96 thoughts on “DAILY CYCLE LOW IN PROGRESS

  1. Goild

    Good morning.

    Gary, thanks for the insights toady which is consistent with your earlier view and likely to happen.

    Let us make money today.
    Good trading to all.

  2. Option Trader

    The precious metals and miners are sifting through key MA’s. It’s going to take some patience here. Once they clear the resistance levels, a strong move should continue.

    1. Option Trader

      Both GDX and SIL have cleared the major weekly moving averages ( 20, 50, 100 and 200)
      I’m beginning to wonder they have the green light to go here..

  3. Don

    The PMs are demonstrating a remarkable resilience, with every minor dip being bid rather quickly. That type of action is usually very bullish, but most notably during the in the early stages of a bull move. While it may seem that the same situation is occurring with the stock market, it is a very old bull. I still believe the next big moves the PMS will be up whereas they will be down for the stock market.

  4. Gary Post author

    If the dollar just topped then this may be all we’re going to get for a DCL in gold.

    Don’t lose your long positions. It may be time to lift the hedges soon. This next leg up is going to be a doozie as it should correspond with the dollar moving down into its yearly cycle low.

    1. anjing bau 22

      After the Yellen address to congress- If you agree that what she indicated was interest rates to move higher – possibly sooner rather than later………longer dated bonds should be moving lower ( higher yields). they are not. the USD should be catching a bid- its not. Gold should be getting monkey hammered and it isn’t.

      the CPI number along with the Chinese PPI number show you that cosh push inflation is rearing its head in a substantial way. longer term if this trend persists and grows -without any wage inflation- the seeds for the next recession are being sowed.

  5. Goild

    Today is a Wednesday and is sort of a neutral day.
    We will see at the close of the week on Friday which is pay day.
    The SM is knots and I take it will close higher.

  6. terrywg

    Took a 40 pip profit on my gold buy order that was triggered at 1227.50.

    Word of caution: I’d like to see gold to be closing higher on a daily basis before confirmation of a wave up. Until then, every day it fails to do so indicates a loss of momentum which could easily see money flowing into other asset classes.

  7. macman1519

    Find the wizard arends he will give u a brain. You have heard about the movie Sofies Choice, well we are about to see Trumps Choice. Senior members of the two parties will come to Trump and give him two choices. Resign for the betterment of the presidency and the country, and all charges will be waived and no prison time for trump and his family. Choice two, fight on and we will go full out against you and ur family. Prison time for whomever is implicated. That will soon be his choice.

    1. dboz

      Still waiting for you to respond.

      HRC selling 25% of our Uranium to the Russians to benefit her donor, treason?

      BHO paying ransom to IRAN and letting them get a nuke, treason?

      If you answer no to either, go back into your tin foil hat in mommas basement and watch some more MSNBC.

    1. bill

      Donald Trump has been president for three and a half weeks now and my life isn’t perfect and stress free. He must be impeached or resign…You cant make this stuff up. 🙂

  8. Hamish

    Can we please leave politics at the door? We are all better than to be annoying each other with politics. I get enough of that sh1t on Facebook and WhatsApp. Beautiful reversal in the dollar today 🙂

    1. macman1519

      Hamish, im done talking politics, it is too stressful trying to discuss events with people who refuse to see what is in front of their faces. So my last comment about this concerns Flynn. He lied to the fbi, a felony, he and some of the other three close trump aides who have had regular contacts during the campaign with russian intelligence, will be offered deals, prison, or tell us all you know. These are old men, do they want to die in jail or are they going to roll on Trump????? Hmmmmm ???? Exciting times ahead, within three months we will have President Pence!!! That,s it. Elections in europe, greece getting worse again, russia flexing their muscles, the presidency in turmoil, all leading to uncertainty and gold rising, silver will outpreform gold!

  9. Option Trader

    I have to say, I’m quite impressed that the metals are holding up well after two days of Yellen on the throne. And she sure is a little stinky,

    What I also like is the SLV behavior today. It’s acting very bullish as it works its way through the daily 200 DMA. If SLV ends the day at the current level or higher, I think it’s ready to burst through the 200DMA.

    1. cazabrujas

      I was concerned about this heading, until I read that Soros got out of gold in Q4 2016. So basically he missed the whole move up. I guess we could get even more upside if he decides to get back in.

  10. Option Trader

    We really need to see SIL and GDX pick up here over the next two days. If the miners don’t pick up steam and end the week strongly, I see that as a possible red flag on my charts.

  11. Don

    GLD is up less than 1% over the last 12 months. That’s a rather dismal performance when compared to the steel (SLX) up almost 150% or XME, up 127% or KOL, up 120%.

    1. Option Trader

      True, but they are moving for different reasons. Industrials and transports have moved aggressively due to Trump’s agenda and his goals in office.
      The fact that metals are at least holding up, not to mention they are holding up nicely, is very impressive right now. They tend to move when there is an underlying sense of uncertainty economically or politically in the future.

    1. Pedestrian

      Looks like I am back. Whew, the wilderness was horrible. Nobody to talk to. Just blinking lights on my computer screen and a silent keyboard. Not that the talking really made any difference. Most of my comments from yesterday got deleted.

      Hmmm…must have said the wrong thing.

      Anyway…. its decision time people. And let me explain this idea as succinctly and in as few words as possible. It goes like this though. If the stock markets do not stop rising then bonds, which are moving inverse to stocks right now, are going to break a very major support line.

      And IF THAT HAPPENS people then pretty much every thing you currently believe about gold and silver is not going to come true this year. All your assumptions are going to be smashed by a nasty new reality. The reason is very simple. At this time gold and bonds travel in the same direction. So if bonds fail then gold fails and that’s all she wrote.

      So if long dated treasury bonds break below their multi year support line (we were almost there today btw and just hanging by a thread right now) then precious metals are going to be reassessed by the algo’s and computer genius’s that run this market we inhabit and be sold off brutally.

      Because that’s how the programs work. I am not kidding.

      Something is just not adding up right now. Our community assumption is that bonds will bounce off strong support lines and gold will catch a bid and be sent flying. But if there is a break by more than a few cents and it holds then look out below.

      There is not much time now and only a dollar-and-change stands between a gold bull market and the reality that the bond bubble may indeed break under the watch of Donald Trump. Who the hell knows what’s going on behind the scenes but this seems almost like a game of chicken now to see who blinks first. Maybe the market is putting the screws to the new President to see if he will bend. I really don’t know.

      But the Fed was again talking up interest rate hikes at the last meeting and there can be no question that those words are intended to cause bond prices to break the lower channel support line. Consensus views are aligned that another hike is coming this spring. And if that happens a whole lot of investors are going to be caught off guard and flat footed.

      Because gold could get smashed along with silver if the correlation holds as Yen/dollars break down and stock markets soar like an eagle. You have been warned. When the 30 year hits 148 or thereabouts and drops lower instead of bouncing back up then a whole lot of dreams are going to get wiped away in a flash.

      So understand this now everyone. You NEED stock markets to go soft and correct. That is the only antidote to ensure bonds bounce back right now and the only way to prevent a bloodbath in precious metals.

      Sweet dreams my babies. But those are the facts based on the correlations.

      1. bill

        Ahh the infamous ” GOLD SMASH ” DAY 15….still waiting. What this ( cough ) trader fails to recognize in his long winded drawn out speak is INFLATION IS ROARING. Now why would anyone short Gold and Silver when its clear at the day is long that Inflation is climbing each and every month?

        http://ei.marketwatch.com//Multimedia/2017/02/15/Photos/ZH/MW-FF952_inflat_20170215140120_ZH.jpg?uuid=231fb926-f3b1-11e6-a1b6-001cc448aede

        But hey let him have his fantasy….keep waiting for that grand dip…in the mean time I see dip buyers racing in at every lower tic.

        1. Pedestrian

          Bill, if you had any idea how closely linked bonds and gold were you might have a more profound response to my post. You just don’t get it. We are nearing the moment of truth here. Either the correlation breaks or gold will go down with bonds should support lines fail. I don’t know if that will happen and neither do you but you had best pay attention because we are almost there.

      2. Pedestrian

        And read this article where Turd Ferguson asks bluntly “where the hell is all this inflation suddenly coming from” since Donald Trump got elected and why is it suddenly imperative that the Fed raise interest rates? Maybe they are going to kill gold and bust the bond bubble. Something is afoot at the Eccles building.

        So yeah, Turd. I am asking the same question because none of this adds up.
        https://www.tfmetalsreport.com/blog/8163/sudden-onset-inflation

  12. Option Trader

    GDX is also flagging here at the 200dma.
    SLV getting support within its 2 week uptrend channel.

    I’m really liking this close so far.

    sorry if I’m blogging a lot. Some days my charts pull me into the screen and I get carried away.

  13. Gary Post author

    There is a chance the DCL occurred today with the end of the Humphrey Hawkins speeches.

    I’ll wait till I see what happens tomorrow and Friday before I decide.

    I will say this: gold has resisted the dollar rally out of its DCL amazingly well. This bodes well for a strong rally once the dollar starts the next leg down.

  14. Don

    ped, you may be right about the miners pulling back. They are looking a little weak but I wouldn’t count on gold and silver pulling back. In fact I see them as rising while the miners stagnate for a while.

    1. Pedestrian

      Honestly Don, anything could happen right now. I think there is a war going on behind the scenes. Too many things are not adding up as the dollar appeared to put in a bearish reversal candle on its chart today. But that cannot be right because if you look at the dollar on an hourly chart its still right within its ascending channel pattern. I think traders who only looked at that daily level candle may have bet wrong. Its not valid anyway until the currency trading day has ended (it is after all a DAILY chart). Lets see how it looks tomorrow. I suspect the dollar may just continue to rise if the hourly level is correct.

  15. ARends

    Interesting another pointer that we at the height of market optimism that has approx lag of market crash by 10 months to history events. Month after month diverse proof of what’s to come in so many forms of proof I read in underlying signs hidden by FED BS and stats. How its going to play out we hear a different story of how to work the market….Gold is most people’s play with others that diverse. The question is when to get out of the mines and if they will dump with gold and if Gold may also dip..what do you do with cash out of maket in the risk of instututions going…dam?
    http://www.elliottwave.com/Economy/Heres-What-Precedes-Every-Recession-by-10-Months?sc_camp=450B04EEA21746BE90FE2F52EC0A2FAB

  16. ARends

    In the 12 times over the last 80 years when the Fed has tightened like this, the stock market has fallen into a bear market.

    The Fed raised rates in December 2015, then again in December 2016 — and the Fed has promised three more rate hikes in 2017 to counter Trump’s “pro-growth” policies.

    Another interest rate hike by the Fed would trigger this rule in 2017. Yet it is U.S. long-term Treasury bonds, particularly relative to the Dow, that have now become extremely dangerous.

    The following chart illustrates a ratio of the relative strength of the 30-year U.S. Treasury bond compared to the Dow 30
    Very interesting graph https://mail.google.com/mail/ca/u/0/#inbox/15a43716c5976ea9?projector=1

    1. Pedestrian

      Thanks Arends. You may know that the Fed famously tightened into the Great Depression and untold damage was done as a result causing millions to lose their homes and farms and bankrupting thousands of small banks in the process. They do have a history of making that same mistake again and again which really begs the question “Is it really a mistake or is it deliberate?”.

      And secondly….why?

      Anyone here want to take a stab at that question? We could be just days away from a precious metals bloodbath if things go the wrong way and bonds keep falling (yields keep rising). Suddenly TLT at 117 doesn’t seem like such a great deal after all.

      Holy shit. We are so screwed.

  17. ARends

    This relative strength ratio is now at record-low levels, even more than we saw ahead of the 2000 and 2008 recessions, when the stock market fell into vicious bear markets.

    Since the presidential election, this ratio has reached the lowest level in over 20 years, signaling extreme “bubble” danger.

    If U.S. Treasuries continue to plunge and the Fed keeps pumping up the Dow, get ready for the next housing bust and recession, as soaring mortgage rates duplicate the financial crisis of 2008.

    1. Gary Post author

      I don’t see any signs of a recession at this time. Over the last 60-70 years recessions have been triggered by surging energy prices. Usually at least a 100% rise in the price of oil within a year or less. It generates a shock to the economy and that’s what triggers a recession.

      I would like to see the market be allowed to have natural corrections though. It would be healthier and the likelihood of the market transitioning into a bubble would be less. I doubt that will happen though.

      The pattern for the last 17 years has been rates too low for too long, interventions/ manipulation = bubble.

      I doubt this time will be any different.

      Central banks just keep making the same mistake over and over.

  18. Hamish

    Given the wild predictions made, especially on the short side, I would like to remind everyone that posting here is free and therefore the posters here are (I expect) largely amateurs!

    1. Goild

      I do not see to much of a difference between amateurs and professionals. We all are here to make money by speculating. The professionals do not know better.
      The so called pros by large cannot beat the market.
      In fact many pros likely come to this site to get insight for free.
      That is not to say that there are not indeed truly talented props and also truly talented amateurs.

    2. victor

      that’s a very amateurs comment Hamish. Many of so call amateurs on this board understand and read market much better the so called pro. My license still on the wall but I quit because tired telling to people “stay invested” as brokerage required.
      Tell you this: – Until those “pro” didn’t lost his own account one/two times he will never become successful trader/investor….

    3. Pedestrian

      Hamish, no speculation is too wild if its based on facts and the idea can be clearly articulated so everyone else can understand it too. That’s why we have a discussion board to hash out ideas no matter how improbable they initially sound. I happen to agree with Gary that the markets are heavily manipulated at the currency level and because most of us here know that (at least intuitively) after many years of watching trades we are guarded when there are subtle changes in correlations that might not make sense immediately. All I have written are comments to keep people thinking so they don’t become complacent at what may be an important turning point. I do not know what is going to happen next though. None of us do. So my commentary is really more speculative than predictive and it refers to probabilities that are reasonable given the behavior of known correlations. For what its worth I am not doing any trading at the moment other than very short term until I can see which way the market will move next. And I am not blindly buying the bull case for precious metals either because I have considerable doubts in the merits of that narrative given divergent technical set ups that are generating more questions that answers. But you are probably right that few, if any traders here, are professionals backed by big trading houses. But if you prefer to listen to their advice over ideas here you can expect to get sheared like the rest of the sheep in the big client bases. The professionals are true scalpers without heart. And you would know that if you had ever signed on with one for very long.

  19. Gary Post author

    If traders would just listen to me about trying to short the rigged stock market they would save themselves all kinds of money.

    They also keep making the same mistake over and over.

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