83 thoughts on “CHART OF THE DAY – 38% FIB REACHED”

  1. ARends

    US Financial Markets – Alarm Bells are Ringing interesting confirmation of huge events coming looking at very interesting charts.
    http://www.acting-man.com/?p=48374
    When discussing the outlook for so-called “risk assets”, i.e., mainly stocks and corporate bonds (particularly low-grade bonds) and their counterparts on the “safe haven” end of the spectrum (such as gold and government bonds with strong ratings), one has to consider different time frames and the indicators applicable to these time frames. Since Donald Trump’s election victory, there have been sizable moves in stocks, gold and treasury bonds, as the election result has strongly boosted certain market expectations.

    Conclusion

    The recent extreme in net speculative short positions in treasury futures is a warning sign for risk assets – while it is per se not a bullish indicator for bonds, it makes treasury notes and bonds very vulnerable to a sizable upside correction. This is also confirmed by a decline in the five day average of the DSI (daily sentiment index of futures traders), which stood at only 9.8% bulls in early January.

    Traders have so far largely ignored the quiet advance in treasuries and gold since mid December, which makes these rallies all the more intriguing. At the same time we see risk appetite indicators at or near record highs, while confidence regarding the trend in stock prices among the groups of traders most likely to be wrong is extremely high. Incidentally, the combined dollar-weighted net speculative long position in stock index futures is right at the upper end of its multi-year range as well.

    While stock market internals are more or less still neutral at this stage, such extremely one-sided speculator positioning (recall also recent NAAIM survey data) should not be ignored. If any unexpected fundamental news should emerge that throw doubt on the beliefs so widely held by market participants of late, a sizable surge in market volatility is likely to ensue.

  3. Steffmeister

    A correction here in Gold to retest mid Dec low, like I said before if we manage to set a higher low we are off to the races for x months.

    Stocks are going to hit a wall after Trumps inauguration, a MAJOR shift in various assetsclasses is about to happen. Early Feb is key 🙂

  5. ras

    Very insightful video. The longer $gold stays above 1200, the greater its chances for moving to higher fib levels.

  8. Gary Post author

    The big picture is complex due to the multiple interventions in almost all markets. Stocks and oil are due for a move into a yearly cycle low over the next 25-30 days. This should propel gold and precious metals into an intermediate cycle top. (gold may not break out to new highs during this intermediate cycle).

    The dollar should fall into an intermediate cycle low along with stocks.

    Then another intermediate trend reversal in all markets, probably before everyone is expecting it. ie. short intermediate cycles for most assets.

    I’ll go over all this in tonight’s report.

    1. tulip

      Gary,
      When you speak of ‘a new high’… can you be clear about
      what the ‘old’ number is… what time frame are we referring…??
      Becomes confusing.
      Thanks

  9. zkotpen

    I largely agree with Gary’s COTD — though I was somewhat looking for gold to hit the 100 day SMA before this daily cycle tops.

    So far, gold is holding above support on my 20 day SMA chart (the one I use to track the daily cycle). If said support holds, I’m stickin’ with the “one more push up” — if it breaks, I’m re-evaluating. In the mean time, no money at risk in the gold market!

    1. Gary Post author

      I think any move down right now would be a half cycle low, not a daily cycle low. Gold needs a pivot point to construct the cycle uptrend line. Plus there is no divergence on the daily oscillators yet. That often occurs at a daily cycle top.

      The euro and yen are coming out of ICL’s and it’s still very early in the first daily cycle. They should have 2-3 more weeks before their daily cycles top. Gold should follow and still have at least 2 more weeks before the daily cycle tops.

      1. Epiphany

        Fib targets, divergence in momentum oscillators, uptrend lines…etc….For someone who publicly dismisses the merits of traditional technical analysis you sure do rely on it quite a bit for your analysis. Don’t cycles work anymore or is all the “market manipulation” causing you to change your approach?

        1. MegaMind

          whats your take epi… I read you made some good gains early one… what should I expect here for miners

        2. Gary Post author

          I’ve said many times that my two main tools are cycles and sentiment. Then I look to technicals to see if they confirm the other two.

  10. Goild

    Good morning.

    It is difficult to read today. USD is up, and gold/miners about flat. As per a few days ago, miners will sink a bit to reflect USD +0.5% up if it stays so.

  12. Goild

    We gold/bugs may have a digression, a dip, if USD retraces yesterday’s drop to close with a green, equal length, candle. That candle formation often indicates a reversal.

  13. Goild

    Miners may drop till 8:00-8:30 AM and then we will have a chance to day trade them long for a nice day profit.

  14. bigglaze

    I don’t know if a drop is really in the cards yet. The VIX shot up this morning. A couple other things to consider are the fed’s beige book and Janet Yellen is speaking today, could stir up some nice chaos.

  15. HomerJ

    Let me get this, you’re saying that Gold is set to turn down, yet yesterday you told subs to buy GDX June 24 calls. Seriously? Why would you do that, do you NOT realize that options have time-sensitive decay? Were you just rolling the dice?

    1. WallStreetJesus

      It appears that was a good call to lighten up on silver today. I own platinum as well and it was a rather disappointing day.

  19. Goild

    Today is a slow/difficult day. Could not make/lose money day trading despite many attempts. So I should stop. It is good that miners are not affected by USD +0.3% so far today.
    Good trading to all.

    2. bginvestor

      I don’t understand how a person can use an “analyst” as a contrarian indicator. Makes no sense to me.

  24. Strike

    I have no predetermines opinion regarding Avi Gilburt, but he made a great point in his recent missive. He noted that both bulls and bears are anticipating a gold pullback now. (Gary also feels that a daily half cycle pullback is only a maybe. I agree.)
    When everyone is on one side of the boat, ……..
    Bullish IMO.

    http://news.goldseek.com/GoldSeek/1484751720.php

  25. Don

    Gary, you have pretty much ignored the biotechs lately. Are they still on for that ‘leading the market up’ parabolic move you were so adamant about several months back or could you possibly have gotten that wrong?

    1. Gary Post author

      I’ve been done with them ever since Trump starting beating on the sector.

      I’m not interested in either stocks or energy until the weekly charts oscillate back to oversold levels.

      1. Epiphany

        Because 99% of the guys on here overtrade. Even though Gary’s underlying message of holding through trends is one I agree with, his daily analyses stating “38% fib target reached” or a few days ago “initial thrust is over” does no one any good any helps perpetuate overtrading. I have no idea why Gary posts these daily wrapups with messages that are neither actionable or promote the sensible trading behavior. If the message is HOLD then just hold. Don’t write a stupid headline.

        1. rozelina17

          Epiphany thank you very much for the answer. I hold 3x miners since August (yes!). Yes I have gained back a small part of my losses…but I do not see any reason yet to sell. The trendline is upward so why bother with selling and buying everyday ?! Is it possible that the potential pullback is so deep that maybe it’s whorthwhile to sell now and buy cheaper ?!

          2. Epiphany

            You’ve held 3X miners long since the August top and now are considering selling in order to buy back cheaper? Wow….so listen, before make one more trade you need to understand that every trade requires a plan. You need to know where your bail points are both for losses and for gains. Put aside focusing on market analysis and direction for now and understand the planning side of the trade so that this never happens to you again. It’s ok to have a loss and we all do but you MUST keep losses minimal so that you can live to trade another day. Your mantra should be “preserve precious capital” above all else.

          1. rozelina17

            Victor hehehe somehow true…I see miners going down. You think I should just hold it and do nothing ? You cannot imagine how hard was it to see my account going down more than 70%, I almost lost ally my hope I would ever get my money back. But for some reason I never sold them…don’t really know why! Guess I could not accept the LOSS. Is it true that the company controlling the 3x miners could anytime buy back all the shares at current price and just give us back cash ? How possible is that and when that occurs usually ?

        3. ras

          This blog is a promotional site for Gary’s Market letter. Not all his missives are actionable. Likewise, for many other analysts. This blog is simply a sounding board. Every one needs to follow his own method and plan.

          2. Gary Post author

            Jeese I was just pointing out the possibility for a short term pullback. One doesn’t have to panic over a 2 or 3 day dip. It’s a buying opportunity.

            My God are all of you guys day traders?

      2. Goild

        rozelina17

        Several people here, Don, Gary, are bullish in the very short term.
        Miners have hit three times around $10.5-10.65 in the last days.
        USD appears wanting to go up.
        Would not be surprised of a bit of a retracement.
        The 5 lots are a lot, and today somehow I am down in mood. So that is why.
        Maybe is a mistake. Difficult to say.

  28. Goild

    Correction, several people ARE NOT bullish in the short term.
    Pedestrian sold yesterday.
    We had a streak of days with gold going up.
    So I took the risk of being out.

    1. Pedestrian

      Yes. Sold near the top yesterday and glad I did. My timing was good for a change (it isn’t always 🙂 that way I assure you). Just a little while back I got short with JDST at 19.05 and making out OK so far. I think I mentioned on the other thread that was my plan for today. Not sure how long I want to hold on for though. A buck a share is good but I think it can do better. Still assessing but as long as its making money I will stay in.

      1. Pedestrian

        Sold at 20.50 so doing not bad. It’s like a paycheck. Maybe play again tomorrow. Maybe not. I am not a fan of big political or Fed days since the swings get kind of unpredictable. I am following the platinum chart if anyone is curious because its leading gold right here and the trend will be down for a while by the looks of it.

        1. Pedestrian

          Anyone still paying attention to gold out there?

          OK, good. Gold was stopped out at the bottom of its rising trend channel as seen on the hourly chart. Funny enough I didn’t notice that until just a few minutes ago but it will be back on a buy shortly if that holds overnight. My plan is to get long again tomorrow morning should the trend have the energy to go another round.

          1. Pedestrian

            That is only for very short term trading of course. Hopefully anyone reading this appreciates my time scales. The conflict here is that on the DAILY chart (as opposed to the hourly which I mentioned above) both silver and gold are at, or near, their respective peaks and should trend down. Doesn’t mean you can’t strategically play both sides of course and that’s what I am doing here.

    2. Don

      No, I am NOT bullish on silver/gold or the miners short term. Scroll back and you will see that I sold most of my silver holdings this morning before the sell off. I am keeping my platinum assets and took out a position on crude oil today ( now slightly underwater).

  30. bginvestor

    What Epiphany has taught me (and I’m very grateful) is to buy support/sell resistance.. Not only is risk /reward typically most optimal, but it allows one to be in the market longer without getting stopped out.. this is key, and supports his comments about over trading..

    So, learn to draw the lines.. the important ones..

      2. Pedestrian

        Dearest Rozelina17,

        Please study just a little more before doing anymore trading or you will end up with roadkill for an account. You need to get this particular idea under your belt quickly as it is one of the essentials of technical trading. It is not really complicated after a bit of practice although it can be very nuanced and there is often plenty of debate about where price will (or will not) reverse. Any primer on the subject will get you started. I have a link that might help but don’t stop at one article and think you have it all figured out. I was pretty surprised to see your post. It never really occurred to me there was anyone on this site unfamiliar with the basics.
        http://www.investopedia.com/articles/technical/061801.asp

  35. jonsyl

    ho hum day again. Been that way for over a month on spx. Still think we’re days away from a top. Alex premature again yesterday with another short attempt, but this time finally may work out. Gold is anybody’s guess in here, but momentary rise in yen and drop in dxy yesterday all taken away. And Vix, well just can’t get erected, just no fear here as Trump will make America great again. Nothing to do but wait for indicators to show some direction.

  36. Don

    Gary, the dollar has kicked you in the teeth so many times that you must not have many left. The dollar is up a rip snorting full percent today . Maybe it will reverse back down over the next few days and your call for a lower greenback will prove to be correct.

    1. dboz

      Low volume move on the dollar, so this move up won’t last. All in reaction to grandma talking today with hopes of rate hikes back on the forefront. Dreaming and hoping. Dollar is heading down like Gary says.

    2. Gary Post author

      Don,
      It’s doing exactly what I said it would do. It should bounce off that support zone, but the bounce isn’t going to hold. The dollar is going to break that support.

  37. Albertarocks

    Gary, you just touched upon the single biggest mistake traders make in their entire lifetimes… and they make it over and over and over again. Even the most seasoned technical analysts forget the rules and make this same mistake too.

    You are bang on the money by saying “Price should spend long periods of time in overbought and very short periods of time in oversold.” Bingo!!!

    Here’s the error: Traders forget that the purpose of momentum indicators is to identify “oversold conditions if we’re in a bull market” or “overbought conditions if we’re in a bear market”. So what they do wrong is look at the RSI or stochastics while in a bull market and suddenly say “Holy shyte, it’s overbought. Time to bail out”. Nothing could be further from the truth.

    What I like to advise traders to do *once they are satisfied that they are in a bull market”, is to take a strip of paper and paste it in the overbought zones of every momentum indicator they have so they can’t even see the damned thing. Why are they looking up there anyway?… if they’re in a bull market they should *ONLY* be referring to momentum indicators to identify *oversold* conditions, not *overbought* conditions. They just can’t seem to wrap their heads around the notion that during a bull phase, they *want to* see momentum indicators in overbought territory… and for weeks on end if possible.

    For example… the stochastics on the weekly chart of the SPX has pretty much been bumping along in overbought territory for 8 straight years now. True enough, it did come down and touch “oversold” a few times but it only remained there for all of about 6 minutes each time… marking spectacular entry points. Which is exactly what it’s supposed to do.

      1. Albertarocks

        Thanks. I’m just trying to help innocent, enthusiastic investors avoid needless pain. They deserve success in my opinion, because they at least have the brains to know that gold and silver are the only places to be for years ahead.

  38. Goild

    Steffmeister,

    Thanks for the warning.
    So I just half the position to have only 2 1/2 lots.
    Indeed, we may have a dip here. Though hardly a retest of the December low.
    I think a NUGT channel between $10.65 and $8.65 may take place.
    Be careful with JDST!!!

  39. zbigkid

    Geez guys. All your posts on gold make me dizzy. Some are in, some are out, some do this on NUGT, some do that on miners. All gold is doing right now, is some much needed consolidation, after a fairly straight run up off its low. It’s not healthy to go straight up, without consolidating the gains, so the pullback today, and even a few more days sideways is totally what you want to see. It was overdue, so anyone making any big decisions here, other than maybe to buy on some dips, is truly wasting emotional energy, mental energy, and just way too spastic about whats transpiring. Take a chill pill or something, As Gary said gold is in a bull market. If you day trade it, you are going to lose money. Pure and simple. Even swing trading here is dumb. Buy it and ride it for at least the time periods Gary has talked about publicly. Or buy his subscription and let him do the worrying for you.

    1. ras

      Please… Recall that Gary was on the wrong side of price for 4 months. Following any analyst blindly is not the best option. Nobody gets it right all the time.

    2. Pedestrian

      Zbigkid, your post is the one that confuses me. What is really so wrong with short term trading? If you have forgotten the brief history of gold performance since August it was the guys who went long and held tight whose accounts were destroyed.

      Not the swing traders.

      Those guys are still in the game. And you know why? It’s because short term trading teaches you to be disciplined and to stay on top of your positions. Losses need to be contained quickly. Opportunities need to be taken with a cool head and a good appreciation for risk. That means it needs a commitment to focus on what you are buying or selling while allowing neither greed nor complacency to cloud up your thinking.

      You don’t get the luxury to sit in an easy-chair like a Turkey as your account runs on auto pilot. Shit, that’s a recipe for disaster if you ask me. And yes, I have done that before and discovered too many times that buy and hold just does not pay without taking into consideration the time frames and technical set ups.

      In any case, we do not yet have confirmation that gold has entered a new bull market.

      That statement might surprise you because most technicals and the guys that discuss them are on the same page. That is to say they are in agreement that gold is heading a lot higher from here but that first it must consolidate a little. I disagree vehemently.

      They are all wrong. What if I told you instead that we just hit a pothole in the road and gold was about to resume its seven month decline? Maybe you will listen to me. Probably not though so I won’t waste a lot of time trying to convince you. You should however note a couple features of the gold chart that cast doubt on the odds of a big bull market in the works.

      Do you recall Trumps election night? OK good. Now draw a line on the daily chart starting at the top of that spike-high peak so that it also hits the top of our January 17th peak. Now that you have established the angle of the top rail of the falling channel, carry that same angle line to the lower channel and notice its an almost perfect fit with the October and December lows.

      Funny that eh? You think maybe there was strong resistance there at that exact point? Well what you have just created is an almost ideal channel and now that it has been created it tells you the direction to follow for the next while.

      Now you know why I sold my longs Tuesday and how I managed to get almost the precise high in the process. I was giving gold bulls the benefit of the doubt though and preparing to add to positions if gold exceeded the upper rail on the daily with any significant push.

      It failed so I went short the next day (yesterday) and caught a second trade down that was over in just a few hours.

      So I guess I cannot understand why I so often see comments disparaging short term trades. Do people like me really need to apologize for watching the charts and trading what is on them? Especially when it is so obvious what is taking place?

      Just to make my point I would ask you to pull up a daily chart of Silver.

      Look at the period since August this year to present and tell me what you see.
      Price rises and falls like a damned clock.
      Tick-tock, tick-tock, tick-tock.
      Buy me…. sell me…. buy me….. sell me….. buy me….. sell me…….

      Could it be any easier to make money if you keep a cool head? I don’t think so. And chartists come up with the weirdest damn reasons why silver or gold should miraculously break out here or there and smash a pattern that has been in play for seven months and they just keep being wrong.

      A guy could really over-think his trading.

      So I am just saying you might want to not criticize traders who follow the channel and make bets at support and resistance within a larger trend pattern. Its not that complicated. For me, I use the daily chart to monitor overall direction. The hourly is my most important for catching the news of the day. When I see a decent opportunity I drill into the 5 minute to focus on the days action. If I am really motivated I pick my entry off the chart of smallest degree since you can see the volatile swings happening there in real time. Then you just wait for the moment to arrive if you think you are right and away you go.

      So not hard at all. It just takes focus. And it really helps a lot if you don’t give a shit which direction gold moves as long as it makes money. I mean, just get detached from all the drama and focus on the chart that’s in front of you.

      1. Lily18

        Hi，Ped，
        Thanks for sharing！
        I just tried to draw the lines on the gold and silver futures daily charts and could not get the results you got. I am using my brokerage’s charting （ IB）. Do you subscribe any charting program to get more accurate charting？
        Lily

  40. Don

    Crude oil looking good for the long side. Taking profits on my NG short but will short again on a pop. Adding to mu silver holdings.

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