123 thoughts on “CHART OF THE DAY – Gold and Silver Index

  1. Goild

    Is it now easier to jump, or perhaps at the next level?
    There is this Donchian theory to jump once it breaks out from the previous level and sustains higher prices for a number of days/periods. That would mean buy above the averages.

    It is tantalizing to say that gold/miners have corrected the interest-hike drop, and that now the next item is to correct for the election day fiasco. Perhaps there is the realization that indeed Trump will be great for gold. That would mean that we would see gold rising with much more momentum than the SM had.

  2. Goild

    Actually Trump loves to add gold features to his luxury cars, motorcycle, and jet.
    He kind of has golden hair…

      1. bill

        Then QE kicked in and the Fed bought the market in conjunction with the London fix and managed to suppress the PM market, ya ya I know conspiracy…DB admitted to the market rigging even tho many even here refuse to accept this claim.

        1. jeffd5584

          Exactly right Bill. The fact that it went from a conspiracy theory to a conspiracy fact can explain some of the cognitive dissonance when it comes to metals traders/investors…i.e. everyone knows it’s rigged for long stretches of time (Gary is always talking about it as well), so it then becomes a question of when/if there is a window where the rigging stops and the markets are allowed to function more freely…

  3. Alexandru Popovici

    GBP is toast once it fell below 1.2195 today!
    We have at least 2w ahead worth shorting the sterling – a pretty safe trade.

    1. Alexandru Popovici

      Additionally, COT report has not been so bearish on GBP as last Tuesday since the end of May – right before the waterfall began!
      I expect tomorrow’s COT to produce an even more bearish outlook for the quid – gonna see on Friday.

    2. Alexandru Popovici

      short GBPJPY –> to take advantage both of the rise of JPY and of the fall of GBP, two trades in one for the next couple of weeks ๐Ÿ™‚

  4. Alexandru Popovici

    Renewed BREXIT talk will bring about the high flames of the Scorch, but before renewing my short-SPX trade I want to see confirmation of new daily cycle in Transports and Semis.

      1. Alexandru Popovici

        not that I know of.

        I’ve recently got into FX & leveraged trading with a small amount of money to test my risk management in this riskier [leveraged] environment.

        PS: after retracing to 1.2181, GBPUSD is ripe for renewing its downtrend to new lows. EUR will be under pressure too (most likely to get into 1.02 turf) but GBP will be killed, so that EURGBP will rise.

  5. brianbreeze

    Gary if you say any mistakes made in bull markets will be corrected that means JUNG will need to break back to $23 which is where you told subscibers to enter months back.

    1. Gary Post author

      Before this bull market is over JNUG will go above 500 and probably above 1000 on a split adjusted basis.

      Retail traders just have no patience and no vision, so they have almost no chance of ever making any money in a bull market.

      1. vin

        WOW! Gary if you are right it will be great. To-day golds are doing well again. Congratulations. Too bad I did not get out of jdst when I had the opportunity.

        But, if you are right my gold portfolio will do well and cover many mistakes including the jdst gamble.

      2. Paul

        Gary- now that is Bullish… I personally have not set a target for JNUG. I am just looking to see how this baby handle try to get near the 200ma- p

          1. zbigkid

            Ha. I wanna see someone actually hold JNUG or NUGT for the next 4 to 5 years, without ‘caving’ or trying to time in and outs. I doubt any one here can do that. Or will do that. Just look at the historical charts of JNUG, or NUGT, or the inverse ETF, DUST. They all go straight down over time.

          2. zbigkid

            Here is one example of what happens.
            Go to charts of JNUG and GDXJ. If you get a 1 year history, you’ll see that GDXJ is up 138%, while JNUG is up 125%. If you had traded at the right time, like selling JNUG in the middle of August, then it was up 800%, and then known to get the heck out, you’d be fine if you didn’t touch your gains and left in cash until the year end.
            Do the same thing, with going back to Oct 2013. GDXJ is up 40%, while JNUG is down 99%. You have lost all your capital if you held JNUG throughout.
            Add DUST into the mix, and over that same time period from Oct 2013 to now, if you held, you are down -97%. These 3X ETF’s are trading vehicles only. Maybe you can get lucky and hold for up to 6 months in a one way directional market like last year from Jan 1 to August , but that is pure luck.
            You cannot hold JNUG or NUGT for 4 to 5 years. You will be guaranteed to lose nearly all of your capital. you might even lose it all in less than 3 months.

      3. downtrodden

        Gary, when you indicate that the pm could do 400-1000 percent for the next leg up. Do you mean the price of the stock or times the amount of dollars invested?

    1. Gary Post author

      FWIW the cycles seem to have evolved into a longer timing band than they used to be. Lately the gold cycle has tended to last 35-45 days.

      So maybe a dip into a HCL around day 20-22 but I’m not expecting a daily cycle top until maybe day 30-35.

      The sector probably needs 1-2 more sideways days to allow the 10 DMA some more time to catch up to price before gold makes the push to 1200.

      1. Surf City

        My short term Daily or Trading Cycles are still tracking to my 23-29 day average.

        I show the move into the YCL resumed after the Low after the US Election. That DCL was near Mid-Nov around day 26. After that the next DC topped quickly on day 2 and was a very weak Daily Cycle that found a DCL and YCL on day 22/23.

        Time is still a very important component for my cycle work.

  6. Strike

    Gary,
    About JNUG reaching or exceeding 500 – have you taken the time slippage of 3x funds into account? That would amount to a lot over 3 or 4 years even at a 50% average invested time.

    1. vin

      3X can be tricky. Just to give one a feel, any decline of say 30% at any time will wipe out 90% of the capital. If and when that happens it becomes impossible to recover.

      It does not have to be such a steep decline, many ups and downs can have a devastating effect. That is why they are so careful to add “daily”.

    2. Gary Post author

      There is no decay when price is trending in the right direction. In fact there is significant outperformance.

      GDX rose 180% during the baby bull. NUGT should have rallied 560%. It did 1000%.

      1. vin

        Gary, That is correct. If one can get the direction right, 3X are a printing press. But, any significant correction and one is in trouble.

      2. Don

        Wrong Gary! According to Direxion, NUGT makes extensive use of options to achieve it’s 3X leverage. Because of the time decay that is inherent with options, NUGT, DUST, JNUG , are all subject to decay even when the gold ETFs are trending upwards or sideways. If they are chopping up and down the decay becomes even worse because of how leveraged ETFs are structured.

        1. vin

          Don, No. Not really. On daily basis 3X will increase in price by 3 times of the underlying index or etf or whatever. So, Gary is 100% right that if the underlying security keeps on increasing everyday without a fall, then the 3X will perform better than 300% due to compounding.

          The problem is when the underlying security decreases in price. Decrease can have a devastating effect on the 3X.

          It is possible that over time the underlying security makes profit while 3X suffers a loss. It is very simple maths, in fact it is simple arithmetic.

          1. Don

            Vin, when you don’t know what you are talking about, it’s best just to be quiet. NUGT invests much of the money it gets from buyers into options in order to achieve the 3X leverage. Option decay, if the PRIMARY reason NUGT loses so badly over time even when the market is going in mostly up.

  7. ras

    Yeah, the tide has turned as noted last week. Using price alone, it was possible to detect an important change in trend without the help of opaque and heavy stuff like cycles, sentiment, undercuts, printing presses, manipulation, etc. with just 7 days time delay. Surely, an “insane” amount of money has not been missed because of the 7 days time delay. That is point No.1. Trade what you see works each and every time. Trading on what one thinks may or may not pan out consistently.

    Straight up folks aspiring for 1000% gains will have to deal with the temporary dips caused by chart oriented folks as price reaches various resistance levels. This can be expected to happen repeatedly until price breaks loose from multiple resistance levels overhead and sails into open ground. This is point No. 2.

    There is only one thing to do now. Just ride the trend in place until it lasts. It could be very dull and boring.

  8. Goild

    The miners have behaved by the book. They honored closing the gap.
    So they have a healthy behavior. Bullish augurs continue.

  9. zbigkid

    The biggest bubble of all bubbles in history โ€“ the global bond market.

    This is a market which has virtually exploded from $10 trillion in 1990 to $100 trillion today. GDP of course is no where close to that rise, so its the law of highly diminishing returns.

    In July 2016, the 10-year US Treasury reached 1.33%, which is the lowest ever recorded and below the 1945 low. (also right around the last and likely final time I re-fi’d my home into super low rate 30 year mtg.) Anyhoo, The 35-year secular rise of U.S. rates went from just under 2% in 1945 to 16% in 1981. In 1970, just before that idiot, Nixon, abandoned the gold standard, the rate was 6.5%, and in the next eleven years high inflation and a dollar that halved in value led to a collapse of U.S. Treasuries. During certain periods rates moved up very quickly, and between June 1980 and October 1981 is one instance. The U.S. 10-year went from 9.5% to 16%. Thus, I would not be surprised to see a similar magnitude of a rise starting in 2017. We could see the 10 year go from its current level to around 6% by year end.

    Eventually the 10-year is likely to reach well above the 1981 level of 16%.

    This would of course involve a total breakdown of the U.S. bond market as well as most global debt markets.

    And a collapse of the USD.

    So what direction do you think gold will go ?

    This is not rocket science folks.

    It just takes patience and discipline, which very very very FEW people have. People who trade in stocks and bonds have very little patience generally speaking, and even less discipline. I intentionally started putting a little of my money in gold, back in 1999. It was so I would never touch the money, since its not only not convenient to sell it, but also you certainly don’t want to pay taxes on the sale, and thus report to the IRS that you even possess it. (you’d be a ‘target’ forever). So you just sit on it. Like a Buddah. ๐Ÿ˜‰
    Gold miners, are only for trading, and I only do that in a tax free trading vehicle called a 401k. I keep very minimal in a bank, and plow the rest into my business or my kids education. And occasionally add more to the other ‘stack.’

      1. vin

        Correct. But, if the yield does increase significantly, there is no way for gold to go up significantly. In the short run, gold and golds look great.

    1. zbigkid

      Wow. Even The bond King agrees with me on the importance of bonds. Today, he is out with his latest musings….
      “If 2.60% is broken on the upside โ€“ if yields move higher than 2.60% โ€“ a secular bear bond market has begun. Watch the 2.6% level. Much more important than Dow 20,000. Much more important than $60-a-barrel oil. Much more important that the Dollar/Euro parity at 1.00. It is the key to interest rate levels and perhaps stock price levels in 2017.”

  10. ras

    One can entertain any opinion or pet theories one likes. But, mixing octals and hexadecimals could lead to confusion and loss of entropy.

    1. vin

      a nice one. thanks. Do you think the gold advance has been stopped is there some upside room still left?

      1. ras

        Just my take. There is upside room. I take the market one day/one week at a time because predictions are not consistently reliable.

  11. Epiphany

    Finally….easy money to be made in the miners! JNUG to $500 then $1000. Wake me up in a few years $$$

    1. Gary Post author

      I expect almost no one will make anything close to that, and most won’t make a dime. Conviction always always goes out the window during intermediate and yearly cycle corrections. We just got a front row seat to that process in November and December.

      I can guarantee that this won’t be the last time it happens, and it will never get any easier.

        1. Epiphany

          that for the whole portfolio…and up 124% on my JNUG position alone. I feel no need to overtrade here.

          1. Epiphany

            sorry, up 56% YTD and up 124% on JNUG since my Dec entry. I rarely nailed a bottom but got lucky on this one buying the bilk of my position in the $3s.

        2. Gary Post author

          Epi,
          Good for you. Don’t let the perma bears scare you out of your position. I expect miners will be going to new 52 week highs during this intermediate cycle.

      1. ras

        The pm market will do everything it can to shake off multi year perma bulls many times. It is not easy ride a bull. It never was.

  12. vin

    I surrender. I sell [email protected], at about 30% loss. In about 3 months time I am still ahead by about 50%. I guess one more wrong call and I am in trouble. At present I have no gambling position. I have learnt my lesson. Now onward I will follow Gary. He is so right.

    1. victor

      vin, you are all over, not necessary to repeat the same 10 yr yild again and again… so tedious to go through all garbage to find something useful…
      Alex, where are you? Please post something …

      1. vin

        victor if you can tell us where the 10year yield is headed please do post. That is all I want to know,

        If you can tell us on daily basis I can make money beyond anyone’s imagination.

        can I count on you?

  13. jonsyl

    miners have little confidence in gold’s comeback from friday. Not a good sign amid all the new found optimism

  14. jonsyl

    miners have little confidence in gold’s comeback from friday. Not a good sign amid all the new found hope

  15. 1970confused

    What happened in the last half hour is exactly why traders should use mental stops….jnug has lost 10% in that time. What a joke, the machines will never leave the miners alone. Up big down big for no reason!!!!

    1. Epiphany

      Short-term traders like to book profits. This is not a conspiracy. If you can’t deal with the beta of a 3X ETF you shouldn’t be trading it. I trade them but watch the GDXJ charts for entries and exits…I do not use some % gain/loss as a guide because I’m not a daytrader. Rule #1 – know who you are as a trader.

    2. bill

      Consumer credit beat… so they gave the market a drive by. Nice way for them to gobble up the gamblers shares as they stop out or bail.

  16. Epiphany

    Folks are freaked out and the miners haven’t even broken trend on 15-minute charts! Ha….yep Gary, this is why very few ever make any money…as you say, they sell and buy at the exact wrong spots!

    http://schrts.co/2HSR35

    1. jonsyl

      not freaked out at all, this gold thing doing exactly the same it’s been doing for months, namely having spirts of bear profit taking only to see these blip rallies reverse and head lower while hope springs eternal.

  17. vin

    jonseyl. You seem to make sense and that is what my feelings are. Unfortunately, I bailed out of jdst at the wrong time.

  18. WallStreetJesus

    Spare the rod, spoil the child.

    Gold Bugs get ready for a beating tomorrow.

    It will be a good one too.

  19. bill

    While all you experts argue back and fourth about decay , cycles whatever I am old turkey held NUGT ALL THE WAY UP and all the way down to half loss gains, during the last dip low I added a bunch of shares for the next leg half up half down this is money I don’t need to live on money I gamble with so for me I’m in it as long as I feel like playing … I like Gary’s ideas the rest is just noise.

  20. dboz

    Gary, it appears you are going to be proven correct on your dollar call with a false break out from NOVEMBER in the very near future. It is rising on low volume and dropping on higher volume and was rejected at resistance the last 2 run ups and today got beat down hard again after rejection. 99.95 could be coming soon and should that level break, 91 is in the cards. ROCKET FUEL for gold!

    I would like to see silver catch a bid though also! I think it lagged early 2016 though also?

  21. zbigkid

    http://www.cnbc.com/2017/01/09/investors-are-dumping-gold-at-the-fastest-pace-in-years.html

    “despite its recent gains, gold just saw its eighth consecutive week of outflows, according to a recent report from Bank of America Merrill Lynch in which gold was deemed “shunned” by investors. Those eight weeks, according to the report, mark gold’s longest outflow streak in three years.”

    “Investors are wise to stay away from gold at these levels”, said Eddy Elfenbein, editor of the Crossing Wall Street blog. While gold became a sort of “risk play” leading up to the election, it then became unwound after Election Day.

    “I think the broader picture for gold is pretty bleak,” Elfenbein said on CNBC’s “Trading Nation.”
    (I just love going against the grain of these pundits)(Hopefully they are wrong.)

  22. Paul

    I exited JNUG today near the High of the day, something I should have done on Friday… made some quick money on a Swing trade… this is no Reflection on what Gold and the leverages ETF’s might do in the long term. I expect to have a good place to re-enter JNUG again. Cheers!

  23. Goild

    The miners would be beaten tomorrow? Unlikely.
    Today we had some divergences, USD down, Gold up, miners hesitating, JNUG at times more than 2X than NUGT.

    Today was an opportunity for USD to get closer to the averages to star forming a double top but it failed.
    USD is already for three periods under the daily averages and the miners well above the daily averages.

    The small range in the Gold candles are saying energy is being stored for a jump which can take place tomorrow as Tuesday can be strong days.

    We shall see.

  24. Paul

    On a more Intermediate Trend (Bullish Continuation Wedge) I think it is possible that JNUG may move up to the 200ma- but in the meantime… I will be looking for pullbacks that will allow a few Swing Trades on the way up… of course time will tell whether or not this pattern holds up or rolls over in another bounce lower… I personally think the Low is in- p

  25. Goild

    As per how the 3X leveraged funds should be played?
    The expert would say: it depends.

    It depends on where you bought them and on the trading range.

    For the case at hand, having Gold in the range $1300- $1900 is clearly a possibility.
    In that case the 3X funds would give splendid gains, whether you bought them on Christmas, or today.

    One stands to have a 1 to 5 to 10 to 25 or more bagger.
    A play like this does not come every so often and so it is worth while playing it.

    The beauty of the thing is that one really does not know!

    1. vin

      Thank you Goild. Your insight is always appreciated. And, I wish you make a bundle. I understand that 3X can be very rewarding.

      But, arithmetically speaking it is a very dangerous game. Did you know that depending on how the prices fluctuate one can lose significant amount of money in 3X while making money in the underlying security when both were bought at the same time.

      For example if both were purchased on the same day, for $100 each then after a while the underlying security could be $140 while the 3X could be at $40. This is just one scenario and of-course there are infinite others. My point is it can happen depending on the fluctuations.

      Or, look at this way. If you look at the long term charts of the 3X bears and 3X bulls, in most cases long term investors lost money in both. Do you know why? How is that possible if they are both exactly opposite of each other.

      Whatever, I wish you well. Making money or for that matter anything else has nothing to do with anything except LUCK.

  26. Goild

    Given the significant divergence in JNUG and NUGT one can say that either NUGT overdid the drop or that JUNG is lagging; the later is unlikely as gold kept the gains.
    So tomorrow there might be a clear play to make easy money going long with NUGT.

  27. Goild

    Gold right now is at $186.25.
    One can say that gold $1200 is about to happen.
    Good trading to all.

  28. Alexandru Popovici

    USX on day 21 today.
    Initially I thought it had put its DCL on dec30 (just like USDJPY pair) but USX’s current daily cycle lingers and it is close to its end, while USDJPY will chart a HCL right below 115.

    A dead cat bounce of USD should ensue afterwards.

    Another proof of GBP’s weakness is that it falls (broke its support at 1.2135) even when USX contracts in search of its DCL!
    What will GBPUSD do after a few days, when USX finds itself in the above-mentioned dead-cat bounce …? ๐Ÿ™‚
    It will bring in profits for my GBP short ๐Ÿ˜‰

    1. Alexandru Popovici

      PS: GBPJPY should break its 140.20 support as USDJPY contracts below 115 to find its HCL –> driven by USX search of its DCL today or tomorrow in Asian trading.
      After this, the short GBPJPY should be shifted to short GBPUSD because I expect the former pair to linger as USDJPY will temporarily advance but GBPUSD will continue its fall to tackle the psychological 1.20 level next week.

      1. jonsyl

        alex, I find little clarity of outcome on these posts. All I know the continued hope for the scorch based on all these currency movements you post daily has not happened. Eventually there will be a scorch, likely with option expiry. The severity will be determined by Trumps first steps post inauguration.

        1. terrywg

          jonsyl: if you can’t find clarity in Alex’s posts then it is on you. His posts read clear as day to me. He might haven’t gotten his timing wrong with the SM but has been spot on with the large movements in gold, euro and sterling.

          alex: what is your outlook for gold at the moment? I am looking at it to retrace to 113x and consolidate in a bottoming pattern before there is any chance of a powerful rally.

          1. jonsyl

            sorry don’t see eventual outcomes. US dollar was to collapse more than a month ago, stock market scorched, oil was to collapse. All of which have continued their merry way. As to gold, got stopped out three times and then gave up as not worth watching with no further word.
            The surgically precise calls that accompanied all of the above calls did have me fooled for a while

          2. brianbreeze

            Alex is a clown who is full of hot air. Much of what he forecasts is dead wrong. Only a fool would go by what he says.

  29. terrywg

    @jonsyl:

    well he did call the top in gold at 1300 levels.

    also called the bottom in euro at 1.03 levels when it was trading at 1.06.

    and the fact that he stopped out of gold does not prove anything. Would you rather be caught in the drawdown to 112x?

    1. jonsyl

      each his own terry. We all get it wrong, that’s why we have to keep trying. Problem is, that those who claim the secret sauce with the greatest conviction are the most misleading.

      1. brianbreeze

        Alex likes to say things with great conviction which is why he is so dangerous and so often wrong.

    1. Dday

      I agree with Gary on the weekly, although i would like to see the k red indicator cross on the stochastic. Monthly still bearish. Euphoria is the most dangerous aspect of investing, price is key.

  30. Epiphany

    WallstreetJesus post of the day yesterday –

    “Gold Bugs get ready for a beating tomorrow.

    It will be a good one too.”

    1. WallStreetJesus

      Hey thanks for the recognition ๐Ÿ™‚

      TOMORROW
      an undetermined time period spanning from never to eternity, often used when talking to a girl

      1.i’ll call you tomorrow

      2. i’ll still respect you tomorrow

      3. we can talk about this tomorrow

  31. Goild

    NUGT and JNUG are lagging gold.
    This might be an instance about how the 3X fund managers collect their share.

    1. bigglaze

      I think it’s just that people aren’t buying mining industry stocks which makeup JNUG/NUGT. I’m sure they’ll catch up.

  32. Strike

    Another Icarus fan shows up at marketwatch.com:

    Stock-market bulls may get scorched by โ€˜Icarus tradeโ€™ in 2017
    Stocks may have further to run in the first half of 2017, but bulls run the risk of getting scorched over the longer term warns Bank of America Mer…

  33. jonsyl

    forever hopeful gold bulls need yen over 84 and dxy below 101 to gain ignition on a rally, just a lot of noise in the meantime unless you trade day to day hiccups. These are coincidental and not leading indicators however therefore only serve as a confirmation of trend in most instances.

    1. vin

      Hopefully following him this time will add to my 50% profit, unlike before when I followed him a few months ago and lost a bundle shorting dollar, long golds etc. This time I think following him will be beneficial and it will increase my profit. Additionally gdxj is not very speculative. My gains could be limited but then it is less risky.

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