock market is to drop some after this snap back rally. It sometimes rally one day, then fail. Sometimes rally 3 days. If 3 days, then target is 2100 ish. I have took profit half near the highs, tightened the balance, and look to short when prices are weak.

  5. chris

    But based on the ABCD scenario, the high probability case is for spx to rally to 2100 ish, and then fail.

  6. jack

    I told you guys that everybody is expecting gold to rally at year end. too many people are bullish on gold right now. The market just won’t give until everybody gets disappointed and leave.

    I see miners are bottomed from today’s trading session.

  7. William

    GDX is being capped right on its vertical resistance from Oct’s peak for now. A decisive break and close above $14 will see its attempt the next big vertical resistance hurdle circa $15.50.

  8. AlexP

    yes, indeed, William.

    stocks show signs of exhaustion and selling on strength.
    To render things worse for stocks, NYA and XLY have been capped by their 50dma while transports lagged todays’ rally.
    we are still in the same daily cycle of stocks with a HCL on DEC14.

  9. AlexP

    it is bearish confirmation for USX (hence for stocks too) that it has failed to penetrate its 50dma by the end of the session on a day with hawkish fundamental US data.

  10. William

    Yes Alex and in the option market, VIX Jan’s call option is trading at a ‘huge’ premium versus its put, pointing to market’s expectation of a big spike coming very soon…

  11. Chris

    Cant be too bearish here guys. Amzn, Googl, msft, all breaking into new high grounds. Wait for a daily lower low in stocks before considering a short. I can tell you the likely scenario. They push dax during europe hours, US futures rally too. Cash market opens, shorts cover, fuelling rally. SPX target 2100 ish minimum. This market could rally til the first 2 days of 2016 before failing.

  12. chris

    Let me share with you guys my recent trade. Short spx on weakness at 2059 on Christmas eve. Covered at 2044 on Monday. Long a negligible sum and cut fast. Short again on weakness at 2039. Did not cover at 2035.5. And placed stop loss at 2047. When prices was at 2045, I could see something wrong. There is strength, There are buyers. I covered and turned long.

    Point is , when prices takes out a certain key level, and keep making higher highs and higher lows, throw opinions out of the door. At least cover half and take some losses.

    I know tis is easier said then done. I also wish I could always stay so discipline. But I believe this is the better way

  13. Mogulrider

    Wow shorting the Fed is what the traders are reduced to…..
    There’s a winning strategy.

    Between Martin Armstrong talking 45,000 Dow and Most of the others talking 666 SP500 I’ll stay with cash thanks until a clear trend is formed.

    BTW – why the heck would anyone ever day trade against the algos and the FED?
    You people are either real smart or real stupid. You can watch every trade you make get filled and flushed by weird sell and buys patterns. If you have level 2 watch how your order fills. Scary man.

    Only time will tell, but you traders are trading against dark pools, algos, The FED and every other dirtbag org out there…

    1. Gary Post author

      I kind of doubt we are going to get a trend in 2016. The way to make money in trendless markets is to buy the bottom of the range and sell the top. This is how we made 25% in the stock market this year.

  14. Will

    DXY’s current 240mins’ candle-stick is preceded by “four” 240mins’ shooting-star candle-sticks…so, i guess USD has no where else to go but DOWN…

  15. David Silver

    USD down IMO (hence bullish on commodities)
    The US markets are ready to pop:
    Today the S&P and INDU had their 200 dma cross over their 50dma
    Tell tale was in the comp two weeks ago (same fashion)
    Russell is the laggard but today gave the green light go
    Megatron stocks:
    AMZN and GOOG in a technical breakout
    BIDU and FB bouncing off their 50dma higher
    EXPE, PCLN and NFLX have similar new rising trend charts
    Even AAPL was injected today with new life
    I was a non-believer but am convinced now with the tape action today
    Want to add more NFLX on weakness for sure
    Long NFLX
    Long SA
    Long crude

  16. chris

    Personally I think the lowest risk trade now is gdx. Post tax loss selling, should be able to bounce are least one two weeks into the new year. Maybe can rally to $16 ish

    1. AlexP

      yes, it was a fools’ rally indeed yesterday.
      I think SPX and DJIA are getting less reliable prediction instruments simply because they are over-employed; not to mention that DJIA is a very small sampled index.
      NYSE Composite makes a far better index!

      yesterday both SPX and DJIA penetrated their 50dma throwing in wrong signals to traders.

  17. AlexP

    David, one word of caution from my personal observations (it may be wrong but that’s what I have noticed): golden/death crosses are obsolete technical signals, now usually casting wrong signals –> short term at least the market tends to move the other way round than expected and it is not rarely that once a death cross occurs the lowest low to have already been touched and the market to trade above that low for quite a while before moving higher (the same for golden crosses).

    1. David Silver

      Thanks Alex!
      You trade energy at all?
      What’s your take on crude?
      Natural gas may be a great short now.

      1. AlexP

        Morning, David!
        I don’t know about crude except that I turned $10,000 into $33,000 in 3 days, NOV3-5, 2008, by scalping crude oil up and down to get my equity slammed to a meager $234 by JAN2009.
        I am not into crude ever since. Instead I left out my ego of a good psychiatrist of Lady Market and embarked on reading & reading, defining a trading strategy (entry rules, exit rules, money positioning rules, risk management rules) while trading exclusively stocks, gold and treasuries.

        So all I can say about crude oil is that I am a loser at it.

        1. David Silver

          Thank you Alex for being honest and up front about it and for the most part accepting and learning from it and passing it here so genuine of you.
          Been there done that still doing it (4th quarter has been brutal for me).

  18. AlexP

    David, Van Tharp’s and A.Elder’s works have been ground breaking for me as to the 2 most important aspects of any trading strategy: money positioning and risk management.
    People are focusing too much (and I too originally) on entry rules as if the Holy Grail lies in when to go in but that is the smaller fraction of trading indeed while exit decision are more of a knack (some say art) than explicit algorithms (on the other hand, I have 4 exit rules there too but which are more risk management related).

    On this continuum, I personally consider and recommend Chapter 6 of Van Tharp’s “Trade Your Way to Financial Freedom” AS THE SINGLE MOST IMPORTANT, RELEVANT CHAPTER ON TRADING FROM ANYTHING THAT HAS BEEN WRITTEN (and of what Ive come to read so far).

    PS: I see you are more into futures trading. From this point of view you may find Van T’s and Elder’s works also particularly interesting for finding entry rules too.

    1. David Silver

      Alex you made my day and I will honestly seek out that reference because I highly value your trading skills and discipline as noted here time and time again in this blog.?

  19. JoshuaF

    Have listened to the video and agree it is obvious gold is getting capped at 1070ish. In markets where there is rampant criminality one cannot operate in a normal fashion.
    I agree with everything said, except where Mr Savage says the banks will push the market down to where they decide “to cover their shorts”. They can’t do that without blowing up the market ! I believe the bullion banks are so extremely naked short, they can’t afford to cover let alone go long! The market would explode upwards and they cannot allow that to happen. They have to get a supply of gold from somewhere and what one needs to be alert for is news of a country selling a large amount of gold. It happened in the UK about 15 years ago when a deal was done with Brown and Blair who ordered the sale of 220 tons or so to the bullion banks. (Blair was guaranteed a “job” with JP Morgan at 2m pounds per annum, and had to hand over the PM-ship to Brown.) You need news of a large sale involving corrupt politicians from a country such as Italy which reputedly has 3000 tons, and such news may never be forthcoming…and the media are not going to say “corrupt” but are more likely to use bogus words such as “responsible” or “statesman” instead of grubby or filthy…if we are lucky enough to get such news!
    If we do get a report of that, I will jump in long with both feet including using margin at times!
    If you watch a one minute chart unfold, it looks so unnatural that it is absolutely certain the market is being manipulated.. I also read somewhere they intend to fleece the baby boomers. It is probably true ! I don’t wish to get fleeced along with them. Do you ?!
    The only way to play this IMO is to use the volatility of the gold stocks to make money. Play the dead-cat bounces. Throw away your analysis. I have a bunch of favourite stocks in which I hold 10 shares such as NEM, ABX, and AEM. When you see lots of red on your trading platform and big percentage points BUY some, and then a lot more next day if the market is further down. Sell on a good “green” day when you should be looking at profits! Forget about targets. I use the 5 minute chart to see where to place an order which has a realistic chance of getting executed.. This strategy has been working for me recently. When the market is oversold (about once every 3 months) sell NUGT! There are days you can’t short NUGT but on those days you would be too late to do it anyway.
    In these manipulated markets the only thing that really works are the oversold signals. No harm in selling early. This game is about making money! Forget about analysis otherwise!

  20. Chris

    Yes alex, money management is key. Traded long enough, no need to read. Just need to be discipline to obey one rule, use common sense. I realized other then my favourite line ” leave opinion at the door”, another one is leave greed at the door.When greedy, position size will be too big that we dont cut early enough, or we dont take profit when we should. Ought to be discipline. Key is discipline to follow rules and common sense.

    I have an account I made 10x in a month, another account, 5x in same month. After that , position size went up too big, affected my discipline, suffered a 70% draw down. Made such blunder so many times already. Keep reminding myself to be discipline! I believe I am there already. Hopefully πŸ™‚ lol

  21. chris

    I hope you are right man. Bcos I am short the index now. Dare not short too much. If it stays weak on the first 1.5 days of January, I shall add.

    1. AlexP

      I am long gold with a full position (23% weight), which makes another way of shorting USX πŸ™‚ , with acquisitions at 1050 and 1068; I did not add anything yesterday at the close even though USX was below its 50dma as I had said because gold was trading at 1067.50, i.e. below the last scaling-in price of 1068 –> otherwise I would have violated my risk management rule of never averaging down.

      But I think I will be able to increase my long gold position to a staggering-for-me 27% weight from 23% today at the open.

  22. Will

    DXY (weekly) – looks like a “bear flag” to me, so, my take is it’s gonna be down next week…together with global equities…while miners could be a different story…

    Major indices $NYA, $SPX, $NDX…you name it, are all having a weekly “shooting star” closing last week. Is a multi-week down-drift on the card??? ???

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