SURPRISES IN THE METALS MARKET

Gold and miners made an unexpected move today. When conditions change it’s best to adapt to them quickly.

See the afternoon update in the premium newsletter for details.

106 thoughts on “SURPRISES IN THE METALS MARKET”

    1. Gary Post author

      Absolutely. When the market does something you don’t expect you have to adapt as quickly as possible. Anything else is just stupid.

      We bought our miners back immediately today in case the daily cycle isn’t finished rallying yet.

      1. Bud fox

        Never has price been so streached above the 50 day MA in 5 years. Buying 29% above the 50 day is buying at extremely stretched levels. I was hoping you would have provided some technical analysis to justify the flip other than “A surprise big up day means buy it”

        http://schrts.co/KbLlJS

      2. Peter

        Gary, that was an amateurish move to rebuy simply on, I might miss the boat. Where’s your stop? Respect your body of work, but today’s move no so much, despite it paying off or not.

  2. Alexandru Popovici

    yes, indeed, Gary 🙂
    GOLD HAS BEEN AN ASSET TO KEEP SINCE JAN28 !
    A trend trader had to keep that long position, never to part away from it.

    miners produced a swing low today WITHOUT EVEN TOUCHING THEIR DAILY CYCLE TRENDLINE…nice! 🙂 promising! 🙂

      1. Alexandru Popovici

        it’s no hindsight; it’s been real time calling of my moves; you can say I’ve been trading live.

  3. Tenyear

    Metals and miners are now back in their bull markets. RIO, ABX, and EXK are the stocks to own for both growth and dividends. Buy these 3 and make 35%+ this year from here.

    2. Atkjhi

      Jesse has been talking about this for a long time. He said 1190 needed to hold for the C&H to remain valid and gold bounced off 1190 exactly.

  10. MuffinTop

    Yeeaaah, not sure I’d get back in so quickly.. best to exercise a bit of patience instead of getting overzealous on this one in my professional opinion 🙂

  13. Russell

    Hopefully oil goes to $20. The modern world is oil. It connects everything, moves everything, allows for everything. For there to be a highly material quality of life, for more people to exist, both of which are inevitable short of catastrophe, demand for oil will increase. Year over year demand for oil rarely goes down.

  14. Russell

    Looking at the silver chart, it hasn’t made a higher high yet, which has me a little worried about being long the miners at this point.

  15. Gold miner

    That is right, Gary, have to adapt as quickly as possible.Got back into miners SSRI, AG, RGLD, CDE , SLW cheaper than got out.LOOKS LIKE 2010 when I got back IN MINERS in july , closed the eyes and sold them only in december2010.Sold few USO calls with small profit .OUR TIME HAS COME AGAIN AND THE SHOW IS JUST STARTING??????????

      1. MuffinTop

        One thing you should know Theryl.. Jay is one stubborn son of a gun and soon enough, he will be licking my toes for using such blasphemous language 🙂 Pencil that in dear…

  17. Bill in Tokyo

    GDX daily vol is really really low guys. Same as on the 12th. The 13th was a huge down red candle. Plus the daily RSI(14) is overbought (not today, but these past few days), and there is huge neg divergence on both the RSI and MACD on 2 and 1 hr charts. If I was long, I’d get out now.

      1. Ty64

        I’d be cautious here taking on any new miner long positions. If the Bullion Banks want out, they need to sell high guys.

        After I got out of GDX early last fall, GDX touched the $17.00 level. GDX then dipped back down to the $15.00 level and then went back up. I bought back into GDX with a 50% position when it went over $16.00 again. My position quickly went underwater and I got stuck with a losing 50% position. I sold that 50% GDX position at $17.80 recently and was glad to get the hell out for a $1.00+ profit. But, I had to hold it from last October until recently while wondering how long I may be stuck holding that losing position.

        This could be the real deal but…Don’t forget to think like a THIEF guys. We are dealing with a system that wants your money.

        1. Ty64

          When I jumped back into GDX when it regained the $16.00 level last fall…,It was my decision to do so…but, I based that decision mostly upon a recommendation.

          Please be careful guys…this may be a bull trap…for any traders here that may have went over the 10% rule…I can only hope that this isn’t the case this time around.

          1. Bill in Tokyo

            … unless he has a heart attack or a stroke in the meantime.

            Which is HIGHLY likely.

            I agree w/everything Ty64 says. Time to be cautious. If this gold bull is alive again, there will be many changes to get on board. Everyone has to trade per their comfort level.

            FYI Doc shorted gold today via JDST. Now, I wouldn’t do that, no way. Just wanted to show though that others are in fact on the other side of the long trade.

          2. Jorgy

            ?’s are making out like bandits while traders get whipsawed in/out missing % (+/-) many multiples chasing counter trend moves in bear markets based on cycle counts that have been manipulated by TPTB.

            Bottome Line: Price is what you pay… Value is what you get! ?

          3. Gary Post author

            But there was only one chance to catch this monster rally out of the initial bear market bottom. You will never get another opportunity like that again until the bubble phase which is still many years away.

            Almost everyone missed it. Certainly Doc missed it.

            I tried and tried to warn people this would happen.

  18. Gold miner

    As Silvery moon posted on Bbt today Watching miners and metals intraday and dayly, there is no difficulty recognizing bull – market action:you get a dip but too brief or shallow to get your price, Big money is looking at the weekly charts and where they will go, not worring about missing the bottom by 10 or 20%

  23. Walt

    Also , what’s silver doing? @ $15.50 ?
    Shouldn’t it be like $17-18 now , up w gold .
    Don’t tell me because its also an industrial metal . Not buying that line .

    1. ted

      I totally agree. They closed the gap. And now they will take down. The market should rally hard tomorrow.

  26. jacob 2

    FWIW: New money: Would rather buy oil and uranium, Risk/ Reward is compelling. Own the miners but seasonality has me thinking about selling rather then buying. Will probably continue to hold over the weekend but too far too fast for gold/silver. When has buying the miners at the end of February ever worked-out?

  28. Brady

    Gary, does this change your thoughts on the next low being in April/May and waiting until then to buy back in?

    1. Gary Post author

      I’m expecting a right translated intermediate cycle. But the next ICL should still bottom in April or May, just that the top may not come until the middle or end of March.

  29. atkjhi

    Here’s a good read from Rick Ackerman. I’ve followed his stuff over the years and like many he’s been wrong a bunch on the way down always looking for the bottom. After a while he stopped calling bottoms like many because gold kept going down down down. But one of the things I remember that he said maybe 2 years ago was that eventually there is going to be a month where gold goes up $400 and nobody is going to be on board because it was impossible to pull the trigger. Are we there? Who the hell knows but there has got to be a bottom someday somewhere.

    http://news.goldseek.com/RickAckerman/1455894180.php

  30. Alexandru Popovici

    Watch out to USX !!! It is stubborn in hitting day after day that 200dma.
    This is not good –> PROBABILITY OF USX GOING HIGHER IS ON THE RISE BY EACH HOUR!

    If USX clears to new high, i.e. > 97.11, then I will personally sell at least 50% of my gold position (or even all) in anticipation of a right-translated DC in USX, hence of A RETRACEMT OF GOLD IN THE PROXIMITY OF ITS 200DMA –> a potential target of 1140 next week if USX goes higher !

  31. Walt

    That’s flexibility Alex . Don’t get wedded to a position if things start to change in unforeseen ways .
    That’s a good quality .

    1. Alexandru Popovici

      exactly, Walt!
      now it looks like that yesterday, gold got excited about USX’ inability to break its 200dma and somehow gold investors hurled IN ANTICIPATION (not on fact) that USX will be rejected by its major moving average.

      now….with another day to attempt at 200dma ….THAT’S EVIDENCE OF BUYING PRESSURE.
      I will not part away with my gold, though, until I see USX at 97.12 today; I’ll wait for the fact and not jump the gun in trading anticipation.

  38. Alexandru Popovici

    Victor, Chris, yeap!
    Sold 50% of my GLD exposure in pre-market at 117.5 , equivalent of gold=1228 (i.e. 35% weight of total portfolio –> I gave gold a larger weight because of its low volatility – I weigh my exposures based on assets’ volatility).

    I will sell the other 50% GLD along the way, maybe as early as today depending on the leads USX and GDX will give me today.
    I have to mind though that GDX has met double bearish divergences with its oscillators!
    Thus, it is very likely I will dump the other 50% quickly buuut I do not trade on anticipation – I search for some signals.

  43. Alexandru Popovici

    Chris, I haven’t changed my view on stocks as I stated my Trading Framework on Monday or Sunday:
    – wait for treasuries to hit a new high before searching for a swing long position in stocks as treasuries emerge out of their DCL and prepare to dive into IC decline (potentially also YC decline)
    – SPX to go above 1970 and search for an ICH while watching treasuries moving into their ICL.
    – Transport stocks are in a new bull but the broad market needs to take another dive before hitting the bottom in Q3.

    1. Alexandru Popovici

      …personally I would not buy any stocks since I am not a swinger; I [attempt to] follow only longer trends.

  44. Alexandru Popovici

    Oil movement: so nice! 🙂
    yesterday I entered a pilot long USO at 9.00 and bailed out at 8.63 booking a mere -0.3% loss of equity –> this underscores the ability to recognize IN DUE TIME that market conditions have changed with your position and TO KEEP COOL AND ACT QUICKLY ON THIS OBSERVATION by closing your position with minimum loss so that YOU CAN RECOVER ALL YOUR TINY LOSSES VERY QUICKLY AS SOON AS YOU CATCH A HEALTHY TREND, as it’s happened to me with the long-gold trade. I still hold the 50% of it.

  45. Alexandru Popovici

    there is a very menacing bullish development in USX even though it looks falling now close to today’s low.

    I’m raising my stop to 117.55 for the remaining 50% GLD –> equivalent gold=1230.
    If USX is weak, it will decline the strong bullish signal it has just given me and let gold move higher (low probability for this, though, but I give it a chance by not closing it outright).

    good luck, folks!
    I am out from the net – gonna enjoy my beautiful family 🙂

  47. Bill in Tokyo

    I would never short the PM’s. I’m still w/Gary’s call that Dec was the bottom, because we have that huge higher high. I think we pull back here, but surprises are to the upside, as Gary says, and this is a baby bull, so I would never EVER short it.

    The VIX looks like it’s about to swing up, and SPY/QQQ/IWM swing down. I won’t short it, but if I were long I’d get out here/now.

    TLT is correcting, but it won’t have far to correct. This went up w/GDX, so I’m watching both for a sign of a swing.

  49. Walt

    Stock market this sentiment the past 2 weeks has been the worst I have seen in years . Everyone is so pessimistic and confused about the economic future .
    That’s when you buy .

  50. Mark

    Wow Ted, you are such a stock bug. You disappeared during the stock market downturn now you’re back. Agreed that the PPT will do everything in their power to keep stocks and housing high, but if we ever do manage to break through that mythical 1812 level on the S&P, I think Gary is right that we’ll be down to 1550-1600 very quickly. US Stocks are so hugely overvalued by any historical metric that if sentiment changes, there will be a mad dash to the exits.

  51. Russell

    Corporate earnings have no momentum. They’re slowly decreasing. Only way they keep going up is if prices are bid high based on sentiment and yield chasing alone. PE 30-40 the new paradigm? This time is different? Market tops always seem to echo the past. Every generation thinks they’ve outsmarted fundamentals. Abolished the credit cycle and all of its evil side affects. Good times forever.

    A new bubble phase will require alot of market momentum. The Fed will have to reignite money velocity once more before the big crash. I suppose it’s possible. Pass the debt basket around the consumer table one more time!

    1. Anthonyo

      What makes us think earnings and profist drive stock market up? That baby was thrown out with teh bath water after 2007 and the ensuing QEs and melt up in stocks.
      This ain’t no market top not even close.
      Talk to me when Dow hist 31,000 by 2020 or before.
      Top Schm-top.

    1. mike trike

      That is probably true…..however if we are at the start of a major move up then the COT report doesn’t matter. Look at the silver COT data for Sept 2010 right before it took off! COT was bearish as hell and lots of people missed the move. I bought some SLV puts in case there is a big selloff but it is not a sure thing.

      http://tinyurl.com/z8lrjqu

  53. jim

    Mark, this market will not crash when everybody is positioned for a crash. Like I said when you were convinced we were collapsing a week or so ago, time to get a call and settle the nerves, and then ride it for a while yet. This thing ain’t finished on the upside, at worst it will flounder with upside bias, look at the VIX, heading down while market negative intraday.

  54. ChrisG

    Market should rally to squeeze those shorts. TLT looks like heading for 50 MA. Sell longs when it’s there. Reverse to short there

  56. Stefan

    This is a BEAR rally so I sold my big gainers yesterday waiting for a new entry point in April maybe or at summer solstice in June/July.

    +63% since December nice 🙂

      1. Anthonyo

        We see themost powerful bull-market in stocks to start from next week? or thereabouts… all major markets will move higher 20% by end of June 2016
        and 30% by the end of this year. Now how’s that for your entry point? lol

  58. Russell

    If the Dow was at 32000, and profits stayed the same, PE ratios would be well past all time highs. Dow PE has never exceeded 30. For profits to get high and fast enough to encourage a bubble phase, there would have to be an accelerating of money phase. Good times here again and all that shit.

    1.bp.blogspot.com/-SG98yggMkPU/TatbPr2RinI/AAAAAAAAA_c/m71AUwwK1xQ/s1600/Dow%2BNormalized%2BPE%2BRatio.jpg

  59. ted

    I want to share something that is probably the most important thing I ever learned about the market, and it will be hard for some of you to get because it so against the grain in everyone’s assumptions, but here it is: Cooperate Earnings Don’t Drive the Market, but Stocks Price Drives Cooperate Earnings.

    Sit with that, and I’ll be more than happy to respond to this statement.

  61. Dan

    Why aren’t you guys just holding gold/miners if you think it’s a new bull market? Why get cute playing the swings.

    1. Ty64

      It’s a bear market until it isn’t. ..gold has not even broken above last years’ high yet…neither has GDX / GDXJ.

      IMO…Some of the guys are trying to get some income off the swings. Perhaps have cash available ** if ** gold were to cycle down to its 200 ma or a little lower…Right now, I’m out of the miners…would rather not get stuck holding a high priced miner position for BB. If I’m wrong, there will still be many plays in GDX / GDXJ…neither stock has even reached their 2015 highs yet.

      In 5 years from now, it probably won’t matter. However, would rather not take the risk of holding a long term position in GDX while there is still risk that GDX could drop to the $11 level before the bear is finally officially over.

      1. Enoch

        to each their own, if gdx does hit 11 this year. you win and found yourself an absolutely great entry point. if not, then those who jump in now will be happy also. I have a few indicator suggesting we will at a bare minimum retest the 2015 high. Whether gold has stuck it’s low or not the 2015 high will be tested regardless. based on the potential either we will test/blow thru the 1300 area as a wave 3 (end of gold bear) or the 1300 area will become the counter trend rally c wave top and the final draw down to sub 1k begins. If this happens it will line up with the one chart suggesting that every 8 year low in gold always happens within 4 months of the US election. so the low last December may in fact be a fakeout. Still just when everyone is convinced, the market does something else contrary to past analysis

  62. Dan

    SPX could get to 2000 short term but stil heading much lower. Then watch these PPT believers vanish again. Anyone holding high beta stocks like biotech or small caps from last year got crushed. Period.

    1. Anthonyo

      PPT is not a religion; PPT is a fact.
      Look at the last 6 years, and see the evidence. Each time market tanks beyond a certain point(this time around they have chosen Dow 16,000 as the line in the sand), money is injected into the market and magical melt up rallies take place to correct the situation.
      You don’t have to be a Nobel laureate to see the evidence which repeats itself like something is adjusting things upward as we go.
      PPT will not disappaear, PPT is a part of market life.

      As a short, you could take advantage of “allowed” routs like the one in biotechs(I did); but I know my limits
      as I know it will be a temporary thing by definition, and by reality of things the way it is now set up by government and TBTF banks colluding to impose price adjustment mechanisms on the stock market.

      There are no markets left in the world(to various degrees.) Period.

  63. Will

    ABX , MUX at 52 week highs.
    A pullback in miners yes short term
    but a bull trap??
    Lol

    I’m out miners for now and long oil to around $40
    We shall see
    Good luck to all

    1. Alexandru Popovici

      Is it you, William from Malaysia ?
      Haven’t heard from you and David Silver in weeks.
      Good you’re back 🙂

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