The dumb money confidence level has now reached a rare level of euphoria. Retail traders are at 80% bulls. Retail traders are always on the wrong side of the market at turning points.

This kind of complacency almost never ends well when the profit taking event begins.

Gold on the other hand is seeing more bearishness now than at last years bottom, yet gold and miners are still holding well above those lows.

The contrarian trade is getting better and better. Keep in mind I would never short stocks, but no way I want to chase with retail traders at 80% bulls.

Gold on the other hand is building the fuel for a very powerful second leg up once the yearly cycle low is complete. Virtually no one believes in the bull anymore. Remember the time to buy is when no one wants it, and the time to sell is when everyone has to have it.

Watch the volume on the triple leveraged funds next week. We will probably get a stop run just like last year and that should allow big money to accumulate their final positions before the cycle bottoms and we turn back up. A couple of huge volume days on NUGT and JNUG should signal the bottom.

Heck if you can’t be a contrarian now, then you’re never going to be one. 🙂

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81 thoughts on “TOO MANY BULLS

  1. wazcam

    Silver looking healthier I would watch for that to make a move first…Gold might not have bottomed truly yet so barring an almost vertical ascent we may lag around here for a week or so more while a pattern builds or finishes out to support the move higher.

    Will it last or will it just reverse course and come back down…time will tell…Buy the weakness sell the strength…you know the big fish will.

    1. Gary Post author

      I’m not calling the exact bottom yet, just that we are close. It’s going to be time to grab ones balls and make a contrarian trade, very soon.

      Just don’t short the stock market.

  2. tulip

    time for a video…
    why couldn’t you have simply told us to buy after the fed meeting..?????
    simple… u sound wobbly.

  3. Markab

    Despite MASSIVE gains in the stock market over the past 8 years, I have yet to see the level of euphoria that I did in past peaks. In fact, many mainstream outlets are talking about how high valuations are (which they are), comparing it with the 2000 bubble. Logically, the stock market should have fallen into a bear market years ago. But didn’t. It really is the most hated, longest-lasting rally ever. And I doubt it will reverse anytime soon. This is their Frankenstein. The S&P is now a political number to parade around to show the masses how great their economic policies are. No way this sucker is going down.

    Spot gold has consistently breached important technical levels on the downside with no resistance or bounce over the last five months. I really don’t think there will be much resistance when it falls below the lows from late last year/early this year. The miners are in better shape, but that is probably simply the blowoff from the rest of the stock market.

    I was incredibly right about the US housing market in 2005, selling my California house and pocketing the money. I’ve been incredibly wrong about the stock market and gold since 2009. And is has been relentless. I doubt there would even be a stock market allowed (the government would ban drops) if the losses in it were anywhere near as ubiquitous and severe as they have been in gold.

    1. Gary Post author

      I doubt stocks are going down too. But they are too extended right now to chase and dumb money is too overconfident. That usually leads to a profit taking event.

        1. Gary Post author

          I do think stocks will be a good buy at the next DCL.

          Remember for most of the last 16 years stocks, gold and oil have gone up together. They can do it again.

          1. ras

            May be. We will know when we get there. All momentum indicators of SM look healthy as of today, even though price looks stretched. But, rut and SVXY display a tired look. No concern about energy complex either. They may pull back with SM and power up again. I am deeply troubled by the waterfall decline in the bellwether AEM. It is sinking like a rock and the relative disposition of mas: 20,50,100,200 with respect to price is the exact opposite of what we saw in January. Heroics are out of place in disciplined trading. I will leave the pm arena to more talented folks until I see a buy signal on AEM and make entry a bit later. I have never seen a major move in pms without the participation of AEM. In the meanwhile, one can look for opportunities wherever one can find them. Cheers.

          2. Gary Post author

            Actually some of the underlying breadth is not painting the same rosy picture. Yesterday stocks rallied to new highs on negative breadth. The last time that happened was in March of 2000.

            Even though the S&P is making new highs less than 70% of all stocks in the S&P are above their 200 DMA.

      1. gent25

        I know exactly when the market is going down… after the FOMC and before the electoral college vote.

        1. Paul

          yeah right? telling the market what to do is a dangerous game… fortune tellers are con’s… even con’s are right some of the time… second guessing is just as dangerous… commit to expectation and loss money based on expectations… when you have expectations… emotions are involved… which to me means… you are not following Price Action… Price action with or without charts does not lie… charts are a secondary tool as Gary has stated before… if I am not mistaken- take care… but it is mistake to be invested by expectations… big money tear’s people accounts by that… nothing is predicable… Wall Street big money is designed to Steal the Retail/Rookie/Emotion/Expectation/Forecasters to apart… put no one up on Pedestal… and take off the rose colored glasses… An old saying on Wall Street… about news… and other events… if everyone knows about it is not worth knowing… Wall Street is trying to give expectations to Retail/Rookie/Emotion investors… – p

    2. vin

      I agree Markab. How can market really go down substantially when so much money is sitting on the sideline? And, I doubt if gold can go up substantially when 10/30 years treasury yields are rocketing up?

  4. goldilocks

    maybe a slight drift to 18500 in the Dow (which is not that big of deal) for a few weeks or a month, then continued drift up to 20000

  5. GMoney

    I agree with you Gary. I think this is a Blow-off top that signals the end of the bull market that began in 2009. I lived thru the 2000 & 2007 crashes and the euphoria at the end of those runs is similar to now. Also, too many people think Trump is Houdini and will instantly change the economic condition of the country. I don’t think the Republicans in the House will let Trump spend money on infrastructure like a drunken liberal. Many Republicans in the House want a balanced budget. Trump is walking into a mess. 20+ trillion in debt, 330,000 people per month enrolling in social security, medicare & SSDI, a hollowed out manufacturing base (if there is one left at all), and a strengthening Dollar that makes it uneconomic to bring jobs back to the USA. This is not Reagan in 1980. Reality will set in early in 2017.

  6. 1622

    Back to the future (2015). Fed meeting next week will signal more aggressive tightening in 2017 (along with at least a 25 pt raise now) and market will react negatively. So many reasons for the Fed to adopt more hawkish posture going forward. Market has Dec rate hike (25 pt) baked in but Fed will surprise, perhaps with more now AND/OR with signaling more and faster in 2017. Get out of SM longs before Fed meeting, and stay away from PMs. Buying opportunities for both coming up after post-Fed dips.

  7. GMoney

    One more thing, Trump was out today bashing China accusing them of currency manipulation – I think China’s patience is running thin with these accusations as well as with the US Dollar and all the bullshit associated with it. If China stopped its exports to the USA for one month our country would come to a halt. The shelves at Walmart, Home Depot, Lowes etc would be 80% bare. GM, Ford & Chrysler assembly lines would stop – so many of their parts are made in China – at least 50% or more. My point is this, the USA is in no position to drive a hard bargain with China. We rely on them far more than they rely on us. The Chinese could put the fear of God in Trump by pulling the plug on the Dollar.

    1. vin

      “If China stopped its exports to the USA for one month ….” China will be in deeeep sheeet. There are many out there who will be more than happy to trade with the US for the conditions granted to China.

      Just watch how China sharpens up. Tooo much has been lost to China. We would love to see reversal of the damage done by the policies of Nixon/Dr. Kissinger.

      1. GMoney

        I do business with the Chinese and many of them well. You would be amazed at their manufacturing technology, work ethic, creativity and the variety of things they manufacture. The USA doesn’t manufacture jack shit anymore. It is that bad. All we export to China is US Dollars, scrap cardboard and scrap steel.

        1. vin

          “work ethic”! Are you serious? I have worked with them, as well. I worked with my foreign groups e.g. Japanese, Indians, pakistanis, Koreans, Japanese, Argentinians, Romanians, Turks and Brazilians. I enjoyed working with all of them except for the Chinese and pakistanis. Of-course every community consists of individualssome good and some not so good yet there is a common thread in each community. My first preference is Japanese without any question.

          But, I really don’t care to get involves with pakistanis and/or Chinese. btw at personal level I found that pakistanis were ok. work ethics? Above all, trust?

          It is about time America looks for alternatives. Only time well tell, but going by what Trump says he is a breath of fresh air.

          1. GMoney

            I have managed hundreds of American workers on the low end of the wage scale. They are the laziest, most dishonest, conniving and stupid workers on the planet. There is no way we can compete with the Chinese or any other Asian country. The only thing holding up this country is the Dollar.

          2. vin

            GMoney, there is probably some truth in what what you say about the American worker. But then it is not that simple. First, American strength is not at the lower end of the manufacturing realm. NO ONE comes close to American innovation, not even India, Germany and/or Japan. In part it is due of liberal American culture and social setup. And, #2 the more important point is the trade with China is biased against American worker. There are many places out there who can provide better deals to America, particularly if Americans are encouraged to invest there as they were encouraged to invest in China, To name a few, Vietnam, Brazil, Thailand, Cambodia, Bangladesh, Philippine and even Mexico under certain conditions.

            America’s trade relations with China have been a disaster for America and a boon for China who treats its workers as slaves even today though in some areas things are improving

      2. GMoney

        If Trump tries to bully the Chinese he is going to get bitch slapped like he never has been before.

        1. vin

          I would say it is the other way around. China should worry. And, the market seems to support that view.

  8. vin

    Yes. Yes. It was Gary who taught me to be a contrarian. Now I remember.

    Even though I have covered all my speculative positions, my dumb money will short golds and long stocks on Monday. “Dumb money” has been so right so far. I will keep you informed, if time permits in details and as soon as I make a trade.

    Only “smart money” can invest in gold when the 10 year treasuries interest rates have increased by about 40%. And, only “smart money” can stay on sideline and not invest in the market when the new president seems to be positive for the economy and business while 100s of billions have been pulled out the bond market.

  9. bginvestor

    Maybe I should take one for the team.. I’ll start investing in equities and the market is for sure to crash.. Sorry, disappointing day, but still have my finger on the trigger..

  10. vin

    Gary labu fipp flopped today. Are blotechs ready for a rise? Or, is it too early. What do your charts say?

  11. earthkitten

    Short the bond market. Yields going much higher.
    TMV is going to rocket much higher. Up over 3% today.

    1. vin

      Thanks earthkittten, I think I will buy it. At present it looks it is ready for a short retreat. If I am lucky and it does come down to around 21 I will buy it.

  12. chrisG

    To me, very simple assessment. If during this 2 weeks of huge SM run, anyone that did not make money from SM, or from steel stocks, bank stocks, or silver, or crude, etc you are lousy.

    And if u are lousy, don’t talk too loud.

  13. chrisG

    Regarding TLT bond sell off. Whether bubble really burst is a huge question. It has so far dropped to major LT support, trendline. If it convincingly breaks and stays below, then bubble burst. Now is not to time to short. It has came down too fast too quick.

    Fomc tis week have major implicationson major assets including gold, bond currencies. A word like will go slow on rates hike will reverse things very quickly.

  14. Paul

    Too many Bulls and too many people projected stuff into the future… a dangerous game… A rookies game… when emotion is involved… Big money loves you! Whatever happen to following Price Action? Is there anyone out there who follow price actions instead of just projecting ideas… I like Gary’s take on Sentiment… but I still need to see the price action… Gary seems to be able Separate the Two apart and remain somewhat Logical in what he is trying to present… Does anyone here do there own due Diligence and follow there own trading methods and stick with them? this I would like know… so far I seen more post of non-sense fortune tellers and sore loser who want to knit pick and blame Gary when they don’t do there own homework… who’s to blame??? p

  15. chrisG

    Yes price action is key. And frankly gold even at support is not showing positive price action.

    My money management dictates this attempt. I have taken profits on silver and already bought some back. Also took great profits on steel and decided to buy some gold since there are divergences and fifty fifty chance of bottoming soon.

    Next week will be taking another great profit on my oil stocks, but those profits will again be used as gold buffers. Ain’t buying any more PM on weakness. If PM still doesn’t reverse soon, am going to cut. All these profits from steel silver oil is comfortable enough to ride gold weakness.

    The potential for gains in PM is really huge if they reverse soon. Money management. Buy low sell high guys. If you have profits, could do this. If gold reversed, I will buy more higher, and then sell higher 😉

    All these PM play is becos it hasn’t broke important support yet. Once it breaks and

  16. chrisG

    You made a lot of money recently DDay? Long any steel? Long any oil? Long big some , or made some Hamburger, or bean sprouts amount?

    Caught the big bounce in silver? Or, just bash for the sake of bashing. If u can’t see the potential in gold over here, u have not much skills. Downsides limited. Use some risk capital to try, if it works, can average up. If it doesn’t, cut with small losses.

  17. chrisG

    Ok, DDay. Very good call on market. Solid calls. He is a fine analyst confirm. But sadly, just an analyst. A classical loves to comment, theory a lot, but dare not take position. Cash here, cash there. Says gold silver going to tank, but dare not short! Great guy. More should learn from him . Good job

  18. cdntrader

    But how low will gold get before this yearly cycle low comes in..maybe we go all the way down to 1080 or 1040 or even 950..maybe gold drops another 50 dollars after the fomc meeting. Everyone seems to think gold will bottom after this meeting but maybe the opposite will happen.
    The fact is that gold and the miners are way below the 200 day moving average which should not happen in a bull market. So its looking more and more like earlier this year we had a very strong bear market rally.

    1. bginvestor

      cdntrader.. look at the charts.. For GDX miners, almost right at the 61.8 % fib level and at strong support..

      This has meaning/substance.. good luck

  19. ocram

    Dear Gary,
    I commented last year at the same period (middle of dicember) when my gold and silver stocks were MASSACRATED .
    You told me not to sell them,I did listen to you and I had recovered half of my losses until june,I never imagined to recover so many losses in such a short period of time.
    But now ,unbeleviably,we are here again in danger of the resuming of the bear market!!!!!
    Miners have hold well until now but after the down break of friday I fear that they will make a new low.
    I will not believe that the same move that happened last year will repeate even this time,even if I saw it with my own eyes,it would be unreal and surreal.
    Now the question is: how far will this correction lasts? hoping,of course,that the forecasts of people like armstrong and dent will not materialize.
    It needs A LOT of courage to be a contrarian righ now 🙁

    1. Pedestrian

      Up until fairly recently Armstrong’s prediction on gold was actually bullish as indicated by his Socrates system which projected a bullish trend on the daily, weekly and monthly levels. When I say recently I am talking about September this year (three months back). You can read it below.

      So Marty was not calling for anything under 1000 dollars as being probable but merely possible if his bearish reversals were hit. Those bearish reversals were hit though and gold has collapsed in price since falling below 1275 or thereabouts.

      As is usually the case, almost every other gold prognosticator who reads him was making the same predictions for a fall rally but they seem to have neglected to pay attention to the potential downside breaks Martin noted. One example is Larry Edelson who I believe once worked with Marty and has since claimed to have developed his own proprietary a system he calls AI.

      The system failed spectacularly where gold is concerned and one is left wondering if Larry really has such a method or he just copies Martin’s work. I really have no idea but the convincing looking chart Larry was sporting two months back based on AI has broken down completely and looks impossible in retrospect.

      Honestly, don’t know if either of their methods are functioning properly. I have made my own calls (bearish) based on different technicals and they clearly identified the negative patterns many months ago. I said so on this site posting under a different moniker but as usual nobody cared to listen or look at the facts.

      Whatever man. The bulls of all seasons get what they deserve for buying based on emotion and ignoring strong technical evidence.


    2. ras

      Folks tend to throw around a plethora of unhelpful verbiage : be daring, be a contrarian, limited risk, etc. for emotional relief. These are not very germane to disciplined trading. What is needed is patience, patience to wait until a trend begins to take shape and then ride it as best as you can until the trend begins to show signs of reversal using your favourite tools, which could be different for different folks. Of course, you will pay a bit more than bottom fishers with premature entry and experiencing needless draw downs causing needless stress. Those who have been on the wrong side of price for the last 4 months know this only too well. There is absolutely no need for heroics. Of course, if you are running an SM letter, you need to be early to claim bragging rights, if the call pans out.

      The current gap between price and 50 ma is twice as large as it was in January. So, a quick upside resurgence in pms of the same kind that we saw prior to August is unlikely. For critical mas to get into proper alignment with price, what would be needed is a strong bounce and sideways movement for a while. During this process, some leading stocks which tend to move ahead of the pack are likely to give premonition of the impending change.

      Just concentrate on riding a trend in place and make each trading move count. Profits automatically accumulate. There is no need for bragging and euphoria. You have earned it through your patience and discipline. Put it to good use.

  20. Surf City

    Gary, I also believe a YCL is very near in Gold and that is my preferred scenario. BUT, Gold has lost the Fib 62% level so the Fib 76% level now becomes critical, IMO. Any sustained drop below that level would be bearish, IMO. A drop that tests or moves below that level will require a strong bounce to cause a short covering rally that often ignites the move out of an IC Low.

    My weekend post covers both Bull and Bear Cycle scenarios for Gold and the PM Complex.

  21. Markab

    I guess I just have a hard time understanding how gold rallies 30% and that is made to be some huge deal while US equities have rallied 250% without any official correction in over five years and pretty much everybody still sees value there. The stock market is hugely overvalued based on any historical measure, yet keeps going up. Whatever happened to the moniker “buy when there is blood in the streets, sell when valuations are high and attitude is complacent.” Obviously the stock market will never be allowed to find true valuation, and based on that model, there is no reason whatsoever we couldn’t have $400 gold too.

  22. Pedestrian

    I could kick myself laughing at the gold retards who were bragging about 10 baggers just a few months ago and then foolishly (greedily actually) held on all the way back down and let all that money slip through their twisted fingers. Reading other sites (like KER) you can almost feel them seething with anger at being caught off guard and being dead wrong on metals once again. Why is it people just never seem to learn to take some profit off the table? All they had to do in this case was sell enough to make sure the original portfolio was back at full strength and then let the rest of the shares ride since they were coming free anyway. Example: you bought 1000 shares of XYZ for 2.50 but then it doubled to 5 dollars. So you sold half to get your original 2500 dollars back and the others were gravy for one fine day when gold actually performs again. And that was a risk free with no headaches and zero possibility of any losses while you redeployed to something else that was moving. But no. The idiot bugs have to be all-in all the time and hold come hell or high water because they are so idiotically self righteous about this metal . No wonder the commercials bet so heavily against you them.

    1. johnyjohnyyespapa

      “…The idiot bugs have to be all-in all the time and hold come hell or high water..” what makes you think gold bugs bet everything in one basket?

    2. ras

      Great post, ped. It is a lot easier to follow a guru than thinking for oneself. If pms were to do a complete retrace ( I have no crystal ball in that respect), then what we have seen so far will look like a a picnic. Stock market can be an extremely dangerous place without proper risk management.

  23. barney

    This is the SM bull market of your life.
    Saying tha,t at the moment trading account (30% of total):

    100% loaded Faz
    Stopped out of 3x short SM, will get back in next week.
    now 150% loaded nugt etc, gold, silver etc
    25% loaded 3x Vix

    If stopped out will re-establish all positions at lower level: the banker will not win this one.

    Rest of account (70%) long core stocks (old turkey as stated on here).

    Turning points always hardest points to trade, always.

    Thanks again to Gary for allowing this platform for all trading ideas.

  24. Markab

    Wow, Surf City, that chart of gold looks absolutely horrible. An obvious secular bear market since 2011. Wonder if we get below $1000 before the end of the year?

    1. Surf City

      I would argue that the jury is still out on the “Secular” Bear front. Rather, the chart shows to me that we have been in a very clear “Cyclical” Bear bear since 2011 and that a Secular Bull is still very much a possibility.

      That may all change over the next week or so if Price moves below $1120 without any kind of significant bounce. If the Secular Bull is alive, we should bounce hard out of a YCL very soon and make new highs sometime before the end of 2017. Otherwise we are likely headed below 1000. One positive sign over the past month is that selling volume has been moving lower over the past month in Gold, Silver and the Miners as price has moved lower.

      1. Pedestrian

        That is a really interesting chart you have posted there Surf but I must reject it because that flag is just far too extended relative to the prior rise to be valid by my method of charting. At what point do you ask yourself if what you are looking at is a plain vanilla bear market versus a mere multi year bear flag?

        This is how we delude ourselves sometimes when we want to believe something other than what should be obvious. And so we sometimes let our mind plays tricks with our eyes. I am betting wee have all had that experience when a bias gets in the way of fairly clear chart pattern.

        The argument about whether gold is now in a secular versus cyclical bear market is also over as far as I can tell. I had posted a lengthy argument on that subject a couple weeks back with some equally compelling charts that Gary deleted for some odd reason. I suppose he does not want other readers to make the connection but it is an important one.

        In one of those posts I showed that the time period elapsed between the two major gold peaks of the last three decades comes out to almost a perfect Pi expressed in years. That number is 31.4 in this case (if you have forgotten Pi is 3.14159) and that is the time interval from the top in 1980 peak to the recent top in 2011. You would need to plug in the exact dates to get the figure.

        To me that is the definitive answer on the question of whether gold is currently in a secular bull or bear market. Pi intervals of that magnitude are quite significant and so there is close to zero likelihood gold will suddenly stage a repeat performance of its 2011 peak.

        So we should not be expecting another recurrence of a similar peak for nearly 30 more years in the future. Knowing that will save you a lot of wasted time and money. It means each gold rally should be played as though this is indeed a secular bear market and sold once they peak. Most of the money will be made on the short side for years and years to come.

        Check this for yourself and calculate the dates if you doubt me. To my knowledge, Martin Armstrong himself has never written a post on this feature of gold or the long term gold charts. I came across it by just plugging in numbers and looking for relationships using an online date calculator that gives time periods between any two days.

        Those periods are expressed in a variety of ways from hours, days, weeks, months and years which allows you to quickly locate Pi relationships and Fibs. Maybe a bit off the beaten track but it has sealed in my mind the long term outlook for metals and secondarily confirmed that we are indeed going to see a very long period of deflation and low growth globally.

        So while others want to continue with a debate that is circular and goes pretty much nowhere I am personally confidant in already having the answer that will lead to good tradeable results for years to come by keeping me on the correct side of the larger secular trend.

        Harry Dent will be the one whose prediction plays out closest to the final number when the REAL bottom arrives. I have a great chart identifying that bottom region/pattern and a timing band as well but won’t post it today.

        Thanks for your chart though. An interesting take.

        1. Surf City

          Take a look at the Bull Flags in the first chart on my Bond Post below.

          Specifically look at the Bull Flags from 2011 to mid-2013 and from 2014 to mid-2015. Both of these flags seem to violate the rules you have sited from the Gold chart above, especially the 2011 to mid-2013 period. Many bond investors likely thought the secular bond bull was over in mid-2013 based on that chart pattern.

          1. Pedestrian

            Sorry Surf, I don’t see any comparison. A two year flag versus a 17 year flag is a pretty big difference.

    2. Surf City

      Also note that Price has not yet breached my parallel blue uptrend channel out of the 2000 low. Divergences on the MACD and RSI since 2013 are holding (barely) for now but all this may change over the next week or two.

      1. Goild


        In the long term equities’ upward movement is about an straight line.
        This would add support to the channel theory.
        Same story as when oil was down. People said sooner or later oil will go up again.
        Gold will go up too. The 2 year yield curve has turned higher, once TIP bottoms, then gold will reverse, hopefully.

        By the way I would appreciate help with what SM stands for?

  25. chrisG

    Saudi decides to cut more after non OPEC deal. Looks like Alex short oil is going to run into troubles.

  26. chrisG

    Surf, we are on the same page regarding gold and PMs. Any further weakness on gold will not look good on the resume. And if so, silver will play catch up and plunge over $1 in a day. Conversely if support holds, gold bounce will play catch up to silver. .

  27. Emptyness

    Oh guys, where did you loose your brains ?
    Fundamentally it’s absolutely stupid to say “Most of the money will be made on the short side for years and years to come. ”
    You need increasing real rates for your scenario. Trump is going to increase inflation. At the same time the FED rates can’t increase so much, because of the debt all over the world, especially in US. Therefore we will get decreasing real rates in 2017. That’s why Gold has to rise again. 2017 … 2018 ….

    1. Pedestrian

      Fundamentally stupid eh?

      That’s a new one. Actually made me laugh. But I can’t agree with what you wrote because your comments are full of assumptions about what Trump may or may not do, how much inflation is coming (if any) and what the exact course of future rate increases will be.

      How can you possibly therefore arrive at what real rates might be?

  28. Goild


    TIP provides info about real rates. TIP and Gold have been going together since at least 2013.
    So for gold to go up currently we need TIP going up and so real rates. So this is at odds with your comment:
    :Therefore we will get decreasing real rates in 2017. That’s why Gold has to rise again. 2017 … 2018 ….”

    I agree that interest rates cannot go up too much; as just the interest in 20 trillion would be substantial on the US yearly revenue.

Comments are closed.