40 thoughts on “CHART OF THE DAY”

  1. stockpick

    Gary,
    We all were expecting a bounce out of these oversold conditions…….so it is here….no big deal.

    Question for you:
    Didn’t you expect the bond market sell off and that to set off a rally in gold?

    Well, the 10 yr. treasury rallied, yields fell and gold rallied……….soooooo what gives?? or now it is back to USD co-relation?

    1. Gary Post author

      I don’t think bonds are driving gold. Not yet.

      However if the bounce in bonds is weak and rolls over quickly and starts to drop aggressively then I think gold will benefit, and just about everything else will suffer.

      Right now the market is just assuming interest rates are normalizing. If the driver becomes fear that the bond market is breaking then we have a completely different story.

      1. stockpick

        Long yields have to keep climbing for the Fed to continue to raise rates. If stocks get soft this will stop the backup in Fed raises. It take years more for rates to normalize as history has shown.

  2. vin

    Gary, do you think that this rise has a lot further to go or will there be a correction before another steep rise. To-day jnug which I own had a phenomenal rise. This cannot be sustainable? Or is it?

    2. Gary Post author

      The rally out of the yearly cycle low should last at least 2 months even if it’s just a bear market rally. I think there is almost no chance this is a bear market rally so I expect it to last 3-4 months.

      And if you think price can’t just rally strongly coming out of a YCL then go back and look at the first couple of months out of the January low.

      I suspect this rally will catch everyone off guard just like the rally last years did.

  3. vin

    Goild, Another indicator I follow is 10years treasury yield. It is at 2.48. My gut feel is that they want to keep it between 2.4 to 2.5. Higher than 2.5% will make me think. And anything above 3 and I will run for the hills. If the yield does go much higher, and that means bonds falling steeply, then serious deflation will be the consequences. Present condition of the economy will not be able to stand that. And, they will do everything in their power to stop any serious yield increase.

    Just look at numbers. A 3% increase will result in extra interest of $600B on $20T for the fed govt. alone. At present they have a deficit of 500B. In other words, there will be more than a $1T+ deficit for a loooooong time. That in itself is very hard to perceive.

    Add other government (state, cities, counties etc.) debts to the picture and it looks scary. But, the biggest scare would be mortgages. Margin?

    First, it is an economy addicted to debt. And, then most of the debt is short term. It doesn’t look good if the yield increses

  4. SLEP

    This goes out to you, Pedestrian. From a previous post, you said, and I’m quoting you directly, “I am almost always right.” What hubris, what arrogance. You’re not a realist, you’re an idiot. 😀

  5. Dday

    Here we have it folks last years low was not broken, the bear is over, we are going to new highs. That’s what happend last time a previous years low was not taken out. It wasn’t long ago 2012 infact. Heres a lovely chart,

    http://invst.ly/2-nb9

    I’ve marked it(crudely) 2011 close low, 2012 close. It finished higher, so what happened next, it rallied right…em no..
    Careful piling your money into gold bulls promises…..

    1. Pedestrian

      Great chart Dday. What was broken however was the channel that might have given hope of a resumption of the climb. Notice on that chart the lower (imaginary) trend line has been violated. I keep saying that on a yearly chart the big bounce in 2016 is no more than a reversal candle. Let the bugs buy at will. Makes no difference to me. I just can’t stand all the crying and sobbing afterwards when they are wrong and looking for someone to blame other than themselves.

  6. Don

    Gary, I knew that if you continued to call for a bottom that we would eventually get a rally and look what has happened! I’ll bet you bought a ton of triple leveraged ETFs right on the bottom day too. Sometimes it just takes longer than what most are willing to endure. I remember all your bottom calls for gold in 2013, 2014 and 2015 and finally, you nailed it.

  9. Alexandru Popovici

    This Yearly Cycle of gold to prove left-translated, to top in early May (on month 5) as USX finds its YCL.
    No higher YCH, gold to touch 1300 but not above 1378.
    I am staying out of it.

    Treasuries will continue to move hand in hand w/ Gold.

  10. brianbreeze

    Gary, you told subscribers to buy JNUG at 23 months back. I don’t think you should be saying that bull markets corrects all mistakes until you see JNUG at 23, if ever…

    1. Gary Post author

      Even the people that bough JUNG at 23 and didn’t use the stop at 1275 and still going to make insane amounts of money over the next 5 years.

      Most traders are just emotionally incapable of understanding that bull markets correct all timing mistakes. It’s why most traders never make a dime off of a bull market.

  11. zkotpen

    Alex!

    G’day mate! You know, my Econometrics teacher was from Romania. I can still remember his face & accent. Lots & lots of statistics, amigo!

    Glad to see you’re liking my preferred count for gold — the triangle, capable of clobbering bulls and bears at any time — more likely when they are most giddy.

    Did you get my book recommendation a week or 2 ago?

    Trading in the Zone, by Mark Douglas.

    I think you will love it!

    Cheers ~ z

    1. nonew

      zkotpen,
      Ive been following your recent post here with great interest and have put this book on my reading list for 2017. Your approach to the market seems fresh.
      I just started putting together a toolbox this year for chart reading skills. Any insights advice, direction you have to getting a better handle on this game would be appreciated and valued.
      You mention the triangle here. Is there a way I can get a view of what you are looking at and are now expecting?

  12. Goild

    Good morning.

    Dday, thanks for the chart.
    Does it mean you are starting to change your position for a long one?

  13. Goild

    I would take the liberty of adding to Gary’s comment.
    Yes, as Gary I also believe there is a great potential on the upside and so I am backing my belief with hard earned money.
    However, if you are not savvy in trading you need to also think that you can lose your money, there are no guaranties here, by nobody, and the risk is high. You can buy jnug or nugt shares but need to decide how much you are willing to lose and set a hard and automatic stop loss. If you make money at first, you can be hook to later lose it and much more. This game is the toughest there is and consequently it can be the most satisfying. Understand you are on your own in the middle of cannibals, that have all the experience and time to eat you. Your worst enemy is yourself.

  15. brianbreeze

    Gary, given you think the US market will correct after January, do you think defense contractors would take a hit too given how Trump will spend more on the US military? Do you follow this sector?

    Thanks.

  16. Don

    Er, Gary, almost all leveraged equity ETFs are up over well over 100% since February ( with the exception of a few, like the Biotecks you were so hot on) so let’s back off with the ‘I told you so’ chest thumpinp just a little bit.

  17. GMoney

    We have a normal pullback today in the miners. I’ll try to pick up some NUGT in the mid 7’s over the next few days.

    1. Pedestrian

      Don’t overstay your welcome on it though. We have a severe sell-off on the Euro pending that could see a drop of as much as 15 to 20% in the opening months of the year. It should be memorable for the gold community as the dollar soars above expectations and gold gets eviscerated. There was no serious technical damage to either the DUST or JDST charts yesterday and both are still primed to go substantially higher in coming months which means NUGT is heading for a share-split and losses on that instrument could be significant for holders who cannot stomach selling at a loss and instead hold on for a recovery.

      Are you sure you want to buy in or just hoping for the best?

      I am buying short trades on metals incidentally. Putting my money where my mouth is as gold is set to continue its declines DESPITE oversold and extreme negative bearishess that is already present. On that note, it can’t be that bearish based on the heavy speculative buying of NUGT yesterday.

      I think the bugs are going to get their asses handed them on a platter one more time.

      1. GMoney

        Pedestrian: What you say is persuasive and I don’t dismiss it. However, I think the sector has bottomed and will move higher in 2017. There is one person who has an excellent track record on this sector via cycle analysis. His name is Eric Hadik. His predictions for the metals has been very accurate for 2016. You should Google his name and listen to his interviews. Gary also makes good points regarding extreme negative sentiment. Also, Gold can rise with the Dollar as has happened in the past.

        1. Pedestrian

          OK, thanks GMoney. I certainly have heard the name but have never followed Mr Hadik’s analysis. I will have a look.

          1. Pedestrian

            I just read on of his articles called “Dollar Decimation” and found it pretty interesting. One big problem with it though is that he was calling for a crash in the dollar to begin April 2015. But of course we all know what has happened since then and it has been anything but a dollar bust. On the contrary the dollar has soared against most expectations. If he had instead predicted a Euro crash beginning in April 2014 (that actually did happen) I would be a lot more impressed! Its kind of curious because I also follow Gann and Eric could not have been using Gann when making the dollar crash prediction if he was loyal to the charts. Anyway, I always enjoy a good piece of writing even if I disagree with it.

          2. GMoney

            Pedestrian: Hadik hasn’t been 100% accurate. Listen to some of his interviews from earlier this year and you’ll see he has been very accurate on the metals.

          3. Pedestrian

            Thanks again GMoney. I just plowed through another lot of his articles and agree some are pretty interesting. One in particular I just finished titled “Food Crisis”, I happen to agree with. I had just been mentioning this topic a few days back actually how a reversal in multi-decade low grain prices could spell shortages and crop failures and his insights on the cyclical nature of farming were spot on and timely. We do know for example that the planet is cooling. That is a fact that flies directly in the face of the climate change crowd but I won’t go there today. Anyway, sunspot activity is in sharp decline and with it will come grain crop failures as average temperatures fall. Agriculture should offer spectacular returns in the coming years but I only say that with a depressed feeling because it also means there will be a growing number of famines and serious political instability that ALWAYS accompanies food issues. Anyway, here is the link to that piece if you have not read it before:
            http://40yearcycle.com/pages/food-crises/

        2. dboz

          For the bears, things are never low enough or negative enough or down long enough. This is what happens after 4-5 years of a bear market when the down trend has been easy. They can’t see any upside. There are two strong up days in 2 months and it’s too bullish. It’s never too bearish, even at 96% bear. There have been a handful of up days in 4 months. Only gold goes down forever and ever and ever. At some distant point many moons from now it may rally once some mythical 980 or 820 is hit, and if we hit that, another 200 or so will surely need to drop off in order to bottom as things will be way too bullish at any slight elevation in price at that time. But to me, today is a little shaky and a pullback was needed for sure so not hitting the panic button after one down day but this move is more down than I want to see.. I never thought we were going to reverse and shoot to the moon in 4 days like the bears do.

          1. Pedestrian

            Got to have us bears Boz. How else will you make money when the cycle turns back up. Sorry but its just the nature of the trade. We have to be on opposite sides and throwing insults at one another or there would be no game to play!!!!

          2. jeffd5584

            Commodities are just a different ballgame (i.e. there is no central bank support for metals prices/it’s the exact opposite). Even mega-bull Gary talks incessantly about metals fixing and there are chat transcripts of I-banks playing “whack-a-mole” with the metals for years on end. THIS is the problem with being a stubborn bull in precious metals…It’s not all that different than being a perma-bear in stocks where bottoms last minutes/hours, while tops can go on for weeks/months. Basically, the central planners have created a kind of “embedded” or “skewed” payoff to betting against metals and for stocks…

  18. jeffd5584

    I’d love to see these cycles that Gary is referring to…Any cycle that is months off of its anticipated turn date would appear to be a broken cycle. The only worthwhile cycle that I’ve found for GDX shows a projected low into the middle-late March 2017.

  20. jeffd5584

    I still believe more people should familiarize themselves with options and use them to make these bets…limit the downside (especially in light of the middle of the night smashes, the binary events and other assorted stuff that will stop bulls out every few days)…

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