205 thoughts on “Currency & gold update

  1. zkotpen


    Definitely like the patience aspect of your video!

    The latest thing that has been puzzling me this week is something to the effect of gold being so far below its 200 day SMA with GDX so close (relatively speaking).

    Today, I notice that GDX’s 200 day SMA is still rising (it never dropped during the YC decline), whereas gold’s is falling, albeit slowly, as a result of its YC decline.

    How could this discrepancy get resolved? Corrections, and corrections to the corrections. Complexity — the mortal enemy of the leveraged ETF.

    I’ve long considered the possibility of 1375 being the top in gold, as well as not, in this multi-year bear market rally. Other factors I watch are not lined up for anything immediate.

    IF — IF — IF — 1375 does turn out to be the top, a very likely, indeed perhaps the most likely scenario for the current rally would be double zig zag that comes close, but does not exceed 1375, but does chew up a lot of time.

    As you know, naked patterns are ambiguous. Gotta dress ’em up in the proper attire. For triangles — if that’s where we are, knowing just how much gold <3 the triangle (about as much as I <3 trig!) — that often ends up making wave C a double zig zag.

    Hope that helps somebody out there 😉

    1. Pedestrian

      No, that does not help me one bit.

      You are really overthinking this and about to go wrong. I left a post on the prior thread kind of related to today’s video. Look, this is not a time to get smart and stay long holding positions if a large fall has arrived. Gold is overdue for a corrective decline and it MUST break out of the upper channel line that has now been established on the daily chart or its down we go again and you ought to be either out or on the sidelines if you cannot stomach short-side trading.

      My bet is on a multi-week decline based on the daily chart cyclical pattern of rising and falling gold/silver prices over the past months. I am not saying that gold will not break out by the way. I am not saying it can’t break out either. What I am saying is your trades need to be thoughtful and conditional given the very obvious pattern in play.

      So that essentially means monitoring the action until it is clear where we are going. If we get somewhere near 1209 to 1210 today that should present a new shorting opportunity. As always I will not commit unless I feel confident what is happening but that’s my basic idea right now. Yesterday my sense was gold would bounce back and that does appear to be happening in the small hours of the night so its not tradeable for most people.

      Near the open we will have a better picture of what comes next. You might want to discard the idea of a wave C double Zig-Zag because that kind of talk will just make you go mental and cost you a lot of money.

      Its sure as hell not a trading strategy I would use!!!!!

      1. Pedestrian

        So all I am saying is I think its poor practice to cling to trades that start going South. Especially when there is a pattern warning of a corrective decline that could last a few weeks. The reason is that you just don’t know for certain how far the stocks might fall before its done. And Lord have mercy if you are holding onto high leverage ETF’s. Those are account killers even when you are correct if you wait long enough. How many days do you really want to sit in front of the screen as you get closer and closer to your original buy-point or start actually going underwater before you say to yourself “Gee, maybe I should have at least sold enough stock to replenish my account at its starting point”. I mean, what the hell is wrong with exercising a little common sense. Unless you are a crystal ball chart reader and know the future with absolute certainty you really need to play this game of investing with a few simple rules. And one of those rules says taking profit while it is still there for the taking! Otherwise what are you even doing this for?

  2. Gary Post author

    Like I said, 1000’s in commissions, if not 10,000.

    Folks just keep it simple.

    If gold can push the 3 day RSI down to oversold that would be your buy point to add to long positions.

    The larger intermediate cycle still has further to go. It at least needs to break the intermediate trend line above 1300, and the weekly stochastic needs to reach overbought.

    And I expect Z might be right. Gold is probably forming a triangle consolidation pattern that will require time to complete before it can breakout and deliver a big run higher. 2017 may be a mostly back and forth year for gold.

    1. Pedestrian

      Good morning Gary.

      I can appreciate your point of view since its one I am familiar with having employed it in the past. Commissions however are just a cost of doing business. If I paid thousands but was net-correct most of the year then it won’t bother me to pay them. Those are just the price to be paid for the opportunity to play. Same with taxes. Who really objects if a tax bill is excessive when it implies your trading income was equally excessive?

      Anyway, who here uses a broker to trade?

      1. Gary Post author

        Well one could use a $900 sledge hammer (government price) or a $10 claw hammer. Both will drive a nail in, but one is a lot more cost effective and will probably do a much better job

  3. zkotpen


    Yep, I’ve come across that one a gazillion times: The person who screams bloody murder at my commentary then, effectively, agrees with me.

    I’m definitely on the short side of the thing, though haven’t committed money to it — not yet. IF – IF – IF – I do, that would be cautiously, and over a very short time frame, with specified entry parameters, and exit targets clearly defined.

    As for the EVENTUAL long entry… I’m using a similarly PATIENT approach as Gary suggests.

    And I also agree, that there’s a lot going on from 8 to 10 a.m. US Eastern time that helps clarify the short term picture.

    That’s funny — seems like you and I are more or less on the same page.

    As for the zig zag, Pedo Pedo Pedo, most people avoided Geometry & its cousin Trig like a fate worse than the plague occurring at the same time as they were being hanged and quartered. Those who “had to take” those subjects hated them. What can I say? I loved them — & still do. Geometry (& cousin Trig) & Français were my favorite classes!

    Most people just hate math. If they can rattle off some arithmetic & do enough algebra to figure out which toothpaste costs more per gram at the supermarket, they’re pretty satisfied. A handful of us weirdos happen to love math, and our minds are shaped to think in its ways. A very few have been taught to explore the infinitesimally small, and the infinitely large. Likewise for having a mind formatted for science. In that case, unlike the case of detested math, the world is full of science thumpers: People who will defend science to the death, though they are not scientists, nor do they think as scientists do.

    No, I’m not being arrogant. All those other people out there have lots of abilities in which they DWARF ME. I admire plenty such people.

    Nope, in this, I’m just like most humans: Very good in a very small number of things, good or OK in a few more, and average, bad, or terrible at most things.

    But there is one thing that some folks & I share: I only make commentaries in my stronger areas & keep quiet in all other areas. And unlike normal people, I don’t chime into a conversation just because “that’s what everybody else is talking about.”

    As for trading, which is certainly not the same as forecasting, I’m working on it — ASSIDUOUSLY — just as I did in poker last summer. For 6 months, I had the probabilities down cold, and spent that time working on strategy and risk management, as practical matters. At the same time, I even had to learn how to deal the cards properly & figure out who was “under the gun” in 3-handed play. When a friend got frustrated, I told him, “hey, this is only the second time in my life I’ve made it to 3-handed play!” He understood: My practical experience needed time to catch up to my theoretical understanding. Same goes for trading vis à vis forecasting. And by the way, while learning poker, I put an average of $7.50 USD at risk per week in a friendly charity tournament. So even when I didn’t win, seven dollars & fifty cents is a pretty manageable loss to deal with one night each week.

    The bigger question is: Why you wish to give me grief?

    1. Pedestrian

      Sorry, I must have misunderstood your post. That Zig-Zag thing and the Trig <3 threw me off. No grief at all. How exactly will you play the day that is coming if you don't mind me asking? Can you be more specific for my worn out brain? Have you got an entry point picked out for example and a price target for an exit? I function best in the world of tradeable numbers. Not so good at hypotheticals and theory.

  4. zkotpen

    There are 2 relevant things to keep in mind for 2017 in terms of gold & miners:

    First, we’ve got to remember that gold’s last YCL and subsequent YCH were about 5-7 weeks BEFORE those of GDX. Doesn’t mean it is happening now, but we cannot discard that possibility, especially considering the fact that GDX’s yearly decline has STILL not turned its 200 day SMA down. GDX’s YCL may be in, but we cannot ignore the possibility that it MAY still be a month and a half behind gold’s. Maybe they’re in synch now — but that’s not a given. I was satisfied with gold’s move below its 200 day SMA, but GDX didn’t even come close. That’s cause for concern.

    Second, regarding the possible triangle in gold & miners, IF in fact wave A is complete at 1375 and B is complete at 1122, it is possible that wave C is both the most time-consuming wave and the wave that retraces the most, of all 5 waves of the triangle. The way the 200 day SMA charts for gold and GDX look now, if gold shot up to 1374 in a single zig zag, say in 7 months like it did last year, it would likely not produce the right divergence to give a high probability set up for a wave C top. It would not be doing enough of a job consolidating the intermediate & yearly cycles. Volatility at those degrees is still too high — consolidation means bringing that volatility down, before the next big impulse move. That means wave C needs to spend a substantial amount of time hanging around the 200 day SMA, without venturing too far one way or the other.

    If wave A is NOT complete at 1375, but rather merely the first zig zag in a double, or even something else, then that leaves open quite a few options, that would require additional consideration, if that situation approaches.

    That is why I’ve been stressing for months: Don’t get too attached to a bullish or bearish bias. The higher high is not guaranteed, neither is the lower low, in any yearly cycle, for the time being. As those inflection points approach, we can take a look and see how things are shaping up.

    If you can get in and out of daily or intermediate cycles profitably — what’s wrong with that?

  5. zkotpen


    Thanks for your understanding. I doubt your brain is worn-out. Rather, it seems to work better with practical matters — which is my area of weakness. Nobody has ever accused me of being a pragmatist or a realist!!

    So maybe we can crack this nut!

    For me, first thing is, both gold & GDX patterns look CORRECTIVE. And of the type that makes me stay away: Where a small degree of trend is opposing the trend one degree higher, and that may go on for several degrees of trend opposing each other.

    So far, I see something of that bounce you were looking for in GOLD — perhaps a bit of a dead cat bounce. All of that looks corrective to me, and in a complex way: Too risky!

    Next, on the 20 day SMA chart (for daily cycle analysis), like you & Gary, I believe it’s headed down for a correction, but in the immediate term, it’s signalling that bounce you were expecting. Still, it’s worth noting GDX bounced off its 10 day SMA yesterday, and gold has yet to hit its 10 day SMA. In particular, gold seems to be consolidating in between its 5 day SMA, and a sort of consolidation support slightly above its 10 day SMA, currently around 1198.

    My current thoughts are that gold will continue to consolidate between 1198 and 1206 for a while (probably less than one day), and that consolidation will resolve itself by taking on a bearish look & proceed down. At this early stage, I am looking at 20 day SMA’s in gold & GDX for a pullback.

    Will reassess after we get the 8:30 a.m. economic data. Also, Yellen gives a follow up speech Thursday evening. Look at the titles of the speeches:

    Wednesday: “The Goals of Monetary Policy and How We Pursue Them”
    Thursday: “The Economic Outlook and the Conduct of Monetary Policy”

    Gold was bearish on Yellen yesterday, and that topic looks fairly broad and theoretical. Today’s topic seems to be more about getting down to the business of the current economy & what the Fed is going to be doing this year — more nuts & bolts pragmatic stuff. There might be more of a bearish reaction to that, perhaps lasting into Friday as well.

    What do you think?

    1. Pedestrian

      What do I think?

      Be careful, nobody asks that question and then goes free without a specific answer!

      Macro picture we will see gold fall to 1100 before this bear market is done. That is virtually a 100% reversal of all the run-up that has happened since December 4th of 2015. If you recall, gold shot up like a rocket through the first few months of 2016 to much chest pounding and back slapping heard from all the gold retards hither and yon.

      And then most of them got run over like soft little chickens as gold went limp. Some of them have lost it all because they played ETF’s instead of investing in actual mining stock. Poor things. But I am not really too sympathetic because most gold bugs are idiots and deserve the quiet moments a big metal decline brings.

      So this pullback is not over although we are finally getting close. Just a hundred dollars plus or minus before we start the real bull trend. You could hold through it if you are brave but what the hell is the point of throwing all gains to date in the dumpster only to have to repeat the experience from the beginning?

      So quote me on where the final bottom lies. It is 1100 dollars with a little wriggle room for a slight expected spike lower to perhaps 1080 just to scare the shit out of the last few bulls who have been holding on all this time. That should get them to finally capitulate as the whole market screeches like a banshee we are about to see 1040 and lower.

      I am also pretty certain gloom will prevail. The perfect time to buy. Between here and there I am going to be short more days than long although I won’t apologize to fellow bears for taking the odd dead cat reversal that always come.

      We are still in a bear market. It has not ended yet. By the time it turns back to a bull most of the gold-bugs will be either exhausted, disillusioned or broke. I hope there will be enough of them still kicking and alive to scalp a few bucks off though.

      Stupidest animals on planet Earth.

        1. Pedestrian

          Just trying to wake them up, Megamind. Gold moves in two directions. They just can’t seem to fathom the simplest ideas. Maybe I am too hard on them though. Not everyone feels comfortable on the short side.

    2. terrywg


      if you believe that the price of assets act cyclically, and that price action is largely pattern based (as I do), then fundamental analysis should have minimal bearing on your investment thesis.

      i have noticed, however, that the human mind always seeks causality; to rationalise and justify price action.

      how does this relate to your question about this week’s economic data? Well I think markets always seek a catalyst, and gold will correct down whether or not yellen’s pronouncements are favorable towards the price of gold (analysts will always rationalise this movement afterwards). Also, another potential catalyst could be trump’s inauguration speech. I think he’s going to shock everyone and actually act in a reconciliatory and magnanimous manner (look at his past few tweets for reference), which should give a nice bump in USD and an inverse downward correction in gold.

  6. Goild

    Good morning.

    Whether you should hold old turkey on your positions or not?
    The expert would say, it all depends.
    It depends on the type of security, the % amount of your account you have in the security, your tolerance to loss, for example.
    If you hold GLD is not a big issue.
    If you hold a 3X leverage fund, it may not be wise.

  7. ras

    Zkotpen & Gary,

    Thanks for your insightful comments. After a severe decline, following a great advance, next year could likely be a (trig?) consolidation year stressing both bulls and bears. Actually, the recent advance peaked 4-5 ago before the last spurt in $gold. A pull back to 1170 or a bit lower over time could produce the RSI OS Gary is looking for. One could do better by keeping an eye on gdx/gdxj/gdxx and HW pm stocks as well. They could reach a low ahead of or in tandem with gold.

    If the trig scenario plays out, what is left in the current advance could be more powerful than subsequent trig vertices. By the time gold breaks above the down trend line and nudges 1300 creating BO euphoria, price momentum and gdx/gdxj prices would have peaked several days earlier. In any event, 2017 could be shaping up to be a challenging year for both bulls and bears.

  8. Epiphany

    Looks like my comments regarding most folks overtrading are getting heard, even by the all powerful Great Oz.

  9. Don

    There is no need to be negative on gold. This correction could be over quickly. I am prepared to jump back into silver if it looks like like it is consolidating.

  10. Gary Post author

    The intermediate advance in gold isn’t going to top until a combination of things happen. First the stock market has to complete the move down into its yearly cycle low. The dollar needs to drop far enough to push sentiment down to 30% bulls or less. The weekly stochastics on gold need to reach overbought. The bullish percent indicator needs to reach 75% or higher. Gold will need to break the intermediate down trend line. And we should see a massive volume up day on DUST & JDST when the trend is ready to reverse.

    1. ras

      Sounds plausible. Personally, looking for Wkly stochs OB and $bpgdm around 70-80, plus nugt around 13-15, sideways price move for several days by gdx, etc. while $gold pretends to make a higher high, plus $gold BO above declining TL on weakening momentum, etc.

      But, the top priority is zero in on the current pull back.

  11. Dday

    So concerning gold weekly looks bullish, although macd d has yet to cross. In the diagram I have outlined a similar set up in 2013 where gold looked ready to take of then the macd reversed back down and stoch remained oversold. Just to be aware…..


    On the daily looking like a reversal, if the rsi continues at this pace I would say best guess 4-5 days before it reaches oversold. MACD, stoch and tsi all turning down from overbought…..

  12. bigglaze

    Even though there’s a dip in gold (probably the US dollar and it’s due for a pullback) the HUI is holding nicely today so far. I don’t know why people are hitting the panic button.

  13. Surf City

    The USD is bouncing here, very likely out of a short term Trading Cycle Low. I have the USD on day 2 and my expectations are, however, that this move should top out on or before day 8 which will likely allow Gold to move into a short term TC Low. If so, this will be a great place to add.


  14. Don

    I think the sell off in silver is already over. Crude oil is going up against the headwind of a rising dollar. very bullish on crude.

  15. Pedestrian

    Picked up JNUG at 7.90 and maybe I am an idiot but we shall see. Aiming for 8.74 by my calcs. So far so good as we are inching up a few cents at a time. Pretty sure the commission fee is already paid. Kind of a so-what thing. But this is just wheel spinning time anyway. The real show starts later when miners start to fall. All you buy and hold guys can cuss me later if my trade is a mistake.

    1. Pedestrian

      No Don. I am a passionless, calculated trader. I don’t make bets I can’t win. I don’t get greedy either. Also I don’t normally post any trades here but Bill kept bothering me about it so I thought what the hell. Just to make a small point I suppose so he would stop accusing me of not being a buyer. I am three for three this week with the fun money. It adds up though.

  16. zkotpen


    I agree! Though I add the math to the patterns, to help resolve ambiguity — all the while, knowing full well that one trader, anywhere in the world, can throw everything off by placing a market order just as price is hovering on the brink of an invalidation point or a guideline level.

    I’m trying to figure out which pattern among more than one valid alternatives is mathematically the most likely, fully aware that the result is most certainly UNCERTAIN. It is the ultimate challenge to my mind, which I’ve always believed was fully capable of handling paradox.

    Funny thing is, as I study TRADING with great interest, in order to improve in that area, I read that, properly speaking, “fundamental analysis” is actually mathematical modeling that was used almost exclusively in the 70s and 80s — which is when I was learning Economics (1986-88). So all those Econometric models were “fundamental analysis” — but I guess you’d call it “Old School Fundamental Analysis”. Those mathematical models even included long term climate data in their calculations (for commodities). I remember all of that hogwash — vaguely! Calculating supply and demand??? The one thing I do remember was my Romanian Econometrics prof who always brought all of that annoying crunching back to the critical question: How does your “fundamental analysis” compare to a coin flip, mathematically speaking?

    When I read that definition of “fundamental analysis”, I thought: Thank God I was in denial of my profession for 20 years! That way, I didn’t spend a whole career practicing non-scientific thinking. Which, of course, was the whole point of being in denial: I hated the “soft science” aspect of it. No interest in empirical studies and data crunching. Give me scientific method and math, all the way!!! No social scientist I’m aware of shares this attitude (if they do, I’d LOVE to meet them!!)

    Of course, during my period of denial, computers and the internet happened, so when I emerged, I had forgotten all the ridiculous Old School Fundamental Analysis. And the New School — well, it’s all of this social drivel, opining about news & such that’s all over the place.

    To that, I sing, “Weird lover Wilde is on [my side]”: Everything popular is wrong!

    I agree about the news-gossip: It just helps with timing the market moves; it does not cause them.

    So just stretch out and wait,
    ’cause there’s no debate…
    how can you consciously contemplate,
    when there’s no debate?
    Stretch out and wait…

    Meanwhile, learn the patterns, do the math.
    See where that goes!

  17. zkotpen


    Wow — gutsy trade on the JNUG — looks like that will work out for you!

    I see exactly where you entered — around 10:12-10:15 market time?? With a tight stop, I’d imagine… does not look like gambling to me!

    1. Pedestrian

      No stops. Just a target and I monitor the thing. Kind of funny actually. I had the bottom in sight almost to the penny but was slow on the keyboard and had to chase for another 10 cents. That gets the adrenaline going. The cat was on my lap chewing on my sleeve though and slowed me down!

  18. Strike

    Ped, Surf, Goild, and z and others all short term (or longer) negative.

    Not me! I’m in Don’s camp. Bullish now. Looks like we have this side of the boat to ourselves.

  19. Strike

    Line in the sand:


  20. Pedestrian

    Sold at 8.45 for a gain of 53 cents a share. Not as good as yesterday or the day before but I didn’t like the look of the turn on the one minute chart. Maybe I was premature but its OK in my books. Fifty three cents is like a paycheck so what the hell. Let the gamblers take the rest.

    1. Pedestrian

      And glad I sold when I did. JNUG just plunged 20 cents. I would have been so pissed if I was riding back down that fast.

  21. Goild

    Hi guys,

    Things here are going well. Bought 1 1/2 lots lower so I am reducing more and more my overall purchase price. Currently I have 4 lots. Good trading to all.

  22. Don

    Have you guys considered the possibility that Gary may be right about the dollar and that it will eventually head down? He is going to get it right one of theses times. Gold, silver and crude will shoot right back up.

  23. Don

    I bought back one third of the silver positions I sold yesterday and increasing my platinum holdings which I did not sell). Keeping a small crude oil position and willing to add more if we get another sell off.

    1. WallStreetJesus

      I added more platinum as well today. I was hoping it would get to 950 so I can get a little more. Maybe tomorrow.

      Great trade on silver yesterday. I thought silver might pull back but I plan on riding it out. I have never been good at getting in and out. I have been left behind too many times. I think $17 silver is cheap.

  24. MegaMind

    Looks like next week will be bloodbath phase number 4 for miners… sell all longs… I will post when to get back in… looking at 30 or so gdxj… 12 or so for silj… 4 for jnug… these are my estimates to help you out…

  25. zkotpen


    I was just going to ask you about that — whether you chose to weather the sharp downturn. So you didn’t — though by now, seeing how the downturn is playing out as a “correction to the correction to the correction” (or even more) — JNUG should head back up in the direction of your original target, before once again turning down more in earnest as you suggest.

    Actually, where you said you were caught chasing your entry, I actually thought you had timed the bottom, then bounce, then slight pullback to a higher low & entered there (gotta love the cat for making it all work out perfectly in the end!)

    At any rate, some say you’re gambling, but I know that’s NOT the case. I can see exactly what you did, and it was clearly not a crap shoot. I called it gutsy, because it was a countertrend move to a countertrend move, but still well calculated.

    On my end, I was looking for a bounce to a short entry, but GDX kept going down in the first half hour of trading. More importantly, the math on yesterday’s afternoon low told me NOT to short just yet, but rather to wait for a bounce (the bounce you actually traded).

    So for now, I am waiting for that short opportunity…

    1. Pedestrian

      Thanks. I am just waiting for another JNUG re-entry incidentally since its fallen close to my target. Not sure I will execute it though as the day wears on and I don’t want to be in it tomorrow morning since I can’t quite be sure what Trump-mania will do to my trade overnight. Patience will pay off soon enough on an excellent short position but it may not materialize until Monday. Once it begins I plan to hold for a bit of an extended stay. More than the usual few days I suspect.

  26. ras

    Where is the “scorch”? Volatility etfs keep dripping down. qld keeps making NHs. It might happen at some point down the road, not today.

  27. zkotpen

    MegaMind, Pedestrian,

    I’m on the same page here — my charts show very short term bullish, but then I’m looking for a move down to the 20 day SMA in miners & gold — I guess that would happen next week. Perhaps lower than that area, but the 20 day SMA should be a minimum retracement.

    Meanwhile, what is the Wall Street Word of the day?

    Consternation 😉

  28. Steffmeister

    No foolish bet in JNUG here please, end of Jan earliest but 2-8 Feb is ideal imo. perhaps as late as 13rh Feb. Then we are back in rally mode, IF the low stays intact.

  29. Gary Post author

    It’s going to take a few more days before I can tell for sure, but bonds may be starting the next leg down. This should be the recognition phase that something is seriously wrong (if I’m right about the bubble popping).

    1. Pedestrian

      Check out the 30 year bond chart Gary. It is the one I use to gauge what is coming next. You will notice its very stable when viewed from a monthly level. At most what I see coming for TLT is a double bottom and strong reversal come mid February with bonds on the move up again and gold in tow.

      1. MegaMind

        ped you could be right… just looked at tlt monthly and all indicators are reaching oversold…also the tlt weekly bounced off the 200ema…maybe it will go back to bounce of it again to get your double bottom…

    2. Surf City

      I agree that Bonds have likely topped longer term but they just reached a high on day 19 of this Trading or Daily Cycle. My expectations are that the next DCL will be very Right Translated in the near term.

  30. bill

    Gotta love the price action in both Metals and Miners today especially the 3x funds holding strong with superb volume.

    1. brianbreeze

      bill you spell it “you’re” not “your” you dope. Still waiting to hear how one can have a very strong economy and weak dollar.

  31. WallStreetJesus

    I think there is a big bond rally coming. The commercials are at all time extremes bullish. There could be something really bad lurking out there that will drive a flight to safety.

  32. Gary Post author

    So far it looks like gold will hold the support at 1200. This may turn out to be just another one day dip and back up we go.

    All the day traders that think they can outsmart a bull market are probably going to be disappointed.

    Gold isn’t going to complete a final intermediate top until stocks complete their yearly cycle low, and the Dow confirmed a failed daily cycle today.

    1. bill

      Yup, lots of Dust players playing the daily swings just got dusted. Of course they will clamor on they made a bundle…sure you did.

    2. ras

      Too soon to tell, Gary. I would wait a few more days into next week. The market has its own time table, it can not be rushed on the way down or vice versa. Your intermediate outlook is fine, though.

  33. dboz

    Anyone feeling bullish? Trump spike tomorrow as payback for the Trump crash on election day? Dollar tanked, USDJPY tanking. Setting up for a nice run tomorrow!! End of day today was very strong.

  34. Goild


    Thanks for the update on gold technicals.


    Good comment on tomorrow’s spike? It will be interesting to watch it. Any idea which way it might go?
    USD did not have a great day today. GOLD held nicely.
    Tomorrow is pay day and so the SM may have a positive day which may carry into USD.
    On the other hand Gold/miners/Yen/Tip kissed the daily averages.
    So tomorrow appears as a critical day.


    I got more platinum shares and a position on GLD these truly would be old turkey, I think.

    I am doing good lowering my purchase price of my NUGT lots.

    It is exciting and fun to be around here.

    Good trading to all.

  35. Goild

    Hey, bginvestor,

    Please enlighten us with your buy/sell at support/resistance approach.
    I thought it is a difficult trade to do when the market can breakout either way, it is almost like
    flipping a coin.
    Please enlighten us!

    1. bginvestor

      Goild, here’s an excellent example with GDX .. Notice how the price action bounced off the support/resistance line on the way down.. This proves these lines have meaning..


      The orange boxes signal excellent times to buy at support. Risk/Reward levels are best. When searching for the YCL, the later orange boxes were the best entries. If using stops effectively, loses were minimum until you find the YCL. Aggressive investors stayed tenacious until finding the bottom.

      Notice how price action has broken the resistance line. This is evidence of a potential trend change that occurred a few weeks ago. Now the resistance line has formed into support and price action has responded to this new support. Of course there’s no guarantee that price action stays above it, but the new support line helps to determine risk going forward.

      If looking for tips .. its to learn how to draw the lines that matter. Let’s make some $$

      1. Goild


        Thank you!
        A figure is worth a thousand words indeed!
        Very well explained and much appreciated it.

  36. SuccessfulTraderJNUGis30

    But Gary! If gold rises too high, won’t your gains be useless since the dollar collapses?!!?!

  37. zkotpen


    “In jnug at 7.75, stop 7.40. Should double my money again, same as Dec”

    Not so fast — wish you had gotten out Thursday afternoon with a little scalp!

  38. zkotpen


    I just went back and read your posts more carefully.

    Wish you had given me those warnings in 2012-13!!

    Especially around the Oct to Dec, 2012 time frame!!

  39. zkotpen


    More to the point of yesterday’s price action & the triangles:

    JNUG almost hit your target — but looks like our good old friend, Triangle Man came back, on a small time frame. That’s so often the risk in the correction to the correction type of pattern (wave B or X), as well as the overall pattern for a sideways consolidation after a long impulse move (wave 4). That’s why I called your move bold, but still well calculated.

    Look at the 3 min chart for GDX & you will see the triangle stuff I look for, on EVERY time frame. If I had been awake, I might have shorted miners at 23.03 with monster leverage on a small position size. If I were into DUST or JDUST — which do not expire — I’d certainly have shorted, with a very tight stop — whatever is equivalent to 23.09 in GDX — reward:risk ratio on that is greater than 3:1, so it’s an excellent setup. With puts, which expire, it’s probably better to wait until Friday morning.

    Otherwise, my general guideline on TRADING the higher probability direction of the triangle breakout is to just go ahead and take a position on the impending reversal at Point C, as waves D & E are MUCH less predictable, and can often be very short, whereas wave C tends to be very long. Yes, I am also aware that wave E can itself be a triangle, which seems to go on sideways forever, but gold and GDX seem to break out from triangles quickly after wave C completes more frequently than slowly. I missed much of the breakdown from the triangle last September, simply because I was waiting for wave E to move a little bit higher and take a little bit longer — next thing you know, there was that huge gap down in GDX and I missed most of the setup I had spent nearly a full month tracking. If I had just shorted at the top of wave C, I’d have nailed it. Forecasting and trading are two very different things!

    With that in mind, switching hats from TRADING
    (an area of development for me, in which I’m working hard at improving)

    (an area in which I’m much more developed than I am in practical trading)

    Here’s what I was pointing out on Thursday morning (market-time): Where I said that wave C is often more complex than A; chews up more time than any other wave in the triangle (except maybe wave B, aka ” the trap”); and usually retraces the most of any wave in the triangle. I especially want to draw your attention to the following:

    Wave C often forms a double zig zag whereas wave A often forms a single zig zag. You successfully traded a small wave A in JNUG yesterday. It was a straightforward, simple calculation for you, whereas you decided not to bother with the subsequent bounce — which turned out to be a more complex, time-consuming wave C.

    3 observations on that likely wave C on the 3 minute GDX chart:

    1. It retraced 91.3% of wave B. Big retracement!

    2. Complex. After the first quick jump fizzled out, it just meandered sideways for an hour and a half before the second part of the move. On a larger time frame, that could get pretty nerve-wracking. Even on the day trade, it could make the holder of a leveraged position nervous.

    3. Look at the slope of wave C compared to that of wave A. It is clearly MUCH flatter. Now IF the bigger wave A in gold was Dec, 2015, to Jul, 2016, a subsequent wave C could take longer, but make a lower high, which would also show a flatter slope.

    I first noticed that last item in the first months after I began studying the wave principle. I began studying on April 17, 2013 — we all remember the steep bounce in gold & GDX from then. By early June, 2013, I was posting on the SMT premium site that I felt the move up from the May 20 low looked anemic by comparison. The May 20, 2013, low was an “undercut” in GDX, but not in gold. Still, the subsequent rally was anemic vis à vis the late April rally, in both cases.

    Then the same thing happened one degree higher, when comparing the move up of Jul-Aug, 2013, to the flatter, much more sluggish move up from Jan-Mar, 2014.

    That’s what I was trying to say when I said that gold loves triangles as much as I love trigonometry (the study of triangles). How on Earth could I, between the ages of 15 and 17, have known that real world application when I was learning all the proofs, the graphs, the sines, cosines, tangents, cotangents and everything… then the following year, learning the derivatives of those functions, and then their integrals… who’d’ve thought it was the beginning of a great love of mine that would also be valuable — if I could figure out how to put it to practical use, which I am presently working on & fully intend to do!

  40. zkotpen

    PS: If anybody out there has a poor son or daughter who feels like they’re suffering a fate worse than torture in geometry & trig class — perhaps you could contextualize it for them when they complain: “What good will all that geometry & trig ever do me in real life anyway?”

    I fully intend to develop this stuff scientifically, so that the general public will be able to learn Basic Economics as required course material in high school. I’ve already got the Econ part contextualized. The biggest educational challenge is to contextualize geometry, trigonometry, and statistics in such a way that people will want to learn those subjects, as they will be the prerequisites for learning the markets, which will help them immensely for their entire adult lives.

    Think about it from your own point of view: We’re looking at numbers, charts, & graphs all day long here — who reading this blog would have just LOVED to learn geometry, trig, & stats when they were 14 & 15 years old, just so they could take the required Econ class at age 16????

    But that Basic Econ class, the way I visualize it, will save a lot of people a world of hurt, for as long as they are alive!

  41. ARends

    Dent has done many forecasts with crashes from 90’s considering world cycles and with his claims and analysis that has predicted crashed by the economics in relation on the age demographics and baby boomers that is interesting in this video, but the fact of how the markets are going to play out with where to make the bucks would be great to have others point of view if he says Gold will drop to $700 and the demand of dollar will increase in his explanation with demand in dollar will increase will the loss in stocks and deflation will al money disappearing. This is a good contrary argument to many others to make you think! Whats the point of view here. I might not be the sharpest knife in the draw but listening too many that has predicted the coming crash have different POV of how it plays out. Whats the on this ? So many POV to wrap your head around today especially if we betting on GOLD

    1. ARends

      The fall of gold and silver being inflationary hedges will make them drop in deflation…so the question is deflation or inflation? His argument for deflation is good , but would that be the gold demand key driver is the question and would that depend in which currency you live. Tricky?

      1. ARends

        Dent talks about cash is king and having $$$, but one flaw is id banks go and cash…This does not add up. Gold is protecting value in losing you cash..does it add up?

        1. ARends

          The other question I don’t think Dent considers, that the world wants to bring in a one world currency by 2018 would also impact demand and value outlook and large gold demand past few years by CHINA, USSR, SWISS ect..mmmm, as basis of currency value possibly not US (if fort Knox still do have gold). International or globalist (bankers..IMF) aim for cashless society and India seen as first test? Food for thought!

          1. Dday

            Dent and the stockmarket, wrong wrong and more wrong….He has even admitted it saying he has to rethink his strategy…I view all long term forecasters with scepticism.

  42. zkotpen


    Gold has certainly hit the 1209 target you mentioned yesterday, then promptly turned lower, which is what I believe you were forecasting…!

  43. Steffmeister

    Retest of Dec low still in charge, Gold just broke 1200 … I must admit it’s a very stubborn metal.

    MasterMind you asked me at what price I will buy JNUG. I am not looking at price I look at time as in timing. Time is always more important than price W D Gann 🙂

    Does anyone here know about mother natures own cycle? If you cut mother natures cycle in half you have a very good cycle to look at. This cycle is jumping out as the dominant one for stockmarkets in 2017.

    Will we see a multi year top for stox in 2017? 2017 … what about 1987, 1997, 2007 ?

    /Steff”Not so skilled WD Gann student yet”meister

      1. Steffmeister

        Mother nature or human behavior likes to do things twice, double top or a double bottom is one of the few patterns to rely on.

        After a top or bottom wait for 30days, then look out for a retest. If a
        higher high -> continued trend up, bullish
        lower high -> change of trend, bearish
        higher low -> continued trend up (like now), bullish
        lower low -> bearish trend … we are going lower for months

        That is a very good rule to follow!

  44. zkotpen


    BTW — where I mentioned “Old School Fundamental Analysis” — I reckon the “old school” part is extra. We tried to crunch out supply and demand, in order to build Econometric models. That’s just plain “fundamental analysis” — a ton of work, but clearly NOT tradeable.

    By massive contrast, what I called “new school fundamental analysis” — just folks sitting around watching the news & spouting off their visceral reactions and mental concoctions. Nothing new school about that — it’s more like “armchair analysis”. Nothing fundamental about it at all!

    Either way, both are useless. The news addicts can not correlate their opinions to anything — they’ve not been able to do so for millennia. And the real fundamental analysis, with all of its crunching & factors affecting & variables, fails to consider the main variable:

    The fact that supply and demand are made up of sellers making offers to sell, which are or are not accepted by buyers making offers to buy, and vice versa. Fundamental analysis ignores the behavior of market participants — the de facto suppliers and demanders!

  45. Goild

    Good morning.

    Looks like indeed SM will have a good day carrying USD. Today is pay day.
    Beware of a hooking bull trap in gold around 800-830 AM just like day before yesterday.

  46. Goild

    In a few of the recent pre sessions gold has lagged USD. If USD is up and gold is not down, is just a delayed effect, Gold will eventually go down to reflect USD up. SO now USD +.3% and gold -0.04%, the divergence will cure in favor of USD.

  47. dboz

    It seems that the vast majority of blogs are all loaded bearish again. Many believe the dollar will soar to 112 region, gold sub 1000 again, bonds continue to rate climb triggering the metals to break down. Some even say for decades. So, here we are again. Is this a dead cat bounce in a bear market or will we power up and crack 1300 which most feel is the trigger to be bullish? Are metals and miners about to roll over and sell off hard again? Is the SM going to rise or is now the time it pulls back? From 2001 until now the market has dropped every January except 2013. We have seen very slight declines so far. Will the SM give investors a scare this year? We are basically 11 months of near zero SM volatility. If markets take a hit of significance in terms of a correction, will that be the needed fuel for PMs? I don’t know, but once again it seems the boat is beginning to load to one side, bearish.

    1. bill

      Dollar longs are going to get Nuked and real soon l. It amazes me how some people just do not catch on when given a free tell. Trump came out and told you the dollar was to strong, yet once again the loud mouths take to the net and proclaim 120 dollar lol its hilarious is the mind set of a trader.

      1. brianbreeze

        bill you don’t even know the difference between “you’re” and “your” you windbag. Still waiting to learn how the US can have a very strong economy and weak dollar.

  48. Dday

    Difficult to say which way gold/ dollar will go. I’m waiting till Trump has spoken, to see what market reaction will be…

  49. Goild

    If today gold ends up below the daily averages then the scenario indeed would be grim.
    For the time being I dropped a NUGT lot.
    Good trading to all.

  50. Goild

    The low of $8.69 on January 11th might be met today again. Hate to be bearish.
    It may set a support line,

  51. Gary Post author

    One has to be insane to short the stock market. Until we get some kind of indication that we are returning to free markets it’s just impossible to short stocks.

    So far I’ve seen no indication that we are returning to free markets with natural corrections.

    This is what we need for gold to really take off. A return of risk to the stock market. As long as traders are convinced the PPT will never let stocks fall then there isn’t much incentive to diversify into other assets.

    1. Strike


      I say dollar weakness is the neutron bomb here. More so, and more directly, than the stock market.

  52. Strike

    My casual observation, undocumented by statistics, is that this board is WAAAY bearish. Ignoring fundamentals, ignoring T/A, and only looking at sentiment, we have a nearly unanimous decision. About the same % as that for the various website pundits. Money center banks are bearish except every once in a while one predicts gold will approach 1300 this year. All very low numbers in the bull camp.

    If i were to poll the board the majority would say they are short term bearish/long term bullish. The perfect recipe for Mr Market to spring a surprise.


          1. Pedestrian

            Sold JNUG at 8.53

            I really did not like the behavior on the 5min chart during Trumps speech and that last little turn a few minutes back did nothing to create renewed confidence.

          2. Pedestrian

            What’s with you? I posted five trades this week real time. Five for five and that’s a 100% accuracy. Most of the money was made on leveraged gold longs. But I refuse to apologize for scalping bugs when opportunity arises.

            I don’t like gold bugs.

    1. Pedestrian

      I have not shorted yet. Still long JNUG for the morning session. We will see what the end of the day brings.

  53. zkotpen


    And I suspect this will be another up year for gold — at least for a while, until the YC peaks & gold will probably close 2017 above 1150.

    Now will it close the year around 1324 (+15%)??? I kinda doubt it…

  54. Strike


    My view is considerably more right translated than yours. Our difference is what makes a market.

    Aside from the big Aug – Dec fall, which did indeed finally stop in the nick of time, $GOLD is still apparently on track. And when you look at GDX instead, the correction was more “normal.”

    Looks and smells like a bull to me.

  55. ras

    Markets do not move at the same speed as fingers on a computer key board. UVXY in drip, drip, mode. SM uptrend intact as of today.

  56. Strike


    The bottom line is the gold-futures setup today is exceptionally bullish. Speculators grew excessively bearish in the wake of the election, dumping a colossal amount of long contracts while adding plenty of shorts. This huge liquidation left their longs low and shorts high, a strong contrarian indicator that has always signaled major reversals higher in gold. These elite traders as a herd are always wrong at extremes.

    So big spec gold-futures buying is coming soon, which will help catapult gold sharply higher again just like it did a year ago. It is already starting with initial short covering, but will soon expand into far-larger long buying as gold continues powering higher. After selling their longs to such low levels, these influential traders will need to buy big for months on end to restore normal positions. That’s great news for gold!

    Adam Hamilton, CPA

    January 20, 2017

      1. Pedestrian

        Thanks Ras. Exactly my comment but you beat me to it. Hamilton just waxes poetic and can rationalize bullishness on gold at every turn with a brand new reason each time. Can’t stand the guys charts either although I go out of my way to avoid his commentary anymore so it doesn’t really matter.

  57. Don

    Crude oil looking good for the long side. Taking profits on my NG short but will short again on a pop. Adding to my silver holdings. I think higher numbers are coming sooner than lower. I don’t know what is holding up the stock market. It is looking like a top is being made but it’s tough to call. Commodities are much easier to play.

      1. ras

        gld/slv and their derivatives are not going anywhere until $usd recovers from its ST OS condition. This may take several days. After that, vice versa.

  58. Pedestrian

    Warning on correlations.

    According to a report from Morgan Stanley, cross asset correlations are breaking down in a big hurry. They are calling it a crash and saying we have not seen anything like this in more than a decade. The breakdown observed is somewhat unprecedented as it simultaneously is being observed between similar assets, differing assets and across markets. Anyone familiar with this will know currency traders rely heavily on correlations for guidance. For example, Yen/gold or CAD/crude and Eur’USD etc.

    So this is a heads-up to be on guard. These long time favourites may be undergoing a change that you are not expecting. Gold may indeed start trading positively with dollars. Or commodity currencies may not be responsive to commodities as you normally expect.

    Here is the article from ZH

    1. brianbreeze

      bill you don’t even know the difference between “you’re” and “your”. Who are you kidding?

      1. bill

        And you don’t even know how to use proper sentence structure. If your, you’re, you are, trying to get to me Dope good luck you better bring a bigger cart.

        You have no clue trust me on that….Fuzzy.

  59. Alexandru Popovici

    TERRYWG, as I was answering you 3 days ago, on JAN16, as to my take on gold, both JPY and gold have retraced to their 10dma (though, it was only JPY to shake it but prevented a close above it) and now BOTH HAVE TO GO TO HIGHER GROUND ALONG WITH TREASURIES.

    Gold (and miners) is in a fantastic lockup rally – I do not expect it to reach 1200 until later in this yearly cycle.

    PS: Mind to $SKEW>140 while VIX is so small –> THE SCOOORCH!

    1. Alexandru Popovici

      error: was only JPY to shake it but prevented a close BELOW it (or alternatively, USDJPY pair above it)

  60. Alexandru Popovici

    what people are missing is that DEC30 hosted an early DCL in USX and that the current daily cycle topped on day 1 (JAN3) –> better evidence of that is cast by the cycle of USDJPY which counted the trading on JAN2 too so that it topped on day 2: still many days ahead to move down especially that it shook and got rejected by its 10dma.

    1. Pedestrian

      Not me. Just entered JDST at 18.83
      You can all call me insane but this was irresistible after that spike up on gold and I think it will do very well. It was a picture perfect entry. I will tell more later for anyone who is curious.

      See y’all later. Gold is going down.

    1. bill

      That’s when the epic whining begins…Ill be handing out free popcorn. And Brainfreeze will be whining all the way back to his mommies basement.

        1. bigglaze

          It’s comments like that which really make quality people quit reading these forums…. People like you. Positively toxic..

        2. bill

          Without risking a ban here, is this from experience ( big fat ones up the butt ) or is this a direct question?

    1. Pedestrian

      Don’t kid yourself Big. We live for these spikes. That’s what creates the energy for the reversal that almost always follows. Its how the bugs always get scalped because while you are busy buying with both hands others are laying a trap.

      1. Gary Post author

        Sentiment reached historic extremes a couple of weeks ago. To think the metals would turn around so quickly is too much of a stretch. That kind of sentiment extreme is going to require at least 8 to 10 weeks before any significant downside.

          1. dboz

            I think it will take a good while to build confidence before the big money starts coming back. I think gold will need to push higher and hold. The longer we stay above 1200 the better as a good base can be built.

            All it is going to take is a world event, stocks to tank or the dollar to keep dropping and gold will move up. I like the bullish side way better than the bearish side. In terms of likelihood, there is greater chances of those happening than not.

  61. Strike

    For the record – I say we test 1377.50 $GOLD (last summer’s peak). Maybe once, maybe twice, but eventually I think we get through it. If not right away, then after a more manageable correction than Aug-Dec ’16. All my previous posts were bullish as well. Because we are in a bull market. JMHO.

    PS That guy who posted once only here recently – with 30JNUG in his name – I agree!

    1. Pedestrian

      Strike, I have been wrong before and I am sure I will be wrong again. But I don’t think it will be this trade. Only time can tell now. If I come running back with tail between legs after being punished by the bulls all you can do is be happy you are not me.

      1. Strike

        It’s all good. I just am in the secular bull camp which makes 3x bear funds either off limits or at most a hedging vehicle. But never a bet against the tide, at least for me.

        1. Pedestrian

          I understand. You are sure not alone. In trading its normal to take ‘sides”.

          You are a bear for example or you are a bull and it becomes a trademark.

          Anyway, it’s just a small minority of traders who spend energy trying to play the short side. Naturally enough most money is made long and so that’s where odds are better and the crowd positions. That’s also where your pension fund puts your money too. Most of them avoid the dark side.

          That however is no reason to stay away. One strategic opportunity in playing the downside is that it often happens abruptly and months of gains made by the bulls can be lost in a couple weeks or less. That is the sound of music to the shorters. Your timing needs to be good though or you will lose at it again and again. What I mean is that there is really no such thing as buy-and-hold shorts!

          (unless you are a commercial trader with an unlimited check book).

          I heard a funny comment awhile back. You might get a laugh out of this. Someone wrote that nobody has ever made a billion dollars shorting markets but hundreds of guys have done it buying real estate or staying long like Warren Buffet.

          Might be true. I have no idea. I can tell you shorting comes with its share of tragedy.

  62. Gary Post author

    I’m going to go out on a limb and say the xau will surge through the 200-day moving average next week.

  63. rupp

    Close above 1210 was important for today and of course we’re there now. Slow and steady is key for this years rally

    Im targeting 98.10 on the dollar

  64. Robert

    Gary, do you still feel XAU will go above 200DMA? It was looking good but gold and miners lost all the late session gains. Bulls still able to push it down hard

    1. Pedestrian

      You mean Bears.

      Gary already said he thinks XAU will surge through the 200 day next week. I doubt it though. There is pretty stiff resistance there and price was unable to break through a number of easy peaks to the left on the daily chart. By mid February it should be trading below 70 at an eyeball guess.

  65. ras

    gdxj unable to break above 37-38 level after 5 tries. If it backs off to daily ma 50, it could generate enough energy for a bigger vault. Price locked in a tight trading range is no fun for bulls or bears.

Comments are closed.