Gold's Failed Daily Cycle

Gold has signaled a failed daily cycle. It should now be starting a completely natural move down into an intermediate cycle low over the next 5-6 weeks. I expect the move will be tortuous and difficult for both bulls and bears. Gold is now in a new bull market. Don’t expect the declines to behave the same way they did during the bear market. I doubt it’s going to be easy money on the short side as it has been in the past.

Our subscribers exited all metals positions last week near gold’s daily cycle top and will not get caught in the impending correction. A failed daily cycle is a cycle in which price moves below the low price of the cycle’s first day. Almost without exception a failed daily cycle leads price to continue making lower lows in the days that follow.

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  1. Gary Post author

    Before Al erased my comments I noted that Doc was going to be wrong on his call for the dollar to go lower for several more weeks. Chartists never catch these intermediate bottoms because the charts and indicators are always pointing down at these turning points. It’s looking like the dollar has probably completed its intermediate cycle low and will now rally for a month or two.

    I doubt the dollar will break above 100 though.

    1. Vortex

      Gary, I hope your right on the dollar. I need the miners to test the lows again before the back up the truck moment.

      1. Gary Post author

        If miners go that low no one will be able to back up the truck.

        I’m expecting a 50% Fibonacci retracement but 62% is also possible.

        1. Ralph Wiederzane

          I’m still long 75% of my portfolio in miners. Using GDX as a gauge, when and if it gets to $17.50 I will begin adding to positions, assuming it’s around the end of April/beginning of May.

    2. RayB

      Al removed your comments ?? wow .. whats wrong with that guy ??? He only accepts comments that agree with him and doc now? crazy .. now I know why I haven’t been back to his site in a long time ๐Ÿ™‚

  2. Jay Linn

    “Hopefully no one listened to Avi’s call to buy miners”. That is funny! LOL

    Some day, people may realize how faulty and destructive Elliott wave thinking is…. It took me some 30 years to leave that cult! Arrrrghhh… We are talking pain!! Only reason why Avi has any traction at all is because he uses Fibonacci levels a lot.

    I have been a student of technical analysis more than 10 years, now. And I find the time cycle to be THE most beneficial concept I came across. Thank you for your work, Gary.

    1. MuffinTop

      I’ve been a student of Technical Analysis as well for a number of years and one of the many things I’ve learned is that you should never rely on just one technique but should instead use them in conjunction with one another to improve the probability of a good trade ๐Ÿ™‚ It works!

    1. Gary Post author

      I’m pretty sure Paul is just pulling peoples leg with his predictions. It would take a 10 sigma event to move gold the kind of magnitude he’s calling for in the short amount of time. So I have to assume he’s not serious.

      1. zaglebie

        well, i said it many times, pmarks targets are completely not serious, insane, but his lovers furiously attacked me. im a troll ? guy who made prediction like 1500 by 31 march is troll

      1. Dude

        Marco, you have to subscribe to Gary’s premium service to understand. Pmarks is one of the subscribers.

  3. JeremyinOz

    I’m finding these to be very exciting and entertaining times; we’ve got “The Donald” on TV making politics amusing again, and The Fed screwing up the global economy (with its affiliates) and making the market an inadvertant war zone. Great fun! Love your work, by the way ๐Ÿ™‚ cheers, J

  4. Huckleberry Finn

    Gary is probably right that the long term bull market has begun but as said before I am still staying short until the Gold Bulls show a little blood.

    And yes you can sell short a baby bull. You just need to use a wide stop, small position size and wait until Gary gets confident enough to say that “You can’t short it” a total of 7 times :).
    But again he is right that the real money will be made on the long side.

  5. Chris

    Beautiful, Gold looks like finally, it is ready for that $50 a day drop. You need that plus a few extra days to wipe bulls smile

  6. Gary Post author

    BTW all my trades have been documented in real time. When I have a losing trade my totals go down, unlike some who conveniently take a mulligan when they have a losing trade. Every subscriber can attest to that.

    They can also attest to the fact that once I accepted that manipulation had become a fundamental piece of the game in modern markets my winning percentage increased dramatically. So I suggest you run far and fast from anyone who tries to claim we still have free markets. They are going to lose lots of money if they ignore the manipulation elephant in the room.

  7. Enoch

    from 46.66 to 53, the 38% retrace is at around 50.50 close to a backtest of the trendline break which started this run. would be a perfect wave ii of III setup

  8. Gary Post author

    Remember my warning that tops often occur when big money manufactures a false breakout to sell their shares to the suckers buying the breakout?

    This was about the time the EW crowd made their call for miners to go much much higher ๐Ÿ™‚

    They need to rethink their theories on manipulation. Big money just manipulated a perfect exit from this rally. Those that understand whats happening used that knowledge to exit at the exact top right along with them.

    1. Ralph Wiederzane

      I must admit, it’s a whole lot easier riding these pullbacks after being up 166% first! Thanks Gary for getting us to buy the weakness instead of the Elliot wavers or breakout buyers. It makes a world of difference.

      1. Ralph Wiederzane

        Since we probably have several weeks of this to work through, I’m going to do other things to keep me occupied like go to the gym. Wake me up at GDX $17.50!!!

    1. Ralph Wiederzane

      Might not get to $17, that’s just the plan if we do. I could’ve booked profits all the way up, when I was up 25%, 45%, 80%, etc but I would’ve left so much more on the table. I’m hoping they double again over the next 3 years, which is very reasonable and good enough for me.

  9. Don

    No one is talking about how they got out of LABU with a profit,
    I guess that will come tomorrow.

      1. Don

        Wow, MJ12, you come across as a seasoned and successful trader. I would love to follow your trades in real time and perhaps ride on your coattails to profit but I can’t seem to find your posting of when you bought that 1000 LABU. Would you be so kind as to tell us the date of that posting ? Thanks.

    1. Gary Post author

      I’m holding my biotech until I think the intermediate cycle has topped. I’ll let others day trade it.

      I’m not expecting a top in the stock market until May.

      I am expecting a corrective move in stocks soon, but I’m not really expecting a top until next week. Sentiment still hasn’t reached the kind of excessive bullishness that usually accompanies daily cycle tops.

  10. Joseph

    OIL inventories 8mil barrales over what was projected was 2mil….. Demand is down, world supplies to grow,….. I hope I’m wrong and this was already built into the PRIICE….OR were gonna test low 30s again and that’s bad for the TSX….

    If OIL goes down, so does the US and CDN Indexs

  11. Punster

    Who is this Walt guy that talks like he has some kind of crystal ball but as far as I can tell has been dead wrong on every call over the last 3 months??

    Walt – Do you have any other hobbies or is trolling Gary and fear mongering his subs your full time gig?

  12. Don

    Muffin— You tend too be too general with your teachings . Could you be a little more specific about your technical analysis and what “works”? Perhaps you could help the rest of us out by telling us when you take on a position? Thanks.

    1. MuffinTop

      Yeah fair enough.. And I do sometimes ๐Ÿ™‚ But my trading style has evolved over the years; I’m a lot more casual about it, meaning you won’t see me making a pile of recommendations. I like to keep it simple.

      I’m already sitting pretty with LABU but waiting to see if we’re gonna get a swing low towards the 62% Fib Retracement to complete an Inverse H&S, and if so.. this could be another great ‘buy’ opportunity for those still waiting on the sidelines (if you’re in the Bio Bullish camp that is).

  13. tulip

    Irwin- theres a Belkin interview on KWNews now…. in regards
    to Silver….hes pounding the table…
    not keen on the other markets except energy, oil…emerging countries
    v good interview

    Eric King: โ€œThe fact is that there arenโ€™t that many pure silver plays, and youโ€™ve scoured the earth and found the best ones (that you are now recommending to the largest sovereign wealth funds in the world).โ€

    Michael Belkin: โ€œThatโ€™s right. The silver price has gone down from $50 to around $15 and itโ€™s right on its 200-month moving average, which is textbook for a long-term trend reversal to the upside, which my model is now predicting. It (silver) has reverted all the way back to its mean and sat there. And so I think silver is poised to go back up, I would not say itโ€™s ridiculous to say it could go back up to $50 at least.

    So if that happens, these silver miners โ€” if the price of silver goes up 3 or 4 times, the silver mining stocks are going to increase a huge multiple of thatโ€ฆKWN has just released the extraordinary audio interview with Michael Belkin, who just issued a major call to global sovereign wealth funds around the world and it has to do with the silver market. You can listen to it in his remarkable KWN audio interview that has just been released, where he discusses exactly what he is telling the largest sovereign wealth funds in the world right now by CLICKING HERE OR ON THE IMAGE BELOW.

    KWN Belkin mp3 3:22:2016

    1. Irwin

      Thanks, I’ll check it out if I can.
      Sometimes my anti-virus says, ‘go away, not safe to play at kwn’.

  14. red

    Gary ,
    Based on today’s gold market movement, now I think you are right.
    There is stock & gold market manipulation

  15. Duncan Smith

    The markets are manipulated and yet technical analysis still seems to work, somethings up!!

    1. Gary Post author

      The technical analysts I’ve been watching haven’t gotten anything right in a long time. They missed the bottom in gold. They missed the top in gold. Doc just missed the bottom in the dollar, etc.

      1. Duncan Smith

        Far from it it was technical analysis that called the top and predicted $1000(not far off $1040). As usual its a mixed bag(mixed skills), regarding who you look at, same with cycle theory.

  16. jacob 2

    SBIO – ALPS medical breakthrough etf

    Probably not much of an appetite for this today as Biotech is down ( which is why you might want to consider it). However, for those who like this space and looking for a long term non leveraged biotech ETF buy may want to consider the above. Doesn’t hold the big ones but concentrates on small and mid-cap bio tech stocks they believe have new break though products. Bought a little just now. Good luck.

  17. Enoch

    xbi has corrected exactly 38% off the low and also backtested the previous breakout line. this would make the perfect wave ii bottom. hopefully it is as bullish as Gary puts it and we will see it go back up from here

  18. Dan

    That’s a massive head and shoulders on the XBI daily. So we’re on the cusp of a bubble phase but the bull market leader is still in the gutter.

    1. Enoch

      would you also call that a cup and handle pattern? and recently we broke the classic abc handle when we cross above 50.50, we are now backtesting the breakout

  19. Herman

    i think it is likely that gold will show a whipsaw, EUR/USD is nearing the end of its correction.

    1. Gary Post author

      I think that is very possible. Even if gold has started down into an ICL I don’t think it’s going to be an easy move to profit from.

  20. Alexandru Popovici

    profits are piling into my positions.
    I’ve pyramided today to full positions of :
    – short gold and
    – long T-bonds.

    I am investigating the character of the expected decline in stocks.

  21. pepe le pew

    damn. I knew it was too good to be true. When I bought my LABU, it immediately started going up – not even five minutes of drawdown! Now I am underwater (just barely), having added a tranche on the way up.

    I’m going to put my faith in Gary’s call, and his advice not to place a close stop on it (he said nervously). As Ralph said, it’s easier to take a drawdown when your account is well in the green for the year…

    1. Gary Post author

      It all depends on if stocks are starting down into their DCL or not. If they are then this is going to last for 5-7 days before we bottom and biotech could very well form an udercut low just like miners did in Jan.

        1. MuffinTop

          Dude — nothing is written in stone! The Market will do what it does, just be prepared for all possibilities and act accordingly. It’s simple.. and yet, so hard.

    1. Alexandru Popovici

      Thank you, Walt!

      There is a subsequent sign of weakness (i.e. subsequent to DCH) in addition to prior signs of a still-demaged market structure –> as I previously said, FEB26 was a solitary event of improving structure and a new multi-year bull should show bettering structure day after day or week after week and the only positive sign has been shallow – only growing price – a typical print of dead-cat bounces.

      The subseqeunt sign is that stocks market retreated today despite massive buying on weakness yesterday.

  22. Don

    Ok, let’s hear from all those who piled into the biotechs the past few days. IBB is down 3.1% and LABU down 15.4%. Was today a day to hold, buy more or sell?

    1. MuffinTop

      It all depends on your time frame Don.. but I’m a hold @6.25 and I would not recommend buying more cuz my 1 hour char is still very bearish. If you’re trying to time your entry then I would wait for a Divergence [Stochastics/RSI] on a 1 or 2 hour chart, then drop down to a half hour chart and wait for the right opportunity to pull the trigger.. That being said, I would also keep an eye on the SPY because if it is indeed dropping into a DCL then it could drag Biotech down to new lows.

      Either way, I’m riding LABU all the way up to 14 ๐Ÿ™‚ Unless red flags start popping up left and right.. it’s important to be nimble!

  23. Duncan Smith

    Today was about oil down 4%, massive inventory build ups, shaky agreement. Its driving the markets and should continue to do so.

  24. Bluebear87

    WARNING: Oil dropped BELOW $40.05!

    I sold out midmorning:

    @ close (opposite)
    DUST, ERY, SDS and oil

    Oil sell signal should affect ALL assets IMO.

  25. Alexandru Popovici

    Folks, it stands as a rule to buy only RS (relative strength) never to make the hero in markets trying to anticipate where value will come and buy laggards on well-thought-of arguments.

    Only a hero or insiders would go for a biotech play.
    Unless you are insiders then…you are wonderful heros standing in the first line of fire, in anticipating a future leader! Congratulations!

  26. Don

    Upon viewing the carnage in the commodity and biotech sectors, today, and given that almost every sector except the Utilities was down, it is odd that the S&P is only down .66%. The treasuries were up quite strongly and did not back off much. Someone is expecting some ugliness in the markets.
    Despite the relentless rally of the past several weeks, the NYSE (NYA) never did close above it’s 200 MA and is now falling away from it. This setup is looking like it could be followed by a nasty drop.
    I remain firmly bearish.

  27. Don

    Today’s close of The S&P, down a mere .66%, is masking what was otherwise a sell off in several sectors. I track 22 State Street stock market ETF’s. Only five closed better than the SPX and with only two that were marginally in positive territory. Thirteen were down more than 1% and of those, four were down more than 3%.
    Obviously, the S&P index is being held up by few high flying stocks. That could be warning of an impeding sell off of significance. On the other hand, I could be full of horse doo-doo.

    1. Gary Post author

      Jeez stocks are due for a DCL soon. How many times must I say this? It is a normal corrective pattern and it sets the stage for the next leg up.

      How many of these have we been through in the last 10 years? You folks should be old pros at this by now.

  28. chris e

    My dust calls were up 80%, I reduced position size to leave houses money on table. I have until june to watch things unfold.

  29. Alexandru Popovici

    We are still in a stocks bear market most likely.
    Though I expect stocks to extend their bull trap and produce a higher DCH in the new cycle to come before rolling over.

    I am and will stay out of stocks through the next several weeks. Most likely I will short them too in less than one month.

  30. Van

    This is actually the 3rd week in a row that gold has closed lower.
    Intermediate correction might be over sooner than anyone thinks.

Comments are closed.