42 thoughts on “MARKET WRAP JAN. 13

  1. Bill J.

    Hang Seng Index – testing 2013’s low as of now. Using Fibonacci low to peak from 2008′ is pointing to 61.8% level at another -8% away to the downside.

    Are we heading there soon?

    1. Al

      If it does Will then market will continue down and gold and silver should rise? I wonder how many institutions are still in the carry here with this starting to go against them? Have to say after watching this correlation for what feels like forever at this point, it’s about time! ๐Ÿ™‚

  2. Bill J.

    On closer look, Newcrest Mining is on the verge of its “MONTHLY” “cup-and-handle” breakout…if this is not another market trick, then, other miners at large should be on to “something” soon!

  3. AlexP

    Victor, Blue, you’re welcome!
    Victor, thank you for the link you’ve sent me.

    I am 100% cash now. I am waiting for the resolution of ECB next week – I expect an increase in its QE program from EUR 60 bln a month to some 70 –> this should propel USX above 100.72 in one day alone alongside stocks.
    I will not trade based on forecast, though, but on price action following that catalyst.

    On SLP, I personally do hope it will:
    – break up at least +20% in the wake of today’s earnings report
    – start a consolidation process through the next 2-3 months as stock indexes will most likely grind lower after a rally,
    at which point I will buy it AT A HIGHER PRICE THAN THE ONE I’VE SOLD IT!

    as a rule, I am happier to buy a stock more expensive than the price I’ve sold it than cheaper because THIS PROVES ME THAT I HAVE BEEN WRONG UNDERESTIMATING ITS VALUE AND THAT THE MARKET KEEPS IT AT A HIGH ESTIMEEM.

  4. Bill in Tokyo

    Good summary. I’ll add that the $RUT (IWM) has ALREADY broken below both lows of last year, AND the year before. And I agree w/you Gary that shorting (although tempting) is very dangerous, as I also imagine that the Fed must be fighting this w/all they got. On the dollar, I think it will stay strong, simply because there is no other currency where large pools of money can be safely stored. The euro and yen are not safe. The renminbi is just paper. The FXA and FXC are both good alternatives I think, but look at resource sector now, and the weekly charts of FXA and FXC – down down down. So I think the USD remains king for another 10 yrs,. But, this is all just my opinion, and so the only thing important I wish to say is to just follow price, and put in a hard floor whatever we do. Me I’m still 100% in cash, and am hoping that gold/GDX start a new uptrend soon.

  5. AlexP

    do we have a swing high in USX?! possibly
    anyway, it is fascinating to see how well correlated USX and stocks are: in the instant USX shows fatigue, stocks dive (and gold up); the moment the buck shows strength, stocks get confidence while gold gets to its den.

    on the other hand, USX shows relative strength against stocks! it is way at distance from the AUG24 YCL while stocks are still in yearly cycle decline, with some indexes having already produced lower lows.

  6. AlexP

    if we have a swing high in USX indeed, then gold and miners have beautiful days ahead and even more: USX would produce a left-translated, failed daily cycle that would give gold and miner plenty of room and days to ride and ride –> at least for swingers, it seems a good time to jump long gold; both gold and GSX are also in the timing band to start new daily cycles

    1. Bill J.

      JPY has already started to explode…therefore, chances of USD to have peaked are casted in stone, I think…

      Miners? ???

  7. Alexandru Popovici

    I’ve seen a couple of IDs with “Alex”, so that I am going to post with my name.
    AlexP = Alexandru Popovici

  8. Michael

    Good report Gary.

    Will stay on sidelines for another 3-4 weeks and book a 2 week Gold Coast holiday next week. Bring on the decline you are talking about. Once the 7 year cycle low is place, when is the S&P due for its 7 year cycle high and what target would that be do you think?

    1. Gary Post author

      Cycles aren’t really useful for spotting tops. But once the public starts to get on board it usually takes about a year to a year and a half for a bubble to reach exhaustion.

  9. Gary Post author

    I’m going to suggest just a little patience with gold. It’s working it’s way down into a DCL. Those usually don’t bottom until the 5 day RSI hits oversold. Plus silver has to finish it’s basing pattern. The big volatile swings back and forth are almost always a bottoming pattern as bulls and bears fight for control of the market.

    1. Gary Post author

      The shorts may succeed in stretching the intermediate cycle. If they do then we will get a final ICL once this daily cycle bottoms.

      But considering the current cycle was right translated we might have a situation where silver & miners form a bear trap lower low and gold does not.

      Silver has to rally to confirm an ICL, and it has not done that yet. So it is still working on finding a final ICL and on week 20.

    1. Gary Post author

      Well the idea that gold only goes up when people lose confidence in Gov. Is ludicrous. If that was the case then how did gold go from 255 to 1000 during a period when confidence was probably the highest on record.

      1. Mark

        Absolutely true Gary,but he is convinced of that.
        Probably he thinks that,after Gold break 1000,and form THE low,the next gold bull market will be fueled by the loss of faith in governments.
        It’s interesting to see if this infamous 1000 level will break or not,the entire planet is waiting for this to happen!

        1. mike trike

          In 1999 Marty was convinced that gold would drop below $200 before a new bull market begins!

          “From a Martin Armstrong email to my colleague Chris Powellโ€ฆ

          May 14, 1999

          Dear Chris:

          I understand your frustration that gold has been perhaps the worst investment for the past 20 years. But to argue that it is being manipulated due to large short positions is not justified.

          There is no interest in gold at this time and the central banks are all sellers. After they sell their gold, then we will see a bull market. Once those supplies are gone, no one will be able to lean on that supply and your bull market will begin.

          I hate to tell you, but gold will drop to under $200 before it turnsโ€ฆ”

          http://www.zerohedge.com/news/2015-02-15/gata-and-martin-armstrong-have-gone-it-nearly-17-years

          1. Mark

            Let’s hope he will be wrong again then!!!! ๐Ÿ™‚
            (But not in the resuming of the gold bull market….)

  10. Dan

    Now I don’t feel so bad missing out short yesterday. Another stupid criminal intervention melt up. Rigged scam market.

    1. Gary Post author

      I think it’s best to forget about shorting and just look for the opportunity to go long. This should just be a short term bounce out of a half cycle low. Still more pain ahead for stocks and oil.

    1. mike trike

      Volume on GDX decreasing on this recent move lower.
      Volume on NUGT is massive.
      Not the time to be bearish on gold miners.
      My Canadian gold miners still close to their recent highs and are continuing on their 2 to 3 year uptrends.

  11. Alexandru Popovici

    Victor, Blue, just bought back SLP but only 10% of portfolio with stop loss at 10.19, hence risk of 0.7% of equity.
    as i’ve told you, I do not mind buying more expensive, on the contrary I love it as i take as market’s confirmation.

    PS: The bear market rally looks healthy right now; it has it all it needs: volume, structure, thrust

  12. Bill in Tokyo

    GDX – 1 hr chart – double tap down has created a small pos div in the PPO’s histogram – a tradable bottom is near me thinks.

        1. Gary Post author

          Maybe a half cycle low although I wouldn’t rule out one more plunge tomorrow to fully test the August low. But this isn’t a final intermediate cycle low. We still haven’t reached the kind of extremes we need to see when price is in bear mode. And we should remain in bear mode until the 7 YCL is complete.

  13. Bill J.

    Dave,

    Market trick aside, SA (weekly) does look like carving out a credible reversed h&s bottom with neck-line at $9 (incidentally this is where it failed to breakout) ?

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