Metal portfolio

Despite what many of the trolls would like everyone to believe the metal portfolio is still up 50%. I don’t know anyone who would be unhappy with a 50% gain. Sure it’s not as good as +127% but still +50% isn’t anything to sneeze at.

We got stopped out when gold lost $1275 right after the election. Now I’m trying to get in at the bottom of this yearly cycle low. We’ve made a couple of tries, but gotten stopped out at basically break even twice now as this daily cycle is stretching longer than normal.

I’m waiting for the next potential setup to try again. It may come this week. Sentiment is extreme.
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72 thoughts on “Metal portfolio

  1. Option Trader

    My charting shows nice bullish set ups for GDX. I bought GDX calls Thursday into the close. Not sure how long this bullish move may last since resistance is not far away. But a small move at least should occur early this week.

  2. bginvestor

    I’d like to see a nice strong bounce.. If bounce is weak; that really tells me there’s a lotta downside potential…

      1. Pedestrian

        If god does come back to life we should get a bond rally to go along with it given the new correlation. Both gold and the 30 year are putting in similar sideways consolidations flags on the hourly charts. Neither are buys quite yet though depending on how you read them.

  3. Goild

    In a more practical matter, what would be the strategy to get rid of jung and nugt shares shall gold nosedive?
    Also any comment about the difference between nugt and jnug?
    Cheers!

    β€œwe were told over and over not to miss a trend…”

  4. Goild

    Gary,

    By the way, congratulations on your metal portfolio +50% gain in 2016!
    That is called beating the market !!!

  5. stockpick

    Gary,
    Are you refering to your metals portfolio performance with triple leveraged securities?

    Well your claim is misleading mainly because it should take into account the volatality by having these securities in the portfolio….meanining you VAR is high for any “typical” portfolio.

    But, gain is a gain and I congratulate you for the same.

    I am not in the camp that gold is in a bull market. Let us see what 207 brings.
    cheers!

    1. Pedestrian

      Check it on an hourly chart Vin. Its not a buy yet. That minor jump so far this morning (2:00 am NYT) is hardly impulsive and is almost perfectly within the flag channel. It could still go either way in other words although I agree odds favour a bounce once sentiment is this negative for such a long time. Technically though its still in a falling trend so I would not be jumping in until it shows a real pulse.

      1. Pedestrian

        Gee, my earlier post is hardly cold and gold has gone vertical another 7 dollars in the past hour. Today may yet get interesting.

  6. Anthonyo

    Gary,

    Gold rally to 1180-1200 for a few sessions into early Jan 2017 , then down (5th leg down) to 1045 or lower.

    What say you to this scenario?

    1. Gary Post author

      The intermediate cycle is too mature and sentiment is too bearish for another daily cycle down. If gold is going to make it to 1045 then it’s going to have a 2 month rally first then another leg down.

      I’m not in this camp though. I think gold completed it’s 8 year cycle low last year along with all the other commodities.

      1. tulip

        Gary,
        I can’t understand what you mean here..??
        8 yr cycle lo —so what next..???
        what camp r u in??

  7. TraderPete

    In PTA, silver has likely terminated T4, and is now likely commencing T5, which should terminate at new highs beyond $50.

  8. GMoney

    If Trump pisses off China in 2017 we could see some interesting market movements. I don’t think Trump can get in China’s face without getting a serious reaction.

    1. Pedestrian

      Watch Platinum closely here and do keep in mind it is considered a strategic commodity by the US Military. If it takes off (as I suspect its about to do) then it means we are heading for a conflict of some kind. The platinum market is minuscule so its a good barometer of sentiments on key industrial applications. This could actually be a much better bet than gold in the near future because it is so sensitive to speculative forces and rumors of war.

  9. Steffmeister

    hrrrmm … remember this ?

    Steffmeister

    December 22, 2016 at 11:17 pm

    I think I have a clear view of when Gold will turn around, I will hide the exact date with a greeting

    *** MERRY CHRISTMAS ***

    a close above 1141 would be nice πŸ™‚

  10. wanderer42

    For the record, I was a sub of SMT and after Gary’s oil and gold calls earlier this year I paid in.

    I guess it was just bad timing because after those two great calls all the cycles stopped working and now my account is down over 70% in 3 months.

    Not here to blame Gary but to caution that you need to do your own DD, everyone gets on a roll when that stops who knows.

    1. Pedestrian

      70% is quite a serious hit to an account. Did you not consider selling after the first 5 or 10% loss? In cases like this you have my sympathy because it is too easy to believe a loss will be recovered if only that imagined bounce would save the day.

      But otherwise there has to be a point at which you sell when losses keep coming and in your situation there were a couple reasonable exit points on those ETF’s that might have limited the damage. So I don’t think this is a case of due Diligence but rather trading error.

      No matter what ANYBODY says to do, it is you (and only you) who have the final call on when to place a buy or sell order and to me it was big mistake to let losses mount that high without taking action. There are strategies to counter draw downs though if you really think you must hold on. Hedging is one when you are in doubt. Maybe look into that next time since it can reduce your exposure to a trade that has soured.

      And just a side note: I don’t generally like the Old Turkey philosophy so I will just add to that you should NEVER employ that idea with leveraged ETF products. OT is for direct stock buys of companies you believe have good long term potential in a market that is rising. It does not work when we see these kinds of violent corrections.

      Its why I asked in the beginning of this post why you did not get the hell out after the first 5 or 10% loss.

  11. wanderer42

    One good trade was XLE calls expiring this week that Gary had as a burrito bet, bought the 69 for 3.50 as told to do so and they are going to pay off.

    Sadly that was just a burrito bet whereas the 70% loss was on “all in” positions so I guess I’m stuck along with other subs.

    The loss in miners is embarrassing to me personally and I am ashamed of it – too ashamed to even mention it to my accountant come filing time. How could I have been so foolish and naive?

    If I just hold on may be it will get better but every day I see a hope of glimmer for miners on this blog now to be followed by heavier and deeper losses. I keep being told that sentiment is extreme or cycles are stretched but nothing helps.

    1. Gary Post author

      Did you put more than 20-50% in metals trades? And if so why? They are volatile that’s why I stressed no more than 50%.

      Did you not use the stop at $1275? If not why?

  12. Goild

    There are too many ways to make money and too many ways to loose money in the SM. The human mind is fragile and our judgment is easily clouded by greed and fear. By the comments here one can realize that many of us have lost big bucks and as a result we are getting those big and deep scars.

    Establishing an infallible stop loss habit is key to successful trading. The problem of failing to exercise stop loss is that then it becomes a HABIT (hard to get rid of); a part of who one is trading and this is not consistent with successful trading.

    “Risk of ruin is a trader’s primary consideration… it increases disproportionally as the size of the bet rises.”

    1. Gary Post author

      I’ve seen many a trader destroy their portfolio with stops. In sideways choppy markets (which are the norm about 75% of the time) stops will just chew you up as there is no trend to ride. In this kind of environment traders “wait for confirmation” and about the time they think they have it the market reverses and their stop gets hit for a loss. Repeat this over and over in a choppy market and you have the recipe for capital destruction along with mental capital destruction.

      Folks there is no fool proof system. The only fool proof system is to trade in hindsight. Which a great many traders (especially trolls) like to do. Unfortunately in real life and in real time that strategy doesn’t work.

      All systems fail. The market breaks every trading plan eventually. Perfect case in point, cycles have become quite popular so the market is now in the process of stretching them to the point were it is now very difficult to spot bottoms. It used to be easy, I rarely ever missed a cycle low 5 years ago. Now I have to try to anticipate how many false bottoms to ignore before deciding which swing is the correct one. Cycles that used to bottom pretty dependably between day 20-25 now stretch 35-55 days.

      Then throw in a healthy dose of market manipulation and it becomes even harder.

      If we take away the manipulation on election night that aborted the stock market selloff we wouldn’t even be having this conversation right now. If stocks had been allowed to finish their intermediate decline, if they had been allowed to open limit down and then bottomed and turned naturally gold would have completed it’s yearly cycle low back in Oct. and already be making new highs by now.

      Everyone likes to pretend they saw this coming, but the reality is that no one anticipated the reversal on election night or just how sharp the sell off would be following that.

      1. Mac

        Sadly everything that you describe are mistakes that amateur traders make. If these problems are still plaguing you then you still don’t know how to trade. Stops are an absolute necessity but placement and execution is the difference between real traders and home gamers. Waiting for confirmation is also a requirement so you’re not just fishing trying to catch every bottom. I guarantee that your definition of confirmation and mine are completely different though. What it comes down to is that if you continue to use the techniques that you read in every single TA book on the market then you are going to fail.

      2. ras

        Broad, sweeping statements are not helpful. It is not practical to shoehorn everyone into the same rule base. Everyone has to decide for himself when to exit a trade. There is always a future trade, if one has capital.

        1. Mac

          Which sweeping statement doesn’t work for you? I’m not telling you how to determine your stops or how to define confirmation. What I am telling you is that having a defined exit is critical and without some form of confirmation you’re just trying to pick a bottom.

  13. Gary Post author

    Watching bonds here. If the sell off continues then it’s no longer going to be because the market is expecting better economic times. It will be from fear that the bond market is in trouble.

    That will have a very different effect on all markets if the driver for bond selling transitions to one based on fear, rather than an expectation for a stronger economy.

      1. Gary Post author

        “That will have a very different effect on all markets if the driver for bond selling transitions to one based on fear, rather than an expectation for a stronger economy.”

  14. wanderer42

    Thanks for taking time to respond Gary, I do appreciate that.

    I had a 95% allocation and I’ll explain why: I got caught up in the emotions. It seemed like a sure thing at the time given all the parameters and analysis in front of me. Was it a mistake? Yes.

    As far as the stop goes, you answered that part here. I was told stops were not good because it was the beginning of a bull market and the over shoots would stop me out before the big move.

    I don’t ever recall you saying specifically to close the position once gold traded under 1275 but perhaps you did and I simply missed it.

    What I do recall is that you said gold was headed lower but then to not really worry about it because it would be headed much higher in the baby bull. I think those two things kept me hanging on and not putting a stop in place.

    I think what would be helpful is to having entries / exits for trades in a widget on the side bar. Just a thought.

    Another thing I noticed was sometimes the tone can get really condescending towards investors. A lot of times it seems like the position was justified by “number of people freaking out on the blog”. I understand sentiment gauges but deriding folks that are essentially just following what you say…it hurts…especially when sitting on big losses.

    It also hurts that a lot of the technical and wave analysis is written off as always garbage, some times it works too and like you said there is no fool proof system. Maybe combining some of the technical and wave analysis into your own cycle work would be beneficial too?

    1. vin

      Well Man, what can I say except that I am sorry for your loss and I hope you recover. Speculating trends is a game. It is not really investing.

      Just like you I did lose more than I had planned to, following the advise on this forum. A while ago I took charge and I decided to short gold/golds, long the SM and the dollar. Did well and closed all the positions at the right time when the experts here started to use buts and ifs.

      Then after a while I bought jnug. So far I haven’t done that well with it but I plan to keep it. I will sell it when the experts here become sure that gold is about to shoot up.

      What is my logic? In fact there isn’t any. See my post below. The contrarian approach is not the only indicator I follow. However it is an important one.

  15. dboz

    Until the Chinese stop buying BITCOIN and move back into GOLD and SILVER we just seem to be getting the usual CRIMEX beat downs that never end. The US market is not buying gold or silver and they probably won’t while the markets remain calm. I do agree though, if the bond market starts to accelerate its implosion, then real fear could start to set in and things could get interesting. Today was another fizzle out.

  16. TennisDave

    If bonds implode new foreign players will jump in long to get the yield and drive the dollar even higher.

  17. TennisDave

    Gold is just a hassle for investment. Where store and protect ?? And the paper markets are just a manipulated joke.

  18. Goild

    look2525 had a nice approach: he sees channels everywhere,
    So I am exploiting that view and getting profits day trading.
    Now I am at 3 1/2 NUGT lots, but looking forward to 5 lots.
    Can come ahead if NUGT falls to $5.00 after hedging with day trading.

    Pedestrian thanks for commenting about not playing old turkey with leveraged funds. I will remain very careful.

    Good trading to all.

  19. Dreamer

    Gary, if gold completed it’s 8 year cycle low last year, would you expect the miners to lead the price of the metal.

  20. Goild

    This is getting nice, people are jumping into the bandwagon, the more people the better. The party lies ahead and a lot of people do not like to miss it. The musicians are just tuning their instruments.
    You can hear the waiters arranging the glasses.
    The old turkeys are already sleeping in the bandwagon.

  21. GMoney

    Eric Hadick, who does some very good cycles work, has been very accurate on Gold in 2016. He said the first half of 2016 would be sharply higher for the metals followed by a secondary low late in the 4th quarter. If he is right then we have likely seen the secondary low and should see higher metals prices from this point on.

  22. dboz

    I have been buying from last week. Mostly JNUG. Liking the action. Took a couple more slices of the action today. Still have some powder in case we dip, not sure we will. Should have bought more this AM but was skeptical. Time will tell. Tough to believe a turn could be occurring after the last 3 months of pain trade.

  23. dboz

    XAD and Copper are tanking. We can’t be in economic growth mode if those two are in significant decline. Markets are going to start to smell blood in the water and the bears are going to be coming out of hibernation IMO.

    1. Alexandru Popovici

      USD to fall big now (but its YCH, higher high to come later through early March).
      This fall will opportunity to buy USDJPY arround 111.

      1. daverobson

        Hi Alex,

        So you think YCH in USD will be in early March? I think it will be in late April/early May…. gold will retest new lows in May/June. Why you think early March?

        Thanks

  24. Pedestrian

    Gold could soon be confiscated from travelers entering Europe if they are suspicious according to a new proposal to be put before the EU. This probably means you should have documentation or receipts if you are carrying gold as gifts for the family or for investment reasons. Interesting that this law is coming now as the Euro has been falling so hard with gold expected to be rising in that currency should the trend continue. No doubt there will be a lot of gold purchases in the future to be liberated from European tourists who have traveled abroad and brought back metals instead of Euro in their change purses. You really have to think twice these days about getting on a plane with precious metals jewelry or coins since customs officials will likely be quick to confiscate whenever the amount seems more than usual. It is all so subjective though. What amount of gold is considered suspicious?
    http://uk.reuters.com/article/uk-eu-security-financing-idUKKBN14A17P

    1. vin

      And, you thought it was going to be easy. But, worry not. We the ordinary folks don’t have any gold, not even the so called “gold bugs”. Really! How many people do you know who have real gold.

      We believe in jnug, nugt and gold futures. In other words, head we lose, and tail we get wiped out. Welcome to the new world order. Europeans are not alone, just watch what the Chinese and the Japanese government going to do?

    1. Pedestrian

      Take note that the HUI, GLD, GDX. GDXJ and XAU as a few examples are all still under their 20 day moving averages. As long as they cannot break above there isn’t a good reason to get excited about the sector despite the oversold and extreme sentiment levels. You just have to wait to pick the moment and not feel rushed into buying prematurely no matter what the gold bugs are blathering on about (as they usually do).

      1. Steffmeister

        Disagree, the low is in ! Bought JNUG at 3,97-4.20 the 19-20th Dec, so far so good πŸ™‚ looking at various dma is conventional/amateurish stuff imo.

        Seasons is the thing, we just had winter solstice with a low in Gold. Now I am looking forward to a high at summer solstice. The sun has been around for quite a while, I am puzzled that traders hasn’t picked it up yet.

        1. Pedestrian

          If you got the exact bottom then congratulations. I can’t say if you are right or wrong. I expect a bounce is not far off though. But then again I have been saying that for two weeks already and its still not here.

          1. Pedestrian

            So I just checked gold and Yen and neither have broken out. This bear is still turned on and 1125 gold looks a lot more likely than another shot at 1150. I will wait.

            JNUG can still get cheaper yet and this year is not over yet.

          2. dboz

            At some point you just have to take the chance and go for it. There is no sure thing. While you can hope to get in lower it could also just keep gapping up and not come back. I missed a huge chunk of the AG run earlier this year because of that. As to the Yen, it matters until it doesn’t. I know you expect the dollar to keep rising, I do not. The USDJPY could go to 106-107 quickly, just like it went up. All we need is one good Chinese overnight gold run up of 30-40 bucks and we could be off and running. I keep an open mind to all possible outcomes.

  25. Goild

    Miners are doing at least a bounce; reasons:

    1) it reached about the early in the year support
    2) that support coincided with oil’s and SM low sand so it was an extreme
    3) sentiment is greedy
    4) TIP and TNX have reversed
    5) price is saying it is going up

  26. crawfordnews

    Gold will bounce a little here. But I am not excited about gold, not in
    the slightest…. I see more trouble for gold coming. At least that is
    what charts are saying, and we are below the 200 and 50 EMA averages.

  27. vin

    jnug @4.78. My $4.65 position is doing well. As I said I plan to sell it at a higher price than I bought it at. At $3.78 it bugged me a bit but I was sure that I wasn’t going to lose to this one. I ain’t going to let this sucker go away without milking it. I am all set. Tomorrow should be another good day. I guess time to buy more gold.

    1. vin

      Just for the record I was short when the experts here were suggesting that any time to enter is a good time. I only purchased it when the experts became iffy. I will most probably sell it when the experts tell us that it is a sure bet to buy gold. It is as simple as that. And, I guess my chancing of making money are more than 50% since the experts here have made more than 50% wrong predictions, in fact significantly more than 50%.

    1. vin

      Thanks Man! But, remember that jnug is a junior mining play. It is not only leveraged 3X, there is a hidden leverage of junior mining companies as well. If gold were to go up, jnug will perform better than nugt. Vice versa if gold was to go down, jnug will be wiped out faster.

      How have you been doing? Making money?

  28. Goild

    Vin,

    Yes, I am making money day trading as to hedge in case miners go south. NUGT is rising and so I am making money there too. Though I am really considering riding NUGT for the long term. Of course there might be clear times to sell and then buy again, though what I see is that losses can be trivial, but gains have the potential to be splendid. So I am not too excited about $10K or $20K gains, I am aiming at $100K’s. There is a chance for it and I do not want to miss it. It may take five-ten years but, hey, there is also a lot of money to be made on the side day trading. I do not see any other great deal around or going elsewhere.

    Some guy was asking what would be jnug worth if gold reaches $3000. What about $2000 which is not unrealistic under the proper conditions?

    1. vin

      You are right. But, remember that 3X dailies are not meant for long terms. Of-course if the market goes up without any major correction then one can make a plenty. However, maths is quite different when there are ups and downs, particularly if downturns are severe. Simply put, theoretically one can lose money in 3X when the underline market actually goes up.

      For long run consider gdx or gdxj. If gold prices do shoot up gdxj will do wonders. In fact I feel that there isn’t much risk in gdx at this point. If you like leverage, you can use margin. gdx and gdxj are marginable while jnung and nugd are not, properly so.

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