18 thoughts on “CHART OF THE DAY”

  1. Mark

    What is really important ,in my modest opinion,is to undertsand what kind of reaction we will have AFTER the YCL,hoping that this would be THE low.
    I’m very pessimist about the resumption of the bull market that started in 2001.
    In the 70s the correction was much shorter,nowadays it lasted about 5 years,it is too long.
    we’ve had the bull of the 70s : from about ’68 to ’80
    And we’e had the bull from 2001 to 2011.
    There are only two reasons why the bull market may not be over:
    1) Silver did not exceeded the old all time high of $50 reached in the 80s
    2) Even Gold performance was not comparable (even though it broke the all time high) with that of the seventies.
    And then there is another fact: Miners can be bought now at the same sale price they were in 2001 with gold at $250,but now gold is around $1000.
    A very obvious fact is that this bear market did hit much more Miners and silver than gold.
    Gold is NOT a good buy as it was in 2001 but Miners are even a better buy now than they were 15 years ago.
    It will be really intriguing to understand what to expect when a YCL will materialize.
    Will we have a new weaker bull market with no new all time high,will we have the resumption of the old bull market with new all time high,will we have a strong bull for Miners and a weaker one for gold and silver?
    It will not be so easy to understand where we are headed.

    1. Gary Post author

      No way the long term bull is over. The Dow:gold ratio only went to 5.5 to 1 at the 2011 high.

      That ratio needs to overcorrect the massive undervaluation of 45:1 in 1999. It can not be over at 5.5:1.

      It needs to go to a minimum of 1:1 and probably .75:1 is more realistic considering how extreme the the undervaluation was when the gold bull began.

      At the top in 1980 both the Dow and gold reached $850 together. This time we should see Dow $5000 and gold $6000/$7000.

      Or maybe Dow $10,000 and gold $12,000.

      1. Mark

        Then you believe that this bull will last about 20 years ?
        Double that of the previous.
        It seems a little extreme but I hope that you will be right.

  2. bc

    Hi Gary,
    Thanks for your analysis. Could you show your analysis about GDX next target if gold and silver rally continuing?

    1. Gary Post author

      I don’t have a target. When I think gold has topped then I sell all positions in the metals sector.

      1. Jorgy

        Are SMTer’s locked and loaded leveraged long or just toe dipping ahead of the ICL? I may have jumped the gun loading a metric ton of NUGT long (?) on Friday, because if gold’s ICL low lies more than 1 day away (i.e. we don’t get a swing tomorrow) my @ss is getting stopped out! ?

        1. Gary Post author

          I’m holding long positions based on the bullish COT levels. I quit trying to trade the metals based on cycles, technicals, or sentiment. The bullion banks have figured out out to run stops for all of those. They just end up whipsawing traders in and out of the market. The only way to win at the game is to trade a longer time frame.

          1. Bill in Tokyo

            So Gary, are gold cycles now working again because you’re using the longer term cycles? And the shorter term cycles are still busted due to manipulation?

            I’m still using the monthly chart for buying gold bullion, and it’s still on a sell signal. And for GDX, I’ve not been successful at trading it this past year.

          2. Gary Post author

            Correct. The shorter term cycles are pretty much useless at this point. The banks can stretch them to the point where it’s pretty much impossible to use them for picking bottoms anymore.

            It’s much harder to manipulate the longer term cycles so those are more dependable.

  3. Dan

    We now return to our regularly scheduled Fed interventions. If these criminals float SPX back to 2000 or so it would set up a low risk short opportunity IMO.

    1. Gary Post author

      I would argue there is no such thing as a low risk short in a world where central banks can turn on the printing presses at any time.

      This is why I’m not willing to sell short.

      1. Dan

        Well there’s another overnight rescue attempt that failed. Market wants to crash. I’ll probably get stopped out but couldn’t resist shorting again today.

  5. Jay

    The idea of the ratio needing to get as low as 1.0 is such a pre-QE-style-manipulation concept, 🙂

  6. zkotpen

    Rest of world data point:

    I brought a friend to my trusty computer repair shop here in Chiang Mai & saw forex charts on the techs’ big computer screen. I inquired — these guys are trading forex in between attending to their customers.

    A few takeaways that impressed me — take them or leave them:

    1. The verb these guys used in reference to their activity was “play”.

    2. Zero talk of manipulation, toilet paper, people, central banks, story. As far as I could tell, they couldn’t care less about any of it.

    3. I ignored forex because I felt exchange rates move at glacial speed. These guys had just covered their short: A 26-day swing trade in GBPUSD, about a 7% move down, highly predictable, and highly profitable for them, using monster leverage. I knew leverage was possible — never realized just how much.

    4. Their preferred broker is Russian http://www.exness.com, which they showed me as allowing very many currency pairs (including gold & silver), small minimum trades, and leverage as high as 2000:1 — which I’m still struggling to believe, though they showed me their latest trade. Unfortunately, citizens of the US, Japan, Singapore, and New Zealand are not allowed to use their services. What a bummer!

  7. Stefan

    The bull was broken in 2011. We are in a 7-8year bear now and we are only 60% through. Then a 4-5year bull with new ATH.

    Maybe a depeg of the Saudi Riyal against the dollar, in 2-3months, that would shake the markets I guess.

  9. bc

    Today’s gold, silver and miner price action revealed faked gold breakout, it is very possible that metals are toward historical low ( final low).

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