Euro top? Maybe. The odds are starting to favor a top in the euro and bottom in the dollar. Patience with gold is required. I don’t anticipate the next good buying opportunity in the precious metals sector until probably June.
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A common mistake most traders make is to let recency bias push them back into a market too soon after its already made a big move. Big trending moves need time to consolidate or correct before the next leg up or down can begin. Gold and especially miners and silver delivered exceptionally strong trending moves during the baby bull phase. Have the patience to let that cool off for awhile before jumping back into these markets.
The trending move right now is going to be in biotech & energy. Play those sectors for the next month or two and let the metals cool down.
Good thinking. I would add SLV to the list. It is just breaking out. Your take?
Wait to buy silver until the next ICL in June.
Gold down 1.33% overnight
Oil UP 1.33% overnight
Sweet.
I don’t think the futures are open yet???
I was reading Friday night futures on Marketwatch , but now Sunday night Futures are open.
The action in gold and oil recently tells me this: People selling gold to buy oil.
The gold:oil ratio still has a ways to go to regress back to the mean. This is something I covered in the weekend report.
Understood. Great.
Thank for the update Gary and great job on fixing the volume on these releases loud and clear now.
I didn’t change anything.
Gary,
I think your short-term cautious stance on gold is probably a good call, but I don’t think any really seasoned resource investors are going to get fooled into dumping high quality miners on a small gold/silver pullback and I also don’t think to a large degree that prospective buyers are going to get much lower prices on the miners/explorers than they are getting today.
Folks for the most part have taken positions that they will likely classify as long-term holds and will simply add to those positions on any weakness.
Most of the mining stocks have very limited downside with enormous upside. Trading out of, or losing a position in some of the good names is almost pointless because reentry prices are not going be as low as most folks think. Sure you may be able to scalp a few penny’s here and there but the big down-drafts in most high quality miners are very likely in our rear view mirror not ahead of us.
Just my 2 cents.
Historically miners will retrace 50% of the rally out of a bear market bottom. If we assume the top has occurred then that would suggest GDX will drop back to $18 before the next leg up can begin.
This is just about what happened as miners came out of the 2008 bear market bottom. They rallied roughly 100% (about the same as this time) and then corrected almost 50%.
“high quality miners” isn’t the same as GDX or GDXJ which contain overpriced, high market cap companies.
Gary, “mini analysis” lol. That made my day. Can’t wait to deploy the 3x oil, bio troups into gold 3x on ur word in a month or two. Ur the best.
A Tulip….. Last THUR and FRI went short and also said short this early week as a few things didn’t add up incld OIL under 43.75…… Well shorts payed off very very well today via emini…..
I didnt say crash… But a at least a small pull bk….
Anyhow, it payed off
I think SPX will drop hard going into May ! B-waves are very moody, but I think we will see a top soon or maybe it’s already in.
I am studying EW and it’s a lot of fun 🙂
No intermediate cycle has ever topped with the ROBO ratio so heavily skewed toward put buying by small investors.
G-money, what do you make of agriculture and some other commodities that have gotten absolutely clobbered the last couple days?
http://finviz.com/futures_charts.ashx?p=d1&t=ZW
Cycles don’t work on them. I trade to trade them before with no success.
I work within the ag industry. For what it is worth I would stay away, allow price to settle back to where it was in early April, then perhaps enter in June and ride a weather rally. Agriculture, like all other commodities want to go higher, but the fundamentals are horrible. I think traders will use the excuse of weather problems to create a large rally then, but for now I would stay away.
Gary, u said that stocks COT is not bearish. But on the contrary, Clive Maund just said that Commercial went even more short last week. He said smart money is now bearish, dumb money has now turned bullish. Why this huge disparity against yours? Tks
He’s wrong. Unless he’s talking about the metal COT’s. If that’s the case then yes the commercials are extremely beaish.
Cliven Mound also told us to sell gold and miners a long time ago and before the great gains were made. I sometimes read what he writes, but will never make any decisions on his analysis since he compares the markets to a skateboarder which is less than useless, in my opinion.
I don’t have a dog in the fight, but just noticed the S&P has made a sharp golden cross again:
http://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=1&mn=9&dy=0&id=p10147887024
Gary, I guess he is wrong , interpreted the cot of stocks wrongly. He is bearish on PMs, and now very bearish on stocks too.
I even deleted his link from favorites…, reading such biases make influence on your decisions you want it or not…, can’t imagine how mad his subscribers, if any, been last couple month…, grumpy permabear…
Same here.
He totally missed the single best rally I’ve seen in my lifetime, while Gary spanked it outta the park.
Here is the cot analysis I did a couple of weeks ago. Not much has changed.
The ROBO ratio hasn’t improved at all since writing that article, and no intermediate cycle in history has ever topped with retail traders so bearish.