MARKET WRAP – Bullish Volume Flows

Bullish Volume Flows

Extremely heavy positive volume in the 3X ETFs, such as NUGT, JNUG, LABU and ERX, have been quite predictive of intermediate cycle lows and bullish trending moves that follow. The S&P 500 has made a breakout to new highs but it is possible that this move was manufactured by big money to escape their long positions.

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47 thoughts on “MARKET WRAP – Bullish Volume Flows

    1. Gary Post author

      Or one could lose a lot of money trying to short as gold comes out of a YCL.

      I can’t tell you how many technical analysts have been wrong at these major cycle lows. Basically they never get these right because technicals always point down at major bottoms.

    2. Mac

      No chart will tell you where prices are going in the future, not technical analysis, not Elliott Wave and not cycles. You either understand why prices change direction or you don’t. Those that understand why trends change are the ones buying or selling at bottoms and tops. Those that don’t either wait for confirmation in a chart or they buy every cycle low and play the probabilities and hope they got it right. You can make money either way but you should know which one you are.

  1. Strike

    (I will repost this on this new thread)

    The key will be whether 1180 holds. It is an important support level defined by the classic 2013 H&S top defined by two shoulders 6 months apart at ~ 1180; the head peak at 1434 was subsequently attacked but not exceeded. This resulted in the long grind down to 1045.

    Last week we had a violent one day drop to 1170 which was quickly reversed. If it falls we may be in for another test of 1045. If not, enjoy the YCL.

  2. ras

    Right now, we are getting a bounce. This may take some days to finish. We will cross that bridge when we get there. Just be on alert keeping in mind 2 possible outcomes.

  3. Bull

    On a previous video you stated the the first daily cycle out of an ICL usually retraces to the previous high, do you think that it could reach 1360ish on this one?

  4. Anthonyo

    Excellent video Gary…Look at the plunging volume on the steep melt up in SPX after elections; not to a lowest level in the chart…I think you are right this rally’s days are numbered.

    On ERX: seems volume also dropping in the ascend which points to a topping pattern also in ERX?

    Gold miners: Between NUGT and JNUG which tool you’d go by here Gary?

  5. duckwhorocks1

    I would like to reiterate this for people who trade NUGT and JNUG. Many before you have blown their accounts to smithereens because of it. Getting a 50% return by using a 3X leveraged vehicle is nothing to boast about. It just means Gary got one set of subscribers hooked. There are people who make 100% returns in Forex in a day using 50X leverage. Almost all of their accounts eventually go to zero.
    Part of my comment from the previous post.
    Trading NUGT is really dangerous. Suggesting that people have 20-50% in Metals is fine. Makes sense if you want that kind of exposure to metals. But that makes sense if you trade GDX, GLD and SLV and GDXJ.
    Trading NUGT and JNUG and then making 53% means you have actually made 17%. Leveraging 3:1 to make 53% is extremely dangerous. Even for someone who has 50% in metals. If you time it wrong you could be down 30% on GDX which would be 95% on NUGT. on a 50% exposure that knocks your portfolio down 47.5% in 3 months. Gary talks about the up move in the baby bull as if every subscriber participated in that. Surely some got taken in after that bull run and they would have only had the drawdown.

    1. zbigkid

      All very good points duck. how many people have been ‘averaging down’ (buying dips) on JNUG for example since Nov 8th ? By the looks of Gary’s charts, A LOT. If this breaks below 1170, there is no stopping it until around 1080. or 1050. People will lose way more than 50%. Even if its only 10 or 20% of one’s trading portfolio, that’s a hit that is very hard to overcome. I think way too many people are likely feeling pretty good about buying JNUG right here, no matter what Gary is saying, because its what he is showing that makes any of his words of caution, not taken seriously. I call that flat out gambling, where people think they are getting a ‘peek’ at the dealer’s hand at the black jack table in Vegas. nobody is going to use a stop, mental or otherwise on JNUG or NUGT bc they are way too volatile and run too fast. What will folks do, when someone comes along and does another middle of the night ‘dump’ on gold, like what happened after it peaked around 1350 back on Nov 8th ????

      1. duckwhorocks1

        Absolutely. With the decay working against you and momentum against you it seems really risky.
        Gary keeps making the comment that the bull market rescues all mistimed purchases. That kind of comment coming from someone who trades NUGT,JNUG and DUST can only come from someone not well versed it basic math.

        Explain how bull market purchase in NUGT at let’s say 100 if it is near the peak EVER breaks even.
        Gold stocks decline 30%..NUGT goes 10…90% decline.
        Gold stocks then rise 50%, NUGT goes to $25 (increase 150%).
        Gold stocks then decline 20% NUGT goes back to $10 (60% decline)
        Gold stocks then double….NUGT goes to $40.
        So in the example above Gold stock Index went from 100 to 70 to 105 to 84 and finally 168…if you held GDX you made 68%. Good for you!!!!!!!!!!!!
        If you held NUGT instead of making 68% X 3 or 204% you made a loss of 60%!!!!!!!!!!!!!!

        And subscribers pay this person for advice. Truly stunning.

          1. duckwhorocks1

            All wins and losses can be seen on this blog. Actually no losses since I started posting here. All my long and short positions have been posted here in real time, including when I closed them. If you have not observed I don’t give a flying duck. But if you want to backtrack start from late July and work forward you will see I was short throughout the decline in gold and gdx. Covered. Went long. Sold and made a profit on GDX and Slw longs.

    2. GMoney

      The time decay of NUGT is the major drawback. The miners need to move up soon and fast otherwise you’ll be a bag holder.

  6. stockpick

    A successful trader buys when trend is confirmed and it is confirmed only after a successful retest AFTER reaction……so far gold has failed every retest in the last 3 months.

    Yet, Gary wants to catch the bottom, or the turn in gold price and then pat on his back. He is playing a sucker’s game.

    So far there has not been a reaction and Gary wants to claim the break of a trendline as a turn………..it maybe or maynot be. but to ask people to buy and take risk is not a good idea. Let the reaction develop and see how market behaves on that reaction. This is the best advice Gary can give to his subs and visitors to his blog.

  7. zkotpen

    Alex,

    “It is more likely that YCLs in EUR and Gold have yet to be set on Thursday, DEC15, for reasons presented above.”

    You finally see what I was talking about back in September and October. To refresh, in September, I predicted gold would test the 200 day SMA. After the early October plunge, I warned you that the YCL was likely not yet in.

    Again, both of those calls were made using math & science. You have expressed your disdain for math numerous times here. Something to consider: I believe that Newton’s invention of Calculus has been the 3rd major invention of the human race. The 1st was spoken language, and the 2nd was written language. I rate Calculus as equally important as language for one simple reason: Calculus lifted the humans out of the food chain. Whatever device you are using to read these words cannot exist without Calculus, nor could motors, electricity, or any of the countless conveniences that we have in the modern world. It is my opinion, as a social scientist, that the invention of Calculus has signaled the end of the ancient/medieval period of human history.

    Of course, as William Gibson said, “The future is already here – it’s just not very evenly distributed”.

    🙂

  8. Dday

    “…I can’t tell you how many technical analysts have been wrong…”
    Are you including yourself in that statement?

    1. duckwhorocks1

      I think he meant to say “I can’t tell you how many of my technical analysis have been wrong” 🙂

  9. Alexandru Popovici

    ZKOT:
    YOU WERE RIGHT, YOU HAVE BEEN RIGHT ALL THE WAY.
    I GIVE YOU 100% CREDIT AND, IF I COULD, I WOULD GIVE YOU 1000%.
    I CONGRATULATE YOU AND I PERSONALLY THANK YOU FOR YOUR INPUTS !!!

    As I told you, I copy-paste your comments in a dedicated doc file as I find them precious – live case studies into the future – to use them as I gradually immerse myself into EW study.

    1. Alexandru Popovici

      as I told yesterday to Dave, even if I would give a 60% probability for an YCL in EUR and gold immediately after FOMC, this is not a probability high enough to render a call.

      What is important in my opinion is that EURUSD is to surge violently, hence gold too to ~1230 (US GDP report later today to be the catalyst), and then fall producing a shortened, left-translated daily cycle to bottom on DEC15 or so.
      If EURUD falls just to 1.0538 (to shakeout its support of 1.0540) or right below its low of 1.0518 and that gold would fall back to 1180 or produce an undercut to 1169 are less relevant issues –> IT WILL BE A ROLLER COASTER ANYWAY.

          1. sess

            Yes, I forget how close to Dec 15th we are. I guess best plan is to get out after next few days (after a bounce) and then just wait and see. I feel gold is waiting for me to quit for good. I am close to it.

  10. Dday

    So Hold cash, worst case gold jumps up and you miss a few %, best case gold crashes and you keep yourself safe from carnage of a $150 fall.

  11. Alexandru Popovici

    At this stage, USX going higher and gold lower are trends too obvious for retailers: USX had a correction therefore it should resume higher. This is a typical retailer thinking.
    Lady Market should play her tricks and not to concede to retailers: resume its daily cycle decline and then up abruptly.

  12. Gary Post author

    The safest strategy is to wait for a weekly swing, Although that will probably put ones stop further away.

    1. Alexandru Popovici

      Weekly swing is easy to be set @ 1221 after US GDP report today as EURUSD advances rapidly and USX falls in its daily cycle.
      The problem is that the stop would be right under 1171 and the probability of running that stop on DEC15 is high enough.
      It would be better I think to wait USX’ advance in its next daily cycle and see it topping post-FOMC and place the long there.
      Otherwise there is a relatively high probability to run a huge loss: from 1222 to some 1169.

    2. Alexandru Popovici

      do not forget that the prior YC of EUR was 8 months long and that FED is rife with pro-Establishment anti-Trump members.
      Thus a lower low of EURUSD in December, on month 13, bears a higher probability than the alternative of YCL on last Thursday.

      Even if gold does not put a lower low as EURUSD goes lower post-FOMC, it would still be a roller coaster for gold –> thus why buy it at weekly swing low of 1221 instead of waiting FOMC ?!
      it makes no sense in probabilistic terms.

  13. Alexandru Popovici

    GBPUSD pushes higher already, ready to penetrate its 50dma 🙂 after US GDP report.
    Once GBPEUR decides to move down in its DCL (EURGBP up to its DCH respectively), EURUSD will be compelled to do what I have been forecasting: VIOLENTLY SURGING TO 1.08 tomorrow or on Thursday morning.

  14. Dday

    I have’t seen any mention of the upcoming Italian referendum. If the vote goes against the government, no fewer than eight banks are at risk. So potentially more strength for the dollar as funds continue to leave Europe, and as yet gold hasn’t been the safe haven.

    1. Dday

      Important test of the $1180(yes $1170 is the 61.8% fib) support approaching. If it fails I can see a small amount of support at $1150 then $1050.

      1. Dday

        Remember gold can fall to between $800-$900 dollars and still technically be in a bull market as its the 61.8% fib retracement of the entire 2003-2012 rally.

        1. duckwhorocks1

          Great point. I mentioned the same number in July and was mauled Gary’s subscribers from Racoon City 🙂
          Although my thought was that oil is capped at $60…so Gold likely should trade at 15X that at some point.

  15. Alexandru Popovici

    The Italian referendum is already expected to fail and in any event it adds to my expectation to see EURUSD producing another left-translated daily cycle and to my strategy to run the ensuing gold bull until tomorrow (end of session) –> hence I WOULD SEE THE WEEKLY SWING LOW TOUTED BY GARY AS A SIGNAL TO SELL START SELLING NOT BUYING.

    PS: Gold & EUR rebound; USD & stocks plunge.

    1. Dday

      “The Italian referendum is already expected to fail…”
      Did you just make that up? I mean come on, you said the same about Brexit, then the same about Trump. The Italian referendum is the latest in another protest vote, and you seem to be ignoring them at every turn. I’ll give you the benefit of the doubt. can you explain to me why this time the vote will go with the establishment?

      1. Dday

        Fail = vote against the government therefore funds will leave Italy and the EU. So i dont see how that will strengthen the Euro.

    2. daverobson

      Alex are you saying Gary is wrong and that Gold will top by thus Thursday on a shortened daily cycle and that gold will resume its bull after Fomc on Dec 15 to top by late January ?

      1. Alexandru Popovici

        yeap, except for gold topping in JAN.
        Treasuries and EUR should top in JAN while gold will go sideways.

  16. chrisG

    If US dollar really rallies, Armstrong is really good. He has been a dollar bull for a while. Yes, he may sometimes hedge his other calls, but, among many shenanigans, he is better than many. As long as he is more right than wrongs, he is fine. And he has some very informative posts as well. But as usual, dont listen to him blindly.

  17. pacoquin

    IMO.. when.. not IF.. Dollar reaches 103 aprx.. I would buy.. Gold, plus bullish ETFs on Golf and Miners.. JUST.. for good rebound. And When Dollar corrects to 96 aprx.. I would close all those positions.. because Dollar will surpass 103 … and by then… only by then… hope many of you land and read markets properly. Again.. I think Dollar is on its way to 118-120.. and Euro.. facing parity or near.. and Gold and metals dont have any future in next few years.. except for rebounds… good luck

  18. Chips

    Good morning, Gary… What do you make of the nearly 6% jump in oil overnight? Does this change your outlook? I think I recall earlier this year you were suggesting higher oil prices by the end of the year. Thanks!

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