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Folks the only purpose of the previous post is to show that the miners don’t always lead the metal. There’s nothing more complicated than that.
I’m watching the divergence just like everyone else.
We have our stops in place. If they get triggered then I’ll re access and decide if I want to continue trading miners. It may be that it’s time to convert to just gold or silver. Or maybe it’s just not worth the headache if the market becomes bifurcated.
I may decide to just wait till the summer ICL before I want to play the sector anymore. We made an insane amount of money during this intermediate rally already. More than most people make in 5 years. We don’t have to keep trading this sector if it’s about to get difficult. We can take our money bag (a damn heavy one after this rally) and go home if we want to.
Insightful analysis. If miners fail to make new highs, while $gold heads to 1300, it is time to head for exits. But first, we need to see miners exceed preceding high and make a higher low before any significant upside happens. In the preceding rally after HCL, all miners were kicking in the same direction simultaneously along with gld/slv. Now several miners are yet to stop declining and stabilise. This could happen in the next few days as all miners pull into sync and align with gld/slv. Until then, it is just watch and wait.
Great advice Gary.
Agreed, very good video.
Gary,
Good assessment.
There is a good chance that the extremist aspect will put a deeper stop trigger and to bring sentiment very down.
This scenario is quite unusual and interesting.
Actually,
Thanks Gary for your hard work on the site.
Monday or Tuesday might bring the opportunity to load 3X shares.
The key is to have a plan of action.
No plan means a missed opportunity again.
Sold all my miner “GDX” shares after reading Pedestrian’s comments.
He has been more right than wrong, imo.
People may not like his comments, but he has a sharp mind whether you like or not.
LOL he’s missed the whole rally trying to call a top. In the meantime we went from being up 50% to up 158%.
No better than Armstrong who has now missed both the baby bull and this rally because of his bear market bias.
I missed the whole rally?
I had no idea. Wow. Let me check with my wife and see if that’s the case. I think I caught something though. Maybe it was just the 24 hour flu.
Lol Gary… you are living in your own reality. Why do you think you have alienated so many of your ex-subscribers?
It’s because you use are over-confident and use words like “insane amount of money” and “a bull-market corrects all mistakes”.
PS: your “158 percent” returns are peanuts when you count it on a risk-adjusted basis.
LMAO only you could find a way to rationalize making 80+% in 2 months as bad.
Yes Gary, this makes much sense. Either way we will get some sort of rally so keep buying miners here and more if it drops further. Its a win win!
Great video again, thanks Gary.
Aftter reviewing recent earniSilver leading miners, this recent divergence is making some sense to me.
There are some big miners that have missed their recent quarterly earnings over the last week or two.
Meanwhile, Gold and silver are being supported by developing economic and political uncertainty.
Although a pullback in the mining stocks is painful for those invested, the bullish move in Gold and Silver should come as comforting rather than frustrating. A rise in the metal prices is much needed to improve the profitability of the miners.
If the metals can break through the resistance of the commercial shorts, the path will be rosy for all.
Yes, I fully concur with what OptionTrader has sai above. I mean to make a post on Friday after observing a few miners that reported disappointing results in this quarter.
Folk, it’s has been said over the last 2 years, that the Gold production would come down significantly starting 2017 , which is related to Peak Gold. And this is why you see all these miners starting to report lower production and hence bad results. Not only the newer discovery mine were much less frequent, but due to the big bear of the last 4 years, many miners actually choose to mine areas of better grade Gold to lower their cost in order to survive.
Now that the better grades and easy profit are getting hard to come by, this is why GDX / GDXJ are not doing well this week.
But eventually if Gold price lead to the upside again as lower supply come online, GDX would catch up. I suspect miners would catch up once gold price > 1280. Better profitability.
Read this chart here
or https://images.angelpub.com/2016/49/41279/peak-gold-chart.jpg
I have followed the gold and silver markets closely for about 8 years. In that time, I have learned the hard way never to make excuses for weakness in the mining stocks relative to the metals. More often than not, it presages weakness in the metals. The weakness of some earnings counts as an excuse here. The earnings were not generally so bad—certainly not bad enough to explain what has happened to the whole index (HUI or XAU) in the past few days. A market that wants to go up will not be deterred by a little weakness in earnings.
One other thing I have learned (also the hard way) is that the precious metals markets tend to surprise in both directions. The market often takes off much further than you expect (sometimes only very briefly). Although Gary says that sentiment is neutral in the gold market now, there appear to be quite a few people on this blog who think that the only big moves that could happen right now are in the upward direction. These people may be right, but they should be open to the possibility of a downside surprise. When the mining stocks have been going up for a while, have become overbought and have then started to roll over, they can plummet rapidly for a few days. I think everyone should at least consider the perspective that Pedestrian has to offer. I, for one, appreciate his posts.
When the markets are giving mixed signals, as they are now, keep the positions small and avoid the leveraged funds.
Gary, your insights have helped me enormously in the past year. Thanks a lot!
Thanks Crow. Your kind words are appreciated.
crow, I could not say better myself.
Make insane amount money would take insane amount of risks. That is why people playing precious sector had lost a lot of money. This sector is highly rigged. If we all knew that, why took insane amount risks, especially x3 leveraged ETFs. “Dumb money” (if excuse me to label our retail investors) would always lose if not be careful.. anyway it is just my opinion.
Absolutely no leverage in the metals sector anymore during this intermediate cycle. Play conservatively from here on out. The next opportunity for leveraged trades will come at the summer ICL in May or June.
I will trade the miner in shorter time frames, but “buy and hold” MAY BE still a few years away. Gold and miners will have their days..
Right now I am feeling the same way as Pedestrian, it is just a bear market bounce or an event driven market.
i dont agree that its a great video. Its ambivalent.
Gary has stated the miners are in rally form…. today he equivocates
and walks backwards.
If theres this second leg up… then why Gary are u so cautious here??/
WHAT r u saying……??
Don’t worry it is a bull and all mistakes will be corrected! One can buy at any time one wishes! We have been told that over and over again. We were told just buy 3X and wait. Weren’t we told that jnug will go $500 if not to $1000? It is just a question of time. Please pay attention. I really wonder what kind of people make investment decisions based on advise given on such forums? My conclusion is that Gary is a real genius. I am very fond of reading him and watching his videos.
I absolutely would not buy a triple leveraged fund and hold old turkey. The drawdowns are too big during ICL’s.
But before this bull market is over I expect NUGT will be over $500 on a risk adjusted basis. But the path to get there will be too rocky for most people to realistically hang on through it.
“risk adjusted basis”???? Is that a new addition, Gary?
What does it mean? Does it mean that many times re-adjusted !0 to 1 reverse split?????
Crow,
Thanks for the useful perspective,
I think the outcome for the miners is tied to USD and YEN.
Monday and probably Tuesday will define the outcome as USD falls, or reacts to its imminent fall.
JPY is at the brink of taking off through resistance.
Gold should continue up trending as TIP broke out and it is unlikely that it will get back to its channel this soon.
It is quite and interesting situation, with substantial opportunity and where much money will exchange hands.
Hopefully Terrywg can give us his perspective on USD and YEN.
Room to go higher:
http://www.kitco.com/news/2017-02-24/Gold-Still-Has-Room-To-Move-Higher-Next-Week-After-Hitting-3-5-Months-Highs.html
For me, it’s all about what the charts are telling me.
Look at the daily chart of GLD since last November. You can call it a huge C & H that’s breaking out or a V shaped rally. Along with my SLV set ups that I’ve been discussing, I seen huge upside potential. All the people that went long metals at the election, and then bailed out afterwards, need to get back in. The hedge funds and commercials need to get in. And yes, the naysayers on this board need to get in.
The more I study the chart for Rangold Resources (GOLD) the more I see extremely bullish set ups that are completing. This Tuesday I’ll know for sure.
The one issue I have with miners is that the long term chart of the HUI looks horrendous. If you go back to November 2010 and look at the HUI (gold bug index) chart, there has been a broadening cone shape pattern developing. This is bearish, but you never know. Let’s see what Rangold gives us this week,
I take that back regarding the broadening, my bad. It’s more like a long term sideways moving channel, after further review. So even that’s not bearish.
Beware the Ides of March. Gold and silver could see a sharp pullback starting next week and go until about March 21 or thereabouts. Gold and silver are overbought at this time and are at the top of the Bollinger Bands and Keltner Channels. Also, seasonally, gold and silver are generally weak going into March, and because of the fear of the Fed raising interest rates, that may put pressure on the metals, even though the likelihood is near zilch that they will. Therefore, beware the Ides of March, goldbugs.
good analysis SLEP… all my charts for miners are pointing to a drop just like you suggested….
what is your take on after the drop… will they rise above the current levels?
I’m not sure why anyone still believes this myth about rising interest rates being good for the dollar and bad for gold.
Does anyone even bother to check recent history?
The last two times the Fed raised rates the dollar topped and gold bottomed.
Based on the recent history the most bullish thing that could happen would be for the Fed to raise rates again on the 15th.
That being said the odds are only 25% and I don’t believe the Fed has ever shocked the market with a rate increase with the odds less than 75%.
Rising interest rates are bad for gold. That’s a fact and the chart proves it Gary. When rates move up then bonds go down and so does gold. We cannot look at an event on a specific date and draw a correct conclusion. You need to examine the graph over a period of time for similarity.
Have a look at the daily chart of gold for example.
http://finviz.com/futures_charts.ashx?t=ZB&p=d1
Oh wait, that’s not a gold chart! Sure looks a lot like it though.
But nope, it ain’t.
That’s the 30 Year Treasury Bond. And that is all the evidence I need that gold and bonds are moving together which means beyond a shadow of any doubt that rate increases are negative for gold the way the algo’s and computer programs are currently set up.
The myth is no myth at all. It’s a fact.
pedestrian you are totally incorrect on this .
go check history yrself. you r much too arrogant
and it is ill placed…
Complete nonsense and not supported by any long term historical evidence. You are extrapolating two months of correlation into an all encompassing rule and it’s just not the case.
During the last bull market gold reached it’s peak with rates well into double digits.
Rising rates are actually bullish for gold (and for stocks up to a point). As liquidity comes out of the bond market it has to go into other assets. This is why a bear market in bonds is usually associated with periods of inflation. Traders want to get paid more for the risk of holding bonds during an inflation so bond prices go down and rates go up.
This crazy notion that somehow gold rises only as a hedge against government is simply ludicrous. If that was the case then how in the hell did gold go from $250 to $1000 during one of the most prosperous periods in recent history? Everyone was getting rich from real estate. The government could do no wrong. What in the hell was driving gold higher (and the dollar lower)?
Gold rises when governments print too much money and there isn’t an expanding industry for the money to flow into. Like the internet and personal computer in the 80’s and 90’s.
The government has printed trillions and trillions of currency units. Once more and more of that starts exiting the bond markets it’s going to find it’s way into other asset classes and some of it will flow into the metals.
I never mentioned anything about the long term. I wrote that rate increases are negative for gold the way the algo’s are *currently* set up. Go back to my post. It’s there in black and white.
Anyway, if we are talking about the long term and old history then I agree you have a valid point. But we are not trading old correlations here. What we need to know is not what rates did in the past but rather what they are doing NOW.
And right now gold and bonds are still trending together. Sorry Tulip!
If you make a comparative chart of GLD and TLT the obviousness of the correlation is quite stark. You can readily see where the two went into sync in October of 2014 and since that time there has not been a major negative divergence (although the correlation has weakened since the start of 2017 but the jury is still out on whether they will be harmonious again soon).
About all that money printing….
Don’t you think its odd that during the period of so-called money printing of QEII, QEIII and the Taper that gold FELL 750 dollars? And that happened at a time when the Federal Reserve balance sheet swelled to over 4 trillion dollars but strangely enough gold belly-flopped like an obese, saturated fatty pig off the 10 meter board gut-first into the pool.
And even when the QE’s ended gold just kept on falling for another entire year and hit the water like a sack of flaccid, coronary-clogged wet meat before it bounced back.
Yeah, that was a dead-pig bounce.
So much for inflation and debasement of US dollars or golds ability to hold purchasing power in the face of all that money printing. Hey, did I ever tell you the one about how USD soared from .82 to almost 1.02 in the 9 months following the Fed’s Taper?
Isn’t that kind of strange too? Care to explain why the dollar took off like a rocket AFTER all that money was already printed up? See Gary, the market already knew that ending the QE program was actually deflationary and so what we got was strengthening dollars instead of lettuce and tomatoes at double the cost.
Agree with Gary, and PED is just full of crap. I’m older than most people on this board, and I was old enough in the 70’s and 80’s to both witness and remember gold and silver prices, when interest rates were going sky high. The problem with these youngsters here is they only know what they read from the internet. No fundamental research, and everyone only knows the nearly 40 year bond bull environment. The bond bull, with 30 yr treasuries doing nothing except going straight down in yield since Volcker put the crush on inflation, is all anybody here has experience trading in.
Short term interest rates can indeed rise, and for long enough periods of time while gold is rising, to make it very very very painful if you are stupid enough to short gold.
The other thing not to forget is how gold has been rising for years now in many many currencies. What you see as a result of the dollar being a major reserve currency, totally confuses most of you on gold. Gary comes the closest to getting it right on gold, of any other real advisor out there, who also publicly and transparently, reveals his calls.
Ped, you really either need to stop lying about so much shit here, grow up, or just leave. Also, stop lying about having a wife. You are not married, other than in your own teenage mind. I know who you are Ped, and I’m going to bury you further if you keep this shit up.
Cool. 🙂 I love a challenger.
I have to disagree with the rest of your post though. First off, I made my first gold trade in the 1960’s and have been at it now for a half century so I might know a thing or two about precious metals.
For starters that guys like you come and go and none of you bugs make any damned sense at all because you are all emotion ridden. That nature versus nurture thing except without the nurture part.
Like trying to argue with a broken Coke dispenser and getting the same programmed message over and over again on that little screen beside the coin box.
And none of you guys ever get the bond market no matter how many times its repeated. But let me have one more go anyway. Listen, there is ZERO money on a net basis coming out of bonds and going into any other assets like gold or stocks or land. ZERO. Not even if the bond bubble bursts.
And you know why?
Because every single bond that was sold must be held to maturity (unless defaulted on) and therefore must be owned by somebody at every point along its life cycle. So if person “X” sells his bond he must have a buyer “Y” before he can get his money or he is stuck with it until the very last day.
So money does not come out and “have to land on something”. That money was already loaned out and its absolutely and unconditionally out of the investment pool until repaid by the issuer. It is then and only then that money can flow anywhere else.
And as far as gold being an inflation hedge that too is pretty ridiculous in modern times. Gold and silver are boom-bust commodities. Why the hell do you think gold could fall 80% following the peak in 1980?
Did inflation come to an end during the 20 year decline? No it did not.
Furthermore, inflation is cumulative and compounding. A small increase this year adds to a little increase last year and next years inflation compounds upon the prior two years inflation.
You see gold prices doing that? Again, no you don’t.
So thanks for the nuggets of wisdom there Zbigkid but you don’t know what you are talking about. I suggest you make a better effort next time because its going to be a long way to Sunday before you pull the wool over my eyes on my favourite subject.
Pedestrian:
Amazing metaphors & imagery!!!
Absolutely hilarious! I love how people will adamantly argue a topic when they clearly have no idea what they are talking about. I’ll say it again, if you use cycles as your main tool then stick to cycles. If you use technicals then stick to TA. You don’t do anyone any favors by making up fundamental narratives or talking about correlations when you don’t understand them. The vast majority of retail traders don’t even have a basic understanding of how the bond and currency markets really work and how the markets are interconnected. Either make an attempt to try to learn it or become one of the clueless souls filled with excuses when the market doesn’t behave as you expected.
Thanks Pedestrian! I could not agree more.
Cheers Vin! Good old common sense has a home on this blog after all. You just cannot reason with bugs though. They have already been so indoctrinated by the hype artists that no amount of reason seeps into their craniums.
Again complete nonsense. Let’s say I sell you my bond for $1000. Then the price falls $100 so you can only sell for $900. The value of the bond has gone down.
In the mean time I’ve taken my $1000 and I need to do something with it. If I decide that inflation is going up I may decide to use my $1000 to buy some gold or silver.
Now take it a step further and the investor that bought the bond from you for $900 sees the value go down to $800. He too gets tired of losing money on his bond investment, especially when he sees that inflation is rising. He’s losing money in two directions so he sells. Now the value of the bond has dropped 20%. And every time it gets sold the seller has to make a decision of what to do with the capital from the sell. Most likely he’s going to put it somewhere other than bonds which are losing value rapidly in an inflationary environment.
“No money can come out of the market”
Where do you guys come up with this nonsense? What do you think a bear market does? It causes a loss of value.
The point is, the face value of the bond must ultimately be paid at maturity. No other security or commodity has this particular property about it.
Jesus Gary, we are talking in aggregates here when discussing the bond market, not what one or two guys might do when they sell. Your assertion that money will come flooding out of bonds when the bubble bursts is the real nonsense because that cannot happen on a “net” basis.
Let me repeat, every bond that has been sold must at all times be in someones ownership. If one person sells it another must be there to buy it and therefore no flood of money will be going anywhere. I was not talking about the coupon rate either by the way since that is another subject so I would appreciate you not complicating the subject.
And even if the bubble bursts its improbable that many would get out whole except at the margin. Most holders will end up just holding to maturity so I really don’t see how gold will benefit all that much.
Your premise about bond sales lifting metals is totally flawed.
While I’m also nervous that the miners aren’t rising (even in my Aus juniors), I’m seeing so many bulls pulling out (while we have just had what looks positive setups in gold and silver). Someone posted on this blog a story I read by Avery B Goodman in which he said the riggers have now lost their access to US government gold, if true, they need to change their tactic, and keeping the miners from leading has really worked on you lot, weather rigging on organic.
Also The mainstream is not even mentioning gold over in Aus, usually it’s time to sell when the MSM rubbish I read has an article or two on gold?
Also, there is a debt ceiling coming up in which Trump is surely going to start talking a load about the $20 trillion.
Anyway, not sure why my negative outlook on metals should bother anyone here. We all have an opinion and the blog is for sharing ideas.
Right?
So I was looking a dozens of charts of silver companies tonight and I cannot for the life of me see any bullishness. Too many have disaster written all over them. Some have retraced all the gains made during January 2016. Others are still in the process of retracing or rolling over. Many have beautiful channels that show a very bearish downward bias.
I just can’t get excited about silver.
Anyone here want to keep calling me wrong because I am a little early, then just go ahead. But I think I will be proven correct and it won’t be very long before these crack to the downside. I hope the few vocal naysayers here will come back once we see the drop and leave an appropriate comment to me in line with the level of criticism they were so generously dishing out when they thought my assessment was nuts.
I’ll be waiting.
Heck you’re just getting the same criticism you were spraying on the bulls during the November and December drop. As it turned out the bulls were correct and you were wrong just like I predicted you would be. I knew gold was just dropping into an extended yearly cycle low and once the drop was over we would get a powerful rally.
Don’t dish it out if you can’t take it.
You are clearly a perma bear and you read too much of Armstrong’s nonsense. It doesn’t matter what the chart looks like you are always going to find some way to see it in a bearish light.
If the metals were still making lower lows and lower highs i would be in the bear camp with you, but they aren’t. They have reversed that bear market pattern and are now making higher highs and higher lows.
Let’s face it, the miners suffered one of the most destructive bear markets in history. The bigger the bear market the bigger the bull market that it spawns. That’s pretty much all one needs to know to be on the right side of the market over the next 4-5 years. Yes there will be wiggles along the way. But as I’ve said over and over, in a bull market all timing mistakes ultimately get corrected.
So if you are wrong (and I was right all along) are you going to write a nice contrite message to me about how clever I was in spotting the gold bull only you could see and calling it the bear market rally I knew it was all along? 🙂
If gold goes under 1045 I will write a public article admitting I was totally wrong.
The odds of that happening a very slim though.
Countdown to 2022 (“four or five years”)
Tic toc tic toc tic toc…
Though sub-1045 gold would be after 2022 — once the bear market rally completes, it still may take a year or two to breach 1045 (article time ~2024-ish)…
and the final bottom… what was the Pi factor? 2032?
Hope & pray we are all alive, healthy, happy, and prosperous at that time 🙂
OK, I can accept that and I will await the time since in all probability that’s exactly where we are going. This is still a bear market in metals until further notice and now that we appear to have stretched price so much to the upside an expected and impeding cycle decline should take us back down.
However If gold does go higher and break 1400 then I will admit I was wrong.
How’s that for a deal.
When everyone is thinking the same thing, then no one is thinking.
It’s safe to say that everyone thinks the divergence in miners is a sign that the metals are about to form a major top.
Just like the bottom in January 2015 I’m the only one who thinks this is probably just a stop run by the banks.
No, you’re not the only one. I agree with you on your assessment.
Let’s just make it a hypothetical Burrito bet then.
I say gold is going down for the next few months and silver will get screwed to the wall.
I can say gold is going down or up, means nothing. When is gold going down? timing makes a difference when you trade.
So is gold dropping down starting Monday? and a few months is 3…so can we say that your bet is that as of Monday gold will be going down until end of May? We will do a paper trade. we will sell gold on Monday and see what the profit/loss are on that short between now and end of May.
looks like gdx could go to 28 after this correction…this is based on monthly charts
I do a lot of reading on various sites and blogs. The perception now is things are done and on the verge of a big draw down especially miners. Makes me think the opposite. Ridiculous sell off in CDE, HL also over earnings miss when they had valid reasons and both are positioned much better going forward.
It is tough emotionally to hold after a good recovery and decent gains to see the gains dropping quickly the past 2 weeks. The volume is the main issue that makes me think we are going higher. Shorts are getting confident here and longs are holding through the down turn. Large drops on light volume seem to me to be shake outs of recent buyers and traders getting skitish and short sellers piling on. Investors are holding and not panicking yet.
The dollar is being very stubborn and to me, that is the issue. Gold still seems to have 20-30 dollar upside and silver 80-90 cents. Will miners move up or resist and drop? I don’t know. But there are enough shorts to provide some pretty good fuel and a short squeeze would be nice to see for a big jump up.
A week or two ago I posted a breakdown that shows there has been minimal money behind this move so far. The sector is ignored as people just love typical stock buying. I expect a rotation back into miners to provide a lift soon once people realize gold and silver moves are legit. We need stability here not a large drop. If things roll over it will do serious damage as people will just give up and the remaining bugs will bug out.
more research… i am a member here…enjoy…
https://preciousmetalsforecast.com/2017/02/25/02252017-gold-silver-miners-dollar-weekly-analysis-report/
The thing to keep in mind is that we have not been here before and so past history may have no value at all.
The reality is that in the last few weeks the Yen has been dancing to the beat of bonds, or decreasing yield rates. So Ped is correct with the recent and unexpected relationship between gold and bonds.
While with TIP up and so GOLD up is understandable. What appears not to make sense is that the bond yield went down, and bonds up. Actually bond/yields are driven both the YEN and GOLD to some extent.
One would expect that yields up would lead to inflation. But we have TIP up and the yields down.
Can someone explain this divergence?
Further analysis shows that the USD may not be driving the miners fall, but something else. Perhaps the earnings.
Does anyone have further insight?
Pedestrian,
Great stuff. As you can imagine, I actually clicked on your link to the 30 yr bonds — it was very interesting. Then I also did the comparison you suggested. But I’ve also added in TMF & UBT. It’s like using an amplifier. Sometimes, the moves in TLT are so subtle, you gotta turn up the gain to get a better view of the peaks and valleys. The YTD view is very telling — especially about the daily cycle low on January 27. That’s not the way I determine a DCL, but it does feel like confirmation. Maybe the past year, but certainly the past 6 months — take a look:
https://www.google.com/finance?chdnp=0&chdd=0&chds=1&chdv=1&chvs=Linear&chdeh=0&chfdeh=0&chdet=1488097972449&chddm=48875&chls=IntervalBasedLine&cmpto=NASDAQ:TLT;NYSEARCA:UBT;NYSEARCA:TMF&cmptdms=0;0;0&q=NYSEARCA:GLD&&fct=big&ei=VpGyWMDwGcHCeN_nl8AP&authuser=0
From a trader’s perspective, I am net long the miners including a bunch of GDX options that are still up over 200% (at one point over 300%) but I also hold a short position in NUGT from about a week ago. This I believe is a way to reduce exposure during the correction but mainly gives me a small psychological edge. I can better sit tight while my account goes down in a scary way while at least making profits on something. I see stops that Gary talks about at the 23.5 GDX and I will be buying options there and buying a whole lot more if GDX gets to 22.5.
Reading Ped’s posts, I think Gary’s analysis is spot on . I can’t fault it. I see this as a bull market rally within an overall bear market. Ped’s timing is way out. The time to go short could be around next August with GDX well into the 30’s. Look at the monthly chart!
You might be getting us mixed up, mchawe. Gary never said this was a bull market rally within a bear market. That was me who said that. Gary counters we are in a bull market and the bear is dead and all timing mistakes will be corrected so just buy when you like. My view is we will get another pullback and silver in particular will see a painful decline and that gold needs to cross 1400 dollars before I will agree this is a bull. So I also think we will see a mine stock decline before we get going again. Its not really that big a difference. Just splitting hairs and pissing in the wind. And it really makes no difference who is right or wrong because all the talk is just speculation anyway.
Everyone has an opinion.
About your GDX chart then.
I did go look at the monthly and of course I can see what all the fuss is about. There indeed does appear to be a massive inverse head and shoulders pattern that started forming its left shoulder back in late 2014. And that pattern implies gold and gold miners could really take off.
The same large pattern is present on the HUI and XAU but I think its going to disappoint.
My problem with it is the pattern is not yet conclusive and there is some doubt (for me anyway) about the way its forming the right shoulder. There is also a pretty clear falling channel line established already that must be broken before I will change my mind. Secondly, I really don’t think silver is confirming a bullish outlook for PM’s so I continue to have strong doubts about the sustainability of the entire precious metals sector.
If silver cannot rally with the silver miners then fat chance gold is going anywhere fast and my bet is therefore going to be the correct call on this. Look, we NEED to see silver confirming the bullish outlook that the bugs keep blathering about or it simply will not happen. So always take your cue from another metal when in doubt and you will usually arrive at the right conclusion.
As typical of turning points it is difficult to make good timing judgements on the longer term charts and I will admit I was unprepared for this recent thrust in gold although happily it did not affect me which was fortuitous. Crazy but true I have come out ahead on my recent bear trades. The bugs will no doubt be gnashing their teeth on hearing I was taken by surprise but still made money.
LOL!!!!
Still, it is amusing to hear them call me wrong every day when miners have factually and objectively been in decline since the 16th of February already. I warned them but they refused to listen. The charts foretold it (in my opinion) but nothing helpful warned me gold would actually rise even as miners went flaccid and limp.
So go check SLV for better insights. It is currently below its 50 month SMA and making a small H&S pattern that looks likely to be filled pretty much any day now. And in the meantime you guys can keep calling me wrong. I am OK with that until the pattern plays itself out fully.
In other words, the Fat Lady has not sung yet.
It seems to me that this PM market is getting driven by inflationary expectations. In a few months when inflation does not manifest, then it will be lower prices again.
I will say that you will get burned if you remain short miners and silver. I assume you sold your silver short already though as that would be in seriously bad shape if you held? Too many see that juicy 200 day MA and are thinking that spells downside for gold. I am taking the position we will blast through, catch shorts off guard and this will fuel a large upside move in miners. AG in particular is getting way to easy for shorts. I think it’s about time to smell some burnt bear fur.
yes we will do the pedestrian paper trade starting Monday, We will use the 8:20 AM NY open and short 100 oz gold and 5000 oz silver. we will stay short for 90 days We will update Peds gains and losses daily and see if taking a trade based on anonymous blog posts. pays.
Ped has never mentioned any sort of plan to hold any short position for 90 days — not even close.
he just posted gold is dropping for 90 days. Silver as well. He can book his profits or cover his losses anytime. all he has to do is post that he wants to close the position. But as of Monday he will be ‘paper” short gold and silver. wwe will see how
Don’t worry about it, Zkot. These gold bugs always play the same kind of games. Seen it so many times before. They are incapable of a genuine, open minded investigation into technical set-ups and instead get all defensive and try to box you into a corner just because you speculate about an idea.
If I want to post on trades I will do it regardless of what RR wants to believe I did. Just for the record though I am short both silver and gold miners at the moment and hoping Mr Trump does not say anything crazy on Tuesday to torpedo me!
Just in case though I think I’ll put in some stops. You just never know.
Politics is beyond forecasting.
actually i am not a gold bug.no more than you are a dollar roach. but you write these long posts warning everyone who is long that they are about to lose big time. so we are going to post paper trades to show people if it is worth listening to an anonymous poster on a free blog. But as of Monday at 8;20 you will be paper short gold and silver. i will post your entry prices tomorrow. anytime you want to close the position just say so. good luck.
LOL!!! A feisty bug.
Damned funny too. How much of my account are you investing btw? And what exactly are you buying. Let me know if I made money or not and be sure to send it along to Gary in trust. I am sure he will forward it to me.
A fiesta bug…cool, never heard that one. Personally i typically trade silver futures. up/down, doesn’t matter to me. long as I get the direction right. I do however dabble in the miners when i like the set up. The miners are a tiny fraction of my overall stock/investing portfolio.
I told you, 100oz gold, 5k silver at spot price. This is an exercise which everyone can track. look, it costs you nothing. and we shall see if your analysis plays out. You sure do spend an exorbitant amount of time trying to convince gold/pm/miner longs, that they are all wrong. For the last two months they have been right. but as we know, future is not indicative of past performance.
disclosure..long 3 SI, avg price 16.58, stop at 17.50, looking for between 19.50 and 21.
P.S. the silver physical market is very tight. The OI and price are telling us. same with gold, but perhaps not as tight. Physical buyers set the price. And they are buying dips. they are supporting the higher prices no matter what the shorts on the NY Comex try to do. Physical buyers know the real value…and I am not referring to coin collectors. i am of the opinion that they will be buyers to at least 1300 and perhaps as high as 1350-1400.
So, we shall see how this plays out.
Oh good, you are a fan.
So you get my personal opinion here. Absolutely free of charge. It is purely speculation. You can like it or lump it since I don’t give a shit one way or another what you do with the information. There are no guarantees either since nobody knows what will happen tomorrow.
And that includes you.
Meanwhile, you sure do spend an exorbitant amount of time trying to convince me I am wrong. That’s the real comedy because even I don’t claim I will be right. It’s a point of view on a free blog. Skip on by if you don’t like it.
Au Contraire…i am not trying to convince you or anybody else, of anything, You seem so sure of your bearish view, and you might be right, a simple exercise using fake money and we see where it goes. there is actually nothing to lose. frankly you should post “fake” or “paper” or virtual trades. call it the Ped PM fake account. keep it simple, like say the account has 10k or 100k and just post trades. After some months you can judge how a bearish PM outlook traded vs the bullish PM outlook traded. Go long or short. have some fun. get your friend Bill to be the PM bull. i suspect that would be more entertaining.
Zkot should do that too>There was a time when you, Zkot, were calling the daily and weekly gold moves really well with CD, in real time. 2013-2014 if I remember correctly.
instead of arguing about whose chart looks better, you can trade barbs on whose fake account has more fake money.
These past two posts have been quite timely and relevant!! In fact, not only timely, but also timeless.
As noted, I’m not in full agreement with Gary’s perspective on the metals markets, but the timing is perfect and the discussion is highly beneficial. I don’t know how other people are using it, but it has caused me to go back and revisit a lot of questions that I’ve had since right before the beginning of this multi-year, cycle degree bear market rally.
That, by the way, is the reason I pay attention to this blog.
Likewise, I’ve relabeled my “page down” key “bill” 🙂
A few thoughts on the video.
First, around time 8:20, “this cycle bottom here”. C’mon Gary — you know you want to say it the way you said it back in October: “this INTERMEDIATE cycle bottom here.” You were incorrect to recant your original assessment just because you didn’t like gold’s November 9 price action. Trust me on this 🙂
Second, 1300 resistance — one step at a time. How about 61.8% retracement as the key or initial resistance/target area?? You actually identified this zone earlier in the video as “1270-1280” — why the sudden jump to 1300? I know, I heard you justify, but I’m not convinced. 1300 is arbitrary. 61.8% retracement, 200 day SMA** for gold — these levels are NOT arbitrary, they are relevant!!
March — the month of Mars, god of war, ruler of Aries — very turbulent for gold and disappointing for both bulls & bears — remember the right translated cycle that never was: March, 2013. The ebullience of March, 2014 — that St Paddy’s day peak that was supposed to lead to ever higher highs, only to end up as the YCH. March 2015, was just about as ugly as a market can get for metals. March, 2016, was runner up in the ugliness contest, after March, 2015. One needs to enter March on point — or maybe just take a vacation from the metals. Arbitrary price targets are not the way to start any month, much less the most difficult month!
Third, January 27 was a daily cycle low. Surf, Likes Money Cycles and I all arrived at that conclusion by different means. Not saying you should just join the crowd, rather, consider the very high probability that we’re each making valid points, and those different, valid points all lead to the same very likely conclusion that does have predictive value.
**when I say “200 day SMA for gold” I mean, gold doing a dance around the 200 day SMA — goes a little above, a little below — kinda like it did most of last October, only this time the dancing would be an upside down version of that dancing 🙂
dboz brings up a good point, despite his bias. Sure, people of opposite bias might be seeing the opposite point.
I want to be clear — i.e., NOT sound bearish: Gold & GDX blasting thru the 200 day SMA in their first IC rise? That was last year. This year, I look at the 200 day SMA and I see TURBULENCE — no strongly trending move in any particular direction.
To me, I see a chance for gold longs (not silver or GDX) to grab profits as soon as the IC tops. At any rate, I suggest extreme caution on either trade, long or short. Either that, or sit on the sidelines until the IC low completes.
Last year’s IC decline, like this year’s, came in between two IC rallies, all of which made up the larger YC rally. The iC decline portion of the move was extremely complex, and I believe this one will be, too.
AFTER the IC bottoms, I expect a much more interesting long opportunity into the YCH — and sure, that one will blast thru the 200 day SMA.
You are describing my triangle bottoming pattern that I think will play out this year.
We need some time for the longer 200 week moving average to flatten out and then turn back up.
A triangle would generate that time and keep everyone locked into the bearish mindset.
Remember it takes most investors 2-3 years before they recognize the major trend reversal from bear to bull market.
Maybe something that looks sorta like this.
Good morning,
Your annotated chart says you believe gold staying in the current channel till about 2018.
I agree, it is the most likely scenario unless a grey swan comes around.
The gold chart is a very good chart, the best prediction at the moment.
The thought of framing it comes to mind.
Good point on your chart. As I’ve pointed out on more than one occasion, your repeated comments about the 200 day SMA & 200 week SMA back in November, 2015, ultimately turned my attention to these moving averages, and led to my hypothesis. I had been working with the 8 day SMA on my daily chart at the time.
My mind had been tuned to “probability assessment and risk management” as guiding principles for about a half year prior to this, so that was my “attitude” at the time. Just as you, I had defined the problem as pattern ambiguity. Once I formulated the hypothesis, I spent the next 2 weeks doing backtesting.
Naturally, the first thing I looked at was the 2011 peak in gold. Using the 200 week SMA, it was an aberration. It took me a few days to figure it out, but I realized I needed a longer time frame. So now I use the 400 week SMA for my long term analysis.
And that’s where your chart breaks with mine. I’ve got the 400 week, 200 week, and 100 week SMA’s all on the same chart. The 400 week SMA still hasn’t even turned down — it’s at its all time high of 1341, still moving up about a dollar per week. That’s the one that characterizes the 2011 peak, so that’s the one I’m sticking with for that particular purpose: To describe market behavior at supercycle and cycle degree.
I believe 2011 was a supercycle top, and it has not yet been corrected by a supercycle bottom, based on fractals (self-similar market patterns at all degrees of trend). That is the reason why I believe the current gold bull market to be of cyclical degree, within a supercycle bear market, possibly within a grand supercycle bull market. I would need data and chart analysis tools dating back to at least the 17th century to see that mathematically — I want to look at something on the order of the 300 quarter SMA, with plenty of data points on it and see what that looks like.
If I had the resources, I’d love to map the whole gold/currency market all the way back into antiquity — 4000 BC, the agricultural revolution, the invention of written language — presumably the origin of currency, if possible.
That’s just how my mind works — any scientist wants to do the same, in their field. I want to explore the infinitely large, and the infinitesimally small.
Solar eclipse is pretty powerful today!
So far the sector is doing exactly what I said it would do.
When I was told gold was going back down in late January I said it would just be a short dip to push the 3 day RSI to oversold and then the second leg of the cycle would take gold to around the 1240-1250 resistance zone before the daily cycle topped.
I knew January wasn’t the DCL because the miners never got oversold or turned the 10 DMA back down.
I said the late buyers that bought the breakout would sell into the correction and we are now having a correction. Instead of panicking and selling and then making the same mistake again by buying the next breakout you need to have a plan to buy the correction.
If Wednesday turns out not to be the cycle low then buy the next swing, but don’t sell into the correction and then wait till your emotions give you the all clear before you buy back.
The time to buy is when you’re scared, not when you feel comfortable.
I’m expecting a stop run early this week, but I’m also watching sentiment levels and if we get stopped out I’m hoping I will be able to buy back in at lower levels (with sentiment more extreme) then where we get stopped out.
Funny thing is, I largely agree with this!
It’s not even that I disagree with the cycles part per se. Rather, I observe a clear lack of consensus among forecasters on what constitutes a cycle top or bottom.
I will say, however, the more accurate one’s cycle tops & bottoms are in line with the actual market behavior, the more the larger degree cycles make sense.
Here’s what I mean: On the video, you identify 4 cycle bottoms from from the 2016 YCH to YCL. How do you characterize these? DCL; DCL; DCL; DCL=ICL=YCL?
I characterize them as: DCL; DCL = ICL; DCL; DCL = ICL = YCL.
That was the past. In the present, I see something similar playing out, in the upward direction.
Accurately determining this ultimately leads to a more probable conclusion about whether the much larger degree cycle move is a new bull market of supercycle degree, or a bear market rally of cycle degree.
You Gary have a good mind and clarity at this moment !!!
Hi Gary, I appreciate your imput… but I find following emotion can be very dangerous in this market… as primarily a Swing Trader from the early 90’s… I learned you could stay “Old School” wall street… I used to live in Boston and work in Financial district from 89 until 2013- Boston home of Mutual funds… I learned from the Investor Business Daily about chart studies… I have found in the past that when i have let emotion rule… was because I either “Cheating trying to get in early” I learned my lesson the hard way… I now use limit orders and stop’s. My entries are Pretty good… I know within the 1st minutes whether or not my entry is good or… for those who want to get a good entry try not buying the Exact Low- buy the next day follow through- higher higher, higher low… *** For anyone wanting to Improve your Trading- and manage risk… Use Pivots and Limit Order… You can’t miss getting in at a good price if buy above the Pivot and the day has not made a lower low… good luck Monday Everyone!
Zkot
can you please clarify what you just said..??
simplify…
thank you
In the first few minutes of the video, Gary has pointed out cycle lows with blue arrows.
My point is, the better you characterize these by degree:
daily;
daily = intermediate;
daily = intermediate = yearly;
the better you will be able to characterize moves of larger degree. If a yearly cycle rise or decline is a 5 wave move, that’s a whole different story than if it’s a 3 wave move. You’ve got to keep your cycles in order, to the smallest and largest degree you possibly can, to best understand what the market is doing in the present, and likely to do in the tradeable future.
I believe the current gold bull market to be of cycle degree, within a supercycle bear market, possibly within a grand supercycle bull market. All of that is based on my own hypothesis for market analysis — except the “grand supercycle bull market” part — that is just a hunch, that I plan to explore when I can.
ALL of those higher cycle degrees, however, still encompass what’s going on in the yearly cycle, which in turn encompasses the intermediate cycle, which encompasses the daily cycle, and so on.
I guess the bottom line is, if you believe that market patterns are fractal in nature (self-similar at all degrees of trend), then I recommend trying your best to have the clearest idea of what’s going on at each degree of trend.
If, on the other hand, you do not believe market patterns to be fractal in nature, then it’s probably no big deal. After all, forecasting is not the same as trading — you don’t even need a market forecast to trade successfully, so long as your strategy and risk management are solid, and you adhere to them in a disciplined manner.
Actually, there is value in distinguishing among daily, intermediate, and yearly cycles even if you don’t believe in or care about fractals.
For instance, if you have a long trading time frame, you may be willing to hold a position thru a daily cycle move in the opposite direction, but not an intermediate move. Holding a position thru a yearly cycle move in the opposite direction can have huge opportunity costs, even if your position never passes into the red for even one minute — that’s a long move, and you could be deploying those resources elsewhere to achieve a better ROI.
Alot of garbage talk and arguing going on here. Who cares if gold is still in a bear market. The point is miners are close to a short term bottom and is setting up an opportunity to make some quick money here on the long side. Worry about the next move after that. All Gary is pointing to is the next near term trade, then we analyze and assess what will happen after. Gary u need to ban some of these new posters, they are very negative and seem to only be here to discredit people and talk useless rubbish.
What qualifies as rubbish, Robert? Which specific comment is bothering you?
Not u Ped, I will not call names but if u browse through u will see
There is probably a good reason they use the word “versus” when discussing bulls and bears. We all seem to be at logger heads and hardly ever agree. Its too bad because we can all stand to learn from each other. None of us has all the answers.
My thoughts exactly.
Relevance is key, not agreement on every single belief.
That’s why so much depends on that red wheelbarrow…
You know, the one glazed with rain water…
Beside the white chickens…
EVERYTHING depends on it!
This one?
https://s-media-cache-ak0.pinimg.com/736x/9c/95/4b/9c954b030d492ca9e72cd240cb8fcaaf.jpg
Pedestrian,
Exactly my point!
I first read the poem when I was 17. Next time I was 47 — WCW read it to me himself. Here’s the 15 second audio file:
https://www.poetryfoundation.org/features/audio/detail/75674
My mental image has always been different: Wider angle, with more context, taken from a few meters further away, and razor sharp. My lighting is much softer — not midday sun, rather, that post rain effect. There’s a short winding cobblestone path to a small country house made of stone. Lots of green, but a damper feeling, because it’s just rained. My chickens are in a pen, about 4-5 of them, and they’re looking for food like yours. They’re pecking the ground for worms coming up after the rain. There’s a lot of trees scattered about, plenty of shade — like a grove, not a forest. The wheelbarrow is near the foreground, just to the right of the stone walk, and the chicken pen is behind and to the right of it.
We are looking at the same thing, but our images are quite different. I’ve discussed this poem with dozens of people the past couple of years — including non-native English speakers and poetry haters, and NONE of us — you, me, or any of them — have presented the same viewpoint.
Funny thing is, we don’t need to kill each other over this or that agreement or disagreement.
EVERYTHING depends on that little red wheelbarrow!
I don’t have difficulty sorting out who is making valid points and who is just out to irritate to get responded to. I disregard them. The Trump approach of banning and censoring should not be encouraged except in extreme cases, i.e. purposely insulting, disrespectful of host and other members, etc. A different view is fair ball. I’ll admit, some posts cause me to question but that simply causes me to firm up my direction.
There have been many times in the past where the miners and the metals have dis-connected . Generally speaking, extended weakness in the miners is not a bullish development for the metals. I am not too worried about the current disconnected although I am expecting a pull back in the metals. That is why I liquidated all my leveraged long silver positions on Friday. If we get some temporary weakness, I will stick to unleveraged positions until the picture is clearer.
miners and gold video with charts…
https://youtu.be/CEIN0N0_ixQ
Mega Mind,
Thanks for the link.
This business of drawing trend lines to support a bearish or bullish argument can always be done by finding the proper pivot points. A more balanced argument who be to make a case for either way and then as Terrywg would say, “find a confluence and have a narrative.”
At this point from the practical point of view one item that matters is what is the plan to follow for either scenario.
Don appears to have taken a decision and sold. I took the risk to keep the NUGT shares.
Oh, I am a chicken.
But on Tuesday or so I will become a rooster with steel balls and at the stop run may load a bunch of 3X miners.
The thought that this traders in the blog are like the employees in a big company, comes to mind.
We have Gary as the manager/supervisor.
Then we have all kinds of workers, some quite competent, some average, and some troublemakers.
There might be restructuring, pink slips, and so the troublemakers are first to go.
The team needs to produce a lot of money.
And the collective thought of the team is powerful to either bankrupt the company or make it very successful.
Here we indeed get many valuable ideas and expertise.
Just rambling…
Three numbers of interst to me-
22 GDX has been a magnet in the past. Strong support
25.71 recent GDX high – would be resistance on way to:
31.70 high – I wish.
Interest
I was looking at charts this weekend and noticed something that caught my eye. The XAU:GOLD outperformance in 2000 started out similar to this bull market that started in Jan 2016. Started in Oct 2000 and outperformed for 6 months, and then underperformed Gold for 6 months after that. Gold stocks then heavily outperformed Gold after that 6 month correction. Gold stocks have rallied from Jan 2016 to July 2017, and have underperformed Gold since then. Judging by a lot of peoples comments here and other pro-Gold sites, many people including me are looking for Gold stocks to drop very soon for that great buying opportunity. Unfortunately, the bull doesn’t care what we want and has a job of catching that most people off guard as possible. Time looks to be expiring on this Gold stock underperformance so look for an upward launch soon.
Here is the XAU to Gold Ratio for reference
http://www.macrotrends.net/1439/xau-to-gold-ratio
I am very happy and feel confident in my charting skills to make an official projection with Silver over the next few months..
SLV is now trading at $17.40
SLV will reach the upper $20 range to $21 (if not higher) over the next month to 3 months.
Anyone one else care to offer a projection?
Option Trader,
I agree with your levels, but not the timing.
There does need to be an ICL in between your now level and 20-21 target. That intermediate decline will chew up most or all of those 3 months. Then, sure, the next IC rise will proceed as you suggest. That’s my projection.
Option Trader,
I know you are a careful trader and what is notable to me is that you come forward to state your prediction.
I have learned than in trading success begets success. Higher highs follow highs. Gold appears to be correcting the election day manipulation. I would say that your prediction has a high probability to come true.
Oh, you used the word projection, and not prediction.
I’m not picky. either or….
TLT continues to look explosively bullish here. I’m waiting for a confirmation on Tuesday.
Anyone have any thoughts as to why treasury bonds would want to go higher here?
If you look at the yield red candles, they are about to go through support. The candles on Thursday and Friday have momentum, Gold and Yen followed their inverse and the yield is becoming a falling knife. So the expectation is that gold will continue up.
I take it the reason is that Trump has gotten very stingy and is cutting all money that is wasted and consequently he does not want to pay high interest rates.
The hope is that as gold continues up the miners will reverse. So one possibility is that tomorrow morning there will be a bear trap early in the morning, and then gold go up. Though on Mondays USD is lazy.
Good analysis. We have another interesting week ahead. The Fed will be speaking throughout the entire week which means markets may be volatile. It will be interesting to see what they want to communicate. A lot of important economic data coming out too.
Meanwhile, there are segments of the general markets that are showing signs of weakness…. Semi’s, transports and small cap..
To get an answer to a question sometimes all you have to do is to ask your brain. Later it will come back with the answer.
The answer to the question I posed above about the divergence between TIP and yields just came.
The probably correct answer is to look at the upcoming real rates; they are perceived as increasing which is coincident with late last week take on the consequences with the US-Mexico trade.
For your enjoyment…
The power of true.
The more completely you live in truth, the more fully you will connect to and realize your best possibilities. Truth will show you who you are, and enable you to go where you most sincerely wish to go.
Truth is not always the easier or the most convenient choice, and it can often be painful. Yet in the long run, truth never fails to be the best course.
When you seek to avoid the truth, you’ll put a great amount of effort into a pursuit that will take you backwards. Instead, work your way willingly toward truth at every opportunity, and you’ll always be making real progress
Those who fight against truth are fighting a losing battle, Use every opportunity, in every moment, to put yourself on the side of truth.
Deception costs much and gains nothing of any value. Truth sets you free to achieve, to learn, to experience, express and fulfill the best that is within you.
Be true to yourself, to others, to the world around you and to all of life. Truth will always keep you looking and moving forward. Ralph Mason.
“For every truth, the opposite is also true.”
Siddhartha, by Herman Hesse.
Much more interesting than any impossible seeking of some truth which is almost entirely unknown or unknowable, is epistemology — how we “know” what we think we know.
So often are we “Fooled by Randomness”
Pedestrian,
I trust you’ve seen my response to your photo (thanks for sharing).
That’s an image from somebody else’s creation with words.
I’ve just uploaded one from my own creation. A place I’ve been to at least 250 times — each visit different from all the others and full of nuance. Imagine how many different viewpoints there are of this object. All very different — I’ve photographed a few of them, in addition to my own.
Starkly different viewpoints and feelings conjured up by them.
We all look at the same thing, from different angles, with different feelings, different conclusions, and we still manage not to kill each other over the differences.
Go figure!
Enjoy:
https://www.flickr.com/photos/7466465@N05/32295362594/in/datetaken-public/lightbox/
Your photos are amazing. Really beautiful work Zkot. You might want to share them with others here. I would link but its not my place to do that on your behalf. One day I really would like to get over there for a holiday and see the country for myself.
How come you don’t have a wheelbarrow and chickens photo of your own!
@vin
Gary’s usage of “risk-adjusted basis” in that context made me laugh. I think he just copied my term but has no idea what it actually means.
@ped, @zkotpen
Thank you for the continued analysis. It has helped me a great deal.
@gary
Your explanation about money coming out of bonds is frankly very worrying. It seems that you don’t understand the simple concept of demand and supply. A fall in the price of bonds does not ipso facto mean the flow of funds will land on gold. Firstly, as Ped and zkotpen have rightly pointed out, bonds are held to maturity. A bond sell-off means there is a willing seller and a willing buyer. There is no increase in net funds available!
Of course, a drop in the demand for bonds could very well portend a sector rotation for managed funds. But flow of funds in and out of bonds will be largely dependent on the price elasticity of demand of bonds, as well as any other fundamental shifts. It certainly does not work as per the example that you have given.
@goild
I am looking at USDJPY to hold above 112.50 this week. My ST outlook for gold is bearish and I have just opened a short position on spot at 1257.55. Looking to make 100pips.
Last week you said the banks were shorting mining stocks/etfs and that should reverse within a couple of days. Are you now saying something completely different? But you were right in both instances, you are always right…. You can understand the skepticism….
Let me take out my crystal ball and pre-empt Gary’s reply:
He will say he trades real-time, and that when the price action changes so does his opinion. The problem is that there have been such fundamental shifts in his outlook that one can’t even form a coherent view of what his directional bias is.
Gary, you said a couple of days back that the DCL was complete and that the next leg up was beginning. Now you say it is due for a correction. For the avoidance of doubt: what is your view on gold in the next month, the next 3 months and the next 6 months?
He’s made it perfectly clear. Up and down in a narrowing triangle for the rest of the year with the next upleg testing last summers high.
We have a little clique that has formed here and they tout always being right but all I see is constantly being wrong? Correctness is in the rye of the beholder.
Ped was shorting silver as it has set a record 9 weeks of gains, yet somehow the clique says he is right. Terry trades short term and gets excited over 100 pip moves. He trades currency and then touts that bugs are making no money? Ped called for golds demise for weeks now as it keeps going higher. He even states how lucky he has been not getting fried on his short miner trade due to one of the biggest divergences between miners and gold ever. We are way closer to Gary’s 1300 then we are PEDS sub 1000 call.
Gary has called DCL in gold, not miners. He said miners still may not be there yet. You guys just make crap up. I called the exact opposite from PED last week, he said dollar up, gold down and silver down. Wrong, wrong, wrong.
I could care less if Terry makes a killing trading currency and shorts gold for 3 buck scalps. None of that interests me.
I trade miners in 4 accounts. Two are up over 200% from the start of 2015. The other two I started using in the fall of last year after selling out of typical stock market garbage.. Both are in th green but obviously not as big of gains.
The constant critique of Gary is annoying. He has it more right than anyone posting here and has helped many of us make money. I cleaned up on Jnug in dec-Jan trade that salvaged some timing mistakes from Sept and Oct last year.
No one can get it right all the time every time. Some here get it right none of the time. Yeah some guess right and hit short term gains. Yippee. Most have missed massive gains being on the wrong side and fighting the trend. Nothing goes straight up or straight down forever.
Gold is going up, silver is going up and the dollar is going down.
Miners are experiencing profit taking and consolidation. They should take a big jump soon, just like Gary has said should happen and MOST will miss it. I agree.
Great that Gary helped you make money. He also lost a lot of subscribers money in the run-up to the low in December. Of course, he will claim otherwise and say that he stopped out at 1275… but it seems a lot of his subscribers did not get the memo. How you want to apportion liability for that fiasco is entirely up to you… but a lot of the language that Gary was using caused people to get overly bullish on gold and the miners, even though I do recall him telling subscribers to get out.
You may be annoyed, but we are doing everyone a public service by keeping his over-exuberance in check. When he starts speaking in hyperbole you know that there will be some idiots out there who are going to bet the farm on his assurances.
If you couldn’t care less about my trading, why do you mention it? Does it get your goat? I am merely posting my trades here to add credibility to my statements. FYI, I have never taken a $3 scalp and I doubt I ever will in my entire life.
Massive gains??? What are these mystical massive gains that “most people” have missed? That is the problem with you bugs — you keep on saying that this is the last chance to board the gold train; no pullbacks; going straight up up up. And that is why people like me will continute to give you a counterpoint and to ANNOY the shit out of you when you make foolish statements like this.
Rage much? Silver is going to exolode soon, maybe try that for a trade.
If you are not a subscriber how do you know what he traded, missed or called wrong? He never posted that JNUG trade on the blog. Again, no one is perfect. Why would Gary buy there and not tell subscribers he sold it? They can see what he is doing every day? You are just a hater who was exiting from here over a month ago? You addicted to Gary helping you make money or you just like stirring the pot? That’s noble work protecting us all from Gary.
We are going to have to disagree on the dollar. Dboz. Thing is its not even plausible it goes down other than in corrective declines. Not with the problems in Europe. And so the idea that the dollar is going to enter a bear market and support gold just does not fly with me. That can only mean one of two choices remain. Either gold declines as the dollar rises or gold actually goes up with dollars. I lean to the second idea and think we should get a respectable bounce from 1150 or so. But who knows for sure. I am not trading on theory or daily charts anyway so most of my comments are speculation. Don’t confuse a discussion about golds future with an actual trade.
Boss, I am still short silver and getting my ass kicked if you need to know. But I believe that the peak is near and am not really too concerned about being underwater if my basic premise turns out to be correct. It just means I wasted some time is all.
Good morning.
Terrywg,
Thank you for your comment.
Would you please tell us what was the “confluence and narrative” for being gold bearish?
np… will do a quick run-through:
Firstly, from an EW perspective I see waves (i) and (ii) of XAU complete. I think wave i of (iii) is also complete and wave ii of (iii) is currently in progress. This should see XAU move towards 50% retracement levels. Additionally, there might be a right shoulder of a continuation H&S pattern forming as we speak.
There is also a big ugly red candle at 1260. It tells me that there is a big player selling at that level. It will take an impulsive move to break resistance.
Secondly, look at the nikkei chart… i see a triangle waiting to thrust upwards.. US SM should follow in tandem, once nikkei approaches 20,000 we should see the reversal that Ped is waiting for. Timeframe is unknown but in the meantime this is not good for gold as per current correlations.
Thirdly, bullish flags and channels in the SP500 and the DJI everywhere I look.
Fourthly, USDJPY support at 111.50-112.50. This is a major support zone at the USDJPY bulls will defend it to the death. I expect it to hold for now which does not bode well for gold.
Fifth, March rate hike is still on the table.
HOWEVER,
for the record, unlike Ped I am bullish on gold in the MT for reasons that I have discussed before. I am looking for it to consolidate for 2-3 weeks with 1243 as the centre-line and 1232 as the pivot. After that, if gold manages to keep its head above 1232 I will start to scale into spot gold and will look for a test of 1298 at the MINIMUM.
I should say that I turned bearish and bought 1000 shares of DUST to counteract the 2K shares of NUGT I have as I cannot sell them in the premarket as they are in a different account.
Good trading to all.
Zkotpen
Thank you for sharing your photo. It is beautiful.
Can you share the location?
Yes, miners have to move higher into a new daily cycle.
Watch USDBRL! It made a higher high on Friday to leave behind a higher low – if you corroborate this with the 75% commercials’ net short of all open interest on BRL futures, then….risk-off mood (begun on NOV15 when US Utilities put their YCL) is getting steam.
Then we have Treasuries on very low ADX – need to start trending. WHEN TREASURIES TREND GOLD/MINERS DO THE SAME.
Then Natural gas and CRB index already in YC decline and in confirmed IC decline respectively.
Transports…
Terrywg,
Again I appreciate very much your taking the time to respond and your expertise sharing.
The response illustrates the narrative and confluence you mentioned before.
http://stockcharts.com/h-sc/ui?s=%24XAU&p=D&st=2000-02-27&en=(today)&id=p33425934363
Ped – your latest response to my last post, is truly typical of a liar who hides behind a screen in anonymity on internet – your lies just keep getting bigger and bigger ! First gold trade in the 60’s ? ROTFLOL ! Dude, the price was fixed at $35 until 1971 ! Gawd now we all know you are both a pathological liar, and also dumber than a box of rocks. Also, linguistically from a grammar standpoint, and lack of consistency (which means you are lying), there is no way on God’s green earth you are older than 25. Your immaturity in all of your posts, and your responses to many people’s posts, demonstrates a rare level of immaturity that would not be coming from an adult. If you are older than 25, then God help you, because you demonstrate near zero emotional restraint, and the typical maturity level of a teenager, or rather an emotional IQ level of an adolescent who is still pre-pubescent. Now we all know to just ignore you, and not pay any attention to a word you print.