121 thoughts on “A TALE OF TWO MARKETS

  1. zkotpen

    Gary,

    You and I both have locked mindset:

    I have not seen a single posting of BTCUSD in any of your videos.

    And today is the first time I’ve looked at that chart myself…

    Gotta break that locked mindset. Let’s see something dynamic!

  2. zkotpen

    For as much as people talk about some Black Swan they’re anxiously awaiting, it has already happened: BitCoin. The proof is mathematical.

    I’m just watching what looks like a countertrend bounce — 12% in 32 hours?

    Isn’t that the kind of volatility we’re looking for in the miners? Only, unlike metals, it’s a market that’s actually trending. And even if the main part of the rise is complete, the volatility remains interesting.

    Now, of course… what is the best vehicle to trade it?

    1. Pedestrian

      You mean to sell it I assume. That sucker is on the verge of crashing. Its get the hell out of Dodge time for Bitcoin owners because she’s going down hard.

        1. Pedestrian

          The chart structure warns of a serious price drop and because it has recently had a near vertical rise. It does not mean it cannot go higher yet but just be warned the signs are present for a potentially steep decline. You want to be on guard whenever you see a chart displaying certain characteristics that are commonly seen before a blow off top. Timing the top is never easy however but looks inevitable to me.

      1. zbigkid

        It is ! The problem is, that nobody comprehends how blockchain structure, and the electronic mechanisms for trading leave it incredibly vulnerable to completely seizing up (i.e. all your so called value is permanently and forever locked, and can’t be converted to dollars or anything), or it can go down in price way faster than any other traded asset on the planet. The energy involved and bandwidth and capacity to mine it, is way beyond what anyone is imagining, and it will NEVER be suitable for the masses. Right now its going up merely on very small number of people actually using it compared to other mature currencies or metals or commodities. It truly has no more ‘worth’ than any fiat currency, and probably way more vulnerable bc there isn’t even a government or sovereign or any deep pockets backing it. Essentially if you tried to chart beanie babies back when they were in such demand and assigned prices to each one’s value, it would like Bitcoin’s chart does today. Now you can’t even give beany babies away. Same thing is going to happen, because Bitcoin’s inherent flaw is actually that its constructed using math that no one understands, and consumes infinitely more energy to produce and keep trading as the number of transactions increases. The cost of making pennies, or coins does not do that, the more you make of them, and nor does the cost of mining gold. It rises over time, but its gradual and not based on a flawed digital formula.

    2. Marc

      The problem with bitcoin is too much volatility. No one wants to buy things in a currency that fluctuates that much…unless you’re buying contraband I suppose. Bitcoin needs to get some respect as a currency not as a mojo trading vehicle.

  3. Steffmeister

    wtf? “a characteristic a-b-c corrective wave”, nice to hear an EW reference by Gary πŸ™‚ EW is a wonderful tool to use for timing short term.

    In NIKKEI we are in a final fifth wave up, so easy to count and fairly easy to time correctly.

  4. earthkitten

    Gary,
    Thanks for the video. One question.
    Looks the the weekly stochastic is
    very overbought on the SM. Would you suggest letting the weekly get a little more overbought before jumping back on the bull?

  5. ras

    tqqq has been trending up for 4 weeks with 20% rise. During trending moves, macd and stochs simply keep running. Wrt energy, I would wait until price begins to trend and keep a close eye on cvx.
    There could be still one more pop to a new high in nugt after a minor dip, too much internal upside momentum, which needs time to dissipate.

  6. zkotpen

    Ped,

    I thought you’d’ve loved my little metaphor of the crude little old lady tip-toeing between mud puddles!

    You know I mean to do whatever the chart says to do.

    As I stress on here, I’m a scientist. I try to remain detached from any instrument I’m tracking. I looked at the chart for the first time Sunday, and my emotions had nothing to do with bitcoin.

    My first feeling was: What? This thing is trading on Sunday? Hmmm…. this could be wonderful… to get the hell off the miserable graveyard shift of New York hours… to break those chains.

    My second was, I was amazed by the volatility. What everybody is looking for with their miners, despite any claims to the contrary. If not, they would just buy physical, or park their funds in GLD.

    My third was getting annoyed at myself for taking so long to at least pull up the chart and have a look. But this one only lasted a moment, as I kicked myself back into the here and now.

    And once I bounced back into the present, landing on my butt, but unscathed, I got up, dusted myself off, and said:

    What next?

    So the first relevant question is what vehicle to use to trade, given all the ForEx restrictions on US, UK, Japanese, Singaporean nationals… most of the global brokers won’t touch most or any of us!

  7. zkotpen

    Gary,

    Did you read Marc’s comment above? It has prompted me to point out something you mention from time to time, most recently in one of the videos last week:

    Just how destructive the 2011-15 portion of the bear market in miners was.

    The last time you said it made me wonder: Maybe the whole market needs to be burned to the ground, to see if, indeed, it does rise from the ashes — is such rising is warranted.

    I thought of posting, in regards to the beating in silver that so many whine about these days… I’ve lived 13 years in Latin America… none of my Chilean, Argentine, Mexican, or most certainly Bolivian friends would shed a single tear for any one enjoying a very luxurious discussion bemoaning their losses in SILVER!!!

    Oops… looks like I’ve posted it πŸ˜‰

  8. zkotpen

    Marc,

    “The problem with… is… vehicle.”

    I know, I know. We heard the same thing before, on the premium blog. First half of 2013. At that time, the word after “with” was Facebook. And Tesla. And… etc.

    Gotta shake off that crust, that oxidization that forms on one’s outer surfaces…

  9. theworldwithoutfacebook

    Lets talk about silver. It’s corrected further than gold and is leading junior miners back up.. Lets not miss the juniors because we are fixated on gold when silver is ready here.

  10. zkotpen

    HomerJ,

    “You stupid monkey!!”

    Why are you feeling so much anger?

    I’ve noticed it in your posts toward others as well… even towards Gary.

    What’s really bothering you?

    1. RTTPD

      Zkotpen —-

      For some odd reason there are a few guys here that want to compete with Gary very badly.

      My question to them — If you’re that sharp why waste your time here competing with Gary when you can start your own blog and newsletter, claim you’re a guru and start off charging 5.99 a month….and build a client base?

      PS —- I am going to take the proceeds of a few miners I made money with over the last few weeks and follow Gary’s advice and purchase a few good energy company stocks that have bottomed and hold them until I see a nice profit.

      I owned SN late last year when it got down in the mid 6’s and rode it all the way back to almost 10 in under 60 days.

  11. zkotpen

    RTTPD,

    Yeah, maybe there are a few folks here trying to compete with Gary. I hope that works out for them or makes them happy or whatever, though I tend to think his adversaries are on some of the other websites that people mention from time to time.

    That energy stocks chart does look poised to go up — I did pull it up briefly yesterday.

    Today, I’m more focused on USDJPY specifically, and in general, trying to figure out down to what degree a fractal pattern has predictive value. Basically, I am renaming some of the cycle periods for the sake of clarity:

  12. Ed

    RTTP, so ducking what? I made more money than you did during that same period. So ducking what it’s Gary’s site, we can’t trash him if I don’t agree with him. It is not like he is doing big favor for nothing.

  13. Gary Post author

    Oil appears to be playing out exactly as I expected.

    Gold should top by the end of the week.

    The dollar is starting it’s final run into its yearly cycle low. The cycle is already stretched so I think it will find a final bottom by the end of the week and then start a new intermediate rally.

    I took a lot of heat for my currency calls but as it turns out I was 100% correct. They just took longer to play out than I expected. A 53 week intermediate cycle. Sheesh.

  14. Gary Post author

    The dollar looks to be ready for its final drop into the YCL. Once that is complete a brand new intermediate cycle will begin.

    This is what will pressure gold down into it’s intermediate cycle low in June.

    If you are long metals you need to exit by the end of the week.

    When the dollar tags the 50% retracement (97.85) you need to exit all long metal trades.

  15. Alexandru Popovici

    short natgas reloaded @ 3.349 after having been stopped out.

    still lurking for re-shorting crude oil: it has stamina to reach 50.50 –> I’ll re-short around there, most likely on Wed.

  16. bluelagoon

    Alex – what makes you think oil is on its way down still? Gary seems to think we are at a YCL or very close to one. Whoever is right will win big and the other will lose big – YCL’s move so fast and hard.

    1. Gary Post author

      It took us a couple of tries to catch the bottom of the gold cycle as well. But once we did we went from $150,000 to $250,000 in the metal portfolio.

    1. Gary Post author

      Sure there is. 8 years of global QE. Probably the single most dangerous thing anyone can do is try to call the top during the bubble phase of a bull market.

      Instead of continuously losing money trying to pick the top you would be better off to buy some 2019 leap options on the QQQ and wait until the Naz that goes over 10,000.

      1. Christian

        I’m starting to realize that Big Daddy isn’t exactly the brightest of the bunch. We’ve tried giving him solid advice but he just keeps ignoring it, Lol! That, or he just enjoys wasting away his inheritance.

        To each his own I say πŸ™‚

  17. WYSIWYGN

    Gary, what are your targets (on the downside) for gold, gdx and gdxj for the coming weeks until their bottom (long(er) term ??) in June/July ?
    And afterwards, what kind of bounce do you expect ? A baby bull of some weeks/months, or a rather final bottom for a lengthy bull (target?) ?
    Thanks for your vision!

  18. JJHarmen

    Gary, you on may 1st, you posted an entire video advising everyone to get out of their long positions and “take the loss” . GDX closed at 21.69 that day, dropping to an intraday low of 20.89 during the next three days. Are you standing by that advice?

    1. Gary Post author

      Nothing has changed. This bounces the opportunity for anyone that got caught at the top to exit and then wait for the intermediate cycle low which will be due sometime in June or early July.

    1. Gary Post author

      If you think that is what is driving the stock market then you really do need help. Sentiment is what is driving the stock market along with trillions in global QE. Investors have watched it go up and up and up for 8 years and now everybody has decided to pile i and that’s what produces a bubble.

  19. Alexandru Popovici

    RAS: 50dma of oil is not at 50.50 but will be some 49.50 in 2 days.
    I expect it though to bounce that high before finishing its dead-cat bounce and take stock market and CRB index along w/ it.

    1. ras

      Alex, wtic just barely poked its nose above 50 day ma at 49.56 and it was repulsed. Also, daily price configuration is different from what it was in aug/nov.

  20. Don

    The stock market doesn’t need a reason to go up. My theory is that the algos are programmed to make money by way ‘skimming’ in markets that are trending up. I read somewhere that the algos stop their game in markets that are moving down strongly. So, we get markets that primarily go up and sell offs are very minor in order to preserve the liquidity provided by the machines.

    The game is rigged like never been before in history. Of course, one day there will have to be a ‘reset’ of some sort. Bigdaddy, I have my doubts that you will be in the right side when it happens.

    1. Bigdaddy

      Kruze If you mean doing the opposite of what I do, don’t because I am now doing the opposite of what I used to do (holding losers to the next day). So now, do as I do. You are welcome.

  21. Christian

    Get ready to short the Miners ladies..! So far everything is playing out exactly as expected. I laid out my plan last week and by the looks of it, we should get one more push up before the final drop.

    Gold will without a doubt tag 1250/1260 before rolling over. I’m currently eyeing $23.50 GDX as Resistance and will buy DUST when momentum starts to fade πŸ™‚

  22. Dday

    Completely agree. Although I’m always open to things going south, as I have been involved in many “certainties” in the past. But agree at $1250-$1260 gold/miners look ripe for shorting.

    1. Gary Post author

      Can’t say I didn’t warn everyone this was going to happen.

      The 5 day RSI tagged overbought and now we have a bearish engulfing candle.

    1. Gary Post author

      People have been saying that for about 7 years now.

      I’ll say it again. There’s nothing more dangerous than trying to short a market that’s entered the final bubble phase. There’s just no way to guess when the bubble will pop. But I’m pretty confident in saying this one still has at least 8 months to a year yet before the top.

      10,000 will be a piece of cake. 20,000 isn’t out of the question.

      If you want to make a ton of money first quit day trading.

      Next just buy 2019 LEAPs on QQQ and sit tight for the next year.

  23. JJHarmen

    Bigdaddy, you are going to lose money again and again until you start getting your dog to make your investment choices for you. Without knowing your dog, I just know he is smarter than you.

    1. Alexandru Popovici

      it is more likely that the dead-cat bounce in CRB index and oil is over than otherwise.
      today’s gap-up in CRB = exhaustion gap.

      stop loss @ 51.6 and target = 39.9

  24. bluelagoon

    Alex – what tickers do you play for crude? I’m looking at UWT and though it looks like it has more to go (in my opinion) – it is due for a correction at this point – hitting the 20/30 DMA’s today.

      1. bluelagoon

        Makes sense. I would rather trade futures eventually – at least then I can avoid the decay from the leveraged ETF’s. And you’re right – the flexibility in getting the best prices when everyone else is sleeping is a huge positive. Thanks.

  25. Goild

    Before noon, I saw the falling knife coming. Said wait.
    Somehow, I tried to outsmart it. To loose about $2.5K.
    Did not loose the head.
    Said, reverse.
    Made back the $2.5K, and more for lunch.

    If one can manage to control oneself and obey the candles, money will easily flow.

    1. victor

      Hi Alex, I missed today’s big move in oil…, sold at 48 expecting consolidation and a small pull bask.
      With all this talk about productions limit and XLE oversold how you are o’k with shorting ? Thanks.

    1. dboz

      Then they will be pinched for money and start pumping again. It’s a cycle that is going to just keep going. Fracking has ruined the chances for oil to ever go above $70 again. May not even get that high.

      1. Gary Post author

        I’m not sure that’s correct. The life span of a fracking well is very short.

        The world hasn’t discovered an elephant field in decades. All the major oil fields are in decline.

  26. Robert

    lol Gary so much for your call on 3rd daily cycles being dangerous. GDX just erased about half of its losses today, if it was so dangerous it should not have rallied this much and it can possibly still go higher if gold goes to 1250-1260. It doesn’t look like you will get your Dec low break. Maybe GDX 20 the most. DUST got killed today

    1. Gary Post author

      I’m going to tell you exactly what is going to happen. Once this rally in gold is over, and it will be over by the end of this week, then the metal sector is going to drop for 20 – 30 days destroying everyone’s portfolio that didn’t take this opportunity to get the hell out.

      You would think by now everyone would finally catch on when I just keep getting these calls correct over and over. I just don’t time them to the second like you people want, but the bigger trends are almost always correct.

      1. Robert

        Ok we will see I do believe it will drop soob but just not as destrcutive as you have described. The strength of the counter rally in miners is negating your argument

        1. Gary Post author

          Clearly you still do not understand how markets work. Think of the market as a pendulum. The further it gets pulled in one direction the further it reacts back in the other. In order to have a truly devastating move into the yearly cycle low we need this rally to be strong enough to get as many gold bugs back on the long side as possible. That’s the fuel for the destructive move down into the intermediate cycle low.

          This is why people are always wrong when they assume that any correction will be mild after an especially strong rally. The exact opposite is what happens. Remember how everyone thought that the rally was so powerful that any correction would be mild last summer? As we now know it was anything but mild.

  27. jake

    Doom and Gloom🌧, either this is a bull market for gold or it isn’t, if it is in a bull market then the pull back to $1214 was a good time to buy. This rally still has time before a reaction retesting December at a higher low. The pendulum has plenty of momentum after 4 1/2 years to the downside.

      1. jake

        Basing phase sounds comfortable, just think of the volatility and the big pull back moves in a bubble phase that will shake you out, never easy.

  28. Alexandru Popovici

    Dear VIctor, the question is a bit surprising.
    It is the conjunction of two:
    1) I kept mentioning since oil got to 44 that it put DCL and that I was WAITING FOR A DEAD CAT BOUNCE AND RE-ENTRY AT 48.9
    2) price action on deal announcement was a classic buy the rumor sell the news type of event.

    There was absolutely nothing surprising in crude oil’s action and in my ensuing resorting but your question is 😁

  29. DaZeD

    Hi Gary,

    I like your analysis, but I am somewhat in the same boat as Alexandru on oil and energy. I very much agree with your analysis in terms of gold and do realize that it is dangerous to try to play the long-side of this bounce. It seems like all commodities are to take a hit in terms of both metals and energy. If you look at the net speculative longs wouldn’t it seem that there are quite a few longs still in the market and therefore not at the sentiment level that you claim in the video which would signal an intermediate cycle low?

  30. pk

    Gary, I respect your work a lot however I think you will be right about one of your calls and wrong about the other. If you look at a chart of oil over the last three months and overlay it with a chart of gold over the last three months, they have become very strongly correlated. I am expecting that when gold rolls over, most commodities will as well. In fact I think oil may be leading and I think we saw the top on both gold and oil today with their dead cat bounces. Another thing that gives me confidence in this is that if you look at the cot report for oil, speculators a very long while commercials are very short. This is not a good combination.

    The other possibility is that gold and oil both break to the upside, but I find this unlikely.

    OK and a third possibility is that the correlation disconnects :).

    1. Gary Post author

      I’ll throw out an idea. Both are correlated because both are somewhat being driven by geo political turmoil right now.

      However if stocks breakout and start to run then I would expect that to take oil up along with it but drive gold down.

      So I would be looking for the correlation to break soon.

      1. pk

        Well I wouldn’t bet against you so… Any concern over the COT? I personally haven’t analyzed it myself but read that it is not favorable.

        1. Gary Post author

          The oil COT levels have come off significantly and are back to roughly the same level as they were in November when oil formed its last ICL.

  31. zkotpen

    Goild,

    I thought I saw a haiku in the works round here.
    Kindly permit me some editorial liberties:

    ——-
    Lunch Money
    by Goild

    If one can manage
    to control oneself
    and obey the candles,
    money will easily flow.
    ——-

    πŸ˜‰ πŸ™‚ πŸ™‚ πŸ˜‰ πŸ™‚

  32. zkotpen

    Goild:

    Correction:

    β€”β€”-
    Lunch Money
    by Goild

    If one can manage
    to control oneself
    and obey the candles,
    money will freely flow.
    β€”β€”-

  33. victor

    to Alex,
    “There was absolutely nothing surprising in crude oil’s action and in my ensuing resorting but your question is ”
    I just become a bit scared…, need someone to hold my hand… (( :

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