I’ll tell you when it’s time to buy miners and it’s not time yet. We need to generate some excessive bearish sentiment first. That will come only at the intermediate cycle bottom. And that’s not due until June.
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Hi,Gary. Good point. Yeah, weekly ma10 is the demarcation line. The same logic would apply to any price ensemble. If we replace gdxj by oih, we can see that price is below declining 10 week ma indicating a downtrend. I wonder what could be the reason for your bullish stance about the energy complex?
That one is easy.
Sentiment as reached bearish extremes in energy. The COT in oil has improved dramatically. Oil is in the timing band for it’s intermediate bottom (and may have already made the bottom). It got oversold on the weekly charts
We will get these conditions in the metals at some point also and then I’ll become bullish on them as well.
Thank you for the response, Gary. I am unable to get excited about energy sector until price begins to kick in the same direction as sentiment and weekly stochastics. The latter 2 can at times be a bit early. Energy on my back burner for now, willing to move it to the front burner when price also chimes in.
Gld weekly stochastics is still in the middle and I am not in the loop with current sentiment readings. No rush here.
Just to change it up a bit I was gonna buy NUGT and ride it all the way down into the ICL Lol! What d’you think about that Gary? 😝
I still think that gold has a potential to run up into the first half of June, maybe only the first week.
I also think that after the gold turn SM will go on a burst, but not a long one 3-5 week and then the long turn down for the SM and a long run in gold.
See what happens
Folks you need to get rid of the bear mentality in stocks. We are not starting a bear market any time soon. Corrections are going to be shallow (just look at the most recent ICL. The damn thing just went sideways.
We are in a bubble phase in stocks just like bitcoin. We aren’t as advanced as bitcoin but by next year we are going to see insane price gains in stocks just like we’re seeing now in bitcoin.
Apple and NASDAQ topping out soon?
There is a harmonic count in Apple. We are in sub wave iii of v that will get us to the final fifth wave up 5 of 5. I think this is a better way to time a trade than saying stox looks boring going into summer 😛
http://stockcharts.com/c-sc/sc?s=AAPL&p=M&b=5&g=0&i=t30011407362&a=526280145&r=1495875951730&r=1495876360749
This week’s COT report confirms that paper gold is being set up for another beating.
commercial shorts increased by 49 k to 393 k.
Gary, will you be satisfied with a ICL in two weeks before the FOMC if it doesn’t break the May low?
2 weeks would only put the daily cycle on day 22. That’s too short. They typically run 35-50 days now.
Plus once the dollar bottoms ( it may have already) it should produce a right translated cycle and rally for 25-30 days.
Trust me there will come a time in the not too distant future where everyone gives up again and we start hearing predictions of sub $1000.
That’s when I’ll be telling everyone to buy and no one will believe me as usual.
If everyone would just follow my suggestions they would make consistent long term gains. But almost no one can do that because our emotions prevent us from seeing turns once we become conditioned to a trend.
Classic example: bitcoin.
The parabolic move lately has conditioned traders to only expect higher prices so they held on too long and now they’ve taken a 35% drawdown in a matter of days. Emotions and visions of never ending upward prices prevented traders from recognizing the parabolic pattern forming in bitcoin.
Here’s a good rule of thumb. When everyone is on the same side of the trade and sentiment is unanimous about direction and I’m the only one telling you to trade the other direction you are almost always better off listening to me than the crowd. It doesn’t mean I will be right immediately. It can take time for a trend to turn, but in the intermediate term I’m almost always correct.
We’ve seen this so many times. I start calling for a trend change. When it doesn’t happen the next day or next hour everyone tells me I’m wrong. Then by 2 or 3 weeks later those that had listened to me make a ton of money. Those that listened to their emotions miss the move.
It happens at virtually every intermediate bottom and top. Because most traders have no patience they can’t hang onto positions long enough for them to pay off. Subscribers get impatient and cancel their subscription right before the move begins. Then they miss the profits.
Last Dec. was a classic example. So many people got impatient and gave up because we took a drawdown after the election. No one could see any future for precious metals and no way to make back the losses. They abandoned ship right before the turn. We ended up making back everything plus a nice gain on top of it. So by the time the miners topped in Feb. the metal portfolio was higher than it was at the summer top.
I’ve tried everything I can think of to correct peoples thinking process so they can make money, but the sad fact is that emotions are more powerful than logic, so most people will never make any long term gains in the market. The only ones who will make money are their brokers.
And the most successful brokers are the ones who have a bunch of day traders for their clients. Talk about a cash cow.
Yes , true the predators need a big chunk of sheeple to survive and profit. I am slowly crawling towards the predator level, inch by inch. I also has arrived to the conclusion that I can afford to miss a +30-100% move in x3 leveraged etf’s so I’ve skipped them to release stress and avoid losses that I can not and will not afford.
Another rule of thumb, I just love vertical patterns, that means a trend is coming to an end very soon.
VERTICAL UP= SELL
VERTICAL DOWN = BUY
I do not mean a penny stock but rather indices.
Gary, what would a weekly close above $1300 near term in gold do for your predictions?
Gary — If the FOMC won’t trigger Gold’s ICL [as mentioned in a previous post] then what would in your opinion..?
The same thing that causes almost all ICLs to eventually bottom. Sentiment.
Understandable, it not easy to step up to the plate on those big reactions even with a method, until experience has been your teacher.
I have gone all cash for now to wait for direction. I am still keeping an open mind that the downside could be minimal. I will load up once we see the direction we are heading, which looks like we should know in the next 1-2 weeks which also coincides with the FOMC.
Of course we could break down again from this uptrend and tag the bottom of the triangle sub 1200ish and rise from there which I think is what you are expecting. So that is why I am sitting on the sidelines. Could go either way here in the very short term. Prepared for either.
Hopefully your vacation will not leave us all hanging while you are hanging off some rock. LOL
Again, THANKS FOR ALL THE INFO AND GUIDANCE!
I would much rather see the green path vs. yellow but open to either. Shorting the yellow and going long the green. Long term, yellow path can probably make me more money as it would create the sentiment extremes you are discussing. Learning a lot!
https://www.tradingview.com/x/WWa1MdVN/
Now you are figuring it out. 🙂
We need the sentiment extreme to build the fuel necessary to finally break out of the bear down trend.
Other then oil the Canadian pot stocks is another sector at sentiment extremes. Decimated. Bought a few for the first time ever on Friday. A long standing dump diver investor am I. Risk reward compelling. Would be interested in hearing opinions from Canadian posters?
They’ve announced they’ll legalize it for recreational purposes and expect to pass the legislation by July 1, 2018 and so many companies are gearing up. Problem is they’ll want to be fully ready for launch day so they’ll invest in all the equipment and setting it up, etc. but, hey, this is government, still have lots of consultations, etc. to go. How does a delay impact an investment going nowhere for awhile? What are the odds things get delayed? What if they change their mind? I’m pretty sure that’s happened before.
The ones that are growing for medical purposes, that have a steady income, are the ones that would have an advantage.
Yes everyone is impatient because you said that this gold rally would be left translated and only last 5-10 days. Its now beyond that & shorts are feeling taking losses while waiting for the turn. The longer it stays up here or higher the longer its going to take for any ICL. Gold could keep going up another week even 2. What will shorts do then? They will give up!
The daily cycle in miners has topped on day 9???
When you see a big spike up at the top that’s your warning sign.
The other scenario is if the cycle is extended the rally could continue past FOMC and provide the breakout upthrust for a bull trap which would set up the deep reaction that Gary anticipating.
OK Gary, waiting on sidelines to buy gold for the next leg up.
About Oil, I’m not so sure, but energy stocks are very oversold in deed.
And about stocks, I agree, I think the S&P 500 will be higher by 2018, but I will short next week because my indicators are telling me about a very posible correction.
Nice summer, and good trading every one.
Everyone on Stock Twits is screaming Buy, Buy, Buy……but I and firmly in Gary’s camp for now, and expect a few weeks PM pain into the end of June.
https://www.tradingview.com/chart/HUI/4k9yaK21-Keep-an-Eye-on-the-HUI-Index/
We can cross that bridge if we come to it.
We have to take into consideration that gold is manipulated. The price of gold is made mainly at the COMEX. The players at the COMEX seem to look at sentiment when buying or selling their paper gold. It’s a greedy game, which has nearly nothing to do with physical gold. Physical gold would behave like BITCOIN, who has no paper market: Physical gold without paper gold would rally into a bubble, not next year or later – NOW. I think everyone with a clear mind could see that US Stock Markets and Bonds are much overvalued. On the other hand most commodities and precious metals are much undervalued. In my opinion we only need a trigger to start a big rally in gold. Then sentiment will be meaningless. Because sentiment is only a toy of the COMEX players.
I really haven’t seen much evidence o manipulation in quite some time. Ever since the banks got busted and started paying multi million dollar fines.
The gigantic contract dumps in the middle of the night seem to be done.
Gary how many commodities that are traded in the futures market have ever been in a bubble?
Lately since the low in PMs there has definitely been a change of character going into expiry week.
Gold and silver during the late 70’s and early 80’s. Oil met the qualifications for a bubble in 2008. Sugar back in the 70’s. Wheat I believe back in the 30’s.
Tulip Bulbs, 1634-1637.
I can’t find any quantitative definition of a bubble other than you’ll see it in retrospect after the crash. I’m guessing there must be a time element to it.
What about silver in 2011?
Found this on Wikipedia…
The uranium bubble of 2007 was a period of nearly exponential growth in the price of natural uranium, starting in 2005[2] and peaking at roughly $300/kg (or ~$135/lb) in mid-2007.[3] This coincided with significant rises of stock price of uranium mining and exploration companies.[4] After mid-2007, the price began to fall again and at end 2010 was relatively stable at around $100/kg.[5]
Emptiness: Good points in your comment. The paper market has been soaking up investor demand that would have otherwise been directed towards the real gold market. Then there is the real danger that the digital variety could one day be wiped out, in an instant, by a cyber attack or an EMP pulse. Physical gold suffers from no such vulnerabilities.
If the end of the world comes gold will be completely worthless, Food and bullets will be priceless.
If the end of the world comes human lifes wil be completely worthless. After the end of OUR world the earth and GOLD will stay “alive”. The creatures who follow us will find gold and use it as money …..
Sentiment definitely plays a major part in finding the peaks and valleys in gold & silver but here is something to contemplate when it comes to sentiment on silver. In the last year silver has had two 23 yr record level commercial short positions at the peaks. One in July,2016 and the other in April, 2017. That is a contrarian indicator on the commercial silver short positions that is telling a story all on its own.
The commercials aren’t contrarian indicators. When they are bullish you should be bullish. When they are bearish you should be bearish.
No, you missed the point. The contrarian indicator was that in less than a year we have had two multi-decade record commercial short positions. The latest peak in April took only 3 weeks to go from a record setting comm. short position to COT comm. short levels equal to the previous bottom in DEC. of 2016. The selling is starting to exhaust itself much quicker. The top in July of 2016 took 6 months to reach a COT level of bullishness.
Gary I have to disagree with that comment on commercials. Have you noticed for example that they have NEVER been net-long gold since 2001? That’s a 16 year run of holding the short side down. Odds are good we don’t get a real signal that a new bull market is about to get underway until Commercials are again net long.
http://finviz.com/futures_charts.ashx?t=GC&p=m1
That’s not how you determine the commercial position. Some commercial traders are long and some are short. It’s the net long or short positioning that determines bullishness or bearishness. I use the Blees rating to generate buy and sell signals. That compares current levels with the past 18 months. So even if the commercials aren’t net long they could still produce a buy signal if the Blees rating is showing the smallest net short position in 18 months.
What I am disagreeing with is your statement that “The commercials aren’t contrarian indicators. When they are bullish you should be bullish. When they are bearish you should be bearish”.
What that implies is you can use them for timing the markets moves but if you have ever actually tried that you would find yourself constantly being too early or on the wrong side of the trade. And often at the worst times.
That’s where the Blees rating comes into play. One wants to wait until the commercials reach either an extreme bullish level or an extreme bearish level, then try to time your entry a little more refined with cycles or sentiment or technicals.
fI the Smart Money in Crude Oil are the Commercials, they have Net Shorts of 395K contracts
does anyone follow the Oil COTs……and know what to expect from Commercials Net Shorst contracts, at xtreme bearish sentiment????….tks
The oil OCT levels are about the same or even a little more bullish than the November ICL and the August ICL
That could be. If one looks at $wtic daily, it is possible to see that after 12 days of advance, stochastics peaks above 80. Then a decline begins for 12 days taking stochastics below 20 and price $3 below previous low. We had one day $4 decline and one day $1 snap back bounce. Should this play out as before, we could see crude around $41 briefly over the next 10 days. It may not stay there for long, though. I wonder if cot levels can forecast short term volatility caused by internal market dynamics.
Everyone is bearish on oil except me. Did anyone notice that oil bounced right back above the rising 50 DMA on Friday?
I think there’s a good chance the drop on Thursday was just a half cycle low.
From the closing lows of early May, gold and silver are now up 4% and 8.7%, respectively. The gold and silver miner ETFs, GDX and SIL, are up 7.3% and 10.75%, respectively. Those are nice gains ! Some, such as myself, did buy into this rally and have done well. I sold all my leveraged silver positions on Thursday and have retained only a junior mining ETF. I also have a significant stake in penny mining stocks that did not suffer much during gold’s most recent sell off. They are a long term hold for the time that gold really takes off.
The miners may take another dive and they may not. Gary, after having followed you for years, one thing I have learned is that you can be wrong just about as often as right. I will take my chances with the junior mining fund.
Well I’m often early now that cycles patterns have started to evolve and stretch. But I’m not often wrong.
I used to be able to call bottoms almost perfectly. But market interventions and QE have stretched the cycles nowadays to the point I can’t call bottoms anywhere near as exactly as I used to, but the larger cyclical trends are still intact. It’s just harder to time them perfectly now.
Look at the current intermediate dollar cycle. 54 weeks. Who would have ever thought we could have a 54 week intermediate cycle?
Likely, this could be the reason for your stance on the energy complex. If your approach is working for you, that is all that matters.
Thanks Don. Bought INSY a biotech company making synthetic CBD for treatment of seizures. Not a grower.
Nice chart:
http://stockcharts.com/h-sc/ui?s=INSY&p=D&yr=2&mn=0&dy=0&id=p23697071515
Gold looks good at the moment. Looks like Gold will test the longterm downtrend again, before the COMEX players are going to press it down again.
Miners are not so weak as you all tell. Don’t forget that Van Eck has to sell millions of high quality miner shares of GDXJ till mid of june 2017 – that’s a lot of selling pressure.
http://blog.smartmoneytrackerpremium.com/2017/05/just-as-i-predicted.html#comment-292672
Sorry, here is the correct link:
https://seekingalpha.com/article/4069240-gdxj-jnug-breakdown-will-impact-junior-gold-miners-sector
Thanks Emptyness. That’s a valid point about all the selling yet to take place and it will be (and has been) depressing some miners prices since its so extensive. Just another few weeks to go before the dump is all wrapped up. Keep your eyes peeled on bargains as they appear. Some will no doubt be good performers once the seasonal strong period gets underway between late July and September.
Here is the Apple chart with the EW count:
http://stockcharts.com/c-sc/sc?s=AAPL&p=M&b=5&g=0&i=p84279959942&a=526280145&r=1495958273739
For those who love correlations, gold’s negative correlation with USDJPY has been clear since early March, and very strong from about mid to late March to the present, almost without exception. Meanwhile, gold is barely correlated with EURUSD only recently, and that correlation is highly unreliable…
Have a look — below the chart are gold’s correlations with both EURUSD and USDJPY:
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&b=5&g=0&id=p87034224067
For those who love correlations, gold’s negative correlation with USDJPY has been clear since early March, and very strong from about mid to late March to the present, almost without exception. Meanwhile, gold is barely correlated with EURUSD only recently, and that correlation is highly unreliable…
Have a look — below the chart are gold’s correlations with both EURUSD and USDJPY:
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&b=5&g=0&id=p34388771117
Oops… sorry I accidentally posted the FIRST time above (tried to stop the posting, but alas…)
At any rate, the above two links show two different sets of correlations for gold.
Here are the correlations of GDX with both gold and AUDUSD:
http://stockcharts.com/h-sc/ui?s=GDX&p=D&b=5&g=0&id=p58811078884
Actually, more like the lack of correlation of GDX with the Aussie, and the moderate but rising correlation with gold.