Miners – The Initial Thrust is Probably Over

Now that the intermediate advance is in the second phase the best strategy is to just hang on for the ride. Don’t worry about the daily wiggles. You will never be able to time them perfectly anyway. All you will do is miss chunks of the rally. Just accept that the trend is up, but slower than the initial thrust. But it’s still up and should be for another 2-4 months.

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    1. Pedestrian

      I am not so sure its all over yet. Look at gold on an hourly chart. Its following its channel still and this bounce since this morning could take us over 1210. Nothing certain of course but as long as gold is bouncing nicely inside that channel I will hold a little longer.

    1. Gary Post author

      There should still be 2-3 more months of gains. It’s just not going to be as easy as the last three weeks.

      1. downtrodden

        Gary, I have yet to make up my losses. I have not shorted just being patient till the next leg up is finished. Maybe it’s because it is an etf on the tsx. So I am confused when you talk about easy money on the initial thrust.

        Also when you talk about 400-1000% is that on the stock price or money invested?

        Thank you, I find you level headed and sincerely trying to assist basic investors.

  1. Don

    Gary, so how do you know for certain that gold has bottomed? I do recall you calling numerous bottoms for gold during 2013, 2014 and 2015 before you finally that call right in January of 2016. How can you advise anyone to hold on to a gold position when you made so many attempts to call for a bottom in prior years, only to see lower lows? Can you say for certain that gold is not going to decline and make new lows during 2017? Of course not.

    1. Gary Post author

      I was just calling intermediate cycle lows. One of them had to turn out to be THE BOTTOM. While we waited we made some money off the rallies. Not huge money because gold was still in a bear market, but we made money.

  2. Alexandru Popovici

    Fools and Stupids are buying stocks and USD, as expected.
    Oil should resume its trend too in order to allow XLE to confirm its new daily cycle.

    Key to all these correlated moves is USDJPY: the moment the pair tops in its second half-cycle, USD, stocks market and commodities will top too while gold/miners, treasuries and JPY will be worth buying.
    Since we are talking about topping in a half cycle, the current trends should last very short, up to Tuesday, as I first argued one week ago.

    1. brianbreeze

      Alexandru the only fool is you. As I recall you said a few months ago the SM would start the scorch and since then it has gone to all time highs. Your record of predictions speaks for itself so you should be the last one to call anyone a fool.

  3. Mac

    Folks, do yourself a favor and learn how to trade. Put down your William O’Neil, John Murphy and Edwards & Magee books and follow the markets themselves. Noone should be trying to catch falling knifes using technical analysis much the same as noone should be waiting for the textbook definitions of breakouts and confirmation. Not only do these things not work but they are actually being used against you. The only way that you will not become the typical retail sucker is to spend the time studying individual stocks religiously and learn how and why they move the way they do.

  4. Alexandru Popovici

    No sooner had I finished writing the comment above than I see SM surge, oil catching up, USD rallying deep and treasuries nose-diving 🙂
    Fools are great! They are getting over-complacent 🙂

    Long live fools like Brian and Michelle who buy when Commercials are selling!

  5. jonsyl

    alex, you’re a masochist. You’ve been calling folks who have been buying for a few months now, seems to me they’re not the fools. Yes, eventually market will correct, maybe even on Tuesday as you predict, would be good if you could provide the time of day LOL

  6. ocram

    Many analysts are much less positive than Gary on gold and miners,they all are expecting Trump….they thinks that this is just a bounce and after the Trump inauguration the dollar will go much higher and gold will make a new low.

  7. Alexandru Popovici

    JONSYL, if you say that it means you have little idea about COT reports!

    COT reports show that Commercials have been decreasing their net long position and further going net short and growing in all futures for stock market indexes while Non-Reportable Traders have been growing net long.

    I am speaking facts!

    1. Alexandru Popovici

      .. Smart Money have been using Fools’ mania to unload their long positions and grow their short positions.
      The advance has been so strong because there are so many Stupids with so much money – opportunity for Commercials to sell them!

      1. jonsyl

        alex, that’s a partial truth on commercials. They have a history of being early with their positioning, unless you have deep pockets as they do, it can be a very painful excercise as you’ve experienced. Additionally, they are also at times wrong with their positioning, it’s not fullproof but does have a lagging but positive correlation. Instead, watch the vix, yen and dollar. Yen and dollar came very close to topping 84 on yen and below 101 on dollar but has since floundered. Vix however is still not showing any signs of life. Much better and responsive indicators.

      2. WallStreetJesus

        I can tell you from experience that getting all excited about what the commercials are doing will lose you a lot of money. Commercials are not always right. Copper and British pound are a couple examples where the commercials completely missed the boat. You will almost always get into the trade early following the commercials and being early is the same as being wrong. Particularly when some markets have big exhaustion moves in their final days.

        You probably have a better chance of making money fading the commercials because the markets are trending. Commercials generally always try and buy cheap and sell strength – which means they counter trend trade.

        Haha you better have deep pockets of you want to trade like the commercials.

        1. Pedestrian

          Goo comments there on the commercials guys. You do need to be careful reading the tea leaves on what they do. And it does not always make sense until you start thinking about the program. For example, the Comm’s have not been net long in any meaningful way on gold since way back in 2001. Does that make any sense on the face of it? It means basically they are playing against the momentum of speculators and large traders who have been continuously net long since the same year.

        2. Gary Post author

          One should also realize that there are commercials long and commercials short. Basically the market boils down to the commercial traders battling each other. When they swing a little more heavily in one direction it’s usually a good idea to follow the majority, but it’s not always a great timing tool.

  8. Goild

    That “mental strength to ride a bull market” is tested and tested again.
    It is so tempting to run away with +100% profit. And then all that bad stuff about the 3X leverages
    hits you too…

    So we may have a period of consolidation, a sideways channel.

  9. Epiphany

    I think the vast majority of you way overtrade. I know Gary advocates riding the trend etc…and I agree when a trend is identified. With the miners, I think we are in the early stages of a multi-month upmove and these daily videos describing “initial thrust is over” are simply distracting and encourage traders to try to get cute and finesse their way in and out of positions, usually to their detriment. These daily updates are so unneeded but I suppose Gary wouldn’t have much of a paid service to offer if he didn’t have to provide analysis every day, whether it’s needed or not. Weekly or twice monthly analysis is probably enough but doesn’t jibe well with selling subscription services.

    1. Gary Post author

      You didn’t pay attention to the video at all. I’m not advocating day trading. No one could have successfully navigated the back and forth swings during the second phase of the baby bull rally. All they would have done would have been to miss the vast majority of the move.

      During this phase you just have to hang on and don’t get impatient when the inevitable consolidations and corrections occur.

  10. dboz

    I completely disagree. If that is all YOU require, then just tune in every other week is YOUR choice.

  11. Goild

    Every trader is different and one needs to discover and built up his/her style.
    For me it is working very well to dedicate some amount to long term trading and another amount
    for day trading. I also apply my day trading skills to reduce say by 20% the long term trade as there are instances where it is clear it is going down.
    Day trading, if you can do it, can be generous. This week for me has been great. I am pocketing $9K.

    This morning I intuited the drop and rise. I had the boldness to get 25K NUGT shares at about $9.00.
    I was losing already $2K. The move started to work. But again the bad habit prevailed of preferring safety to risk so much. So I only got a bit of what could have been another say $10K for the week.

      1. Pedestrian

        Here is something negative on gold to get you in the New Year spirit (if shorting is your thing). Its a set of pretty interesting charts from the nice people at Goldtent that were created by a guy named Parabolic Chuck. Have a kook and do take care to note that his support/resistance lines are curved to make a point. Great stuff there! He must be a follower of Gann.

  12. bill

    Thrust, Cycles TA, noise whatever you all want to call it, I added to my longs…love it when many Capitulate, the big move up is coming.

    1. WallStreetJesus

      Yes, yes there is a big move coming. That’s for certain.

      Most reliable way to find out which direction:

      Flip a coin!!

      On a side note the bears had to be disappointed today. Generally a little push down in the morning and the metals are finished for the day.

  13. dboz

    I am open minded to realize that scenario has a possibility. I will say if there is going to be so much growth and stock market explosion and building why would industrial metals go down (silver and copper) and why would oil go down on bigger demand? So I think a lot of this is screwed up based on market pumping for a decade. Nothing makes sense.

    Check out the thermodynamic collapse of oil. That theory says oil is never going higher than it is right now and will actually collapse in price.

  14. Surf City

    We may see one more push higher in this Daily or Trading Cycle but it is day 19 for Gold and we often see a top near day 18-21. This is not the place to be adding, IMO and I plan to wait patiently for the next TC Low (DCL) to add back my Trading shares.

    1. Epiphany

      How many 18 to 21-day trading cycles did we see from Jan 2016 to August 2016? There’s no way you did better trading in and out of that period using cycles than simply holding while key support above the 50MA provided support. I stand by my comments that most of you overtrade. If you are daytrader and remain 100% cash at the close each day then that is different. Most people make this so much harder on themselves that necessary. By support, sell resistance, and monitoring the MA’s during the trend to properly have a bail plan.

      1. jeffd5584

        Are you Gary as well? All of these cute “buy support/sell resistance” comments throw in as well. Do you have a 24/7 team of trader’s to handle the middle of the night slamdown’s, the “binary moves” during the election night and FOMC meetings as well? Seriously, some of the stuff written on this blog is ridiculous. I can’t count how many “potential cycle lows” Gary found on the trip from the August high’s down to the December lows. All the while, we have a crew of guys talking about “over trading” as if one should just sit long thru that downdraft.

        Anyhow, that’s the jist of it. I’ll sign off from this place as I’ve had enough of the group think.

        1. Epiphany

          Ok, that’s hilarious! Definitely not Gary here. I find him odd that he slams classic TA and claims cycles is the only way to make money in the markets and then he posts an XAU chart the other night citing a million technical indicators including RSI, trendlines, support and resistance levels, STO, MACD, and TSI as evidence that the turn is upon us. Perhaps he’s giving up on cycles and trying to become an Edwards and Magee convert? haha…..

          The dude is all over the map and he claims that NUGT will reach 500 or 1000 which is truly impossible. Even during the fast rise between Jan and Aug last year NUGT only went up 10X. Now he thinks it will go up 55 to 100X? And some of you actually believe him??? I’m not sure which side is more pathetic.

          1. Gary Post author

            And I’ll bet at last years bottom you would have bet the house there was no way NUGT would ever go to $32, and especially not within 7 months.

            You would have been wrong on that one too.

            The one universal and historical constant about virtually every bull market is that they always go much further and higher than anyone can possibly imagine at the start.

            If gold just matches the 70’s bull then it should reach at least $5000. The scale of money printing this time dwarfs what we saw in the 70’s so it’s not unreasonable to expect a larger bull this time. So $7000-$10,000 isnt out of the question.

            You would have to be an idiot to think NUGT isn’t going to be at least $500 with gold at $5000 or higher. Especially now that the bear market has made miners lean and mean. Their profit potential during the bubble phase is astronomical.

          2. WallStreetJesus

            No, no $500 not impossible but improbable.

            The stock would split long before $500 to keep the share price affordable for the gamblers.

            Manias are marvelous things.

            Look at bitcoin – something created out of thin air selling for $1,000

            Never rule out the impossible!!

  15. bill

    Not going higher huh hmm let me try and find no reasons why Gold or Miners should not climb here…

    Below is a list of America’s accomplishments over the last 8 years under the DEMOCRATIC DESPOT and his adminsitration.

    1.) Student Loan Debt – 1.3 Trillion

    2.) America’s debt – UP over 100% in 8 years,

    3.) America’s unfunded liabilities – 150 Trillion plus and climbing rapidly

    4.) Corporate Debt – Up over 100% in 8 years.

    5.) Bank Derivative Exposure – Up over 300% in 8 years.

    6.) Crime and Violence – Out of Control (Billions in Lost Property, Lives)

    7.) America’s foreign policy – America now pays ransom to terrorist states like Iran (1,700,000,000)

    8.) State and Municiple Pension Shortfall – 6 Trillion plus

    9.) Fed Balance Sheet – At 4.5 Trillion – Up Over 400% in 8 years

    10.) US Government Cannot Account for 6.5 Trillion in its books.

    Well done Mr. ‘Outgoing’ President … Well done!!! Yup absolutely no reason to be in Gold or related share not a single one.

    1. Surf City

      Longer term I agree with you. My post was short term over the next week or two. We may see one more thrust higher but TIME is becoming an issue with this first Trading Cycle out of the YCL.

      1. Pedestrian

        I agree with you Surf. I am holding for a last brief pop. Might make a set of batman ears on the HUi if it hits 205 or thereabouts but then I want out.

      2. Gary Post author

        I think gold first needs a dip into a half cycle low then a second leg higher into the DCL.

        Gold rarely ever runs in 18-28 day cycles anymore. The cycle has evolved to run 35-45 days.

        1. Robert

          Gary, couldn’t this sideways grinding be classified as the HCL. Bears have made every attempt to smash miners lower and it always bounces back. There would have to b some sort of news to smash gold 20-30 bucks in a day to see a big selloff in miners. I was nervous but I feel after today’s close we can still get that 1 last push up that Surf is calling for. Hopefully. Cause I’m still underwater

        2. Surf City

          My work shows the ave timing band of 23-29 days still holds for Gold. TIME is a fairly important component within the cycles framework. Without a fairly consistent timing band, I don’t see how cycle analysis would be of much use. To that end, I think Time is just as important as cycle trend lines.

          I’ve seen some Daily or Trading Cycle stretch into the 30’s but nothing ever close to 40, let alone 45 days.

          1. jeffd5584

            I agree Surf…the bigger issue is remaining objective about cycle analysis and not using a position bias to affect one’s objective analysis of the cycle’s. As a for instance, I believe that we have both commented on the 47 TD cycle that has been present in the stock indicies for almost a year now. It’s become a widely followed and very accurate timing cycle for high’s low’s (even though I’ve only found that a hand full of people actually discuss it). Well, it follows that if that timing cycle is still relevant then we are literally “in the window” for another stock index high (literally as of yesterday). If one is too long the market (based on the overwhelming pull of sentiment that affects most people’s better judgment), then it would be tempting to disregard the cycle and continue on with one’s position bias.

    2. GMoney

      And Trump is not Houdini so he cannot wave a magic wand and make the debt and all the other things you mentioned disappear. Gold will do very well under Trump.

  16. Gary Post author

    The average duration is now up to 38 days, with many cycles running longer than 40 days.

    Just like everything else cycles evolve. The currency cycles are stretching, probably due to interventions in the currency wars. So it’s not surprising the gold cycles are evolving as well.

    1. Surf City

      With all due respect, either we are looking at different charts or our method of counting days into a DCL or Trading Cycle Low is quite different. To each his own. 😉

  17. zkotpen

    Alex, jpeterman,

    Thanks for your understanding — I appreciate it. Alex, you already know I’ve stashed myself away from the society in which I grew up, as it has tried to force me to become somebody I am not, on every level.

  18. zkotpen

    I try to connect with sociable people — as we can complement each other in many instances. If they recite a lot of cliché & script, I’ll probably lose interest & they’ll probably find me too weird, so we politely break contact. But if they’re hypocrites and/or sycophants, they leave a foul taste in my mouth, so to speak.

    My horoscope warned me of the “tense full moon on January 12”. With the 24hr internet life, that monster invaded my main meal, strangely enough, on two separate days.

    On the 12th (Eastern Hemisphere), I had the displeasure of meeting a sycophant while having lunch. Then for some odd reason on the 12th (Western Hemisphere), I found myself reading the posts of the hypocrite to whom I reacted, which spilled into my lunch the next day.

    As I continue to look over their posts, I find they are both hypocrite and sycophant, much like the old poster I once considered “Gary’s fandrodge”:

    They are just looking for a freebie, while contributing nothing of substance to the conversation. My guess is, they figure if they act like a bulldog, they are making a valid contribution.

    Only problem is, their posts have no predictive value whatsoever.

  19. zkotpen


    I am also with you on your contributions here.

    Plenty of people have been giving you a lot of grief the past couple of months. I once asked and you told me that your trades were coming in just below 50% in the win column. Some people criticize you for that, often rudely.

    But you’re still making money. I remain fascinated by the fact, with good strategy and solid risk management, you can profit — profit significantly — even when your forecast is wrong half of the time. Instead of lambasting you as some do, it makes a lot more sense to give serious consideration to your strategy and risk management skills.

    Indeed, if it weren’t for the importance of my forecasting work, I’d abandon it completely and just work the coin flips. I call my work “The Swedish Venture”, and even though I might not live long enough to take it there in the flesh, this will make it possible to teach the world populace at large a basic understanding of how markets work, as part of their high school education. It reaches far beyond financial markets — after all, most humans participate in some market or other — even if it’s the labor market, and they have absolutely no clue how those markets work. The big guys — the Commercials in the COT reports — they understand, and take defensive action to protect themselves from markets turning against them. But regular folks — people at their jobs & small business owners — they have no idea why they’re suddenly embroiled in a prolonged bear market. Their explanation? “There’s no money”; “People aren’t spending like they used to”; “People don’t value [product or service they are selling] any more”. I’ve heard these remarks all over the world, and people suffer, because of their lack of understanding. But otherwise, I’d just play the coin flips & abandon all the forecasting altogether!

    As for trading strategy, you have driven home the whole concept of “reward to risk ratio”, and how important it is to have that figure clearly in mind BEFORE you enter a trade. “Trading in the Zone” examines that in greater detail — but your frequent reference to it prepared my mind to better understand the concept, such that I can learn it and eventually make it my own.

    I’ve noticed your recent interest in Forex — how are you finding that? I’m a bit stuck in the mechanics of it, as I find the trading platforms & jargon downright byzantine. When I look for videos on youtube, they talk about strategy & forecasting — stuff I already understand. I need to know how to do the “easy part”: Set up the labyrinthine platform, and go thru the motions in the correct way!

    But to be sure, I need to get off the “night shift” that the US market is for me. My mind is foggy Friday night at 1:30 am. That’s the time my alarm rudely awoke me from a brief one-hour nap. I looked at GDX, just sitting there at 22.55 at 1:52 am. The pattern was so obvious before my eyes: A perfect triangle, with the lovely divergence — on the 3-minute chart, ready and waiting for that small thrust up to end the week. You’d be surprised just how juicy a 1.3% move can be in the final two hours of Friday trading — reward:risk is greater than 3:1, with a very small position size just in case I’m wrong. By the time my brain had moved from the moment of understanding to a path of action, the move was half over.

    I need the 24 hour markets, so I can do my thing when my mind is clear.

  20. zkotpen


    “Thank you for warning us in advance. You are superb.”

    “Gary, should we stay in or bail out at this point?”

    “That doesn’t sound too bad.” (your response to being thrown a bone to chew on)

    I’ve just figured you out!

    You’re Gary’s chihuahua with a lampshade collar 😉

    1. Steffmeister

      hahaha you are evil zkot … good advice not to trust all Gary’s calls or anybody elses for that matter.

      ok some nice fractals in markets these days. Lets see how it plays out, More on that later.

      In the case of gold, do not get too exited if we break 1200, we are heading back south to retest mid Dec low and yes I sold my JNUGets at 9ish. Trying to get back in later. Mother nature likes to do things twice.

      If we manage to set a higher low that would be good news and we are off to the races for a substantial amount of time, maybe even longer than the 2016 rally.

      Of course I could be totally wrong, we will find out the next couple of weeks,

  21. ARends

    You gold bugs (me) will find this very, very interesting!! (bears need to fear if you in and would ground some of Gary statement)

    As a tracking ETF, GLD’s mission is to mirror the gold price. But GLD shares have their own supply and demand totally independent from gold’s, so GLD-share prices are always on the verge of decoupling from gold. The only way to maintain tracking is to shunt excess GLD-share supply and demand directly into physical gold itself. So GLD effectively acts as a conduit for stock-market capital to slosh into and out of gold.

    Stock investors jettisoned GLD shares so fast in mid-November that this ETF’s holdings fell sharply for 11 trading days in a row. Every day GLD-share selling outpaced gold selling, so every day this ETF had to buy back the excess shares to offset that heavy differential selling. The money came from selling gold bullion, resulting in daily draws in GLD’s holdings. That short span saw GLD’s holdings plunge by 7.3% or 70.0t!

    While this extreme selling moderated in December, it still continued relentlessly. Gold was driven down to $1128 the day after the Fed hiked rates for the second time in 10.5 years. While that was expected, the Fed officials’ rate-hike projections for 2017 were more hawkish than expected. That happened to mark the very bottom for gold, yet the heavy GLD selling persisted. That day GLD’s holdings were at 842.3t.

    As of the Wednesday data cutoff for this essay, gold has rebounded 5.6% since then. It has rallied back up to late-November levels. A strong bounce out of extreme bearishness was inevitable, as I wrote that very week. But what’s wildly unexpected is since gold bottomed GLD’s holdings have fallen another 4.4% or 37.3t to 805.0t. GLD still hasn’t seen a single holdings build since the day after the election!

    So gold somehow managed to rally sharply in recent weeks without any capital inflows from American stock investors. They not only weren’t buying GLD shares, they continued to aggressively sell them as evidenced by a couple big GLD-holdings draw days so far in January. This situation is remarkable, as it implies the investment gold buying hasn’t even started yet. That means big gold buying is still coming.

    Read this:

    1. Strike

      Even more important Gary (to emphasize your point) AGQ is 2x silver BULLION, not shares. I think that’s worth another separate 3x factor of share performance over bullion.

  22. bill

    And that $500 is easily attainable Gary there already is a crises boiling in the bond market which could pop NUGT out of the price rage for many in a single week… I’m
    Long so price swings mean very little to me … be well.

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