165 thoughts on “CHART OF THE DAY – PARABOLIC?

  1. brianbreeze

    You said the same thing months ago. You are often very wrong in what you predict about many asset classes.

    1. Gary Post author

      It’s just as true today as it was a month ago. We have a bubble forming. But they can stay irrational for a long time.

      This is why I keep saying over and over not to short the stock market.

      Have you been listening?

      1. DrJ314

        Gary-
        Kudos again to you for responding to such idiocy in a constructive and benign fashion. You have a much longer fuse than I do.

  2. Gary Post author

    This is what happens when governments intervene to prevent the normal corrective periods that should occur in a healthy market. You get complacency and bubbles as traders lose all fear and start betting like they’ve found a “sure thing”.

    1. Epiphany

      so if the markets are dominated by government intervention and manipulation, both preventing normal market cycles, why would you try to apply primarily cycles and secondarily sentiment in your trading methods? Both seem to be irrelevant in the face of massive intervention and manipulation.

    2. Epiphany

      never shorting the market seems like a “sure thing” though doesn’t it? I smell cognitive dissonance here.

      1. Gary Post author

        It’s a sure way to stop losing money on the short side of the market.

        Just wait for a correction. They come eventually, but be ready to buy quick as they are never allowed to run to completion.

  3. Steffmeister

    *** WARNING ***

    US stock indices is about to top here! We are in the fifth wave up of 5. If we look at the final fifth, we still got two more waves. I give US stockmarket another month, then it’s a multi year goodbye.

    No QE4 and rising rates …

  4. brianbreeze

    Steffmeister EW is very subjective and it is not clear we are in wave 5. Very stupid to try and call a top (just ask Alexandu who has been calling tops for months in the SM).

    1. Pedestrian

      I don’t think the word stupid is appropriate under the circumstances. Steff makes a fair enough point. Bank of America itself has an analyst who is saying the stock advance may now be in the last 100 days of this current climb and we are heading into a pullback.

      1. brianbreeze

        Pedestrian, who cares what Bank of America thinks when it comes to the market? Most of these analysts last year had no clue we would be around 2300 today. You and I know as much as Bank of America analysts when it comes to calling market tops.

          1. Steffmeister

            mmm the ew wave structure is only one of many analysis on the subject “Mr Merlin” presented a chart to me that went back 320years to try to figure out what is going on in US Markets. Very little upside from here!

            Ok, I will extend a bit from Feb until Summer Solstice 2017, fair enough Brainfreeze?

            I will save this post and pick it up later ๐Ÿ™‚ just for fun and for reference.

  5. Goild

    Good morning,

    I think the drop of gold will end today.
    Reason:
    The sudden drop appears to only correlated well with the drop of TLT.
    TLT is about to reach substantial support.
    Miners are quite resilient.

    Game plan:
    1) If gold further falls at the open, wait for it to over do it and then l will load myself with NUGT shares.
    2) Wait for a low around mid day and go long.

    1. Gary Post author

      You might want to wait until we get past the three trigger events. The GDP report today is the first. Then the FOMC meeting on Wednesday. And finally the employment report next Friday. Historically all those have been easy events for bears to take down gold.

  6. zkotpen

    brianbreeze,

    I believe the term you are looking for is AMBIGUOUS, not subjective.

    People, human beings, are ALL of us SUBJECTIVE. The wave principle is just the wave principle. It has no feelings, and no preferences ๐Ÿ™‚

    And by the way, I do not refer to the wave principle by the name of a (subjective) person.

    Indeed, Ralph Nelson Elliott himself described it as “The Wave Principle”.

    A couple of subjective disciples called attached his name to it.

  7. zkotpen

    I also like how the subjective-sounding “Pareto Principle” has morphed into a more appropriate “80/20 Principle”.

    Likewise for getting lost in the “Bollinger Band”

    Heck, I even remember one poster here, whom I called “Fandrodge” referring to Gary as the second coming of Jesus Christ!

    People are subjective.

    Markets? They go up, they go down, they move sideways.

  8. Dday

    https://invst.ly/35k2e

    Dollar daily, look how accurate the stochastic has been, i dont think the dollar is done yet, wouldn’t jump into the gold market with both feet . I think the gold pull back will come to an end soon, but we could see $1170, $1160, or $1145 first… Keep some powder dry…..

    1. MegaMind

      I am with you Dday…looking at 1140… hope it gets there before the Chinese return from holidays

  9. Goild

    Dday,

    Agreed to not jump with both feet.
    I am thinking that there might be a good opportunity to make a quick good profit if gold overdoes the fall at the open. I am imagining seeing NUGT around $9 – $9.2 and then jumping with 10K shares for probably $2K nice profit to enjoy the weekend.

    Actually, I did it yesterday to reduce my NUGT lot price, and now I remember that Fridays can be a repeat from Thursdays.

    1. Dday

      Yea good plan, i have a small position in nugt. But expecting further weakness, I think NUGT could fall to 50mda at 8.46.

  10. zkotpen

    dboz,

    “So is 1220 the break out number…?”

    I really liked this question yesterday! I don’t think anybody replied.

    Naturally, I asked myself the converse: So is 1220 the resistance zone for an IC rise?

    I have been looking at how miners and even gold got rangebound for a few weeks after the big move up from the December lows. I’m wondering when GDX will test its 20 day SMA. I’ve long had in mind a possible double zig zag up to an eventual lower high than 1375 this year.

    If 1220 becomes a resistance zone in the IC climb, the current corrective wave could very well be a long, grueling…. Triangle!

    It’s still too early to tell for sure, but I can see some indications of how that could play out.

    So my answer to your question is: Yes*

    *If the current correction in gold morphs into a running triangle, wave B could very well exceed the beginning of wave A at 1220.

  11. Goild

    Just to clarify or correct,
    Going long today would be only for today given a proper candle formation or an overdone drop.
    With the FOMC rate we may go further down.

    1. Pedestrian

      Gold should get back to at least 1190 today and may start moving up at the open judging by the set-up.

      1. bluelagoon

        Ped – what do you see for next week barring “a black swan” event doesn’t occur? Weekly charts seem to suggest that gold has another week or two downward before going up. That would make sense given Fed meeting next Wed (likely not to soften up their rate hike plan). I think this bounce in gold today is temporary – perhaps lasting until Mon.

        1. Pedestrian

          Hi Blue. Yes I agree gold has not finished falling. The rise now is just a counter-cyclical bounce. The same kind we would see on any chart rising and falling if we zoom in on the smaller action. The long side can still be played on a daily basis and that’s what I have been doing. But don’t hold it too long and certainly not overnight until its clear we have a bottom in place.

      2. Pedestrian

        Looks like my target was reached and we look to have topped at 1189.80 for the day. That is a technical break out on the hourly as we exceeded the upper channel however it does look like it will turn down from here as it has peaked on the minor charts. I had an outstanding day hitting my key numbers left and right Crazy stuff. Its not always like this of course. But when the charts read nicely and my mind gets focused I can really get pumped up.

        Best not to let it go to my head too much though. That never works out well.

  12. Dday

    If dollar follows the past 16+ occasions regarding the stochastic reversing then there will be a minimum of a five day rally. Or maybe this time it will be different…..

  13. WallStreetJesus

    I am not a fan of technical analysis however with that being said the stock market based for 2 years around 18K. It appears the market doing what bull markets do, its broken out of that base and has begun the next leg higher. Apparently there is a lot of skepticism and people trying to short the market here – isn’t that the hallmark of a bull market??

    1. Goild

      WSJ,

      I think your observation is good, and also in view of Trump.
      The only think that is not consistent is that the SM has been going up for too long.
      Do we have another form of a bubble?

  14. Goild

    Pedestrian,

    I am thinking the same, rather than a further drop, we may see gold rising at the open based on the candle pattern.
    We shall see.

    1. Pedestrian

      Yup, gold looks gamed to bounce on the lesser charts. Especially as it closes in on a minor support at 1180 and after losing 9 dollars since the close yesterday. Gold is due for a breather of some kind. As I said, my target is 1190 but we shall see as the day progresses.

  15. bill

    Prior was 3.5%

    Personal consumption

    2.5%
    Expected 2.5%, prior 3.0%

    Inflation

    GDP price index 2.1%
    GDP price index was expected at +1% q/q, prior was +1.7%
    Core PCE 1.3%
    Core PCE expected at +1.3% q/q, prior was +1.7%

    Q1 was 0.8%, Q2 was 1.4%, Q3 was 3.5%.

    BOOM big miss and there goes NUGT! lol

    1. dboz

      So it appears the strong dollar was not so good for GDP. Bad GDP is good for the market though? Crazy.

  16. terrywg

    @ped:

    Gold looking really weak, even with durable good orders undershooting forecasts. I might be squaring off my gold futures, currently holding 900oz so I don’t want to risk a drawdown

    1. Pedestrian

      LOL,.. You sure take your gold investing seriously. I won’t touch physical anymore. There is just no money in it and the inconvenience of holding bullion is more trouble than I can tolerate. But each to his own. About selling? Well that’s a personal decision. You already know that bigger picture I am still bearish on metals. But it does not mean I will be correct. Fortunately I don’t let that get in the way of participating in the market anyway.

      1. bill

        Im holding many ounces of Physical from my ( admitting ) gold bug days, trust me I have been fondling the idea of selling more and more. Most was bought in the early 00 so I am not upside down or need the funds, but its boring me to death.

        Many silver ounces as well.

  17. Gary Post author

    We still have two trigger events to get past. The FOMC next Wednesday and the employment report on Friday.

  18. Pedestrian

    Well, we tagged my gold target at 1180 and it does look like the bottom for the day may be here.

    1. Pedestrian

      Aaaaannnd she’s away to the races. Just two bucks more and gold hits my secondary target at 1190.
      Man, I’m on fire lately.

    2. Pedestrian

      Worth mentioning. Gold has seen a technical breakout on the hourly chart as it spiked above the falling trend line. Not much but its good enough for me. We may see it consolidate here for awhile before moving higher.

      1. Pedestrian

        Projecting JNUG to go no higher than 8.34 today and GDX to reach its days top @ 23.23
        The wait begins to see how close I come.

        1. Pedestrian

          Sold at 8.34 — Another winner.

          Anybody see that by the way? My estimate from earlier this morning came within 3 cents of the top. It actually peaked at 8.37 before reversing back down. I had put in my order ahead of time though so didn’t miss much.

          Also Sold GDX @ 23.22 just three cents shy of the top –

          I am eight straight folks!

          1. terrywg

            Very well done!

            Just be careful my friend, it is when I’m running hot that I make the most elementary of errors.

  19. zkotpen

    Pedestrian,

    I’m afraid I’m not with you on this one. I’m more in line with Surf’s daily cycle analysis — though we arrive by vastly different methods.

    But I do want to point out something to you, regarding that first post twixt you & me last week, about the double zig zag in wave C of a triangle.

    Look at GDX’s 3-minute chart. You will see what I’m calling wave A of triangle yesterday morning’s high. Then came the undercut low for wave B, the low of the day. That “undercut” would make this a running triangle, if it’s a triangle.

    Then, the mid-day lower high in miners looks like a potential — fairly convincing — wave C — I even mistook it as such yesterday. After all, it’s ONE zig zag up, which is enough to form a wave of a triangle. Subsequent price action is convincing enough to look like waves D & E —

    BuT NO! This morning, GDX takes out yesterday’s midday peak — so that’s not wave C, after all. But it fails to exceed yesterday’s high. So far, this morning’s peak looks like the real wave C of this small triangle.

    People want to get short — or long? Who knows.

    Two things I can say: Price action continues to look corrective, and I am certainly not seeing indication that either gold or GDX has bottomed.

    I hope that clarifies your prior question about wave C double zig zag for triangle.

    That’s on the 3-minute chart. Now imagine the same pattern 3 (or 4? I’m losing track at the moment) degrees higher, on the yearly cycle.

    1. Pedestrian

      I dunno man. I see a modest gold bounce and maybe 30 cent upside on GDX for the day.
      We can compare notes at the end of the day.

    1. Gary Post author

      A half cycle low needs to at least push the 3 day RSI down to, or close to oversold.

      You can’t just call a cycle bottom based on time. Price has to move enough to alter sentiment.

  20. zkotpen

    My indicators tell me convincingly that a daily cycle decline is in progress for gold & GDX.

    And based on my answer to dboz’s question from yesterday, about the 1220 resistance zone for gold, the next bounce may or may not provide some nasty surprises for people married to their longs.

  21. zkotpen

    FOMC meeting/minutes always good for 1-3 reversals.

    One of them will be the daily cycle low in gold & GDX.

  22. zkotpen

    Pedestrian

    “We can compare notes at the end of the day.”

    Yes! More like, over the weekend ๐Ÿ˜‰

    But I, like you, am fully aware that regardless of my forecast, the future market moves are UNCERTAIN. As you can see, I’ve got a clear picture of what I think is going on, but that is by no means a certainty, and I can change gears, if price action over time tells me to do so!

    1. terrywg

      @zkotpen:

      That’s exactly what some traders on this blog don’t understand – you don’t have to be a bull or a bear to trade gold. Price action is king.

      1. terrywg

        Btw, was it you who made a call for a steep drop in gold after fomc last December? If so I’d like to thank you, you convinced me to keep my stops very tight, which saved me a fair bit of money.

        1. zkotpen

          Yes. That was a profitable short for me.

          My forecasts are MUCH better than my trading — I’m trying to fix that — by improving the latter ๐Ÿ™‚

  23. dboz

    I think silver has to lead, until then, we are going to be zig zagging. Silver needs a strong move up.

  24. jonsyl

    much ado about nothing. As long as vix signals little ro no fear and confidence in Trump’s wall streeters this thing will flounder with an upward bias in spite of all the stupidity. This will end badly and abruptly but anybody’s guess as to the final trigger. To project a spcific timeframe such as the famous scorch is a mugs game. You will know the reversal by the conviction taken with vix, dxy and fxy moves. Until then day trading gambling is the name of the game.

  25. Don

    The semiconductors are leading the charge again. I think we are going to see a lot of big dollar take over deals in that sector during 2017.

  26. Don

    I would like to see one more good sell off in the PMs as I want more platinum at a better price. I have enough silver assets but if the price is right…. buy more.

  27. Don

    The algos are having a tougher time skimming when the volume is so anemic. They generally only make money in rising markets so it may be time for sell off reset.

  28. dboz

    Yep, not many buyers left up there in thin air. Could still move higher though. It’s going to take a black swan to rattle it.

    1. Pedestrian

      Just a spike Boz. That one will retrace back to the bottom. I picked up DSLV at 25.55 when it hit and hope to take a dollar a share minimum by the end of the day.

  29. bill

    That ( Gold ) 1190 zone is like kryptonite, when it busts through ( and it will ) were off to the races.

  30. Adrian

    “The U.S. Weekly Leading Index (WLI) increased to 145.1 from 144.8. The growth rate ticked up to 11.9% from 11.7%, a 350-week high, highest since May 7, 2010.”
    I agree the S&P 500 is overbought on several indicators, but I don’t use to go short when WLI is growing

    But I’m short oil because the put cal open interest is in an extreme, selling a CFD 149X, by now gainin plus 1% with a stop loss in breakeven.

    Good trading every body

  31. Goild

    I hope you guys are doing great.
    I made $2K to enjoy the weekend and now I am not carrying any NUGT shares.
    We will see how things develop.
    Good trading to all.

  32. Robert

    I am with Surfs analysis as well. This aint no half cycle low. And even if it is it should head back down into a daily cycle low on any gold spike. So staying short gold should work out for the next week or so especially with things like FOMC

  33. Pedestrian

    Gold just got a bid in Europe on news that the European Commission is proposing limits across the continent on cash payments and restricting how much can be brought in from abroad. The idea of course is to clamp down on terrorism and underground activities. But the reality is that criminal organizations will already be preparing to shift into cash alternatives. On that score there are very few good options that are portable, divisible and readily understood by the market. So precious metals fit the bill and it is almost a certainty if the new regulations are passed into law that buying of physical will ramp up. Actually, I should rephrase that. The buying must take place now BEFORE the regulations come into effect since such purchases would not likely escape scrutiny later. Thus, gold just caught a bid in Europe.
    http://www.zerohedge.com/news/2017-01-27/europe-proposes-restrictions-payments-cash

  34. Dday

    You have pretty much covered why gold purchase wont fair any better, the EU will limit them stating the same reasons as limits on cash….

    1. Pedestrian

      There is more than one way to get at gold outside the system as most gold bugs are well aware. Plenty of people have bought it in past years before receipts were required so there is theoretically a large store of it that can come to the black market. Its really all about price isn’t it? The thing about black market rates is that if done in enough volume they actually start to impact on the public trade. We saw that recently in India where premiums skyrocketed. Or take currency as another example. Down in Venezuela there are two prices for Bolivars. One is the government rate and the other is the black market rate. The thing is that black markets pay better and are typically more reflective of the real price. So that’s where all the action moves. Shopkeepers are not selling goods according to the government posted rate because they would go broke. What the BM price actually reflects is how many Bolivars it takes to buy one dollar. And so what happens over time is that there are two rates posted (official and unofficial) that pretty much everyone knows and dollar holders will virtually always go to underground markets to sell. That’s what will happen with gold and silver coins in Europe after the regulation comes into effect. Actually it could start right away if demand arises and I think it will because the global trend is clearly towards cashless societies. Criminals are not going to be caught flat-footed and empty handed when that day comes.

      And there you go…gold will become money again. It is the dream of every bug.

        1. Pedestrian

          Sure thing. If you are curious about how a real world example of the above scenario plays out you might want to read this article from India titled “Household Gold Fuels The Black Market”.

          During the cash ban there prices for physical gold skyrocketed by 50% including broker commissions. People were being stopped on the street and asked to sell their gold by agents making generous offers.

          During the same period gold sales in legitimate shops crashed 80% because Indians could not launder money through them. What people wanted was not necessarily gold but rather the opportunity to dump paper currency away from the prying eyes of government.

          The result was that local gold prices soared in spite of a global price that was stable or falling. How much gold shifted from private hands into those of the black marketeers is unknown although this does show how the BM can influence the posted price and how it also creates an arbitrage opportunity. These gaps ordinarily only close by posted prices rising closer in line with the BM or by relaxation of regulations that eliminate the problem altogether.

          The point is though that we can see how the availability of certain classes of metals (coins for example) can quickly go into shortage. Buyers must then revert to acquiring less pure and more difficult to measure jewelry. When you measure in fractions of grams the purity is material. Nonetheless in India jewelry was still in nigh demand and I don’t see how it will be any different in Europe once the stock of coins have gone underground.

          Depending on how high demand becomes we could see scarcity of coinage developing outside the EU as imports would rise to meet both legitimate and illicit demands.
          http://timesofindia.indiatimes.com/city/coimbatore/Household-gold-fuels-black-market/articleshow/55425172.cms

  35. Strike

    Good find Ped.
    It seems to me that the fundamentals are lining up on the bull side. One day the boat’s got to tip, and price expload. Soon maybe.

    1. Dday

      I think gold at $1192 is key if it closes above, bears might get nervous.. Below more weakness… will see GDP pretty weak..

  36. Don

    Ped, I think you are going to get burned with your DSLV. I think your original call for gold to spike to 1190 will be proven to be correct. I guess 1189 was close but the rally ain’t over yet, my opinion.

    1. Pedestrian

      I am OK with that trade and will hold until Monday if necessary. Silver is on a slightly different cycle than gold. If I am wrong well I guess I get that face-egg Bill keeps warning me about! But I am not too worried. It just needs time to play out.

      1. bill

        Funny i thought I toned it down and even was being civilized. Sorry I traumatized you Ped.

        None the less I’m looking to take a friendship stance and tone down the rhetoric and make money instead .

        Waves white flag

  37. Don

    Goild, are you not sticking around for the last hour fun today? Just a few more bucks and gold’s long tailed candle will turn green and become a reversal candle, provided, of course, that it does not sell off at the end of the day.

  38. Goild

    Don,

    I need to control myself. I tend to do too many trades.
    The big thing for me is staying out of NUGT.
    I got $2K today and that means a happy weekend. No need to take a risk.
    I usually make money during the first two hours. Later becomes difficult for me.
    Have you guys good profits today.
    And get a good rest in the weekend because next week can be tough.

  39. Don

    At 17 bucks, silver is a steal. waiting for it to go lower before buying, as Gary has suggested to wait earlier today, is a losing strategy.

    1. Gary Post author

      If this is a half cycle low like I think it is then it will be confirmed by making a higher high next week. But it’s still very late in the daily cycle so a higher high will still give way to a deeper and more sustained correction into a full daily cycle low.

      That’s the next low risk buying opportunity.

    2. WallStreetJesus

      Don – what do you think about copper?

      The commercials are heavy short right now. It looks to me like copper is going to break out on the upside >2.73 and the commercials are going to get smoked. This is rare occurrence if it happens.

      Look at the weekly chart.

      Any thoughts?

  40. Goild

    I chickened out and sold it. Also some gold I had bought earlier.
    So I have no shares of any thing. I should and will stop; this is called over trading.
    Have fun guys.

    1. Dday

      Good decision, if gold breaks out above $1200 next week, buy back in… If it falls wait and buy lower you can’t really loose…

    2. Pedestrian

      Ever tried an AA meeting? Wow, are those ever fun…so many, many regrets. There is never enough time in a day for all of them.

  41. Pedestrian

    Buying JNUG again today at the best price. If I get 8.00 I will be thrilled but holding and waiting for now to see how it plays out.

    1. Pedestrian

      No, I sold that first trade already Rozalina. This would be a second kick at the can. If I can’t get a good price I won’t do it though. Also I don’t recommend anyone to follow this trade either because it is less certain. The junior miners look bullish to me right now though in spite of gold. If you are familiar with this trade it is based on mining stock, not gold directly.

  42. Strike

    So what do you do when it goes the wrong way Ped? Do you buy anyway?
    I am a bit surprised at the over-the-weekend-trade. But only a bit.

    1. Pedestrian

      It has to hit a price point that is acceptable to me so risk is reduced and I get the best upside. I keep tabs on it using the one minute chart. If it goes South after the buy I will make a judgment call based on the chart. Sometimes hold and other times bail out. If I lose money I sleep on the sofa.

      Just kidding.

      (PS; this one has almost run out of time so it looks like I will do nothing.)

    1. Pedestrian

      I am cross-eyed right now from charts. Might need to reset my brain. Let me get back to you tomorrow.

  43. TraderPete

    Here’s an interesting news item today about silver: “Silver Replaces Copper in Volkswagen Windshield De-Icer.” I hope it catches on with other auto makers. GO SILVER!!!

  44. zkotpen

    Pedestrian,

    Looks like you and I are actually on the same page!

    All of my posts from yesterday correspond to what you cite on your hourly chart.

    I use 144 minutes for gold.

    1 day = 1440 minutes. Divide by 10. I just like the mathematical elegance of it, that’s all.

    At any rate, whatever you or I use for our first division of the daily chart — 1 hour, 2 hours, 2.4 hours, 3 or 4 hours — we’re seeing the same thing there.

    You’ve got a keener eye on the next chart division below that — your 1-minute chart for the miners — I don’t know what you use for your smaller division for gold. No surprise — I use 15 minutes, but I do not trade gold itself.

    All told, we both see gold’s move down as INCOMPLETE. And I believe we both see the weak bounce one degree smaller as also incomplete.

    On the positive side for me, although I was looking for a sell off Friday, I did NOT short, like I did one week ago ๐Ÿ™‚ I was thinking of shorting GDX on those early morning spikes — even had the trade dialed in and ready to go. BUT my technical set-up looked more like it did last week: Premature. So I forced myself to wait until the technicals I watch looked the way they’re supposed to look. They never did, so I made no trades on Friday. I missed the move, but also kept myself out of a losing trade.

    Hey, if you can calculate those correction to the correction to the correction to the correction bounces and cash in on them… that’s great!

    Saturday has come and gone here, and I haven’t looked at the charts at all to see how the week closed out. Probably have a look on Sunday. Certainly by Sunday night (America-time).

    1. Pedestrian

      He does not seem to have math figure out, Goild. In the presentation he listed 11 stocks where he had large gains then he totaled the percentages together to make an outlandish and impossible claim about how much wealth he could create.

      He Wrote:
      “Thatโ€™s 11 stocks with cumulative gains of 6,220% โ€ฆ gains that gave me the chance to turn every $100,000 invested into $6,220,000 โ€ฆ all thanks to my understanding of this secret economic force….I just want you to fully understand the immense profits that can be had from understanding this secret economic force…It will mint more millionaires than any other time in history”.

      Think about it for a second. Who combines percentages together like that. Its crazy. And it does not work.

  45. Goild

    Ped,

    Thanks.

    I am working on finding any insights for Monday.
    Hopefully, by Sunday evening there would be some clarity.

    1. Pedestrian

      I’m with you. I don’t get going until the early hours before market opens though. My wife won’t tolerate it anymore. Used to spend the whole weekend glued to my screen but it made her crazy and we had no social life. Out of respect to her I just shut it off these days to enjoy our time when the markets closed (except a few posts here of course!).

  46. zkotpen

    Hey Pedestrian,

    Did you know I usually listen to Afro-Cuban “Son cubano” — Buena Vista Social Club type stuff — while looking at charts.

    After a while, on a good day, the charts start dancing… ๐Ÿ™‚

    1. Pedestrian

      I had no idea (naturally). But I am a fan of old time Cuban swing music. I love the horns. So you are in Thailand? Pretty cool. I looked at your work. Those are fantastic photos. Really well done. Hope its ok to mention that.

    1. Pedestrian

      I don’t think so Surf. My charting shows the dollar trending up well into 2018 so that’s a long time before we need to think about a reversal of direction.

      1. Surf City

        Fair enough but I have not seen you post much in the way of your chart work so it is hard for me to judge. Cycles are best for calibrating Lows and Highs are somewhat tricky using Time. That said, my 9 Year Price channel in the attached link (3rd chart), clearly shows Price is near the top of my channel.

        Perhaps the USD has one more push higher in 2017 but based on Time, the USD’s Super Cycle should be nearing a top.

        https://surfcity.co/2017/01/26/usd-trading-cycle-update-3/

        1. Pedestrian

          I would post more charts but I am no whiz on the computer. I notice most people are using Stockcharts. Maybe I should subscribe. Anyway, I was not intending to criticize your work so you have my apology. Just offering my own opinion. The dollar is in an extreme bullish position right now. I cannot agree with Gary at all that a big correction is coming anytime soon. Price is going to go parabolic before this ends and the reasons appear to be partly because the euro will tank and secondly because of the political dynamics of a new president and the changes he is making.

          1. Surf City

            Trump has clearly stated he wants a weaker USD. If you look at my 40 year chart and pencil in when Republicans were in office you will notice that the USD typically gets weaker during Republican administrations and stronger durning Democratic ones.

            This is not by chance but rather by policy, IMO. Trump has stated his desired policy and the JC Collins link in my post explains both the “Why” and the “How” on where the USD is headed.

          2. Surf City

            BTW, I do not subscribe to Stockcharts but rather use it for Free. I use screen captures for my posts. ๐Ÿ˜‰

  47. Robert

    Guys I wonder if gold is gonna spike this week due to Trump’s ban on Muslims entering the US. It’s causing chaos worldwide

      1. Robert

        If I had to choose to buy between gold and silver I would buy silver. I see silver back at 19 in few months

  48. Strike

    Conundrum – if indeed USD is on a long upward path, it most likely is due to Euro collapse. So by default USD gets stronger. The cleanest underwear in the hamper.
    But does that foster concurrent $ GOLD price rise even in the face of $ strength?
    I am not signing up for your strong dollar path yet Ped, but i’m trying to reason different outcomes.
    I think I agree with Surf’s timing.

    1. Pedestrian

      That’s the puzzle we are all working on Strike. Gold follows bonds and yen most closely though and both look like they have bounces, if not significant reversals, coming. Yen/USD has a few cents more to go before major support comes in and its almost certain to bounce once we get there. Nearer in time the 30 year (which looks strangely identical to the gold chart when viewed on the daily) is also fast closing in on its own long term trend support line. See weekly chart. That would indicate the outlook for gold is up once this current consolidation and decline have ended. I don’t think the bond bull is anywhere close to dead yet incidentally. So the question I have been asking myself is which of the three major gold correlations (Dollars, Yen and Bonds) will be the one that breaks if gold is going to go higher. And I think the answer to that is the dollar correlation since it is also currently the weakest. In other words I am forced to seriously consider that dollars and gold will rise in tandem. But what does that say about commodities in general since gold rarely breaks from the group? And again I must concede it means that resources are also finally at a bottom and must go up. Uranium is one example that may be leading the way although coffee and sugar are both working their way up already. Thinking this through a little further then does that not imply we get inflation via rising commodity inputs? So a rising dollar and commodities going the opposite direction of the correlation we have known forever (up instead of down) tells us that the real burden of living costs will fall on every country that is using a currency other than dollars. Because in the US, a high dollar will offset the pinch of inflating food and manufactured goods but in Europe they will feel abruptly impoverished and possibly substantially poorer with a crashing euro. This is kind of a circular way of thinking of course and its only one of many possible scenarios but we need to keep an open mind. The dollar and gold have risen together in the past though. There is a precedent.

  49. Don

    Pedestrian: Would you care to provide and email address so I can keep in touch with you in the event that you disappear from this blog? I like your thinking. If so, please send it to [email protected]. Thanks.

    1. Pedestrian

      OK, thanks Don. I will file that just in case Gary decides to kick my sorry arse out of here one day.

  50. MegaMind

    correlation between assets keeps changing over time…. what time frame should one study this or makes sense… typically 20day is used… anyone here experiment with different correlation date ranges where meaningful results could be obtained… this is more for technical people

  51. MegaMind

    I did 20 day correlation between gold and euro and dollar. currently euro and gold are positive correlation at 84%

    Gold and dollar currently have -84% (negative correlation)…

    Gold to bonds is 43% and dropping

    Gold and Yen is at +89%

    So basically look at yen euro and dollar for next move of gold… bonds not that much

  52. Strike

    Mega – your data shows what is intuitive to me. Gold vs dollar, yen, euro correlation much stronger than vs bonds. Thanks for that.

  53. macman1519

    Herr Trump strikes again, thoughtless, poorly organized, unaware of big picture and the ramifications. The mulim ban backfires. Buy gold, uncertainty continues as Humpty Trumpty continues to show his paranoia and ignorance. America becoming the laughing stock of world to have elected such a complete idiot.

    1. RonL

      macman1519 what is the mulim ban? Really!!! Maybe you should learn to spell if you are going to insult someone. If there is a laughing stock, you should look in the mirror to find one. Your hateful comments are not only insulting but in poor taste. Get over it, Hillary lost. Put on your big boy pants. get a real job and move out of you moms basement.

  54. Goild

    WSJ

    Thanks for brining attention to Ed Seykota video. I enjoyed it.
    Actually I reread parts of his chapter in Market Wizards and got newer insights.

    Continuing with the discussion about what it takes to make 10 million…

    Ed mentioned that he had a client starting with $5K and ending with $15M over I guess about 30 years.
    To do that one needs to do about 30% a year. Here time horizon makes all the difference.

    So starting early in life is key.

    Another factor is to have the discipline to manage large amounts of money.

    Interesting, the “secret” is not so much on the trading but on starting early and having discipline.

  55. TraderPete

    Iโ€™m just guessing, but I think gold and silver will peak sometime next week or the following week. I believe silver could reach 18 to 18.5 before it pulls back to about 16.5 or a little bit lower by the end of February, which will be another great buying opportunity. That should complete the first mini impulse wave among a series of others going forward. On Friday, silver had an outside bullish reversal and closed only 11 cents from the high, basis the March month, instead of closing near the opening price. That is bullish behavior, in my opinion. Usually, if silver is weak, traders will sell the rallies and bring it back down to near the open or even lower, but not this time. That indicates to me a thrusting move, which is bullish. Also, the three day RSI briefly went below 30 (oversold) before shooting up. Friday morning was a good entry point (near the low of 16.635), which I took advantage of.

    Iโ€™m very bullish (bellow, snort) gold and silver, especially silver. 3 : (:) โ™‰๏ธ

  56. macman1519

    Ronnie, you are too stupid to see what is happening, all u r concerned about is ur tax break and protecting ur own ass. You and Trump are two peas in a pod, ignorant, racist, selfish and miopic. God help America from assholes like you and Trump.

  57. LiesandDamnLies

    Nadeem Walayat (editor marketoracle.co.uk) who has been accurately calling the bull market from 2009 to date (including a call a number of years ago that the Dow would make the 20K at this time frame ) today announced that he that for the first time in several years that he is shorting the Dow. To understand why check out this article.

    http://www.marketoracle.co.uk/Article57979.html

    I’ve followed him for a number of years now and cannot fault his guidance. He called both the Brexit and Trumps win early when the bookies odd were 6/1 or over. Anyway on the marketoracle website you can view each of his articles over time by looking at author archive and make your own judgement.

    He has a huge following and I believe that today’s post has the ability to influence the market on its own.

    The coming week will be interesting for most markets including gold. As I pointed out in an earlier post the Chinese markets are closed for the week and things can happen in the gold market while the Chinese traders are away.

  58. Pedestrian

    It looks to me that silver is close to beginning a turn down. The spike rise on Friday was unable to exceed the peaks of either January 18th or 24th and if you look very carefully the pattern created by the three peaks on the hourly chart is a head and shoulders. On the daily chart we can see silver is clearly at the top of its channel and the prior bottom is not by any measure a bottoming pattern. We should see a decline to just pennies below the 16 dollar level within a few weeks. I am still holding a position in DSLV that I plan to leave on until the chart turns decisively my way. That could begin as early as Monday.

  59. Pedestrian

    And good thing I did not buy NUGT or JNUG last Friday. What I thought looked like a pretty obvious inverse head and shoulders on the 3 month charts of both is now looking more threatening after a closer review. It stands to break down and not up although we will have to wait for Mondays action to be more sure. One of my reasons is that I don’t like that the Bollingers are narrowing after the price pattern has started to decline. And this in spite of the fact the bands are both rising. Stochastics are also disheartening and point to a further roll over so I will go with the charts keeping in mind to play this by ear as the next move progresses. Gold may initially move to 1195 tomorrow before turning back down. The next decline might just be a painful one!

  60. WallStreetJesus

    Pedestrian – Trump is going to be good for precious metals.

    For those hoping for a decline and a chance to buy lower I wish you good luck.

    Silver the restless metal looks like it will breakout to the upside and it will be a quick trip to $18 once the stops are triggered.

    Jesse Livermore said โ€œThe market is never obvious. It is designed to fool most of the people most of the time.โ€

    Remember your greatest asset is your health and not your wealth!!

    1. Pedestrian

      Sure thing. Just remember the time frames I work in are usually less than a week and most often a day or two. A little further out in time I am bullish but the charts have not yet turned up. Its OK if you are waiting it out though because in time there is a reversal coming but for me I just hate positions that go underwater even for brief periods period. If the market gives me a gain now, well then I will take it now and worry about the big picture later.

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