155 thoughts on “CURRENCY CYCLES REVERSING

  1. Bigdaddy

    The only thing that bothers me is that Pedo was yapping about going long the miners and it is not good to be on the same side of anything he is on but he has been flip-flopping a lot lately so it could go either way.

      1. Bigdaddy

        So now we can’t point out when someone is consistently wrong (or right) ? I guess i could copy and past the dozens of contradictory statements made by Pedestrian but i couldn’t be bothered. He is a good contrary indicator and that’s a fact and will remain so until he gets it right more than few times.

        1. Christian

          C’mon man, I’d like to think you’re smarter than that πŸ™‚

          It has nothing to do with pointing out that someone is consistently wrong.. it’s the language that you are using: words like “Pedo” or “yapping” are derogatory and will get you booted off the blog and then you’ll have nobody to talk to cuz Mutt doesn’t really care about Silver.

          1. Pedestrian

            Thanks Gary. You too Christian.
            ——————————————–

            Bigdaddy, it is true I am talking about both long and short gold plays but you need to understand I am generally a very short term trader and with that in mind it will help to explain why I might reverse positions frequently. It’s not to drive anyone crazy I assure you.

            That being said I am no longer responding to argumentative posts.

            This site has grown up over the years and we need to grow up with it. Since Gary has achieved a remarkable breakthrough into the ranks of the most highly rated sites in the country we need to make it more welcoming for newcomers and so I want to be the first to tone down my rhetoric and help keep the peace here.

            As the new bull market in gold finally gets underway I think we will see this site swell into the many hundreds of daily posts like it enjoyed in past years when gold was rising and its status will grow even further.

            You might not know but I have been challenging Gary for many years here and elsewhere and he has earned my respect for his willingness to adapt to changing market conditions and absorb new ideas quickly. Too many people give him a rough time about some past calls but their energy is usually misplaced. Gary has also made some superb calls including nailing the gold market bottom almost to the day and he deserves credit for great work.

            I consider him a friend even though we have never met or exchanged even a single email. Anyway, peace Bigdaddy. Lets try to get along better and just enjoy the success this site has rightfully earned without detracting from Gary’s hard work.

            We are all going to make more money working together than working apart.

  2. zkotpen

    Hey Gary,

    Would you please dispose of this “Bigdaddy” extremely negative, obnoxious person?

    Take a step back from your own involvement in the blog — is this a place you’d want to hang out? If anything would hold you back, what would that be? A massive step in that direction would be removal of one key pole of negativity. Of negative energy.

      1. Gary Post author

        LOL what a fraud that guy was. Has anyone else noticed that his yearly totals never go down no matter how many losing trades he has?

        I guess those trades don’t count… πŸ™‚

      2. JJHarmen

        In defense of Bigdaddy:, please stop with the whining Zkotpen. Everyone knows you and Pedestrian are very ‘close’ and probably the same individual. I think there are many here, including myself, who find Pedestrian’s track record as a good contrary indicator. That’s not insulting, just the way it has been.

        1. Gary Post author

          Heck most of you are great contrarian indicators.

          Most of the time I just try to do the opposite of what the majority here are doing.

  3. JJHarmen

    Wow, everything that was down yesterday is up today and what was up is down today, It’s like yesterday never happened.

    1. Nada

      LOL! Yes freaking markets are cray cray. Tech stops like NVDA just erased losses on a gap up. Can’t have the markets looking ugly in front of Yellen.

      1. Gary Post author

        I’ll need to see the close to be sure but I think we probably completed the HCL yesterday when sentiment in the QQQ pegged 9% bulls.

    1. Gary Post author

      Just a month ago everyone was pointing to the small caps lagging as the reason the market was going to go down…

  4. Bigdaddy

    Anyway, Gary Savage, you don’t have to ban me because i have had it with the likes of Zkotpen and Pedestrian a you protecting them from criticism for their bad analysis. Like most here, i have long suspected Zkotpen, Pedestrian and Gary are very close and probably all the same person.

    I am done with this nonsense. And folks, buy silver.

    1. Gary Post author

      I think we’ve all had enough of the crappy behavior on here. It’s time to clean up the blog. Either participate to make this a better place to debate the markets or go somewhere else.

    2. Lenapowich

      BD, I hope you are not leaving us. You are the most honest person here and I meant that. When you say buy silver, what do you recommend?

  5. Roy Batty

    Gary,

    In your blog “A Lesson to Learn” you stated …..”At this point there’s no more doubt that the bitcoin bubble has popped”. Do you still believe that?

    1. Gary Post author

      So far this looks like the normal counter trend rally that often occurs after a bubble pops.

      This is when the true believers stubbornly hang on to the view that this time is different and that price will never go down. It the next leg down that destroys investors when they finally acknowledge that they are wrong and the bubble has popped.

      The article was more about trying to control greed. We will all need that ability if stocks deliver a vertical phase and then later if gold completes a bubble. At some point one just has to be satisfied and get out. Otherwise you guarantee getting caught when the bubble implodes.

          1. Roy Batty

            ”At this point there’s no more doubt that the bitcoin bubble has popped”. Bet a burrito? πŸ˜‰

    2. Americano

      My “edge” is that I take any comments Gary makes about NASDAQ & apply them directly to Bitcoin. A jimmy-rig to be sure but I see it as THE perfect bias ( technological/different/whatever) filter.
      Bitcoin isn’t even 1% of gold market yet ($4900 ish will be 1%). My bet is Bitcoin goes to 2.5-3% gold market next year – to factoring other use cases like the one JPM is so scared about – judgement resistant trusts.
      Hardly swinging for the fences based on that math!

  6. Lenapowich

    I picked up another 300 shares of GDX this morning at 23.46. If we are really in a gold bull market, it isn’t the time to be picky about when to buy. I am not taking the chance that gold may gap way up one day and miss the opportunity.
    Maybe my thinking is wrong but that’s how I see it.

  7. AT

    NEW trade Sep 26 sold 50% DUST 24.16 … back in cash

    Sep 25 buy 50% DUST 23.45
    Sep 22 SOLD 50% JNUG 19.25
    Sep 21, BUY 50% JNUG 18.41
    Sep 18 – sold 100% DUST 23.45
    Aug 31 – buy 50% DUST 21.80
    Aug 28 – buy 50% DUST 23.06
    Aug 24 – sold 50% JNUG 18.89
    Aug 22 – buy 50% JNUG 18.27
    Aug 18 sold 100% JNUG 18.80
    Aug 2 buy 50% JNUG 18.20
    Jul 31 buy 50% JNUG 18.59
    Jul 28 sold 100% JNUG 18.69
    Jul 27 buy 50% JNUG 17.61
    Jul 27 buy 50% JNUG 17.98
    Jul 24 sold 100% DUST 30.95
    Jul 18 buy 50% DUST 30.19

  8. MagnuM

    Ped, in the last thread you said anyone with debt over the next 10 years will face a lot of pain as the credit boom busts up bigtime. Are you suggesting that nobody take out any mortgages over the next decade? What should millennials do? Rent?

    1. Pedestrian

      I probably have to rewrite that post. A large devaluation of the dollar is generally beneficial for debtors as the real burden of the debt is extinguished more quickly during an inflationary period. So I apologize for the comments that suggested otherwise. What was actually in my mind was the ability of borrowers to *service* their debts during a time when incomes will remain flat or even decline due to automation and as unemployment becomes more widespread as robotics become more commonplace. So this is more a question of our absolute buying power declining and pressure being applied via rising taxation and falling disposable income. Yes, debtors will feel the pain. But only if they are unable to make the monthly payments. Retirees for example will likely be hardest hit. We are already seeing signs that many private pensions will either bust or reduce their payment amounts. Social security itself will be impacted or the program will bankrupt itself. You should not head into retirement with a heavy debt burden and the expectation your income will be secure either. On the contrary, income is going to be more of an issue than it ever was for the millions of Baby Boomers who are not prepared. And most are not as they rely primarily on the value of their home to support them when they run out of cash. So my view is macro on the demographic issue as we know there will be many more home sales during the retirement Baby-Boom bulge than there will be buyers to absorb them. And that in spite of a dollar devaluation that should normally push home prices up we will instead see them fall in price in relative terms.

      Getting back to that cumulative inflation chart for a second, it has occurred to me that it might actually be going parabolic during the next gold bull run. And then I wondered, is that how we will know the dollar has finally run its course? It could still be many more years in the future before the dollar loses its status of course but all parabolic moves end only one way and that is with a huge bust at the end.

      Just something to think about! It may happen in our lifetime.

  9. Goild

    Indeed, healthcare is doing very well.
    XLV VHT IYH IXJ
    All doing very well and their upward trend looks bright.
    How to get in?
    I guess pyramiding.
    We shall see.

  10. Goild

    Trading expectancy here is horrible.
    $675/30 or about $23 bucks a trade plus $8 commission is $31.
    It is the trade of the ANT. Carry insignificant risk, and add many little profits.
    A few times a week the market is splendid and the ANT takes a lot more.
    ANTs sleep very well and are happy just doing what the know to do.
    They are no greedy, they only carry what they can. Though by the Fall they have plenty in storage
    for the Winter.

        1. Nada

          What is your point? I admit, one can only take so much of his hindsight trading before they lose their shit πŸ™‚ Goild says the same thing everyday – always on the winning side of the trade. How do you ask? By using candlesticks on the 5m tf. Now if that’s not the biggest BS I have ever heard, then I do not know what it is. Candlesticks are less reliable than a coin toss.

          Sorry, but I will continue to call him out on his BS hindsight trading.

        2. JJHarmen

          Give us a break with the ‘insulting’ rhetoric. Sometimes people deserve to be tuned up when they get out of line or talk nonsensical.

    1. Christian

      GOILD — No more hindsight trading dude.. it’s annoying and doesn’t really help anybody on this blog.

      If you’re legit then you can take a SCREEN SHOT and post for everyone to enjoy, if not..

  11. Goild

    Nada,

    earthkitten mentioned that it is a sector to look at.
    I would say it would be hard to criticize someone that gets into healthcare.
    They appear to be winners, and in this business it pays to join the winners.
    I looked at the 5 year charts.

  12. Goild

    Thumps up, hugs, and let us get bright to make money.
    We get what we put in.
    As team we could do wonderful things trading and pocketing big bucks and not just crumps.

  13. Goild

    Nada,

    Some of the healthcare charts have surpassed the previous peak of 2015.
    Their are bullish. Considering how precious healthcare is one would not be surprised if they take a Gary’s bubble path.
    May be I will wait for a retracement and put some dough for a 1-2 year trade.

    1. JJHarmen

      Goild, I think you may have made a typo error. Did you mean a 1-2 minute trade ? That is normally your investment time frame.

    2. Nada

      @Goild I would agree that a rising tide lifts all boats. I don’t subscribe to Gary’s great bubble phase, but thats not to say it will not happen. I don’t have a crystal ball. In regards to what you originally posted, I was mildly perplexed by the tickers you referenced. All those charts are bearish, but without seeing your viewpoint (why I requested a chart) I would not know what timeframe you had in mind. So sure, if you are looking to old turkey, maybe it works out.

      However, I certainly would not want to old turkey anything with current equities evaluations.

  14. Sassybabe

    I added substantially to my SLV position a few minutes ago. I hope Bigdaddy is right on silver. According to my rating system on most everyone here, he rates very high on success with silver.

    I am never playing leveraged funds. From what I have read, they are too dangerous.

    1. Duuuuuude

      SB, I don’t post much and don’t pay much attention to the comments, but you really need to come up with a method that works for you. Its bad enough for traders that bounce from one guru to another who subscribe to different methods of trading becoming confused in the process. If you are now looking for that one trader on a blog that you hope knows what he is doing is a recipe for disaster. Are you a trader or a blogger? If you are a trader, then you find a method that has a high degree of success, then learn to manage the risk as there is no foolproof method. Gary uses cycles and sentiment, but if you cannot manage the risk, you will blow up your account following his or anybody’s method.

      Good trading everybody!

      1. Sassybabe

        Duuuuuuude:

        Thank you for your input. I am not smart enough nor do I have the time to figure out what is a good or bad investment but I still want to give it a shot. I read back almost two years of blogs on this site and made a notes about calls or positions others have made. It was well worth all the time it took.

        There are some very smart traders here who seem to get it right more often than wrong. Unfortunately, some of the best have left and not returned. Bigdaddy is high on the list although he often sells too soon. Gary does quite well as does Christian and a few others. I figure I will try and achieve success by paying attention to those with the best records. I hope that makes sense to you.

        I won’t mention who had the worst rate of success except to say that they say the most and sound smart but fail far more often than someone using a simple guessing method.

  15. JJHarmen

    Sassy, every time I have played the leveraged funds, I got burned. If they go against you, losses mount quickly. It’s a fact that the poorest performing leveraged funds since 2009, have been the inverse variety. That all said, I still try once in while.

  16. JJHarmen

    Gary, I have to ask, now that ERX has come up (a lot from the lows) and you are at almost the exact break even point, what is the plan? Do you see more upside at this point?

    1. Gary Post author

      I’ve gone over this multiple times. The intermediate cycle should still have at least one to two more months before topping so there’s no need to do anything with the trade at this point. And by the way we are into profits not break even

      1. JJHarmen

        Okay, got that. Thanks. The reason I asked is because I am looking at getting into the oil sector. I thought I read that your break even on ERX was 29.50 or there abouts so I guess you are into profits right now. Congrats!

  17. Goild

    JJ,

    Sometimes I can be very patient.
    My oil USO trades were multi day trades.
    The XLE trade was like 5 months.
    But you are right, I like money right now. And this costs me as I leave on the table a lot of it.

    1. Nada

      investing.com has a great economic calendar. If you install the app investing.com and pay a 1 year fee of 19 dollars you can get it add free and its an excellent resource to keep up with calendar events. 19 dollars is 1 round trip of 200 RTs you typically do daily πŸ™‚

  18. JJHarmen

    What is driving the ‘buy the dips’ phenomena? Is it the trading computers (algos), the central banks or the retail crowd? The dips are getting tighter and tighter and for that reason, I think an explosion upward is very possible, as Gary as been saying for some time.

  19. AT

    Another trade just filled:
    Sep 26 BUY 50% JNUG 18.83 – I am now 100% JNUG under 19 average

    Sep 26 BUY 50% JNUG 19.07
    Sep 26 sold 50% DUST 24.16
    Sep 25 buy 50% DUST 23.45
    Sep 22 SOLD 50% JNUG 19.25
    Sep 21, BUY 50% JNUG 18.41
    Sep 18 – sold 100% DUST 23.45
    Aug 31 – buy 50% DUST 21.80
    Aug 28 – buy 50% DUST 23.06
    Aug 24 – sold 50% JNUG 18.89
    Aug 22 – buy 50% JNUG 18.27
    Aug 18 sold 100% JNUG 18.80
    Aug 2 buy 50% JNUG 18.20
    Jul 31 buy 50% JNUG 18.59
    Jul 28 sold 100% JNUG 18.69
    Jul 27 buy 50% JNUG 17.61
    Jul 27 buy 50% JNUG 17.98
    Jul 24 sold 100% DUST 30.95
    Jul 18 buy 50% DUST 30.19

  20. Nada

    Well.. One of those listed scenarios is potentially playing out and something one must be alert about – Since we had a swing low, if we make a lower low then this will be a failed daily cycle and we are rolling into an ICL as Gary had previously suggested.

  21. Spanky

    Yeah, today’s drop in gold was not ideal. Do we get a gap down in the miners tomorrow, along with the yen breaking down below its 200 dma? It’s certainly possible.

    If the yen continues to break down, I would expect the stock market to start ramping up to new highs soon.

    I was expecting commodities to start rallying, especially against the Dow. That too could be put on hold for a while.

    1. Nada

      Gary, quick question. I have heard enough of this now famous JNUG 23 trade – does this current setup look similar? Looking at the chart, we have Sept and there was a pop the day before then a gap down and weeks of blood bath. So there was a DCL and then a quick failed daily cycle that caught everyone off guard.

      Seems eerily familiar with that very scenario?

      1. Nada

        What gives me pause is this; IF gold is in a bull market, should we not be making a higher high in the IC and more importantly a higher yearly high? We have not had that in 2017. Time has ran out, so we are in the spot to do it nor or the bull market is in question, on? How can we have a lower high in 2017 vs 2016 and say that.

      2. Gary Post author

        I made the mistake of trying to catch a 2-3 day trade last Sept. thinking even if the daily cycle was left translated it should still give us 5-8 days to rally. It topped the next day after we entered and then we got hit with a premarket attack that ran our stops before we could get out. I did the best we could and tried to exit during the next daily cycle bounce.

        We would have been fine except for the election night rescue of the stock market killed the gold rally and grossly stretched the dollar cycle.

        We managed to recover and are now doing just fine in the metals portfolio, but I learned my lesson: never bet big late in an intermediate cycle, and never count on a left translated cycle to even produce a 3 day rally. Sometimes they don’t and you get caught.

        That’s where I think we’re at right now. Gold could potentially produce a left translated cycle so it’s risky to be long and very risky to be leveraged.

          1. Pedestrian

            You mentioned my worry there too, Nada which is that golds failure to exceed the 2016 high pushes out the bear market to an unknown date in the future. For what its worth though I still think we are going to go up and test that old high and most likely exceed it. Not sure how long that will take is all. We got a promising looking bounce off golds 50 dma a few days back and seem to be consolidating right now. Might still see 1280 before the bounce gets moving although that’s not necessary. What that 1280 number was all about was my worst case scenario for gold before heading higher.

  22. mexican

    I am thinking way to early to load the truck with NUGT JNUG, but perhaps i will be wrong and corrected! LOL

  23. Spanky

    All Yellen has to do is open her maw and gold drops $15.

    Anything she says about inflation is complete BS. This is simply her way of keeping the yen carry trade going, which has fueled this stock market since 2011. As long as the yen continues to slip lower, commodities will be sold and risk assets bid. It’s a virtuous cycle with no downside–as the lower input costs go, the more profitable US corporations are. Deficits don’t matter and nor does money printing. All that matters is the direction of USDJPY.

    1. Pedestrian

      Sounds about right to me Spanky. But consider what happens when Yen/$ starts to rise again on its next cycle up. That’s our inflation signal if there is going to be one and we will know that because gold will be rising versus dollars. I still think that is a ways off though. Sometime next year anyway. For now gold will likely remain depressed (not including a bounce that may be coming of course) and remain within is long term bear channel. A dollar/euro reversal at this stage will further dampen golds outlook until the dollar has reached the end of its next cyclical rise. But this is really a euro story anyway. The dollar moving up to 1.20 or higher is really talking about the euro completing the last leg down of its massive dome pattern as seen on its monthly chart. And when you really give it thought, which currency is more likely to weaken next year, euro or dollars? I think that should be an easy question to answer given the instability in the EU banking system, the inability of Draghi to unwind or reverse course and all the moving parts of the many countries and regios bucking to exit. Its politics at the ballot box that will ruin the Euro project. Whether Italy , Spain, Greece or another, the variables are beyond control of a Chancellor in Germany whose hand is weakened by her parties poor showing.

  24. Spanky

    $plat doesn’t look so hot on the weekly chart right now. It’s in danger of seriously breaking down here. Very disappointing that it can’t even hold the 20 WMA.

    It’s possible it could maintain itself around the 20 WMA, but with metals, you always have to assume the worst, which in the this case means a break to the lower BB on the weekly chart, currently at $893. From there, it’s anyone’s guess how low she goes. The July low is probably toast and the December 2016 low is also probably toast in the event it breaks down. Only question after that is whether the January 2016 low ($811) gets taken out. Needless to say, none of this will be good for gold and silver.

    1. Pedestrian

      Agree. Platinum has lost 100 dollars this month and reached the 10% decline level today putting it in a technical correction which is kind of bearish. Especially as it so often leads gold. The professionals who dominate platinum are bailing out for good reason and are usually ahead of the crowd.

  25. Clarence

    Avi not so bullish anymore, GDX possibly dropping to $17:

    Price pattern sentiment indications and upcoming expectations

    Unfortunately, the depth of the pullback in the GDX has caused me to become concerned with the complex. While GLD and silver can still be looked at bullishly, the overlapping pattern in the GDX has now increased the probability that the GDX can fall back down towards the 17 region by year end. I know this is not what metals bulls want to hear, but I have to abide by what the patterns are telling me. And, at this time, they are telling me I have to become more cautious as long as we remain below 28 in the GDX.

    Ideally, I would still want to see the market rally up towards the 26.50-28 region before we begin to drop later this year. But, if we break the 22 region before we are able to climb towards the higher target, it opens the door to a potential slide earlier than I ideally want to see. Moreover, it would take a strong break out through 28 to take this potential off the table, but I really do not see a highly reliable pattern at this time to suggest that can happen with a high degree of probability.

    Lastly, should this decline take shape on the GDX, it opens the door to silver making a low that is below the one struck in 2016.

    So, the action seen recently has set up a potential trap door in the complex, which may open before the end of the year. One may want to consider protecting their profits/portfolio as we move into the last quarter of the year. And, as always, I am going to be watching these charts VERY closely in the coming weeks because of the uncertainty the recent drop in GDX has caused for me. Long term, I remain bullish, but I am seeking the point at which I can get aggressive to the long side.

    1. Gary Post author

      They are oversold and we have a Bollinger band crash signal. Those things usually occur at cycle lows.

      Again I would stress that all cycle lows (sometimes even HCL’s) look bad technically. They have to in order for sellers to panic at the bottom.

      The only two times this may not apply is during a baby bull and during a vertical phase. It’s still a bit early to tell if the vertical phase has begun. I think it probably has but we need to see the Nasdaq catch up to the other sectors as confirmation.

  26. Spanky

    Commodities. It’s time to show me the money.

    Unfortunately, it really seems like commodities are under the thumb of the Fed and BoJ. They have zero incentive to let the complex rise, and so it probably won’t. Sure they will lose control eventually, but when will that be? Again, if the complex breaks down here and takes out the July low, how low will she go? Will it be a headfake lower? I think Yellen and co. would love a nice cascade to new lows, and then they will keep pretending to wonder why inflation hasn’t picked up and yet the Dow is at 50,000.

    1. Gary Post author

      Oil is doing just fine.

      It’s just the metals that are under pressure. I warned this could happen and I explained the reasoning in this video. That was just too big of a resistance zone for for the euro to break through on its first try. That should lead to a counter trend rally in the dollar and the short cycle scenario playing out in gold.

      Can’t say I didn’t warn everyone.

      1. Spanky

        The $gold:$wtic monthly chart has a huge head and shoulder top. It look like gold has topped vs oil for a long long time.

        1. Gary Post author

          It took me a couple of years, but I eventually figured out that I was never going to make any money trading chart patterns.

          If it was that easy every retail trader would be rich. Most never get rich, yet most retail traders go their entire career trying to trade chart patterns.

          1. zkotpen

            Gary,

            This is a belief, not a truth. But since you’ve energized it, you’ve made it your truth. There is absolutely no way you will ever profit trading chart patterns in this lifetime unless you first de-energize that belief and approach them with an open mind: “What if…”

            I only began learning chart patterns on April 17, 2013 — not your favorite date in history. I, too, recognized their limitations fairly quickly.

            Instead of throwing out the baby with the unsavory bath water, I defined the problem. Then I put a ton of energy into seeking out a solution, using two tools that are not in your toolbox: Math and science.

            I do not post this intending to change your belief. Rather, I want to point out, if all people thought this way forever, how would innovation ever occur?

          2. Gary Post author

            I would only even consider a chart pattern if my other tools also confirmed the pattern.

            Way too often a pattern morphs into something else by the time it’s played out.

          3. zkotpen

            Gary,

            My point, exactly!

            I know you’ve got your set of tools, which are effective.

            I’ve gone to work figuring out the tools that are woefully lacking in the chart patterns.

            It’s a work in progress, begun in November, 2015. Malcolm Gladwell suggests the 10,000 hour rule for mastery of something. So I’m gonna go with that and keep pressing forward.

            We will see how things look at that point, but I’m pleased with my progress so far. For now, everything looks like it’s on track for leaving for posthumous. I just want to focus on the scientific investigation, not on the personality of the scientist. Of course, any new idea is met with incredulity and contempt, and if I deal with these distractions, they take away from the 10,000 hours.

            So this is my Hamburg πŸ˜‰

          4. Gary Post author

            In the end you are going to find the same truth that I figured out years ago.

            Nothing works 100% of the time. The market eventually breaks every successful system.

            The traders that succeed are the ones that can adapt and evolve the quickest when their system starts to fail and find a new system.

            I can tell you right now that math isn’t going to be your holy grail. If it was then LTCM never would have gone bust.

            And on top of that we are now in a new era of government managed markets. So just one more wrinkle to throw into the mix.

          5. zkotpen

            Gary,

            “I can tell you right now that math isn’t going to be your holy grail.”

            Once again, I can’t agree more! The holy grail is a medieval sort of thing — it’s pre-calculus.

            But if you and I are separated in space, not within each other’s line of sight, and out of earshot, then how is it we are communicating?

            Add to that… when was the last time you hunted a beast to eat meat, defended yourself against a predator who wanted to eat you (literally), or gathered plants for sustenance?

            Or, more recently, when was the last time you cultivated plants or animals for sustenance? Built your own transportation unit? Your own communications devices using only “commodities” and your mechanical tools?

            The third game changer, after spoken and written language, is calculus. Not just math, but the math that examines the infinitessimally small, and the infinitely large, which are necessary to make the motor and the generator possible… and everything else in the modern world.

            Thus, ironically, calculus IS the holy grail. Indeed, I have long thought of science as “the religion of the 20th century”. Certainly, calculus is the answer to the problem of the middle ages, as used in science, and manifest in engineering.

            Fortunately, my colleagues in the soft sciences all disdain math as well! That’s what makes them soft: Their subjectivity. Lack of calculus, and lack of scientific method.

          6. Bluebellkid

            There are plenty of IBDer’s that have made lots of money off chart patterns and buying at the proper buy point – that is what IBD is all about. Knowing how to spot proper cups, double bottoms, flat bases, ascending bases etc. and then determining the proper buy in point. And just as important is knowing sell signals and when to employ them.

          7. Pedestrian

            I don’t see the objection to patterns either although I would agree misinterpretation is their biggest drawback. But they unquestionably still exist just as they have always existed and the simple proof of that is a back-test of any given chart.

            And there they are:

            Double tops, wedges, flags, domes, cups, waterfalls, channels, megaphones, triangles, support lines and the like are all readily apparent and easily visible. They are so obvious in fact that its a wonder we don’t understand them better as they are developing.

            There is just something about the human mind that places a bias on patterns such that we cannot accept them for what they are as they build. We have been talking about the bear market channel on gold here for years already without agreeing that we are even still within one! And that is a very basic pattern so its a wonder we don’t all know the rules.

            So I don’t think there is any problem with patterns so much as there is a difficulty with our perception of patterns. Where these things come in handy is for quick visual answers about a charts dynamic. Anybody with eyes can read a chart without even having a modest grasp of math, the asset that the chart refers too or deep knowledge of the subject matter.

            We don’t even need to know if a chart is a weather graph, a population chart or the prices of butter in 17th century Switzerland and yet we can still read it effectively if we adhere to unbiased pattern analysis. Every parabolic rise ends in exactly the same way with a reversion back to the mean and virtually every price crash will plant the seeds of the next bull market.

            So patterns are useful and they do work if we can get past our subjective nature but I would also agree a heavy reliance on them can handicap a trader. You need other tools to weigh the odds. And you need to be a jack-of-all-trades where good analysis is concerned being just as comfortable plugging in Fibonacci’s as you are counting out cycles days.

            Where this all gets kind of humorous is with the buy and hold crowd who try to find a shortcut around the hard work of reading charts and bypass all the rules by using one single maxim as their guide.

            In the long run everything eventually goes up so just hang on and wait!

  27. zkotpen

    Goild,

    I, too, looked at long term health care charts over the weekend. Not the most enticing setup, but you can profit from a bull trap, so long as you escape with the cheese before it slams shut on you.

  28. Steffmeister

    No, I disagree with Gary and palobar. The dollar just did a successful backtest of the breadown. It will most likely continue in a downward fashion. I am making money looking at chart patterns, I will post a few charts later today.

    I am bullish on Gold πŸ™‚ expiry is today and sell pressure should ease.

  29. zkotpen

    Gary,

    And by the way, it’s not just the wave principle, so-called “Elliott” wave, patterns that I’m working on.

    My work includes a complete modernization of cycle theory as well.

    Paying close attention to nomenclature. Not sure if you recall, but even in my newbie days, late 2012, I posted a comment on the premium site asking why people refer to a cycle that is not at all daily, as the daily cycle.

    That may have sounded naive, but even folks like Surf recognize “daily” cycle is inaccurate. Of course, his “trading” cycle is vague. After all, one can trade any cycle one wants to. “The” intermediate cycle? There are numerous intermediary cycles: There’s one in between every primary cycle.

  30. primetime

    It may be about time to get your head out of the charts and look around the world. I hate to say it, but the left is hell bent on the destruction of America. A race war is inching closer by the day. Not to mention the little things like NK, China, and Russia aka WWIII. Or maybe a Trump impeachment?

    Your charts are gonna miss these things and then you will be chasing. Look longer term.

    It also is comical watching these short term traders call the market. One day gold looks great, then one day later it is going to 1150. It is whatever way the wind blows. Simply laughable at this nonsense. If gold is up for the day the chart looks good and of course if it is down for the day the chart looks horrible.

    Gary is much more consistent with his calls longer term and does not fluctuate much with the market wiggles. I like that. Ped can be good at that also most of the time when he is not rip the face of emotional. HA Christian will also stay with a trade and Don seemed to be good at that also.

    Like Gary says, amateurs compared to pros. Who will you follow?

  31. Pedestrian

    So lets run a channel so I can show what I’m watching right now to make my next move. The chart in this link is Yen/dollar futures and the line I am looking at is the support that runs across the lows of December 2016 and July and September of this year.
    https://finviz.com/futures_charts.ashx?p=d1&t=6J

    What you see here is that price has stopped right on the support line and failed to break lower after its second try yesterday. It is consolidating a bottom in other words and odds strongly favour a bounce from this point. If that happens our expectation is that gold will rise too with a good probability of going up with Yen to its next major resistance level that comes in around .94 …..so a strong bounce in other words that could exceed 100 dollars in gold.

    OK, so far so good. But will this happen for sure?

    No, nothing is for sure. We see the setup alright and it looks very bullish for metals but with all channel trading we need to keep in mind that eventually the pattern will change and a support will give way or a resistance level be breached.

    I am however betting on gold going as high as 1400 on this next cycle and possibly exceeding its 2016 highs as I have mentioned many times this past week. There is still a lot of bullish sentiment in the gold sector and plenty of energy to push price back up so its a low risk trade from my perspective.

    This is the cycle-up that is going to finally catch the bulls off guard. Once we break above 1400 dollars all hell will get loose and the longs will come out in force pushing the COT’s back into record territory. It is THE moment that the bulls have been waiting for since forever naturally.

    What they are NOT expecting is that this next peak will be their last chance to get the hell out of Dodge for the rest of this year because the decline that follows will rip the flesh right off their beating hearts as gold begins a long painful journey down into the 1100’s

    So that’s my prediction people and you can judge it for yourselves. Draw in the channel and come to your own conclusions. Gold is a great buy here during this week for a nice run higher but be warned, it is not going to continue after hitting the upper channel around 1400 dollars so be careful.

    When Yen/dollar rises so does gold and this chart is tipping us off that gold has a bounce in store.
    https://finviz.com/futures_charts.ashx?p=d1&t=6J

      1. Pedestrian

        Absolutely.

        There is a caveat however. If you noticed, the yen is falling this morning. It must not break below resistance because if it does then down we go on gold. So the support line is our reference here and the decision point. As we are currently at the outside limit of tolerance for this support level it could be a close call. No action until there is a decision in other words because there are no guarantees. What I am doing is just watching this morning but should a bounce materialize this will be a strong buy in my books.

        So yes, I should be long this morning and will hold until we hit my upside target zone.

        1. Pedestrian

          My apologies. I should have written “It must not break below support” in the second sentence above.

        2. Gary Post author

          I already noted in a previous video that the yen was in a left translated cycle so we know it is going to break your support trend line.

          This is a classic example of what I mean.

          Markets have to get the most people on the wrong side of the boat. They do that by breaking the chart patterns everyone likes to follow. Then those people have to panic to exhaust the selling before the bottom occurs. It’s why cycle lows almost always break the cycle trend line. It’s why moves out of cycle lows almost always break the down trend lines. They have to panic out the shorts.

          1. Pedestrian

            Actually there is a little wriggle room for a break below support that I did not notice until I looked again. So no big deal and I do agree that this will get most people on the wrong side of the market.

            You might have to refresh my memory about your “left translated” cycle. Are you talking about the peak of September being higher than that of June or does this refer to something else? I don’t see how it bears on my comments about the support line holding or breaking.

          2. Gary Post author

            I’ll have the morning video up in 10-15 minutes. It will cover what is happening in the currencies and metals. The short cycle is now in play.

            One doesn’t want to be long metals this early in the dollar cycle. In fact we may have just generated a left translated cycle that topped on day 3 in gold.

  32. Pedestrian

    Dollar has poked its head above one more resistance level today which reinforces the bullish thesis for USD. The odds that we are not seeing a euro/dollar reversal are therefore diminished. I see one more resistance barrier that could be meaningful but after that it should be confirmed that USD will indeed see one more cycle up and that could easily take us to 1.20 or higher during 2018. We won’t actually call it until we see it however but once confirmed the bull case for gold will go sour during the dollars rise so trade accordingly.

  33. Nada

    Gary,

    Quick cycle question. Since we had a swing low and now we have a lower low, does that represent a failed cycle this morning? Some people have different views on swings – example they wait for a move back above 10ema or trend line that was broken by DCL. What actually represents a failed cycle? Thanks

    1. Gary Post author

      The problem is that central banks have so warped the currency cycles that it’s bound to mess with the gold cycle as well.

      This is what almost no one was bothering to look at. If the dollar started an intermediate rally then gold would have trouble producing a normal bounce in a normal cycle timing band.

      This is why I did the short cycle video to prepare traders for that possibility.

  34. Pedestrian

    ERX should hit the 200 day moving average today. Still shocked. I really did not see this as likely but here we are and the gang is in the green again.

    1. Bluebellkid

      ERX is already at the 50 day (actual 50 days of data and not 50 calendar days) on the weekly chart. Transports are doing pretty well so something has to give.

  35. Goild

    Good morning,

    Well, JNUG at $18.20 looks good to me so I got 1K shares for a while, may be a micro while.
    Good and wise trading to all.

  36. Goild

    It seems that this might be a good spot to start pyramiding on the miners.
    It is worth to take the risk as the downside risk appears not so high, but the upside can be very bright.
    Ped, appears to be bright on the miners.
    We shall see.

    We need to get into automatic profit, and nothing will happen unless we have a plan and execute it.

  37. Goild

    Ped, I agree. The miners punishment cannot be eternal and hopefully soon they will be rewarded for their pain.

    1. Pedestrian

      This is one way we differ Goild. I won’t buy until I get the setup. Even though I think I am correct there is always a possibility open for support lines to fail where I think they should hold. If your goal is risk minimization it costs nothing but your time to let the chart work itself out first. That’s exactly what I am doing since I don’t claim any special foresight about the market. This is more like tracking quarry through the jungle by interpretation of little broken twigs, footprints in the sand and crushed grass where your dinner sat down to rest!

      When the moment is right I jump in for the kill and my dinner doesn’t get the chance to chew off an arm before I get to him first.

  38. palobar

    @Pedestrian
    Because the low on the 8th of September took place exactly 5907 days from the secondary major high in 2001, therefore, the US Dollar made a full circle precisely to the day.

    1. palobar

      We had a similar event in Gold at the high that took place in 2012. That high is still holding after 5,5 years.

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