96 thoughts on “CHART OF THE DAY – BREAKOUT?

  1. dboz

    Thanks for the update. I listened and held and am now positive. I bought in Sept. and then again in October and finally in December. I have pulled out of 35% losses to be slightly in the green at this point. Looking forward to more upside to get more green.

    1. Gary Post author

      You may be one of the few that “gets it”.

      It’s basically impossible to lose money on the long side in a bull market if you just let the bull work.

      1. downtrodden

        Gary, can you estimate how much one would make off the miners on let’s say 10,000 dollars for the next leg up in the miners bull. Stipulating that one stays in the market not trying to time the wiggles.

        1. bill

          Down respectfully no one can assert that sort of prediction. None the less if this is money you are willing to gamble And don’t need choose wisely especially 3xETF plays .

  2. Gary Post author

    Barring a miracle save at the end of the day the dollar is going to close back below 100.50 and negate the breakout, like I predicted.

    Look out below. The next month and a half to two months may be rough on dollar bulls. We’ve built up such a huge bullish sentiment on the dollar over the last two years that everyone thinks the dollar is a one way trade. When it becomes clear it isn’t we should get some serious selling as hordes of traders are forced to unwind what they though was a sure thing.

          1. Pedestrian

            Christ you are arrogant Bill. Even if I am wrong (which is possible in spite of my best effort), the most I will be out at this point is a wasted day and commissions. If I recall, you said you held NUGT since the top last July so you can stop smirking like a drooling retard.

          2. bill

            I’m very arrogant, this is fight club not a classroom at your safe space university, I’ll call it as I see it.

            You reak of hypocrisy, you call Me arrogant then go all child like and call me a retard, is there anything else you would
            Like to add?… Asshole perhaps?

            Yes I’m all of those things and more and it won’t change…
            ( smirk )

          3. Goldlion78

            Pedestrian has either a been smartest man in the room telling people for the past 6 months on a message board daily that gold is doomed while secretly buying or the dumbest doornail I have ever read. I’m hoping for humanity that it’s the prior.

          4. Pedestrian

            That’s because you only see in black and white. Like Bill you need a fixed point of view and discard everything else. The market is nuanced and variable though. So you need to keep an open mind and be prepared to quickly abandon any idea that does not work and never apologize for changing your mind.

  3. ras

    Tight trading range can not last forever. A breakout either way at some point has to occur. So, it is upside BO. Price has spoken today. When xau reaches Gary’s PO, I am expecting nugt to slam into 200 ma. Any other ideas out there?

  4. ras

    We have to move forward from where we are. After 10 days of consolidation, we have a BO today. When price speaks, we need to pay attention and try to be on the right side of price.

    1. Gary Post author

      Until we get some indication that we are returning to free markets it’s just not safe to short stocks.

      But I certainly don’t want to be long at these lofty levels with sentiment at bullish extremes. At this point you’re just gambling that the PPT can keep the market propped up forever.

      Better to just hang out on the sidelines or metals sector and wait until a correction comes. It will happen eventually, but it’s impossible to predict when in modern managed markets.

  5. Epiphany

    Resistance levels, chart pattern breakouts, measured moves….etc. Looks like Gary is having much better luck with traditional TA than using his cycles magic. Last May he was predicting gold would head down to an early July cycle low but instead the GDX went from $22 to $30 from May to July. Nice job Gary…I always thought you should abandon the cycle BS and it’s finally paying off for you!

    1. Gary Post author

      Cycles got us in at almost the exact bottom of the yearly cycle low. Sentiment extremes suggested that the odds were good this would be a large rally out of the YCL. I was the only one bullish 4 weeks ago. Everyone else was selling when they should have been buying or holding. This never changes. It’s why most people lose money, or fail to make any money in bull markets. Their emotions prevent them from grasping the concept that there are no losing trades on the long side in a bull market.

      Like I keep saying (but apparently no one is listening), my first two tools are cycles and sentiment. Then I use technicals, Fibonacci levels, and COT levels as confirming indicators and shorter term timing tools.

      1. Robert

        Gary what is the deal here? Gold is now on day 25 of this daily cycle so if it puts in a new high tomorrow that will b day 26. That seems to be late in the cycle without even a pullback. Surely there must be a half cycle pullback this week like u said 2-3 days or Is it just gonna run straight to 1240?

          1. Robert

            Tulip what price effect will that have on GDX? Doesn’t necessarily mean it will dip maybe they want puts to expire worthless?

      2. dboz

        Gary, you were the only one sticking to your guns on your call. Everyone was ridiculing you, especially on your dollar call. I listened and held fast. You were correct on both accounts. It was emotional trying when we were tanking, but I held and believed. Nice job, being a leader is never easy.

  6. WallStreetJesus

    OMG Dennis Gartman on CNBC going to comment on gold.

    Yikes the gold bugs are finished if he is bullish.

    This guy’s track record is unblemished. Fortunes have been made fading his calls.

    1. Pedestrian

      Just saw that Ras. Thanks for mentioning. I have to tell you I am very bothered by that right now.

  7. WallStreetJesus

    YIKES!! _ Gartman is bullish gold.

    That can’t be a good thing if you are long gold.

    Ever see that movie – The Mothman Prophecies??

          1. Pedestrian

            He could be right though. If stock markets sag here then gold will be taking the elevator ride up. As a bear that’s my number one worry right now and doubt grows as each day passes and the S&P stays range bound in this interminably threatening sideways pattern. I am starting to believe some old correlations really are breaking down. I noticed it today. Maybe we have all been so conditioned by Gartmans contrarian calls from the past we could be lulled into sleep.

    1. Pedestrian

      Gartman bullish? Holy shit, gold really is doomed. On the other hand, I hear all correlations are breaking down because of Trump. Maybe Gartman is the one to follow now. Let him be tested on this one trade.

      1. WallStreetJesus

        I wouldn’t bet on this correlation breaking down. The appearance of Gartman on CNBC is almost certain to mark a turning point on what ever he talks about. Going in the opposite direction of his forecast.

        They call him the Commodity King on CNBC

        1. Pedestrian

          You’re kidding? The Commodity King. Kind of funny but now I am worried. I have some doubts at the moment anyway. All day I have been having a struggle with whether I am early or just wrong with this trade. A few gold stocks really took off recently. I kind of wish more people here were doing technicals instead of trading by rhetoric and cheap one liners. Input would be helpful.

  8. ras

    Upside crossover by $xau & $hui weekly macds. Positive stick number 2 on $xau and $hui weekly histograms. Both $hui and $xau above the weekly BB midline. Open ground until we smash through the upper BB to the next resistance. GDX and GDXJ likewise. Upside target to gdxj 44 plus? Upside target to nugt 16 plus? upside target to jnug 18? Time will tell.

  9. Gary Post author

    The metals portfolio is now at an all time high +140%.

    Remember when the know it alls were writing articles about blowing up accounts with leveraged ETF’s?

    I guess they have some egg on their face right about now.

  10. Gary Post author

    He was one. There were lots of trolls piling on at the bottom. You think these guys would figure out by now that when everyone is piling on it always marks the bottom. That’s the time to be buying an SMT subscription. I’m one of the very few that ever get these bottoms right. Most people are selling when they should be buying or holding.

    Like I said, most people will never make a dime off of a bull market. They are incapable of thinking logically.

    Logically it should be obvious: buy low & sell high. But as we saw 4 weeks ago, no one was buying. Everyone was selling, because human emotions always make us think that price is going lower, no matter how far it has dropped.

    After a 90% decline there are still people expecting the bear market in miners to continue. It’s the housing bubble or tech bubble all over again. Only in reverse. People lose all commonsense at bubble tops, and at bear market bottoms.

    1. MegaMind

      Gary, i noticed that tip and tlt were on the sos… what do you make of it? i think this is a nail in the gold coffin

  11. Goild

    Well, what a day!
    I did well but not so well as on the way up I sold the 3 extra lots I had so I only carried 5 NUGT lots. Still pretty good money. Though, the comments here influence my trading. Say Pedestrian was shorting! and doubling!, others are not touching the 3X funds. So even if you are on the right side there are many temptations to dodge; it isn’t easy either. Of course with the right personality you do not have these problems, but you have other problems.
    What is the deal for tomorrow?
    Several here are waiting for a dip, even Gary talked about it today (more influence to drop the 3 lots).
    Scenario 1; It keeps going up which would mean USD falls more but there would be panic now in USD so we could have a long green candle.
    Scenario 2: the manipulators decide to inflict pain both ways an so we will have a doji going back and forth.
    Scenario 3: It is not unusual a Monday to be a long positive day to then fall the rest of the week.
    Take your pick!

  12. zkotpen

    Interesting catching up today!

    I spent Asian Monday in KUL — did not see William there — though I don’t know what he looks like πŸ™‚

    American Monday zonked out back home in bed from an exhausting day of travel.

  13. Alexandru Popovici

    European mkt is in negation: now it its turn to bring USD higher before the US mkt brings it lower.
    The only constant remains that the Americans lead.

    So, do not trust mid-day trends, use them as contrarians.

    1. Pedestrian

      USD higher? Yesterday you were insisting with plenty of exclamation marks that the dollar was going down and gold up. Make up your mind Alex.

  14. zkotpen

    I am still seeing this first daily cycle as running out of steam. Monday’s high in gold & miners could be an overshoot, or one of the final waves in the first DC rise. I posted on the weekend I felt that the daily cycle top in metals/miners was close at hand, but not sure how the move into the DCL would run — more of a sideways consolidation is how it has looked for miners since Jan 5; gold has been running out of steam since Jan 12. Monday’s marginal higher high did not change that. Gold has held it’s 10 day SMA & miners pretty much the same. I’ve been looking for a test of the 20 day SMA in both, before the next wave up.

    Still looks to me like short term volatility needs to decrease before the next daily cycle rise — perhaps one more little poke higher before the daily cycle decline. I’m not ready for a long or short trade yet…

    Uff. Still knackered from travel — I need a massage to rub some coconut oil into my skin & work out all of the knots my muscles got tied into on Monday. But too tired to go get one. Time for a cat nap!

    1. Alexandru Popovici

      hello, mate!
      in normal circumstances things would be as you say, but this is the first move of Lady Market to move from depression into mania as to risk-off assets–> a sudden reversal in volatility would be surprising at this moment.

      good sleep!

  15. Pedestrian

    JDST bottomed at 17.83 during the night and has broken out this morning thus far turning bullish (5 minute charts). I remain in the green on the trade and really only regret being a day early initiating it. Yesterday the money was made on the bull side and unfortunately I had already staked out a mental position for gold declines and was unwilling to be swayed despite the action. That’s not always a smart idea because if the trade does go South you end up being a bagholder. I find I constantly have to check my own bias at the door. If I don’t keep asking questions and looking at both sides I tend to get in a rut and that usually ends in a trade loss. Anyway, looks like I will be rescued by the market. Metals are turning down this AM along with yen, euro and t-bonds. My instincts are still good and this trade intact and ready to be played. The only question now is how far will the move take us this week. With luck the new trend will move in my direction.

    1. zkotpen

      20 day SMA in miners & gold… could be lower, but I’d need to see how the DC decline unfolds on the way down.

    2. Pedestrian

      What I would like to see is gold sub 1195 in the next four trading days and a sharp move higher in miner/gold bear trades. But I am always ready for surprises. There are no perfect forecasts. Every set-up comes with its own personality. And well, you know the rest. Best laid plans of Mice and Men……If it does not look right by the open I will abandon it and try to re-enter later in the week.

  16. Alexandru Popovici

    USDJPY=113.4 –> stands ready to collapse, thus to reinforce underlying volatility and trend; of course this will have intermkt repercussions.

  17. dboz

    The dollar gets bid up overnight then gets smashed during the day. I see today as no different. The dollar will be near 91 by summer. There will be days that it drops less aggressively, this may be one today or today could be a bear trap. Gold can certainly pull back and maybe it needs to but I don’t think so. I think there is the possibilty for a rapid upsurge in gold and it could drive to the 1250-70 level. If silver catches on and breaks higher it could shoot to high 18’s fairly rapidly as it appears there is little resistance over 17.50 due to the November crash. Should silver jump quickly gold will follow. I would not want to be shorting either here, but some seem stubborn and want to fight the trend trying to prove they are right.

    1. Pedestrian

      Don’t be foolish DBoz. I made more money long-miners last week than short. Maybe you think stubbornness is when people don’t see things your way? Try to get out of that thinking rut. There is potentially a very good short trade in the works. That’s why its worth pursuing. If I though gold was about to soar higher I would be there instead.

      Check your fave technicals. Check the cycle counts and length on silver and gold. Look at the channels at different chart levels etc. And then compare those with whatever it is you like to play for comparison. I am not trading some haphazard best guess here.

      I think the odds favour a corrective move of more than a few days.

      1. dboz

        I was not calling anyone out, there will surely be some down days. If you can time them, good for you. I have no problems with anyone’s trading strategy or system. I learned my lesson early last year in AG. Buying and selling thinking I had it down, then one day AG took off, drove up big 8 straight days. Went from 6-9 rapidly and I was left behind, went to 19. I was sick, still am. I am not doing that to myself. Buy and hold, ride the downside. If it looks like full on BEAR case is imminent, I will reconsider but I don’t see the scenario for that at this time.

  18. dboz

    Trump and Mnunchin both state the strong dollar is not something they want. I think it’s wise to start listenening to those with direct influence. Many cabinet members are gold favorable. All it is going to take is for them to start talking up the idea that Americans should own gold and it could get crazy very fast for PMs.

  19. dboz

    Imagine if 50 million people decide to go buy a few ounces of any PM? Talk about rapid depletion of physical, especially silver since it is considered poor mans gold and seen as more affordable.

  20. dboz

    Just saying, the big picture could be seriously crazy bullish and as Gary has stated and been ridiculed, 5000 to 10000 gold and 1000 silver could be reality under a rush into PMs. It may seem crazy now, but I am not ruling out the possibility where it could happen.

  21. Goild

    Well, it seems that is time for a dip.
    USD yesterday showed lots for resilience to drop well beyond support.
    Yesterday could have been a bull trap.
    I decreased my NUGT lots.

  22. zkotpen

    Gary,

    There are a couple of things I do NOT like about XAU:

    1. Jan, 2016, low below the 2000 low; and

    2. XAU has already exceeded its 200 day SMA.

    I watch GDX on daily and intraday levels.

    Gave XAU a try on the longer term charts, but not convinced for those 2 reasons — at least not for trading GDX.

    Perhaps XAU is more silver-oriented? Just guessing on that one — it doesn’t correspond to what I trade.

  23. dboz

    I also watch the Nikkei. Our market tends to shadow it but on a delay of weeks to months so if the Nikkei continues shedding, I am open that the US market may start to follow. That could become very bullish for gold.

  24. Goild

    USD indeed appears to be putting a tough fight as once it well breaks support there is vacuum to hold it.
    And fear will compound the drop. This might be a case of manipulation.

    Probably, it will need a good SM drop to be enticed to well break support.

    A right shoulder in USD and a dip in gold are not unreasonable.

  25. zkotpen

    Pedestrian,

    I can definitely see where you’re coming from, using charts. It seems some people don’t like your predictions based on their bias. Like you, I don’t care which way gold, miners, or anything else moves — I just want to forecast better than a coin flip.

    Gold does seem to be forming a small consolidation prior to one more pop — maybe to the mid-1220’s — before commencing its move down into a DCL. Still trying to get a read on miners.

    The timing aspect is a bit tricky, though we both realize that a daily cycle decline is forthcoming.

    Finally, your “sub-1195” gold is pretty much spot-on for my “test the 20 day SMA” target — gold’s & miners’ 20 day SMA’s are both rising. The former will soon reach 1195…

    1. Pedestrian

      Much appreciated Zkotpen. I keep coming to the same conclusions after reading the dollar and gold cycles. There is a nice rhythmic rise and fall along a channel or curve that is often predictable. But finding the precise turn is not always as easy as it looks and sometimes it can be frustrating as hell (especially with the Bill types in the playground mocking as you go!) He kind of reminds me of that Simpsons character. You know the one who ends every sentence with HA HA!

    2. WallStreetJesus

      The coin flip method of forecasting is time tested.

      Forecasting is irrelevant in investing.

      Money management is key if you are interested in making money.

      Not everyone invests to make money, many enjoy losing.

  26. Goild

    A divergence between USD and gold/miners will be cured in favor of USD. As of now USD is +0.3% up and NUGT about flat. So I would expect NUGT to catch dropping later.

  27. Pedestrian

    Whoever it was commented recently that gold is stuck at 1200 made a pretty interesting observation. It is true too. Gold is just 12 dollars higher today than it was in June 2013, more than three and half years back. All that drama and theorizing about the future of metals and how the world economic system was on the verge of collapse each week was mostly wasted words and noise.

    Twelve dollars higher. That’s all the progress that was made.

    NOBODY forecast that!

    1. zkotpen

      I concur — and see more of the same for the foreseeable future. You’re talking 3.5 years ago to present… this consolidating correction is dragging on in terms of years. People want to see big lightning bolt moves, but that’s not the most likely scenario in this sort of correction.

      I noticed Steffmeister’s suggestion about a higher wave B top in 2017 (than 2016’s high).

      That is a possibility. Once again, many wave principle technicians also want to see a lightning bolt for wave B (a single zig zag into the 1400’s or maybe 1500’s for gold). Their bearish count is also calling for a speedy drop to sub-1000 gold.

      Those moves could happen, their patterns are still valid, but I think more consolidation, more triangle than lightning bolt, on the larger scale…

  28. Goild

    The dip theory probably is incorrect.
    Both gold/miners appear to be in uprising channels, while USD in a downward channel.
    Gold may continue its way up to later drop a bit to hit the daily averages.

    Miner volume appears stable.

    1. Dday

      I see resistance at $1218 if gold breaks above then onwards to $1230-$1240 otherwise the dip still on the cards.

  29. Goild

    Alternatively, we may pose the extremist theory in which for gold to change direction we must see an extreme and that would be diverging much from the averages.

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