I predict it’s going to be a boring summer for stocks. Price will just churn sideways for the next 2-3 months and allow the long term averages time to “catch up”.
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Boring for gold too?
No. I think there will be fireworks in gold. First to the downside then to the upside.
Get your popcorn ready
Surf City,
I have been thinking about your comment about intermediate cycles lasting 5-6 months.
Are you calling last year’s drop in gold from the July peak to the December low one or two intermediate cycles?
Gary,
You have been predictiing that the dollar will soon bottom and then go up. Do you expect oil to be vulnerable as a result of an appreciating dollar?
Not really. Oil isn’t like gold. It can rally despite a rising dollar.
Thanks for your response.
I suspect we’ll see the dollar and gold rise together after the interest rate hike.
Great call on gold and the dollar Gary. Looks like dollar is ready
to move up & gold going down.
I doubt this will be an easy trade. Gold will probably hang on for awhile before heading down in earnest to its ICL. This will keep the bulls hanging on all the way into the bottom. We could churn sideways for a week or so before really starting to drop.
Maybe gold will hang on but I think the miners will drift down steadily
Seems right to me Robert. Today for example gold is down a measly .3% but GDX is down 4 times that amount in percentage terms and GDXJ is off 7 times. In other words, miners are sniffing out a coming gold decline and selling off before it actually arrives.
$100/day for BITCOIN. Everyone says it’s impossible for gold to jump like that though?
Make that $200 day for BITCOIN. All the safe haven money is gone to BITCOIN. BILLIONS rolling into it.
I like cryptos and own a small position. However, no one has been able to explain to my why the entire Bitcoin architecture and code cannot be copied and launched as “Bitcoin 2″ or Bitcoin Plus” thus increasing the supply of cryptocurrencies.
Never thought about it that way, Gmoney but you made an excellent point. It’s just code after all. Not like anyone actually cut a tree and printed Presidents on actual paper. So why would anyone bother mining Bitcoin if they could just replicate the whole thing on a laptop and then sell the counterfeit crypto-currency online? Almost nobody would know the difference anyway. Hell, most of us are still struggling with how to even buy our first coin.
Or why anyone else can’t make many many more named something else. They are just like a website. YouTube took over for MySpace etc. It is just a popularity contest. I guess you have to have merchants etc. accept them so that helps BITCOIN. No matter how high it goes, I will not be getting involved. I see no reason why it could all become worthless overnight. Especially if a government cracks down on it and considers it tender which is illegal.
If it’s going to be a sideways period for Equities, then why pile into 3x ETFs where the decay will get you? Why not wait?
I think we generally trend up until the fomc meeting. After that I’ll probably go back to mostly cash in the stock portfolio other than maybe just a small core position in tech.
What about energy Gary? Are we still expecting fireworks there?
I covered my GDX short at 22.68 for a nice profit.
Too soon. Miners haven’t even had a recognition day yet.
Nice trade Bigdaddy, bravo!
That was quite the overnight smack down for gold. Gary, did you have a hand in that?
I’m not showing much of anything happened last night.
You are right. Early morning fuzzies. I was looking at the wrong chart.
Ped’: A few days ago you were saying something about the SM taking it’s cue from the Chinese market. Given that the S&P is now within a whisker of making new highs, are you still committed to your assertion that the Chinese SM is taking a lead that the rest of the world’s markets will follow? Just asking.
Maybe Don. That’s the best I can offer right now. Asian markets have often lead US and European markets though so while there is no warranty as to what will happen next, I do track the relationships when I think its offering an insight.
At the moment the Shanghai is off more than 10% which is technically an official index correction. Meanwhile, Japanese indices have not yet recovered to their prior highs while none of the US markets have exceeded the highs seen on the 16th of this month (I am using futures charts btw which are not the same numbers as the actual index’s).
Maybe they will all double-top together. I really don’t know but its been more than interesting to me that we did get a few percentage points correction right on my target of Nikkei 20,000 which I had been using as my proxy for a correction since all the way back in February. To me that was good evidence that a technical approach was valid and the pattern I detected so many months ago did indeed materialize.
You don’t get much credit in this world for identifying where declines might originate from unfortunately. But if a larger correction does ensue as part of this existing pattern I get the bragging rights…and maybe a few bucks on the trade to boot.
Well, I WANT you to right so I will be sure to give credit due if you are proven correct. I have seen markets look like they are never going to go down, in the past, and then one day, everyone looks back and wonders why they didn’t see the final high when it looked so ‘obvious’. Hindsight is useless in this game.
Just as I spoke the miners made a big comeback today. It’s crazy don’t know what s going on
Gary — question relating to cycles. There’s normally 4 ICs within a YC and 2/3 DC within an IC. Correct?
Usually 2 intermediate cycles embeded within a yearly. 3, sometimes 4 dailies in an intermediate cycle.
I dont know why u believe gold wil drop slowly. But miners should bear the brunt of selling even if gold dies slowly
CDE running out of time to make a move. Looks like it will not be able to have a successful breakout.
https://www.tradingview.com/x/GK7InOdC/
Miners are under attack by Christian ahead of the Minutes this afternoon.
gold http://stockcharts.com/h-sc/ui?s=%24XJY&p=D&b=5&g=0&id=p68267696839
http://stockcharts.com/h-sc/ui?s=%24XAU&p=W&st=2000-05-24&en=(today)&id=p82255041671
I just dumped all my USLV (3X leverage) and added to my ZJG holdings ( canadian junior etf). I don’t want to be subjected to leverage decay in the event of a PM sell off. ZJG is much safer given that there is no decay issue.
I think the juniors will be longer term winners so I bought 1000 ZJG at 7.96 also. Not a big investment just in case the miners crash.
The SMH made a new high today. The semi-conductor sector has been relentless.
PM’s are going up after the Minutes ?!?
looks like I sold metals/miners too soon, now it’s going to go up like hell
I was calling for a DUST high of $31/32 yesterday and it hit that today. Let’s see if shorter timeframes hold up and price stays above $28.40.
Gary’s newest long term favorite , energy, is not doing well , again. This must be the accumulation phase.
I am starting to get miner FOMO. Dollar did not respond to FED minutes. Good pop on gold.
CDE is about to close above the downtrend line today.
WOW DUST & JDST – steep drop from today’s high. Tomorrow is the jobs report…
JJ – it’s looking to me like DRIP is going to have a serious breakout soon….if tomorrow’s OPEC meeting is a sell on the news event – Gary’s energy trade is going to have a tough time – for a while.
Facebook, a company that produces nothing, is today leading the big five charge.
I did well today, covered my GDX short with a nice profit and bought ZJG which is already up .24 from my purchase price. I would like to take another crack at SQQQ but I am scared of these V shaped bottoms.
YTD, Facebook is up 30%, Amazon 31% and Apple 32% Google lags at 24%. Three of the four don’t actually manufacture anything and Apple makes virtually nothing in the US and yet these companies are the back bone of the US stock market. I don’t believe there has ever been such a disparity between the economy and the markets. It is mind boggling situation. When these stocks eventually come down to earth, and they will, we will witness a wealth destruction such has never been seen before. Just my opinion.
The economy and the markets don’t have anything to do with each other. (Can’t find the link anymore.)
Listened to a guy on the radio today predict 30 years from today, the Apple donut hole in Cupertino will be a derlict structure with broken glass and tumbleweeds scattered about.
Actually, St. Paul seems to have said the same thing 2000 years ago.
And Yeats wrote a poem about it round 100 years ago.
Looks like the radio guy is a copy-cat.
Google, facebook, apple and amazon are also corporations that are both key and vital components to the world-wide surveilance and infornation-collection apparautus…
So it doesn’t surprise me in the least bit that they are where they are.
It hasn’t been a US market for some time, it’s a flood of dollars coming back home from a broad, along with the real estate market being inflated by the Chinese.
Pedestrian,
“miners are sniffing out a coming gold decline and selling off before it actually arrives.”
While that is often true, maybe not so this time around.
Last week, after gold & GDX had risen abruptly with news drama, it looked like gold and perhaps miners hadn’t reached their daily cycle highs — but that an intraday cycle move down to at least test the 20 day SMA’s was necessary before completing the DCH, and that the inverse looked likely in USDJPY — a move up to its 20 day SMA before continuing down to the DCL. Those moves needed to happen to reign in daily volatility, since all 3 daily moves were counter-trend.
If that sounds confusing, well, I’ve got a headache just trying to unravel it!
Point is, these are all counter trend moves: Daily counter to Intermediate; Intraday counter to Daily.
Gold tested its 20 day SMA last Thursday — GDX needed to catch up. USDJPY still hasn’t quite tested its 20 day SMA… leaves me wondering if it actually will.
Post FOMC minutes, volatility is generally contracting, with the exception of the 2p.m. and very short term price action thereafter, which exhibited short term volatility within the context of long term volatility reduction: Moving averages are converging, and no market move in either direction is getting out of line.
More and more analysts are getting extremely bullish, a final MELT-UP event is coming:
https://orders.cloudsna.com/chain?cid=MKT328877&eid=MKT330318&step=start&plcid=PLC023496#AST64860
mmm, cycles says down, but the EW count in NIKKEI looks very harmonic and the wave count fits like a glove into school book classic type of bullish scenarios.
There is no shortage of gurus now saying there is a coming ‘melt up’ or as Gary calls it, a ‘parabolic’ move coming for the stock market. Back in the late nineties, I don’t recall any analyst predicting the parabolic rise that was in store for the Nasdaq. It was only after the rise was well into it’s blow of top that it became common knowledge that because of the internet, things were ‘different’ and the crazy stock prices could only go higher up.
I don’t get it. Why is gold rising again (inverse bloodbath?) and why are metals/miners been dumped? Are they smelling something (deflationary doom) that gold isn’t smelling yet? And what about silver?
do not read to much into it, come June pm will most likely head down into mid/late summer …
chartfreak is a street smart analyst like Gary
https://chartfreak.com/blog-2/
Just short sellers gone wild ahead of the minutes then covering, expect the same for the FOMC statement next month.
OK so gold looks like it’s in a triangle of intraday degree, prior to breaking out to the daily cycle high, before the intermediate cycle decline resumes. When? Aucune idée… 😉 maybe on sluggish GDP? Tuesday pre-market (Personal income and outlays??) Seems like next week will end bearishly for gold, if the jobs report is strong.
USDJPY — so cool! Looks like wave 4 of C of B (bull trap) is actually a megaphone… I’m not sure, as I’ve never seen an expanding triangle in real time before, so this is kinda exciting to watch. I’m a scientist… observing a phenomenon for the first time is fun!! This expanding triangle idea came to me after the FOMC minutes.
Miners? Again, I think they got out of line on the way up last week & needed to get back in line, i.e., make a visit to the 20 day SMA, which offered strong support. Not quite sure, but they may be on their way up to the DCH already… GDX doesn’t get to play on Monday so they might want to get a jump on things…
Miners definitely look like the wild card in all of this… once again — The Gold Rush!
If you want a parabolic rise, buy Bitcoin. 10% per day. Up another $250 today. 2750. It hit just 2000 on Saturday.
No doubt bitcoin is well into it’s bubble phase. More than half way through I’d say as it’s already well past the 100% in a year or less mark.
This is the point were investors have to pick a spot and just say enough is enough and get out. If they don’t they will get caught in the crash that comes when the bubble pops.
That dollar is really taking off. Glad we nailed it!
The big five are leading the charge again today with AMZN up 1.2% and closing in on the $1000 mark.
Dennis Gartman is now bullish on tech stocks. His track record of getting it wrong is better than any analyst who may get it right.
Gartman changes his bias frequently. What might happen now that he’s bullish is that we get a significant pullback, one that’s large enough to make him turn bearish, and THEN stocks take off into the bubble phase as Gary is expecting. We need Gartman to be bearish in order for the bubble phase to seriously bubble. 😉
Gary — Gold seems to be forming a ‘Pennant’. Seems unlikely but in your opinion could the cycle in Gold extend and subsequently pop up to tag the trendline at 1275?
Gary — Your point of view on this please and thank you. Don’t be shy!
I’m waiting to see if the dollar has bottomed yet. Once it has gold should begin the trip down into its ICL.
No ICL has ever formed without at least one failed daily cycle. We don’t have that yet so the ICL still has to be ahead of us.
Sounds about right 🙂
Dollar predictions are worthless, and they affect everything.
On the contrary the dollar has done exactly as I said it would. It just isn’t doing it as fast as you would like it to, but it’s still following the script perfectly. It won’t be long before it starts to rally just like I’m predicting.
Big day for the stock market, unless you hold energy or mining stocks, then not such a great day.
AMZN now within 3 bucks of hitting $1000 and up 1.7% The VIX is below 10 again. No fear.
This far being a gold bug and trading the cryptocurrencies seems to be mutually exclusive. PErhaps most bugs like myself tend to be older and slow to adapt to the next new big thing. Bitcoin has certainly been the place to be.
What’s going on with Energy? Has Gary given up on this sector yet again?
The place to be for a while could be sco or dwt. Predictions do not always pan out.
Wow my COP options are WAY UNDER WATER – bought them with Gary when COP was $49!!
Pull up a weekly chart of osx and do your own read. It is risky to depend entirely on others. Individual due diligence always a must.
If its any consolation it looks like COP may have just hit support. Check this chart..
http://finviz.com/quote.ashx?t=COP
I still don’t get the allure of crude though. The daily and weekly charts of WTI are forming domes that imply plenty of downside. Possibly a return to the lows of early 2016. The outlook is horrible. Not sure what Gary sees in it but it looks like plenty of losses for oil longs to me. Better to just trade the swings.
Thanks Ped – very helpful. I’ll wait for the rebound to the top of the channel line in your chart and then exit there. The options are out until Aug but I’m weary of holding given back half of the year is not as seasonally strong for crude.
I also agree with you on crude – I see more downside as well. Gary was saying that we’re close to a YCL but I’m not seeing it yet.
Gold looks to me to be going sideways perhaps until the Fed meeting. Choppy stuff so I guess good for quick trades.
Glad it helped. If you are lucky you might just get out at breakeven sometime in June. As far as I am concerned break-even is good as a win once a trade goes South. Looks like you have time on your side with that chart though.
bot some coffee….127.47
Bought futures in coffee? Didn’t see it go that low.
Waiting for the $116 support.
Tough for sm to make much headway with vix under 10.
SM at record highs and energy stocks are getting slammed. Anyone holding leveraged energy ETFs are getting their asses kicked. Good call.
I have to laugh at you people. At every single intermediate bottom it’s the same thing. When the weekly charts are oversold no one wants to buy. But that is the time traders should be buying.
You guys are hopeless.
Sorry, I disagree.
What over sold weekly chart are you referring to?
Miners should begin the drop soon. I don’t understand why there is still buying in gold and stocks are making new highs
Gary – I’m not seeing a weekly oversold chart on any of my crude tickers – if anything – they look like they’re gong to slide some more. Why do you think we are oversold and near an intermediate bottom?
That looks pretty oversold to me.
i have some questions.
Which people are you laughing at? someone or some group of persons or just everyone who reads this blog?
are you buying today? have you bought oil/energy this week?
i understand this is your bog, but why would you be so rude to the readers?
perhaps it might serve you better if you presented your thoughts, such as ” i am buying xyz at this price and i expect it go up or down this % over the next (time frame)”.
maybe oil/energy will have a nice run. maybe not. I can’t speak for others, but i wouldn’t risk a dime based on some analyst laughing because I don’t think it is time to buy.
Now ‘they’ (central banks?) have Alphabet in the race for the $1000 mark, at $990 now and rising fast.
Christian,
The move up in gold & GDX you suggest has been my preferred scenario since last week. Last week’s rise was a bit dramatic, causing daily volatility to increase when it wasn’t supposed to — hence the need for both to pullback to their respective 20 day SMAs, albeit not in the same day or even the same week, but they both accomplished the needed volatility contraction, which is still in progress & should continue into the DCH — 1275 sounds about right for that — something above last week’s high, but below last month’s peak, far as I can tell… good luck with it!
Correction to the above.. Should read:
“…causing daily volatility to increase unexpectedly — hence the need…”
Z — Your prognosis is a “maybe” in my books. If Gold really had a date with 1275 then it would’ve already done so when the dollar was dropping into its ICL — that was the perfect opportunity, or the perfect excuse if you will.
As per my chart.. GDX is currently trading below its 10DMA and working its way down into a downtrend channel. RSI/Stochastics have left overbought and are also working their way down. All we need now is a recognition day in the Miners to catch the Bulls by surprise.. and it will happen 🙂
https://www.tradingview.com/x/BDqBNLcT/
Also worth noting.. We are already running late into this Daily Cycle which means that the likelihood of GDX printing a new high is very small.
Remember: Trading is all about PROBABILITIES. Probabilities currently favour the downside.
That being said.. if GDX continues to close above the 10DMA then I will have to cash out, give you credit and re-adjust my point of view.
Also worth mentioning — Yesterday’s move was more than likely a knee-jerk reaction, meaning that if this reversal [Miners] was real then we would’ve had some follow through today.
GDXJ never made it past the 10DMA. These are all tell tale signs that the Miners are weak.
PROBABILITIES………………………….. Can’t say it enough!
It’s not too late in the cycle to print a new high but I’m doubting it the high most likely happened alrdy. Miners should move down soon
Hey all,
Looking to toss a very small portion of my portfolio at Bitcoin for a relatively short term trade. Any suggestions as to which vehicle to use?
Thanks!
Small caps are flat today (drifting down from earlier today) while the other indices are way up. Usually small caps lead so and from the way the charts look – perhaps we’ll finally get a correction. The question is – does this happen before or after the Memorial Day weekend? Usually – there’s strength and a good trade buying 2 days before the holiday and holding until about 4 days after the holiday according to Thackray.
I doubt we see any meaningful correction ahead of the June rate hike.
That being said I also don’t think we are quite ready to just runaway to the upside like bitcoin is doing. That’s coming but probably not until after the bitcoin bubble pops.
Dust to 48 and nugt to 14
I hope so 🙂 NUGT @14 is the steal of the Century.
And if we get a “baby bull” run like I think we will then I’ll be buying waterfront property in the Bahamas and a big bag of Angel Dust 🙂
I’ve been reviewing the crude daily and weekly charts and it looks to me like since its high in Feb – crude has been making lower lows and lower highs = DOWNTREND. It just hit very close to the top of the upper channel trendline and seems to be moving down towards the mid to low $40’s again.
I was beginning to doubt Alex’s next prediction when I saw that both crude and NG were going up beyond what many of us thought but it seems he might be right yet AGAIN afterall. It took the OPEC meeting as the catalyst I suppose to send at least oil back down.
Crude hammered….!!!!..52 topped as expected….. 37 next tgt.
hal and slb are down hard.
Blue lagoon, yes, oil has been acting as expected, OPEC “decided” as expected and, as expected, now that all reports are behind it, it needs to 39 turf.
It needs to..
So far you’ve been right Alex – great work man! I have to say that $39 seems hard to believe given where we’re at now and Gary’s bullishness – but it’s possible. I was going to go short at $26 on DWT this morning given the charts, etc. but by the time I decided – it hiked up and just kept going – hit my target in a day – +15%. Will see if it retrace tomorrow and then get in.
Great.
Clue for gold direction.
https://www.tradingview.com/x/0wnX3zqM/
Same for silver.
https://www.tradingview.com/x/g9j5QCN5/
Short CAC40 – the French index, it is a bleeding deer, a good hunt
Gary, this summer ain’t gonna be boring!
ENergy … the bottoming process continues. Suprized they didn’t move up this spring given strong seaasonals. Solar outpreforms and maybe the leader in this sector going forward. Will contine to hold energy as they remain cheap and if one believes the market cycle top is a year or two out ..They will have there day in the sun.
Blue lagoon, if oil does not chart a minor trend tomorrow and feel uncomfortable shorting oil, then go shorting some European index !
Check the net for renewed talk on Greece! 😀 You will read something fresh, debt relief talks that show great waitering of decision makers.
W stock market at a top in search of a natural cyclical ,YC decline and w German elections looking…this summer AINT GONNA BE BORING! 😁
Wavering…this autospelling crap!
Looming …instead of looking. damn!
Gary, XLE chart looks oversold and that’s why retailers who think are smart find this as a buying opportunity. This overselling becomes bullish in itself and before the YCL is set, this remnant bullishness must be first erased, pendulum must first get to the extreme of optimism exhaustion – we are not there yet!
Lol. I saw the same panic in December in the metal sector. The weekly charts were over sold but no one wanted to buy except me.
We are close enough. Buy now and sell when the weekly charts cycle back up to overbought.
The bullish percent hit 15 last week. We may still get an undercut low but in my book 15 is “close enough”.
Right. But, it could go as low as 2. The real carnage happens during the final descent. Look at iez chart weekly. Now it is at 36. No support until 29. During this final descent, weekly macd simply would run under 20. This may not be a problem if one has the stomach to handle the volatility without panicking. It is a risky assumption to think weekly macd going below 20 is an automatic buy signal. It could run below 20 for a while depending on price activity.
There is also capitulation level volume in the triple leveraged ETF’s.
Absolutely. Some folks like to buy in the bottoming zone of their bp indicator and stomach the draw down. It could be their trading style.
Price is king. Volume and indicators derived from price are ancillary. One buys price, not volume. I would be surprised if the carnage is over before crude sinks to $40 zone. The market will speak in its own good time.
Of course if price gets to $40 then it’s going to look like it’s going to $35. And if it gets to $35 it will look like it’s going to $30.
You see where I’m going with this?
Or you could wait till a rally starts and then buy… except there is no way to know in advance when a trend is starting or whether the bounce will roll over as soon as you buy. This is what happened in March. The rally broke the intermediate trend line, formed a weekly swing and closed above the 50 DMA. All the normal confirmations that suggest a trend reversal had occurred. Except it failed. So those that waited for confirmation just ended up buying at the top of the rally.
Waiting for confirmation sounds logical but it doesn’t work very well in our modern markets.
Gary any thoughts on gold …still bearish or now bullish? Its popping overnight
It may pop even more…..
The MSM is not reporting – but It’s sounds like they are going to attack NK very soon.
They have over a 100 strike/stealth aircraft ready and participating in exercises.
http://www.businessinsider.com/us-attack-on-north-korea-is-imminent-george-friedman-says-2017-5
I took the bait on a oil producer today but there is still going to be some wild arse shorts extrapolating until the OPEC news gets old. We’ll see how your call works out.
It is amazing on how the retail crash in the U.S. is being obscured. The health of the middle class sector can be seen in plain sight when looking at companies like Macy, Bed Bath Beyond, JCP, SHLD, TGT etc….. Some of the major food chain are also down 33%. Take a look at EAT. We are having a stealth crash as it pertains to the middle class in this country. The PTB want to try and convince you that this is the internet overtaking brick and morter….BS!! This country is in trouble right here…..right now.
Also take a look at shippers like SHIP and DRY. They are probably both candidates for bankruptcy the way their stock looks. The curtain is starting to get pulled back just enough to get a peek at the bare asses behind it.
Gary, I am going to offer a alternative scenario to the $USD bounce. If we don’t get any relief in the dollar by the end of this month, (3 trading days), and the commercial shorts on the COT cover less than 10,000 contracts this Friday I am going to go out on a limb and say we stay oversold in the dollar with minimal bounces until the commercial shorts cover enough of their position to create the 3yr cycle low.
lfcsm19
“Looking to toss a very small portion of my portfolio at Bitcoin for a relatively short term trade. Any suggestions as to which vehicle to use?”
Are you a US citizen or resident? If so — problems; if not, I’d go with trading bitcoin on Forex markets — open literally 24/7 — yes, on weekends, too!
I posted the same question here 2 weeks ago and got no response, and also did some digging. BitMEX seems to allow US people to sign up & trade — though I suppose there’s added “verification risk” which I have little or no idea about — it cannot be ignored. Again, I have no idea how they handle their business, and would therefore recommend taking partial withdrawals as profits become available. If you can grow the position to zero risk by taking partial profits along the way, that seems like the best way to mitigate and eventually eliminate that risk.
Christian, Gary,
I’m surprised that despite the popularity of this or that correlation, nobody seems to be using the correlation feature on StockCharts!! I don’t worry too much about correlations, but I don’t ignore such possibilities either. I also haven’t tried StockCharts yet… I use tradingview.com.
That said, I’ve reworked Gary’s gold chart to add the dollar/gold correlation:
http://schrts.co/e3lBkA
I believe 50 to be the cutoff: -50 to 50 is no reliable correlation; above 50 and below -50 show different degrees positive or negative correlation, respectively. As you can see from the chart, gold and USD were negatively correlated on the daily level from late March thru early April. Then they were pretty much uncorrelated, or even slightly positively correlated and are only recently beginning to show some negative correlation this week.
Now, what do you think happens when we plug GDX into the correlation scheme??? Mostly correlated on the daily chart, but as of Thursday, that correlation slipped to 0.43 — not reliable.
And silver??? Like GDX, mostly correlated, except when it’s not!
But using the fickle dollar/gold correlation to trade is like using a camel for transport:
““Tomorrow, sell your camel and buy a horse. Camels are traitorous: they walk thousands of paces and never seem to tire. Then suddenly, they kneel and die.”
Christian,
“Z — Your prognosis is a “maybe” in my books.”
Tell me about it! I’m super happy with my recent analytical developments since April 23. They keep proving to be correct, but I still need to learn to trust them…
I thought for sure you’d have at least taken some partial profits on your short position when you saw GDX bounce off it’s 20 day SMA on Wednesday!!
As for the rest of what you wrote, with emphasis on the word “probabilities”:
What are your quantitative methods?
If your methods are moreover qualitative, then…
If I was young and just starting out perhaps I would’ve taken partial profits but I’m a lot more patient now and I’m in it for the big bucks, meaning I’m gonna ride this trend all the way down into Gold ICL 🙂
As for my method: It’s actually quite simple.. like Gary, I use cycle analysis as a starting point, sentiment and a plethora of technical indicators [that I’ve tweaked over the years] and chart set ups to time my trade accordingly.
Trading doesn’t have to be hard.. I’ve learned to simplify my process.
Christian whats your take on gold its still not really dropping only miners slightly. Gold is spiking tonight. Is it still going to do an ICL or could it just break away to the upside?
I don’t have a crystal ball unfortunately and that’s why I always tell people to be nimble when executing a trading plan. We are very much due for a correction but right now Gold is forming a “pennant” which should break up to the upside. If that is the case then GDX could very well tag the 200 DMA before rolling over into an ICL.. which would subsequently push DUST all the way down to $24.
Let’s see what happens…
After iez sinks below 30, it could take about 4-5 weeks for the bottoming process. Price can not be rushed on the way up or down. It takes its own sweet time to do its dance.
Christian,
Sho-shin!!!!
(Pronounced “show-sheen!”)
Beginner’s Mind.
Just listened to someone I call “the voice of American Zen” narrating Shunryu Suzuki’s classic, “Zen Mind, Beginner’s Mind”
In the mind of the beginner there are many possibilities;
In the mind of the expert, there are few.
We must retain our original mind 😉
Sho-shin!
This article is for you Zkot.
Investing lessons from the great investing minds of all time—Zerohedge
http://www.zerohedge.com/news/2017-05-25/investing-wisdoms-spot-whats-missing
Christian,
“I would’ve taken partial profits but…”
It’s not about age. I read this in “Trading in the Zone” — brilliant idea. If you calculate risk = the amount you would lose if you got stopped out — take off that amount of profits when the trade goes your way, then the trade becomes zero risk, and you sleep much much better! Plus, make better decisions when you’re not in do-or-die mode… I’ve tried it & love the feeling! It’s a very mature approach, actually. Glad I read that book, as it has helped me learn not to get married to a position. One of Douglas’s main themes is, take profits as they become available. Again, not a sidebar, a major theme. But this is Gary’s blog, so don’t take my word for it 😉
“As for my method… I use cycle analysis as a starting point, sentiment and a plethora of technical indicators…”
Choice of method is going to have a qualitative aspect, I totally agree. I probably didn’t state my question properly…
“…and chart set ups to time my trade accordingly.”
That’s the part I was asking about. Once you’ve made the somewhat (or totally, for some folks) qualitative decision about what to use, then the chart setup must be entirely or almost entirely quantitative, at least if you’re dealing with probabilities. Probability is quantitative, and probability assessment can never be taken for granted.
“Trading doesn’t have to be hard.. I’ve learned to simplify my process.”
Simple is good 🙂
Funny thing is, we agree: Looks like gold is still going higher into its DCH after the triangle breaks out. Again, higher than last week, but lower than last month.
Exactly Z, take some damned profits. That’s what I keep saying. You don’t need to score exact tops or bottoms either. Just take a piece out of the middle whenever you hit a number that you like and you will post consistent modest compounding gains. Sounds too boring for most of course but its just a better way to trade. I actually learned that from my wife who kept inquiring why I had not sold obvious winners (only to see the profits melt away the very next day). And my explanation was always the same. I figured I knew better than her and told her so. If we just waited the payoff was going to be MUCH better. Too often though the thing that gave up its gains turned even more sour after a few more days passed and was sometimes sold at a loss. I had no good explanation but after being challenged often enough about my method I finally decided to try hers. And she was right. Turned out my biggest enemy was greed followed closely by my assumptions about the future trend which all too often did not pan out. In retrospect the lesson seems so elementary but it was really a struggle at first. But the solution was easy in the end. Just take some damned profits when you have them!
Here is a terrifying chart for those of you with an open mind and willingness to accept a very disturbing picture of our impending reality. It is the 30 Year Bond chart produced by Martin Armstrong going all the way back to the year 1798 (a 220 year chart if you are counting.)
What the chart talks about is interest rates and bond valuations over time. So the peaks are when we have low rates (high bond prices) and the valleys are naturally periods of high rates and low bond prices.
But as a technician what I want you all to focus on is the pattern that has developed. What you see on the chart labeled “CBT 30 YEAR BONDS” is a massive multi-century megaphone that has just about reached its apex.
What will follow beginning in a few years is going to be difficult to imagine for most people but even harder to contend with. That chart talks about the wipe-out of our pension system, a serious tightening of cash and credit, rates that rise relentlessly for years, massive defaults that will follow in their wake and pretty much the end of life as we know it.
If that is not dramatic enough then take a long hard look at that chart since they always end in the same way. Three waves up are inevitably followed by a single devastating final wave down. Since we are at the top of the third wave now, we only await the end of this millenniums massive and unprecedented bond bubble.
And do take time to notice the termination candle on the top of the chart. There will most likely be another to complete a double top in the next few years but after that the drama gets going in earnest when the bond price collapse finally gets underway.
As it unfolds, your insurance company will likely go bust along with innumerable banks and pension funds at every level imaginable. Each default will add more pressure to the system and domino-like the internals will fail. From regional governments all the way up to the federal level there will be a relentless stream of bad news as one after the other fails to make good on past promises.
The catastrophe will result in a genuine economic crisis that will only get worse as each year passes.
Those of you in debt will become the serfs you were always meant to be while those who saved in hard assets with no counter-party risk will be the real beneficiaries of a collapsed financial system. To me it looks like more than two decades of severe pain before the chart will finally reach bottom and during that time we will experience a devastating and heartbreaking global deflation.
So there is no escape for anyone, anywhere.
If you doubt me then I strongly suggest you look into the expanding wedge pattern (AKA, megaphone) and draw your own conclusions. When you have done that then you need to extrapolate what it will mean to see sharply higher interest rates, a bond market collapse and the end of easy credit as cash itself mysteriously dries up and just about every major asset class eventually goes no-bid.
The money supply itself is going to implode upon itself across the globe and trillions of dollars of fictitious ginned-up dollars manufactured out of excessive asset valuations and vacuous credit facilities are going to go up in smoke and vanish in front of our eyes. Your home won’t be worth snot anymore and it is highly probable your net worth will entirely evaporate in the process if it is primarily based on stocks, bonds and real estate.
So kiss your pension good bye. That chart I am talking about points to what will almost certainly be the greatest financial trauma the so-called wealthy developed nations have ever faced in the past two thousand years. It will be both agonizing and impoverishing.
I have no idea what will set it all off. What I do know is that charts like this don’t lie. They have the ability to foretell the future and I am very sorry to have to tell you people this bad news, but if you don’t prepare now you are going to be among the millions upon millions of casualties who lose 60, 70 or even 90% or all your wealth and assets as the bubble slowly unwinds.
Ugly days are coming. But you still have time if you change your ways and prepare now.
https://www.armstrongeconomics.com/markets-by-sector/interest-rates/interest-rate-up-bond-up/
Ped, once again: well written!
I personally think that the bonds bull ended on July11 and, as I cautioned in November, I would advise anyone in debt to use this period of expected YC advance in treasuries to swap their interest rates from variable to fixed by contracting swap contracts with their banks.
I doubt we are to see debt as such low levels in our lifetime (I am about to turn 38).
Yes Alexander. The end of low rates and easy money is virtually at hand now. What will follow instead is many years of tightening and widespread failures of institutions that we thought were permanent and impregnable. And while we have given so much of our focus to this or that currency, the real arbiter of what comes next is the price of money itself. The system won’t unwind in a single day though. This will be a process that unfolds over the years and slowly exposes everyone swimming without shorts until most of the pool is empty and naked. We will just have to do our best to avoid the periodic crisis that will erupt along the journey, keeping in mind that rising rates mean asset prices will fall relentlessly for many years to come. That is after all what the chart is telling us. Our existing asset bubbles are a direct result of the cheapness of money. What we have to look forward too instead is a reversal of that trend as cash becomes scarcer and more dear while assets respond by gradually deflating. It means we are nearing the point where we should rotate out of certain investments for the long term while strategically engaging with those that will perform better during this next cycle. Other than a personal residence I don’t see most real estate as being the place to be in the future. Not in our aging economy anyway.
As an aside, any coming trend that will take 20 years to play out means, by definition, that there is going to be plenty of time to make an escape plan and run. Its not as though we are going to be unexpectedly surprised by any of this. Our biggest worry is probably going to be the initial elevator drop that puts our stomachs in our mouths. But after that we should adjust pretty quickly to lower expectations year after year so that by the time we are old we have acquired a taste for canned cat food.
Bluelagoon, shorting CAC is already paying off to me.
Weakness in European stocks is growing when contrasted to American SM.
The European snowball is quickly to turn into an small avalanche through summer.
Thanks Alex. I don’t have a futures account nor have I been able to find European indices to trade yet but will keep looking. Thanks!
gold and silver are climbing fast now, what about the ICL bloodbath ?!?
And will metals/miners now pick up this climb?
I don’t think so. Look at gold on an hourly chart. We are at channel resistance already this morning. Unless it breaks through soon its going to be sold.
http://finviz.com/futures_charts.ashx?t=GC&p=h1
what IF it breaks through ? targets ?
Then look for the next major resistance level to come in at a level below 1300 dollars by identifying the downward slanting channel that has been in play on gold since the 2011 peak. How quickly or slowly gold rises will determine the actual number. So time matters. Use the monthly chart for that. There is always the possibility gold could break through its channel top but even if it does it will almost certainly pause before it does. If you have been watching gold this morning though you can see it has already stalled at resistance and looks like it will fall the rest of today.
http://finviz.com/futures_charts.ashx?t=GC&p=m1
Gary looks like u r wrong on gold. Looks like this will be another right translated cycle
GOLD needs over 1270 to be considered a reliable long
Something like that. Its hard to read by eyeballing it. But if gold did rise to 1300 it would be unquestionably bullish and would constitute a breakout from the 6 year falling channel line.
The euro is on day 33 in it’s daily cycle advance. The dollar, day 43 in it’s daily cycle decline. Both are very mature and ready for a turn.
Before gold will be ready to drop into its ICL the dollar has to bottom. So we continue to wait for the sign the dollar and euro have turned.
After 3 years of bearish sentiment the euro is finally about to register excessively bullish sentiment. That’s exactly what should happen as the dollar completes its 3 YCL.
has broken through 1265, now never looking back again ?
No gold isn’t going to make a higher high. This cycle will top without making a higher high and then it will drop far enough to break the May low at 1214.
All ICL’s have at least one failed daily cycle and gold hasn’t produced that yet. So the ICL is still ahead of us. It will occur once the dollar starts its rally out of the 3 YCL and the euro and yen begin to drop.
This is the counter trend rally that draws everybody back in and then crushes them during the final ICL decline.
But I’ll say this again. Gold is in a new bull market. Don’t listen to the nonsense about this still being a bear. Gold is still stuck in a basing pattern. The final drop into the ICL next month will build the fuel for gold to breakout of the basing pattern and start the next phase of the bull market.
I’m not sure at all – too many “experts” are expecting strongly falling gold in front of the FOMC meeting. Maybe we get a big surprise ….
Gary, that’s your test: If your forecast is correct, I’m going to subscribe your service. If not, you are only one of so many so-called experts.
Gary, the dollar commercial short position has been telling us all along that we are not even in the ballpark of a 3yr cycle low. They need to cover about 40,000 contracts to be close to previous 3r cycle lows and yet you just keep ignoring this. If that happens then I am all in on your proposed scenario but you cannot just cherry pick your data to match up with your cycles. In my opinion that is a recipe for disaster.
Emptyness, just ignore this, I meant to comment to Gary down below.
I’m not expecting a big surge in stocks right now. We wasted the first daily cycle going sideways. The second daily cycle isn’t likely to produce a big rally IMO. Probably mostly sideways to gently up until the FOMC meeting.
We had a big rally after the election. We need to consolidate and build a base first before launching into the next phase of the bubble.
The energy stocks and financials need to get in synch with the rest of the market before the next leg up begins.
Z — I appreciate your opinion but I don’t need to take partial profits. I’m not looking for ‘instant gratification’ like most of the cowboys on this forum.. I don’t need to. I get in at the bottom and get out once the cycle tops and have done well following that one simple rule. And guess what? I’m good at it and that my good man is all that matters 🙂
And ps: It is about ‘age’ for some. I’m a lot more patient now than I was in my twenties when I started trading and that was a big lesson for me. A lesson that’s now paying off more than ever.
Best of luck with your trading!
We have a swing on the dollar. If this is the final ICL then we should get a pretty strong rally next week. We should also get a right translated daily cycle that rallies for 20 or more days. That would give us the driver for gold to seek out its ICL and left translated daily cycle. The dollar may still have one more drop next week though. It hasn’t quite reached the 61% Fib retracement at 96.40. So this bounce today may turn out to be a bear flag.
All ICL’s have to have at least one failed daily cycle. So at some point next month gold must move below the May low.
Gary, the dollar commercial short position has been telling us all along that we are not even in the ballpark of a 3yr cycle low. They need to cover about 40,000 contracts to be close to previous 3r cycle lows and yet you just keep ignoring this. If that happens then I am all in on your proposed scenario but you cannot just cherry pick your data to match up with your cycles. In my opinion that is a recipe for disaster.
We might need another short intermediate cycle before the final 3 YCL. But this ICL is probably just about finished.
More divergences. Gold has made a higher high for the cycle but miners have not.
Red flags are popping up again just like they were at the last top in April.
Everyone is convinced oil is going to make lower lows. It would require a fourth daily cycle. I don’t think I’ve ever seen 4 daily cycles within one larger intermediate cycle.
Short term sentiment got excessively bullish during oil’s rally. So it’s no surprise we experienced a sell the news event. But I’m not convinced oil is going to make lower lows. This could also just be a half cycle low.
Gold has broken out of its pennant and I’ve exited my DUST position for the time being and just in time for the long weekend. Will look to re-enter next week when Gold finds a top which should be around 1275.
Folks, the big money will be made if you’re brave and patient enough (that one’s for you Z) to ride Gold all the way down into its ICL.
What is the possibility that gold could rise right along with the dollar?
Everything up together is coming. Or here.
is it a writing on the wall that miners/metals are NOT following gold’s rise ?
are they forerunning gold’s decline ?
what about silver ? going its own way (up) ?
Gary,
Admit it you have been WRONG all along with your metals position. Your December call was correct but anyone could have predicted that. Its because they were grossly oversold.
None of your predictions about Oil, Gold or SMs have been correct. You become adamant and cocky in your LINEAR thinking (that’s a huge problem with your analysis and you forget to look at the macro trends)
PMs are shooting higher from here.
Good luck to someone who follows you.
My stock market calls have been flawless. I told you exactly what gold was going to do. Now it’s doing it and you think I missed the call somehow?
The dollar is doing exactly what I told you for months and months it was going to do.
Oil has been stubborn but I’m going to be correct on that one to. Buy when the weekly charts are oversold. Sell when they are overbought. It’s pretty simple.
The difference is I just don’t play these stupid amateur day trading games. I have more patience than that. That’s why I just keep grinding out long term gains.
Gold is on day 13 of it’s daily cycle. Come talk to me again when it’s on day 30.
Its taking rather very long for the supposed gold drop. Im getting tired of waiting lol
It’s only day 13 of the cycle. The fireworks occur toward the end of the cycle. Day 20-40 is where the real downside selling pressure starts to emerge.
The fireworks will occur on ‘recognition’ day. Can’t wait 🙂
“The difference is I just don’t play these stupid amateur day trading games. I have more patience than that. That’s why I just keep grinding out long term gains.”
Exactly — this is exactly what I was telling Zkotpen. PATIENCE is a virtue that many [especially on this forum] lack. Once again Gary and I are aligned Lol! No Ass kissing intended fellas 🙂
Robert… You really need to learn to chill out. Take a Xanax!
lol!! Just tired of waiting on gold, feel like im wasting time when could be playing other stocks or oil
Patience will pay off when you cash in on that ICL. And no one said you couldn’t play with Stocks and OIL in the meantime…
So now that gold HAS made a higher high (for this daily cycle), where does that leave us as far as cycle count goes? I have us on day 13 of the daily cycle. Another day or two of higher highs and the odds that the cycle ends up right translated increase significantly.
The December low seems like a very obvious ICL. Seems like the May low should have been the next ICL because it was right in the timing band. If so, then we’re on only the 1st daily cycle within that IC. Seems unlikely that a first daily cycle would end up being left translated and fail. So this behavior in gold seems to fit the most obvious cycle count. At least to me. But I’m not a cycle expert. Gary has pointed out divergences, so I guess we need to wait and see whether those divergences correct themselves or whether gold ends up following the miners back down.
May could not have been the ICL yet. We must have at least one failed daily cycle. By the time the current daily cycle bottoms gold will drop below the May low. Not by a lot though. I think the bottom will be somewhere around 1160-1180.
Seriously people pay attention to what is happening. The dollar hasn’t even begun it’s rally yet and you guys want to extrapolate only higher prices for gold. Gold is making higher highs yet the miners are not.
Once the dollar starts rallying then we’ll see where gold goes.
Geez how many times must you guys hear me tell you I told you so before you start to learn?
I thought the “one failed daily cycle” was more of a guideline than a rule, no? That is, MOST of the time, you do get a failed daily cycle to end an intermediate cycle. But sometimes–maybe just a small percentage of the time–you don’t get the failed cycle. Could this be one of those times? The May low came in right in the timing band for an ICL, so based on timing alone, it looks like it fits.
Gary,
By the way, I am resisting buying this breakout in Gold because you make a strong case and could end up being right.
CDE is a breakout on the weekly.
https://www.tradingview.com/x/aRAEz9a3/
The same thing happens at every cycle turning point. Everyone starts telling me I’m wrong (that’s the sentiment extreme), then the cycle turns just like I predict and most of you end up missing the move because you’ve become mentally locked into the current trend and you can’t envision a trend change (again that’s the sentiment extreme that occurs at turning points).
You all have to be on the wrong side of the market in order for it to turn. That’s why I’m the only one who ever catches these reversals. I think and behave differently than most of you. The vast majority of traders are herd animals. They just follow. Only a very few have the emotional stability to ignore the herd and take a different path. Those are the people that make money.
Well, I think you can definitely count me out of that group. I emailed you and told you I was exiting silver within pennies of this last top at around 18.60 and I emailed you again when I was entering silver at the bottom when the money flow indicator was at a 40 yr low so I think you can say I am somewhat objective. I just have a problem with the 3yr cycle COT data at this time but who knows, maybe the commercials covered last week. I am really interested to see this weeks numbers. One thing that is starting to make your case is that the MFI is now starting to reach oversold territory. I , for one, am hoping that you are right and we covered big time on the dollar this week instead of stretching into another daily cycle.
desertsun – Congrats on your silver trade timing. What indicators made you think silver was at a top? and how do you get 40yr money flow #’s? My programs only ever go back maybe 10 years. Thanks – still learning.
BTW – it’s looking to me like Silver is going to stop either here or around $17.60 tops and then correct.
Bluelagoon, sorry but I don’t give out trading advice on Gary’s blog. I consider that to be rude. If you want to post your email I will send you a annotated chart of what I was looking at. The MFI is available on stockcharts going back to 1980 if you have a subscription.
Thanks for sharing desertsun. You can reach me at [email protected].
Gary – studying the miners charts – it looks like GDX is going to remain within the $20-24 range for some time. And if it breaks out of that channel – it will likely be to the upside in late July or Aug when it has seasonal strength. After that – then DUST would be the play for Sept.
So with your DUST entry at $34, I think you may be lucky to break even in the coming months and may need to wait until much later this year for a profit.
And just how can you determine that miners will resist the pull of the next DCL this early in a cycle?
By the time we get to day 20-40 you will see again that I was correct.
20 – 40 days is too long for some people who bought DUST/JDST the decay will have eaten away and they probably wont make much when the cycle turns
Robert, once a trend becomes obvious the decay will be gone in one good day. 30% moves fix decay really quick.
Maybe but they are all suffering right now. I guess its all about who can bare the pain before the turn happens
I don’t disagree with you in that miners will likely top within that timing band – perhaps close to the Fed meeting. I just don’t think miners will correct as deeply as you may believe.
i am still long gold juniors and added to my position a few minutes ago. Looking at oil etfs also. I had a meeting yesterday with the people that operate the pumps on my land and they are saying that oil is going higher for the rest of the year. They are usually right.
Gary, I have taken the prudent path here and am in wait and see mode. I plan on going into JDST if/when we turn. It may take another week as that appears about the range for silver to hit overbought and start to roll over.
Once again, the miners did not take the move in the metals as anything significant. Minimal gains. Whipsaw action every day. Up and down. Killing everyone. Directionless for now.
As PED said, gold is right on the upper end of the range. No breakout in gold…..yet.
https://www.tradingview.com/x/2lf9mMpE/
Why is it that so many are convinced that the miners are under performing gold when the numbers clearly indicate the opposite is true? In the last month, gold is down slightly (-23%) while GDX is up (+3.2%) YTD, they are both up close to 10%. It’s simple math . The miners are doing just fine relative to gold.
Correction: In the last month, gold is down slightly (-0.23%)
AMZN came within $1 of hitting the $1000 milestone yesterday with Alphabet (GOOGL) coming a close at $996. Both are wildly over valued but that doesn’t mean anything to a determined central bank.
Both look ready to take a serious haircut in the very very near future.
I think by early next week we have a very good idea if things are going to take off or head lower.
https://www.tradingview.com/x/SmNHeWp5/
The S&P and the Nasdaq both hit all time highs yesterday, mainly because of the performance of the big five, notably Alphabet and Amazon. The equal weight S&P ETF (RSP) did not make a new high and has yet to exceed it’s high back on March 1. Yesterday’s peak is the second failed attempt for RSP to make a new high.
Maybe I am just looking for a reason to justify hanging onto my short positions but it seems to me that this market may not be as bullish as the S&P is indicating.
Donny boy, I think you are right. I just bought 500 SQQQ at 30.42. The QQQ is going to take a big haircut, as dboz put it.
Don, I finally got a fill yesterday on that BKX at .205. It pays to be patient. If oil goes back up, the Canadian oils should do well too.
<Bigdaddy, you don't do ANY research before you throw your money down, do you? This is pathetic…
HOMERJ. I don’t see you telling us what you are doing, just criticism. So u can piss off jerk.
Before I “piss off” for the long-weekend, can you tell me WHY you think Canadian oils doing well would affect BKX?
Or even HOW.
Anyone else can chime in as well on this question, don’t be shy.
BD: I sold all my oils, except for BKX, just before the big drop in crude. If we get the market sell off I am looking for, I think the Canadian oils will go down with the SM and be available at better prices. That said, I don’t have a crystal ball.
BTW, be careful with that SQQQ. You are betting against the big five which are the top choice buys for the central banks. If you are insisting on playing a 3X inverse fund, you may want to consider SRTY as it based on the Rus 2000.
I enjoyed watching the blog for the week with minimal input.
I have made several observations. The first being the lack of consensus in regards to the SM, oil, and gold. Enthusiasm seems minimal as is chat volume. Nervous energy is present about SM shorts and PM and oil longs. Several bloggers flip flop more than John Kerry on their position. Some write European novels and Americans cannot even understand what the hell they are talking about. WTF
Emotions seem high, maybe frazzled a bit. Everything stated is usually extreme in nature. Nothing is moderate ie 5000 gold, 20000 nasdaq, 500 jnug insurance company failure, heads getting ripped off, bloodbath, you will be sorry, you were warned, you will looooooooose ALL your money and retirement, the world will starve to death etc.
From a common sense approach, if someone is always right, and has a track record of being right then the masses should follow. However, here, it is ironic and bizarre, because we have a leader with a self proclaimed crystal ball with flawless SM calls, and we will not follow. Seems illogical to a caveman.
Happy Memorial Day to the greatest country in the world USA…USA…..USA…..USA..!!!!!!
Maybe put some beef in that nothing burger next time.
You got it PUD!
I was hoping for something meatier.
You are one of the great doubters of technicals though and there is not usually much that can be done to change a fixed mind. The thing is, the chart I linked offers a very clear warning about what is to come based on a well established and reliable pattern.
At face value its implications regarding the future are alarming in a best case scenario and catastrophic at their worst. The reason of course is because the implied bond collapse speaks to the kind of economic convulsion that usually accompanies serious political discord and social upheaval.
Few of us will get through that chart unscathed by the ramifications associated with a systemic pension failure and sovereign default crisis. You may not want to hear that or you may not even believe it possible but such charts are consistently reliable and you should at least try to give consideration to what a mean-reversion of rates and bond values imply.
Personally I am very concerned about what is coming but then I know more about the history of these kinds of patterns that the average person because it has been my interest to study them. I will tell you though, its not going to be easy and it will probably result in a significant loss of freedoms that we now enjoy and take for granted by the time its all over.
Armstrongs conclusions that a period of war, rebellion and civil unrest will become extreme during the early part of the debt collapse are spot on. The news is already written on the charts rather than the other way around where people such as yourself believe the charts are dictated by the news.
For most technicians following long term charts however, this is self-evident and rarely questioned. We do not in fact need to know the news before it happens because the charts themselves have already warned us long before the events have transpired what to be aware of.
I would love to see a few more converts here to this kind of predictive charting but I am OK with all the doubt since that’s a fact of life. Just open your mind a little to what you are seeing though and ask yourself what that clear pattern is really saying. Especially a pattern of multi-century magnitude where we have obviously reached the point of termination that precedes a steep decline.
And then follow the logic through to understand what may be on the horizon. We are in the final innings of the credit cycle and the opening days of an epic credit bust that has taken more than 200 years to build to its present point. It won’t be a walk in the park once it unwinds. Given the steepness of the final rise I expect the fall to be rather dramatic.
Interestingly enough, a similar looking chart of US household wealth (on a much shorter time frame) implies an initial decline in net worth ranging as high as 40% to 60% and to me the only way that is possible is if we see a second housing bust since most people’s wealth is all tied up in their principal residence.
But perhaps the most worrying part of the chart is that it warns inflation could spike sharply which would be expected if rates begin marching higher. That tells us we are headed for an inflationary depression in a low growth environment where money tightens. It is beyond ugly if you need to know.
So keep stacking Primetime. You don’t need to believe me to stay invested in gold.
Precious metals will indeed have a place in that new kind of world we are about to enter.
But you said it yourself Ped. You don’t know when this will all come to a head. Before that all happens, you could long be dead!
(Wow, that entire paragraph sentence structure rhymed the whole way! XD)
No, I said I don’t know what news will be the trigger. The chart is pretty clear as far as timelines go. We have almost arrived at the peak. I think there will be a consolidation and double-top before the decline actually begins but only time will tell if it plays out that way. That might give us a year or two more at tops. We are not trying for the precision of a day and month based on a 220 year chart though but even a Neanderthal should be able to sniff out this top. Not that it matters much in any event. What is of more interest is what are the investment implications and what classes of assets should be avoided or embraced when it arrives. These kinds of patterns are very easy to read though and I think the conclusions should be obvious. Not everyone here shares that sentiment unfortunately. Not so surprisingly it is the same people who have not done their homework or don’t know their economic history.
Too bad for them.
I hope they ignore the warning!
GOLD 1269….hard to get there….haaa
Don, based on oil chart pattern moves, I think I will buy BKX at .19 – .195 next week and hopefully out of it at .32 – 34. Would you mind 34? ( ;
Vic: I hope you are right. I have a large GTC buy order in at .185.
Maybe take a flyer on UVXY over the weekend and see if you get lucky with some EVENT. 52 week low today at 10.90.
Make that an all time low.
It may be a boring summer for stocks. But it won’t be a boring summer as long as we’ve got The Donald.
Make America Great Again BABY. Greater than ever!
BITCOIN is getting nervous, down 400. Who would ever get into that with those types of swings?
The only thing our once great country is good at is providing weapons to other countries so they can kill innocents. Trump just proved that by selling billions of dollars worth of weapons to one of the most oppressive and corrupt regimes on the planet, that being Saudi Arabia, of course. I am ashamed to call myself American.
Move then!
Interesting remark. Prime, do you by chance, work in the weapons industry?
Nope, healthcare. Just not a liberal bone in this body. I dont believe in freebies and handouts, only hard work.
I am taking another crack at shorting the SM. Trump is pissing off the Europeans and it is their central banks that are buying our stocks such as Apple, Amazon, Google and other tech stocks. I think the Donald may be in for a lesson in diplomacy.
don’t worry JJHarmen, Donald knows where and when to press a button… , why you are not been ashamed American when Bush and Obama did the same even worth? I clearly don’t understand probably half of US population who against Donald, blind people what to say…
Well spoken Victor!
sorry, I mean “worse”,
actually checking spelling at the end that’s usual process for English second language people…., I speak in 4 and it the same in each…
My shame stems from the fact that we are the biggest manufacturer of things that kill people, on the planet. Why are we involved never ending bombing campaigns on countries we are not at war with? Our country has been taken over by the military establishment and the CIA. Who is President, is irrelevant. All Americans should feel shame instead of what you feel, Prime.
Whatever, no one makes you live here so get the hell out then. The whole world would speak German or Japanese if not for America. So thank the older people of this country who know what greatness is. You don’t.
ditto
Regarding German, if the US hadn’t entered WW I, the Germans would not lost that war, there would have been a reasonable peace agreement between the parties and Hitler would not have come to power. It was the draconian terms of the Armistice Agreement that destroyed the German economy that led to a strong man like Hitler coming to power. WW II might have been avoided completely if the US had stayed out of WW I.
You are right about the older people are those who made America great. It is people such as yourself who refuse to acknowledge that this country has become a rogue nation in the hands of powerful interests that work behind the scenes. Real democracy died when they took out Kennedy and we are now seeing the results of that take over of our government. Prime, you seem like a smart man. It is going to take Americans like you to wake up and stand up for humanity before it is too late. Moving out is the cowards way.
agreed JJH. Oh-BOMB-uh lived up to his name. During his last year in office alone he dropped more than 26,000 bombs. Our regime change wars in the Middle East have killed over one million civilians, wounded millions more, and created millions of refugees. And now we shut the door on them. We all should be ashamed.
It is very “patience-requiring” (I found no word to translate tålamodsprövande into English) to wait for a decline for several weeks/months and quite often it’s the best trading strategy.
I am a grinder, instead of chasing the market I will wait for the market to come to me … patience is key.
Yes Gold is up but very lame response in my index the GDX-Steffmeister.
Gary — Time for a new thread. The Goombas are at it again!
https://en.wikipedia.org/wiki/Goomba
Christian: That was a good one. Made me laugh.
Find a new country you bleeding heart Liberal.
So it looks like gold could melt up to about 1273.36 now? Miners may play catch up quickly. BITCOIN is getting dicey and gold may start picking up some of those becoming disenchanted with 10-20% daily swings.
From Zerohedge:……… 70% Of Millennials Have Less Than $1,000 Saved For Buying A House.
WTF!?? Can that really be true? I mean holy smokes Batman that is SHOCKING news.
Does this story make anyone here think that housing has a lot of upside potential in the next decade? No?…I thought not. If Millenials and other first time buyers cannot cut the deal there is no housing market for the rest of us and price appreciation is going to go the way of the Dodo.
Shit, we are just one recession away from the next major housing bust as far as I can tell and when that ends there will be no cavalry of young people ready, willing or able to pick up the slack. Who exactly is going to buy your house therefore so you can enjoy a nice retirement?
Nobody, that’s who. You are likely better off selling early and building a cash position now because once the prices begin to fall there is not going to be relief for many, many years afterwards if you can sell at all. You have been warned.
70% Of Millennials Have Less Than $1,000 Saved For Buying A House.
http://www.zerohedge.com/news/2017-05-26/70-millennials-have-less-1000-saved-buying-house
Should anything posted on ZeroHedge be believed? ZeroHedge would have had you short the last 9 years of this 2nd-longest bull market in history! You’d have run out of money a long time ago listening to them.
A couple days ago, they also posted a report by Manulife Financial that 75% of Canadians wouldn’t be able to pay their mortgage if their payments went up by +$100. That I also don’t believe (and I’m a Canadian!)
Read anything on ZH with a skeptical grain of salt…
Real estate has eaten the Canadian economy whole. Like you though I also don’t know that we can put too much stock in such a small sampling of the population that was used in that story but we are already well aware discretionary income in Canada is an almost extinct idea. Even a modest move in interest rates of 1% at this stage could prove very difficult for retail, restaurants and bars as existing mortgages consume that last bit of gas in the economy. Whats to be optimistic about. The bond chart courtesy of M.Armstrong that I posted today tells the whole story if we are to believe in mean reversion. And unless Canada can miraculously buck the trend in the US as rates rise for the next 20 years then there is going to be hell to pay. By the time its all over Canada will be a renters nation.
This is exactly why we sold our 3200 sqft trac home in Southern Cal and used the proceeds to purchase 121 acre farm in WV/VA and still had plenty of money left over to purchase 2 duplexes.
I’d estimate that about 65 percent of the people I went to school with have already moved out of Cal…..and I grew up in Marin. The writing is on the wall indeed.
I would bet a nickel against a donut that at some time in the very near future many millennials will definitely move back in with their parents.
Well done RTTPD. What is coming is obvious as a freight train on the frozen prairie but incredibly, so few like yourself seem to actually get it and are making the smart decision to cash out ahead of the crowd.
We are facing an unprecedented demographic dilemma where the majority of those who should be first time home buyers are broke, uninterested and still living at home. Hell, many of them will never leave as they instead just inherit the digs and simply never move out.
Where are the buyers going to come from if our kids are not the buyers?
This idea is nothing new either. We have endless amounts of data already to confirm that the next housing bust will likely be most remarkable for how long it lasts. Just nobody wants to believe it will be that bad.
I suppose its because what we are really talking about here is an end to culture of home ownership and an end to the American way of life. That might be a bit too much for most people to absorb in one sitting.
At the end of the last great credit bubble (bond bubble of the 30’s) houses in parts of the US fell all the way to zero before the bottom was in. And even then nobody wanted the damned things because so few had the cash ready to keep them heated and taxes paid up to date.
Probably won’t get that bad again though. Its different this time!!! LOLOLOL!!!!!!
Ped, millennials don’t buy cars either. They live off their parents. They will inherit their parents’ property and probably just keep living in the basement. They also are not going to get married and not having children is a real possibility. So no one to pay into the government retirement ponzi either as the population size retreats.
I agree, get used to it, the world demographics are changing. We are good for a while as the boomers will hand all their money and wealth down to the next generation who will go on a spending spree of some sorts with it. So 20 more years, you are good. Since you are mid 60ish or older, I don’t think you have a thing to worry about. You bank roll and life style will be fine.
Problem is that the Millennials will be inheriting assets in decline. We are close to the top of the asset bubble as it stands. So no big spending sprees are likely to materialize as the decline ensues. More likely we are heading for a broad based nationalization of property and confiscation of pensions. It will mean the socialization of everything and honestly, how else will that be achieved if the new goal of minimum incomes for all is to be achieved. I think this has disaster written all over it. But I suppose there probably is no other alternative to offset the contraction of the money supply as the credit bubble concludes. Its going to be interesting to watch and yes, you are correct, I doubt it will affect me much. But if it affects everyone else then nobody really escapes anyway, do they?
Ped, I don’t think you are interpreting this correctly. Millennials won’t care as they did not work for the money, it’s all free to them. If things are truly as bad as you paint, then we are talking worse than the great depression and maybe desperate times and desperate people will turn everything over to the control of the government, but many won’t. Violence and unrest will rule in that scenario.
There will more than likely be a reset instead. The petrodollar will be gone and a NEW form of currency will be implemented. What ever it will be, it will have to come with the guarantee that the same thing won’t happen again (just print out of thin air). How can you insure that? You have to come up with something that is not printed and can’t be made from thin air. You can say gold and silver are not plentiful enough to provide a backing for such a currency and I agree UNLESS it has a drastic revaluation.
This is where Gary and his 10k gold comes into play. It will be the largest transfer of wealth in history. Banks know this, why do you think they load up while telling the general population it’s stupid to own. The cost of ownership, storing, no interest etc. etc. To me, it’s a no brainer what they are doing. Who knows how long it takes to play out. BUT, it will happen at some point.
If you say you know history then you should know that NO CURRENCY lasts longer than about 40-50 years. We are in that zone now with our current setup of being off the gold standard. Oil was the key, as oil goes away and becomes worth less and less, the only other item in the ground that has value is the PM’s. You can’t fake it and you can’t make it. It takes lots of time and energy to get it.
People in the great depression had gold and silver as money. We are 2-3 generations out that have no clue about it. That will change but for the vast majority it will be too late and they will never have a chance to own any, they will only have the paper that it’s backing.
It is truly the only thing that has any sustained worth and will only be more valuable as it is getting harder to find and more expensive to mine. It’s finite. Remember, those same people that owned gold and silver also owned houses that cost hundreds or a few thousand. So it is not inconceivable to imagine getting back to very low worth as the money supply goes from infinite to finite. Tangible assets will have real value as they will not be easy to get like they are now. It will take a lot of time and hard work to acquire them just like it used to be (no or little credit) Save and pay in cash. Not sign a piece of paper and there you go with a multi hundred thousand dollar house on a promise to pay it back. Many promises are going to get broken as you surmise.
We have massive inflation all around us now, houses, cars, etc. The average car costs 35k in the US. Most homes did not cost that much in the 1970’s.
I agree gold and silver (among others) are going to be good investments. Where I differ though is on the idea of how high gold actually goes. My thinking is that its price in dollars won’t exceed the 2011 highs (that is what the chart suggests) but that its absolute purchasing power could be substantially more than it is today.
GOLD COTs: Commercials INDREASED NET SHORTS 37k CONTRACTS TO 175k….THIS WEEK. ICL STILL PENDING…..Gold still has way to go down….
As long as I’ve been following the financial markets since the late 90’s, the doom and gloomers have been predicting a complete collapse of the world’s financial system. They were shouting it from the rooftops during the financial crisis and for quite a while afterwards. Twenty years–at least–of warnings of dire consequences just around the corner: stack those gold and silver bars, hoard your ammo, load up with 2 or 3 years worth of food, etc. At some point, you just stop listening and go about your daily life. Maybe it will happen this year, I don’t know. Maybe next year. Or in 2020.. Or maybe it doesn’t happen till 2050 or 2100? Who can say?
Yes, that’s a good point. And that’s why I gave you a chart that allows you to be a better judge of when the trouble starts. The credit crisis was merely a prelude to our problems though. But the problem has certainly not gone away. I can also understand your reluctance to want to hear any of this because it sounds like a repeat of a story from 10 years ago. And I suppose that’s the idea. That once people quit listening and complacency returns the time will then be ripe for the obvious drama to begin playing out. In fact I expect no less than almost complete rejection of these ideas as the time finally approaches. The majority must always be wrong. And its likely that most here will be among them.
The Specs did quite well adding to their long position.
Ped, I think you’re leaving out a very important part of the housing picture. It’s probably not going to be millennials that will be buying the baby boomer’s houses, it’s immigrants. There’s a whole lot of people in the world that would love to live in Canada and buy our houses!
You mean the refugees? Not likely. And meanwhile the two most populous countries on Earth (China and India) are so busy erecting capital control barriers it will be a surprise if any of them gets money out a few years hence. Thing is, when we are on the declining side of the wealth cycle, immigration trends go sour and borders tighten up. What is more likely is to see expulsions of certain categories of people. Its already happening. And the more unstable the world becomes the less likely we are to receive the kind of immigrants who might fill the void.