96 thoughts on “T-1 PATTERN

    1. Pedestrian

      I agree Goild. That’s an excellent point. Prior to the correction/crash of 08 there was a period where the market was topping before rolling over that lasted more than 18 months. To a few rare people it was obvious as hell but to most others they just assumed equities would recover and eventually go higher. Go look at the S&P on a monthly chart and see for yourself. The first signs actually came in late 2006. A double top was made in 2007. But it wasn’t until middle 2008 people started to sell and get nervous. Then the plunge finally came and by the summer of 08 and into the early months of 09 a lot of retail accounts were obliterated. Any market watcher worth his salt was already making money shorting though. So you are right that we don’t have those kind of topping signs yet. What traders really fear is a massive single day decline that catches them off guard. But there are ways to prepare for that too. Until then its a better bet to just buy what’s moving and try not to get too greedy or lose focus.

  1. Robert

    Yes 2420-2450 is possible then a selloff which will be quick. Could be violent and erase all the gains in few days then 2500+. I’ll be waiting on it to buy. This is a much better and stress free trade setup than gold. Gold should bounce on the stock selloff a little

  2. brianbreeze

    Robert nobody has the slightest idea of what the market will do. That is the only certainty.

  3. chrisG

    China just announced growth slowed. Cutting steel and coal production annually. Any effects on market Monday?

  4. brianbreeze

    Pedestrian problem is charts can make it look the market will do one thing and it does another. To be honest the only ones who got this market right for many months now have been EW practitioners I have followed but not those using regular charts and cycles.

    1. Gary Post author

      It’s easy to get any market right with EW. You just have 10 alternate counts. One of them is bound to be right. ๐Ÿ˜‰

      1. brianbreeze

        Well I don’t know as some of the guys I follow called the moves correctly for months without having alternate counts.

        1. melt

          Brianbreeze, could I ask who are some of the EW people you’ve been following? / their websites? Would love to read/subscribe

          1. brianbreeze

            @ElliottForecast on twitter has free stuff but is a paid subscription (just following his free stuff is useful) and stockerversals.com subscription has been very good with EW and he does not give alternate counts; he has a twitter for some free stuff: @StockReversals

  5. MegaMind

    What is your take on interest rates hike on FOMC meeting? Will Miners drop or go higher on that probability?

    1. Pedestrian

      I might throw a comment out on that question.

      The next FOMC press conference will be on Wednesday, March 15th. That’s just 8 trading days from Monday. And if you look at the miners indexes they do look bullish for the coming week. We might get a few more days of basing and then expect prices to move higher.

      So the question will be whether the rise is aborted 8 days from now and the declines in mining stock resume and that is kind what I suspect is in the cards. Personally, I will be buying JNUG tomorrow unless something unexpected happens and will plan to be out again before Yellen hits the microphone on the 15th.

      We do look set up for a bounce in any case. I am really undecided about how sustainable it will be though and hate getting my ass kicked on Fed days.

  6. Goild

    One initial take is that gold will stay in a channel, miners will rise a bit, and on Wednesday March 15, at the FOMC, meeting JNUG will hit again about $5.75.
    That will make the double bottom.
    Then gold will take the miners up.
    And Dboz will recover his money.

  7. Goild

    Oh, as I have two glasses of wine now…
    We will make a lot of money out of the miners.
    ED is becoming an expert on the miners and we are set to continue making money whether the
    miners go down or up.
    The miners are given their riches away.
    All you have to do is to stay tuned, be perseverant, and have fun here.

  8. Goild

    Dboz,

    I think and sincerely wish you recover your money and make good money.
    Look at the CPI index.

    1. dboz

      Thanks man. Another day like Thursday and it will be a six figure loss off the 2/8 highs. Things went south this week really steep really fast. I was holding OK until the Thursday dump. Overall accounts sit in the green but narrowly. I had 2015 picks that I still hold with near 200% gains which helps.

      However, big plays in Sept and then more in October are sinking red again quickly after all being back green.. All combined it is getting dicey. May have to use stops which I don’t like to use due to the stop running. May give it 5 more percent then I have to bail. I can’t go down as deep as I was in December and it is looking like the bottom is about to fall out of silver and gold as Ped says miners leading the way down.

      I was way more optimistic for a bounce end of last year vs now. I see whipsaw action being the norm and fear gradual descents that just eat away. Easy come, easy go. I hate losing though. Should have followed Gary out on Monday. I am just too stubborn.

      If we go up, next ride I am setting stops at break even and just let it go. IF we go up. Getting deeply concerned Ped may be correct. This negative divergence is an all time high…….of course. Hence the need to add some stops. Tracking metals tonight to see if it just remains flat, which I view as bad. Flat eventually means break down.

      Can’t imagine there are any bulls left in Miners at this point with many below December lows due to earnings and panic. There are just no big buyers in the sector right now. Bears are having their way and the short trade has been easy outside of the first 6 months of last year. The rally out of December is very disappointing having virtually collapsed already after so few weeks. I think that is the real worry. Most miners are 20% down in bear territory. Fearing the worst. JNUG is barely above early Jan levels.

      Yep, inflation is coming for sure, it does not mean metals are going to rise. I have learned it’s all sentiment and psychology based.

      1. Pedestrian

        That was a big loss Boss. Very sorry to hear about it. This is not my idea of a good way to get an education trading though (even if almost everyone learns the hard way like you). But in my view your loss was entirely avoidable had you taken just a few precautions or given some of the other traders thoughts some of your time.

        The unfortunate thing about these kinds of discussion sites is they often pit bulls and bears as adversaries in battle putting your knowledge, pride, patience and skill to the test. And in that kind of environment which often becomes semi hostile it becomes difficult to make rationale decisions about your own trading as the adversaries are typically too willing to mock and throw out insults about the stupidity of the other guy.

        Take Bill as a perfect example (sorry Bill). He never wastes a moment telling everyone how dumb they are when price is going up even though he lost a fortune riding a 3X leveraged fund almost all the way to the bottom.

        So take care who you listen too.

        And do keep in mind that there really are people coming to these sites who are experienced and want to help other traders succeed where they themselves likely failed early on. And as it happens I would be in that category having taken some very nasty losses during the years I was learning and would like nothing more than to be able to help another guy avoid my mistakes before he takes a big loss.

        Like the loss you just took. And it bothered me Boss. A lot actually because I had written quite a few detailed posts to you advising caution and that trouble was coming based on the technical set ups but you ignored it anyway. Six figures is no joke though. That’s a big hit.

        It’s only a loss if and when you book it though. Lucky for you there are compelling reasons to believe that these declines are not permanent and even I (as a gold bear) believe that another great rally is still coming. When exactly is much harder to determine. There is still hope in your case if you are in unleveraged plays such as GDX though or if you bought a selection of miners.

        It is obviously much more worrisome is if you are holding the likes of NUGT or JNUG when the shit hits the fan. With those you can be right and still lose money if you hold on long enough. I trade them of course but as you know its just daily out to a week or two at the most. And that’s all they are good for. Otherwise stay the hell away because they are account killers.

        The other thing about sites like these Boss is they are often infested by bullshitters, gold-bug zealots, trolls and industry insiders who run an obvious pro-gold agenda. There are always guys making preposterous claims of wins that are unverifiable or they are busy sabotaging the excellent technical work of others.

        Be very careful about what you are reading and don’t get caught up in the emotion of the moment. Especially watch out for guys who disregard major technical warning signs or minimize their importance based on the one time 23 years back that a particular technical failed.

        Christ, if I had a nickel for every time……..well, you know what I mean.

        Anyway, this was an easy call and the signs were present at last 3 weeks back already. Gold and miners were indeed overbought when I was most recently warning to get out. They were also overextended on a cycles basis and had reached the absolute limits of their trend lines channels. It really did not matter which technical you looked at because as a group they were warning you a decline was coming. That included Stochastics, RSI, money flow, divergences, TRIX, Bollingers and you just name it because none of it told me a big price jump was coming before we had a pullback first.

        Boss….there was absolutely no good reason for you to have taken any losses.

        My advice? Next time check the charts for yourself and ignore all the blather about what the dollar is doing, about the effects of Trump and the worries in Europe or the latest war or the stupidity of a shortage in metals and the Indian wedding season.

        Most of the gold bug rationalizations are total nonsense. Just stick to the objective technical indicators and you will stay on the right side of the trade. Gold and silver are factually the easiest to read of all commodities once you get the hang of it. The reason is that no other commodity gets so much attention and so there are a plethora of superb charts to work with and some really brilliant (mostly anonymous) people analyzing the information in the background.

        Latch on to the guys who obviously know what they are doing.

        And lose all the people who just manipulate facts to confuse or to keep you in the game.

        This is about your retirement after all. So its serious business.

        1. dboz

          Thanks, it’s really not that big of a deal though. There is just no reason to own PMs at this time. It is something I have to deal with though. Price is king and it told me I was wrong. Giving it 5 more percent then cutting my losses. It will pribably mean selling right at the bottom though. Nothing I can do. I can’t hope for a bounce. This drawdown is not healthy. I think gold is going to get attacked with another huge dump. The big difference this year and last, the Chinese never bid it up any longer. They are into Bitcoin.

          1. dboz

            And BTW the market did look setup to run, it just failed to. No one knows. No one can predict instant and sudden Fed speak that manipulates the market. Silver looked absolutely bullish until someone dumped 2 billion dollars worth in 30 minutes. Just normal market behavior?! You can’t predict an event like that.

          2. Pedestrian

            Maybe we are just different then. To me every trade loss calls for a little self examination or reflection. I want to know where I went wrong and when I am honest with myself I can often trace the problem back to a few common causes.

            Like over confidence, apathy, impatience, incomplete analysis, assumptions and that sort of thing. I can’t trade well if my mood is bad for example or there is some other life problem intruding on my mental space. Like a blaring loud TV in the same room. I can’t trade while in the middle of an argument with my wife either because that just introduces the wrong emotion into the mix.

            And of course it is mostly folly to buy or sell when drinking, tired or short of time. There is no perfect time of course but some Zen is required and good focus is essential.

            So thinning out the easy to solve problems is the first step I take. Secondly, making a thorough analysis of the trade I want while attempting to stay as objective as possible. I do best when I stick to technicals and don’t let the gold bugs mindless repetitive bullishness influence me.

            It’s not just about the money Boss. When you play this game you are really playing against your own weaknesses and trying to defeat the pre-programmed nature we are all blessed (cursed) with.

            Otherwise we are just the same as the rest of the sheep that make the market averages…..um…average.

          3. Pedestrian

            “And BTW the market did look setup to run, it just failed to. No one knows. No one can predict instant and sudden Fed speak that manipulates the market. Silver looked absolutely bullish until someone dumped 2 billion dollars worth in 30 minutes”. Dboz
            ——————–

            I just don’t know how else to tell you this man but if you start blaming outside forces and manipulation you will NEVER learn how to trade successfully. Not to put too fine a point on it but that is just a bullshit cop-out that lets YOU off the hook while leaving no room for genuine self examination so you can learn to be better next time.

            Of course the markets are manipulated. So what? You will learn to trade within that reality or go broke blaming. But it can be done if you are serious and the proof is that there are people coming to this very site who do it every day.

          4. Gary Post author

            This is why I had that stop right under the reversal.I knew if the banksters ran that stop they would have a free for all on the short side. It’s tough to predict every intervention, but we have to try. When the SEC banned short selling in financials it became a free for all for the banks to make money any way they could.

          5. dboz

            Ped, I am very far from broke. Most of my loses were unrealized gains that are now gone. I have maybe lost 10% of capital. An acceptable loss for me for the risk I was taking. Of course a reversal and those losses reverse quickly also. You can try to make me feel low and stupid all you want. I really don’t care. It is only money. If I lose it, I go make more. I am not going to cry over spilled milk. I made the moves I thought were the right ones. If you know every move the market is going to make you should have your own site or better yet, you should be retired and no longer dabbling in the market as you would/should be a multi-millionaire.

          6. Pedestrian

            I wasn’t trying to make you feel bad. Sorry about that. Just being a little blunt about the whole manipulation excuse since its so lame. Thanks for the advice about quitting but being a millionaire is not a reason to go home and be dead if you enjoy the game. Maybe one day I will start my own site. Devoted to people like yourself who think an unrealized gain that becomes a loss is somehow OK. To me that just makes no sense. Why even bother if you are going to make easily corrected mistakes and give it all back.

            We are not alike at all.

          7. dboz

            Actually, after looking at things this morning I still have a 10% unrealized gain if I average across all accounts. Still not bad following a beat down.

          8. dboz

            Don’t get me wrong, I don’t like it and do not think it is OK, but that is what happens in markets. A pullback turned into a beat down. OK, it looks like you sort of called it, but then I am not sure as you were all over the place the last few days to a week. Regardless, I understand. It was my own fault not rolling with stops. I can take the losses. Was it smart, well in hindsight no. If things would have broken up (Fed not speaking) then I would be way up. So again, if you saw the Fed hiking in March, good for you. I think it is insane, but so is everything right now. I will just have to regroup and try to find a new level to buy in. At this point, it looks like significantly more downside is probable. I am hitting stops this morning. I have to cut off loses at some point as things are not appearing bullish at all to me. Currency is all over the place.

          9. Pedestrian

            OK Boss. Long as you know I am not trying to irritate you. Hell, I was kind of upset you got caught. Figured you would get out of the way in time. The decline was late in coming as far as I was concerned but after reviewing a couple other charts I had to ask myself why I didn’t time it better.

            Everything is obvious in retrospect.

  9. Goild

    Tulip,

    The consumer price index, says what we already know.
    Groceries, and everything else is becoming quite expensive
    The cpi is rising, and gold is following it.
    There is not stop for the cpi in sight, and so gold has no choice but to go up.
    The miners will be taken up by gold.
    The miner riches are being given away, though the manipulators will try every trick to make it hard.
    Nevertheless, we gold bugs will prevail, and no matter how many tricks and pain the manipulators try to exert, we will get the miners riches.

  10. Goild

    Dboz,

    I think that there was too much of an expectation for the miners in January and February and so sentiment took them way ahead of gold. Now they paid their greed, but they will come back.
    The thing to watch is that the 3X leveraged funds pocket severe fees.

  11. Goild

    redbaron9 comment:

    suggesting Fed own >50% SPX?

    can be followed up by,

    If so, the FED may want to sell a lot of it very high to maximize profit and fill its pockets.

  12. Robert

    Little tip for you guys who are deep underwater in JNUG/Nugt, one I wish I implemented when I was stuck. Sell covered calls! Let’s say you bought JNUG at 8 and ur now down big. The 5.7 region looks like solid support, start selling the April 8 or 9 strike calls. This will reduce ur cost basis and if JNUG is above 8 or 9 by expiration you will get out of the trade at a profit

  13. dboz

    I am not holding any leveraged funds. I did place stops though. I hated to do it but just fearing the worst. Metals look weak here to me. I left a little room to wiggle but not much. I just hope I don’t get the dreaded quick drop and then run in the morning. I hate FOMO worse than losing.

  14. Ed

    I like to thank Pedestrian for his articulate explanation about bond price and gold price last night.
    And I agree with him that a higher yield, rate hike, inversely correlated with gold price because all investors looks for highest return on their investment. We have two safe haven asset classes, bonds and gold; and only one pays interest.
    So bonds are the obvious choice for investors when FED starts to raise interest rate.
    But rising interest rate environment, real rate of return on bond investors are negative because they buy higher price than sold. In this case, gold can outperform if gold keep up with rate of inflation.

    But what I really counting on gold is that whenever there is a rate hike, there is a relief rally for gold.
    I am thinking the rate hike is bad for stock market. We never raised interest rate other than last two December. So you may see a substantial market correction, may be not immediately but very soon afterward.
    If that is the case, the market see that as Fed’s last rate hike.

    In such scenario, I think gold will do really well.

  15. Americano

    Great post Gary.
    I will await word to go all in on SM. I will use 401k. All my non-401K fiat is now Old Turkey……Bitcoin.
    Keep physical silver I have because why not but am never touching miners again after the recent fiasco.

      1. Americano

        Hi HomerJ.
        Maybe not all in. I will wait to see percentage Gary reccommends.
        If Bitcoin ETF is approved 13th – forget it – I’m going all in on that without reservation.

  16. Ed

    PM is most manipulated market. PM market is designed to screw small retail investors. Last week SILVER price proved the point. When banks can sell unlimited amount of SILVER contracts without any fear of covering their contracts with physical SILVER delivery. JPmorgan has hoard of SILVER even if they have busted sell strategy. Gold is different. NO one has enough gold to cover if banks deploy this sell strategy and get busted by equally big buy side investors requiring physical delivery.
    Just one time failure to deliver physical gold is all we need to take gold price to rocket to sky high. Tightness in gold supply will soon have to force the price to go much higher

  17. Pedestrian

    OK, here is a post for the bulls in the crowd. There is a lot of hope for precious metals (specifically gold in this case) and its encoded right on the charts. The single most important element though is timing entries though so before you look at this chart I want to point out that it is a monthly (20 years chart in this case) and that even though there is a bullish set-up we cannot easily divine from such a long chart when the turn will come.

    You can lose a lot of money being wrong so care must be taken. And its a good habit to keep apprised of the shorter duration charts as touchdown nears so you don’t make the mistake of buying when you should still be selling or getting short.

    OK, look at the chart.

    It is Yen/dollars and based on the rounding curve along the bottom of the price pattern it is currently basing and could be very near its final bottom. As Yen and gold move together this is important to know so provided the correlation does not break down there is an extremely bullish set-up in play that may arrive later this year or even early 2018.

    When Yen starts to rise we can assume gold will follow along and also rise. At that point the chart seems to imply a bull market in metals will ensue that could last some years although there is always going to be ups and downs along the way.

    But this chart also contains a warning over the shorter time periods because as you can easily see there is more work to do on the downside before Yen is ready to rock and roll. As long as Yen is trending down then gold really has a poor outlook and most of the money will continue to be made on the short side or by opportunistic trading strategies.

    You will appreciate better now why I have no interest in buy and forget ideas right now. In other words, this is no time for buy and hold. Forget Old Turkey. We are clearly still in bear country even while the charts work their way towards a more forgiving environment for the guys who want to get long and stay long.

    Next, go and look at the bottom of the chart and notice the positioning of the Commercials. Notice that they have abruptly and aggressively gone long Yen (green line) even before the bottom arrives. This is very typical behavior of that group. They get in well ahead of the crowd and have the deep pockets to ride out the time as it works itself off until proven right.

    And they will be correct given the clear implications of this chart. Yen itself will also soon be a buy and that is an interesting story where the carry trade and flight to safety trade is concerned. I will leave it to you to speculate exactly what might be happening in the market to make Japan’s currency (the worlds most heavily indebted nation) a big buy.

    http://finviz.com/futures_charts.ashx?t=6J&p=m1

  18. ARends

    Just want to thank Gary but all contributions and those who share thats a great help in diverse experience and insight :
    PED for his insight and outlook to other side of the coin
    Robert for tip
    Goild for keeping the Gold bug alive

    Steve Morton does an indepth technical outlook daily and good weekly summery and get it spot on many times:

    Thus, as market still holds above 1230 support, it keeps chances on immediate upside continuation and completion of 1278 target. If still downward action will continue – our next destination point here will be 1210 K-support,
    As you can see gold perfectly has completed our AB=CD 1222 target. Thus, on 4-hour chart we continue to monitor possible appearing of H&S pattern, since it will be the key to retracement’s depth. If H&S will be formed, daily retracement will be deeper and may be even will reach 1180. Also H&S stands in agreement with weekly bearish engulfing pattern.
    On hourly chart it is logical to suggest that gold should reach 1250 Fib resistance – to keep harmony of H&S pattern, but it is also possible that it will hit K-resistance around weekly pivot of 1240 area.
    In shorter term situation unexpected Fed’s frankness has pushed gold market in turmoil and rather volatile action. As a result, gold keeps as chances to go up further as turn to deeper retracement. The 1250 is a clue to clarity. Upside breakout will lead gold to 1280 target, while appearing of H&S pattern on 4-hour chart will trigger deeper retracement. NFP data will play significant role in estimating of short-term direction.

    The Rosen SM cycle warning letter see’s the SM dump very soon now, but interesting charts to look at in comparison used of past http://www.321gold.com/editorials/rosen/rosen030317.pdf

  19. Goild

    Good morning,

    Today is a new day. We will see how we make money today.

    ARends, thank you for the comment.

    There are divergences this morning. Gold up, miners down?
    Saw JNUG at $6.48 so I got 2K shares at $6.49. Maybe too impatient? Probably.
    The yield is down which is good. Although the USD is up, it should not make too much problem for the miners as they just got beaten down.

    Wise and good trading to all.

  20. Goild

    Somehow Monday mornings are appearing as a day of divergences.
    If one has the fundamentals right then there is easy money paying attention.
    I think the lower yield will win over the higher USD and so I expect to make money in those 2K shares.
    I have another 2K shares I bought on Friday last minute at $6.74.
    JNUG at $6.00 would be a bargain so I do not expect to be punish for my eagerness.

  21. Goild

    Sold the 2K JNUG shares at $6.65 and so I have $300 easy more for lunch.
    Probably, sold way too early; though one in hand is worth a hundred in the bushes or so.

  22. ARends

    This article might support Gary POV in that SM will excell with reserve 2 trillion available to banks that have only used $700 billion of $2.7 trillion..wow. This I found interesting as inflation and money changes in correlations change with bonds and gold.

    There are three features in this chart worth special emphasis:

    – First, the commercial banks steadily reduced excess reserves from October, 2015 when the Fed first suggested that it was about to raise interest rates.

    – Second, bank credit* accelerated from early 2014 just before excess reserves began to flow from the Fed’s balance sheet and back to the commercial banks. It gained momentum after the Fed actually raised its target for interest rates by .25% in December, 2015 and again in December, 2016 โ€“ the second and third time in a decade it moved to push rates higher.

    – Third, there is a clear divergence between excess reserves and bank credit demonstrating the direct connection between the two. As excess reserves were drawn down, bank credit went up.

    This explains it well:
    Will banks’ excess reserves fuel a new monetary crisis?
    Don’t look now but inflation and a new gold rush might be in our future”The everyday tools of monetary policy are about to shift. The old standard tools of monetary policy taught in every intro econ class โ€“ open market operations, altering discount rates, and adjusting reserve requirements โ€“ all depend on banks that don’t want to hold lots of excess reserves. When banks are holding a few trillion dollars in excess reserves, other policy tools are needed, and the Fed has already announced that monetary policy in the future will be conducted using the rate of interest that it chooses to pay on bank reserves as its primary tool for monetary policy, and secondarily by using its new reverse repo facility.” โ€“ Timothy Taylor, Conversable Economics
    http://www.usagold.com/publications/NewsViewsMarch2017.html

  23. Pedestrian

    9.44 New York time and while the leveraged gold miners look tempting I am not going to bite yet because the basing does not look quite done yet. I could be wrong of course. It happens. But the small clues suggest we could drop lower still on NUGT and JNUG.

  24. Don

    Direxion should be announcing a reverse split on JNUG any day now as it is gradually working it’s way to zero, as it is designed to do. It baffles me as to why anyone would play JNUG knowing just how bad the odds are stacked against the longs.

  25. Don

    if Gary is right about where the stock market is headed, and he may very well be correct, I stand to lose a lot of money. I think a serious correction is on it’s way.

  26. Don

    The only thing I am not sure of is will the pullbck be a ‘correction’ or the beginning of a full blown bear market. I am leaning towards the latter.

  27. macman1519

    Like i said in my lastvpost, the markets love affair with trumps wish list has come to an end. Reality says the markets have gotten ahead of themselves, and trumps presidency has evolved into factual investigations, outlandish claims from the whitehouse and uncertainty growing. All this is good for gold, bad for SM. Simple as that.

  28. Gary Post author

    I’m not sure I would be in a hurry to short just yet. The PPT will almost certainly try to keep the market propped up into the FOMC meeting. If the market takes a dump ahead of that it would make it hard to raise rates again.

    They will want the market at or near the highs in order to hike.

  29. ARends

    MegaMind, it would help if you gave a link that is not a paid jion link on news, but a screen shot. Otherwise it might look you promoting them!

  30. Pedestrian

    All morning I have been waiting to see if silver would break below its lower channel line or test and bounce back and finally it looks like that will indeed happen. Naturally that nixes the idea of getting into NUGT for the moment since its not yet know exactly what will follow as both gold and silver have just gone soft in the last half hour.

    1. Pedestrian

      Ouch. Next support on JNUG is 5.00 or possibly a little below depending on time. This is a bigger sell off than I expected today so really glad I waited. But it may still yield an entry for a bounce some time soon so still worth watching. Might be just catching a falling knife though since gold looks so weak.

      Anybody playing JDST? Up 23% vertically. Nice.

  31. Don

    Ped, were you not bearish on silver when it was below $17? Where are you expecting it to bottom?

    1. Pedestrian

      Yes Don. You refer to the peak and decline into late January I think. And indeed you are correct I was pretty sure that on a cycle basis we were due for a decline. But the chart defied me and instead of falling silver ran up for all February which only reinforced my view that an even bigger decline should follow. I am still underwater on a DSLV trade from back then but its slowly working its way back up and I have little doubt it will be profitable given time. We will see soon enough. Ideally silver would break down from its support this week and then we are off to the races.

  32. MattyMan

    So far, right on the short term direction of the S&P, but not on the best way to play it! Still in UVXY trade, but this will likely be my last foray with it…

    Who is buying GDXJ/JNUG at the 200 week and 61.8 Fib?? I’m not… yet…

    Watching XBI for a short… XLE for a long position… Anybody else??

  33. MagnuM

    (First post on the SMT blog side)

    I just wanna give a big shoutout to Pedestrian! I’ve been watching you in the background for weeks go against the herd, which is the most unpopular thing one can do. You were delivering a prediction that many (myself included) did not want to hear. I was hoping you would be proven wrong, but instead, it looks like the opposite occurred. Well done sir!

    This isn’t to say that you will be right every time going forward, but I have to give credit where credit is due. I appreciate you putting in the effort to share your analysis here, even when people act less than enthusiastic about it.

    1. Pedestrian

      Well thanks Magnum and glad to hear it was helpful. One thing I will never do is come to a site like this and comment on metals with any agenda. I do my best to keep perspective and stay independent and really only talk about what I believe is the correct action based on the charts and technicals. Being a bear on a gold blog is always challenging though.

  34. bluelagoon

    If my technical read is right, I’m still thinking JNUG will temporarily bottom end of day today or tomorrow am and then bounce – at least for a few days. Thinking of jumping in for a short trade based on that.

    1. vin

      Of course. This is 3X baby. If you read the prospectus you will find that it is 3 times the daily fluctuation. It is NOT an investment. It is a gamble. And like all casinos the odds are against those sitting on the table. Casino WINS. Always.

    2. Pedestrian

      Ouch!

      That might hurt a few people. Whoever it was said that a share split is coming probably called that one right. It’s still stuck below its 10 day EMA so off limits for me but a bounce should be coming and it might well be rewarding.

  35. vin

    Demise of the dollar was predicted looking time ago!

    Is the US dollar a Buddhist? Keeps on reincarnated based on its good Karma so?

  36. vin

    We have been told that bond collapse is good for gold. Then why does gold go down every time the bond yield goes up?

    Today is no exception?

    1. Gary Post author

      This is not a crash yet. As long as bonds move down slowly in a controlled manner then I think that would be positive for stocks and probably bad for gold. But that’s not what I’m talking about. I’m talking about a dislocation in the bond market and a huge move down in a very short period of time. That would be a sign that something is broken. that would be bad for stocks and very good for gold.

  37. Pedestrian

    A little off topic but worth your attention. The Prospectors and Developers Conference (PDAC) has now begun. For those of you not familiar with the event it is in its 85th year and is all about the mining industry, financing projects, get together of the who’s who in the business and lots of exhibitors showing off their stuff.

    It’s also the time of year that gold stocks mysteriously sell off.

    So we have a thing called the PDAC Curse and some people swear to sell all their miners before the day of the conference arrives knowing that afterwards is almost always sour. Its not guaranteed to ruin your week naturally but this curse has a pretty good record of being a bad time for owning mining shares, especially juniors.

    Put in on your calendar for next year. Here is a Kitco commentary about “The PDAC curse”.
    http://www.kitco.com/news/2016-03-08/Can-The-Market-Survive-the-PDAC-Curse.html

    1. Pedestrian

      And just in case you had any doubts that this time of year might be bad for metals or that my view silver was heading for a very bloody teeth-smashed-out-of-its head period you may want to consider that the silver short positions held by the Commercial traders have reached an ALL TIME record historical high. There is massive betting against our favourite poor mans metal and shorts will likely be rewarded kindly.

      The last time we had a similar high resulted in a pretty bad hair day for all involved.

      I am no fan of KWN but they did cover the story this week so everyone pay attention and maybe reconsider those silver calls before making them.
      http://kingworldnews.com/sentimentrader-just-released-an-extremely-important-update-on-the-gold-silver-markets/

    2. Robert

      LOL!! Thanks for that I feel better now, not. Ped where do you think GDX has potential to dead cat bounce to? Its way too much a selloff compared to gold, surely it will bottom soon

      1. Pedestrian

        Robert, I am very bearish metals and miners. You probably already know my long term outlook is that many will retest their lows set back in December last year just as a starting point. So GDX should see 19 dollars and change again but that probably won’t be the final low.

        Pull up a 3 month chart and check the rolling curve on that time frame to get an idea where its heading in the next month or so before a *real* bounce comes in. My contention is that a 100% retrace of all the move since way back in January 2016 is more than possible although the jury is out on that one until it actually happens.

        If you wonder about my bullishness mentioned earlier just keep in mid that I am trading in and out as metals and miners fall over very short time periods (day trades). So I am not really bullish at all but rather just making opportunistic bets to kill time.

        Check out this chart of a major copper miner that just hit its 200 day SMA but is destined for deeper lows as the weeks roll by. And also check TECK which also looks to have broken below its neckline support. I mentioned this one the other day as its a Canadian bell weather being as its the largest mining company in Canada.

        Freeport McMoran — A breakdown on chart but just on major support. It will fall further
        http://finviz.com/quote.ashx?t=fcx
        TECK has also broken support. I would not buy this one quite yet but will do once it bottoms.
        http://finviz.com/quote.ashx?t=teck

          1. Pedestrian

            Playing it by ear right now Robert. It looks like JDST has not topped yet so there is not an entry on JNUG until it does. Maybe tomorrow. As the alcoholics are want to say “one day at a time”.

          2. Pedestrian

            Sorry, forgot you were talking about GDX. If its is bottoming here (short term until the next leg down) then we are looking at maybe 5 to 7 days before it actually bounces. Look at the chart on a longer time period and you can see GDX rarely makes a V shaped recovery. Usually you get a few days waffling around before it changes direction. That rise may coincide with Yellens press conference next week.

  38. Gary Post author

    Folks there’s just no need to pick a bottom until the weekly stochastics get oversold again.

    Give the sector a break for a month or two.

    1. Pedestrian

      Or maybe three which is my outlook right now. The good news is the bounce should be respectable.

    2. Pedestrian

      By the way, that was an excellent point you made Gary. Anyone can check this for themselves. Just pull up a chart longer than a year and using the Stochastics make a few rough measures of the peak to trough time periods. Given where we are now it is a couple months before a bottom worth talking about comes back into play. Like end of May or something in that region. But hey, who’s counting out the days anyway. Its like next week if you get busy doing something else for a distraction.

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