258 thoughts on “THE RUBBER BAND THEORY

  1. Christian

    This video is very timely. I warned everyone NOT TO BE A GREEDY LITTLE PIGGY ๐Ÿ™‚

    How many will listen? And how many will watch their winnings evaporate into nothingness?

    We’ll find out soon enough…

          1. Christian

            Alvin — You’re wasting your time trying to taunt me. By the time I’m done with this trade I will have made money and morons like you (and others whose names I shall not mention) will have to find something or someone else to criticize.

  2. Bob

    Thanks Gary, Much appreciated. Watching the bullishness of gold in this cycle and with little time (10-12 days) before we’re starting to hit recent history records for cycle length, I was strongly considering the possibility gold may only retrace to the 23.6 level and I’d be lucky if I got 38.2. There is hope.

  3. Goild

    From a day trader’s point of view timing to go short on the very first pull back has
    a high probability of a good return with reduced risk.

    Today at the JNUG peak I had 1800 JDST shares, and tough it to be the high of the day.
    As usual, I only got crumbs. Had I sit quietly I would have pocketed like $5K.

    Need to listen and obey more to intuition, our Guardian Angel.

  4. Pedestrian

    This was really an interesting article Daboz posted on the previous thread. Right in line with my remarks to Sassy last week that when traders get back from the Hamptons in September they are in no mood to keep bidding gold back up.

    We all know Wall Street hates gold and loves stocks.

    That clown JHarmen was telling anyone who would listen I was an idiot and to go back and look at history since I was wrong. Well nobody bothered to look but this article sums up recent history perfectly. Since the gold top in 2011, gold has face-planted more than 200 hundred dollars on multiple occasions immediately following labour day.

    Who knew eh? (Smirk). This year I am looking for a 250 dollar plunge.

    Get ready for Golds Post Holiday Fall — Investing.com
    https://www.investing.com/analysis/get-ready-for-golds-postholiday-fall-200211773

    1. Christian

      250 dollar plunge?? Not gonna happen. And more importantly.. when it doesn’t happen, will you then please stop with the “this was just a bear market rally” nonsense?

      Gold bottomed in December 2015 and has since demonstrated all the characteristics of a Bull Market. The end. Finito. La fin. Das ende. Finis. ็ต‚ใ‚ใ‚Š. ะบะพะฝะตั†. ุงู„ู†ู‡ุงูŠุฉ

        1. Christian

          You’ve already been provided with so many reasons BASED ON THE CURRENT PATTERN – reasons that are factual and not just *opinions* – but you choose to ignore them time and time again.

          1. Pedestrian

            No no Christian. That’s Gary’s work. You haven’t offered any proof at all anything at all. At least Gary puts in a big effort. You just fall flat though. I figure you ride his tails actually. Which is why he wants you to enter the contest since you are such a blowhard all the time.

            Prove yourself.

          1. Christian

            Yes Pedo, that is exactly what I am.. ‘a blowhard who likes to ride Gary’s coat tails’ โ€” spot on ๐Ÿ™‚

    1. Pedestrian

      We could be ready Christian. My only reservation was I was thinking gold would thrust itself just marginally above the 2016 high before the pullback commenced since that would get the maximum number of people on the wrong side of the trade. Right now there are too many who want to play the decline.

  5. Nada

    As mentioned yesterday, it’s a little subjective but there may be a move to 1347ish before move down. Depending on the count. Draghi is on deck this morning, so he has power to send euro to hell or to the moon.

    1. brianbrown67

      Love how you told everyone to stay leveraged in JNUG when you told them to buy at 24 last year saying gold was going to 1500 and that everyone who was calling you out when it started to fall was a cry baby.

      1. Gary Post author

        JNUG is going to 500 or probably more realistically 1000 you moron.

        Jesus how many times must I tell you people this?

        It’s going to take time to get there. The biggest chunk of gains will occur during the last year in the bubble phase. Just because it doesn’t happen immediately like you amateur traders want doesn’t mean it isn’t going to happen. If you ever develop the patience to be a real trader you will make a fortune off this bull market.

  6. Gary Post author

    Looks like Ped missed on another top call. The Canadian dollar is exploding higher and oil is doing exactly what I thought it would do. The DCL has held well above the June YCL.

    I still think the intermediate cycle will at least reach 60-62 before a final intermediate top. By the time that top comes we will have made some nice gains in our ERX position even though we were early on the trade.

      1. Gary Post author

        My ERX trade is going to end up producing a nice winner. If I had listened to the nitwits on this board I would have sold for a big loss. Instead by staying disciplined and following my plan I’m going to end up with at least a respectable win, and maybe even a huge win if XLE retests the 52 week highs.

  7. Gary Post author

    The dollar is confirming a bear market. That will push inflation in everything, also what I’ve been looking for.

    Most of the inflation will still occur in stocks but the commodity markets will now start to follow stocks upward. Once the bubble in stocks pops then commodity inflation will surge higher.

    That’s when we get our next recession, not until.

  8. Nada

    And as mentioned 1347.5 has been hit. Looks like the two counts I mentioned has now played out and the upside target idea was the winner. Time to roll over gold, job done.

  9. Jimsee

    good morning SMTBlog ๐Ÿ™‚ Just wow on gold – over 1350, 1380 in sights. This setup is a weak spot for cycles I follow – price upper limit (1380) not hit – yet time expiring….I usually miss the last bit of rally..grrrr.

    1. Gary Post author

      The rule wasn’t that the trend changes on a full moon, its that bottoms occur on a full moon. Gold would have to be in a downtrend for the bottom to have occurred on the full moon. So in this particular case there is no actionable strategy.

  10. Nada

    Ah, yes this is exactly what we want to see “Yes, technically the TREND did changeโ€ฆโ€ฆfrom hot to rip your face off.” Sentiment is your friend to the end.

  11. Spanky

    Not sure why bears are taunting/warning gold longs here. If any group knows the drill in this sector it is gold/mining longs. We are constantly weary, which is probably why almost no one has the stomach to hold for sustained periods of time.

    Yes sentiment and CoTs are less bullish or even outright bearish. But as 2010 and 2016 showed, those extremes can carry on for far far longer than most would or could predict. I’m not necessarily saying this will be a repeat of the epic 2010 and 2016 moves, but you would be a clueless moron to discount the possibility. If it turns out this rally will meet or even exceed those prior two rallies, good luck if you are short or trying to time the perfect long entry.

  12. Bigdaddy

    Spanky, you don’t need to worry about COT , sentiment or any of that head banging work. Just do the opposite of what Pedo is saying which, in case you haven’t noticed, is always the opposite of what Gary says. Pedo does the job of making Gary look good.

  13. primetime

    Spanky,
    I love the commentary. Old Turkey here, on a very long investing horizon for the PM. The emotions spewed here daily are comical. The panic is real and evident. Ped and many others continue to smoke too much hopium. They continually talk out of the wrong hole.

    PS. How is the ride on ole dusty?

    1. Spanky

      I will never ever taunt a long or short if they can provide a sound fundamental or technical basis for their thesis. I also reserve the right to respectfully disagree with either and I will state why. But anyone talking about “sure things” needs to check themselves, even if they are ultimately correct.

      1. primetime

        Well, I believe in an eye for an eye. And they will taunt you relentlessly if given the chance, so they are fair game. Some can dish it out, but they sure cant take it.

      2. Nada

        I have not seen you do this Spanky. However, I see this very thing being thrown at Ped daily. The guy has provided a viewpoint with analysis. Yet he is attacked for it? I have not seen him say he was short yet, but patiently waiting for his desired entry. Yesterday the bulls were very quite and today they are pounding their chests with their “i have been long and strong the entire time”.

        I think we are going to need more than a few days for this to play out. Lets re-visit in two weeks and see where gold is. To summarize, I am excited as anyone about the price action of gold. However, a hunt for a daily cycle low is necessary, so obviously caution is warranted at this level. Sorry, but no one is going to be able to call an exact top or bottom with any consistency.

  14. Gary Post author

    Maybe at some point most of you will recognize that I’m right about all of my long term calls.

    Commodities bottomed in early 2016.

    Gold formed a final bear market bottom in late 2015.

    Stocks are definitely in the final bubble phase of a bull market. Possibly getting ready to start the vertical phase of the bubble.

    All of these trends are being pushed by the dollar starting a bear market. Just a little common sense should tell you that there is going to be a price to pay for years of QE and the price was never going to be a strong dollar. In the years ahead we are going to have a serious dollar crisis.

    Most of you are stuck trading very short term… because that’s what retail traders do.

    But any of you who can have the patience to trade the long term fundamentals have the oportunity to make insane amounts of money.

    JNUG is going over $500 during this bull market. More realistically it will easily go above $1000.

    The ERX trade if you followed my plan will result in a nice gain and possibly even a huge winner if XLE retests the 52 week high.

    Over the next 6-12 months the Nasdaq is going to at least 10,000 and 20,000 isn’t out of the question.

    The mining stocks just experienced one of the most destructive bear markets in history. Ultimately that will produce possibly the greatest bull market in history.

    Again the vast majority of you will get sidetracked every time we have any kind of counter trend move (as we’ve seen) but the few of you that can find the discipline to trade these longer term trends will change your life in the next 3-5 years.

    1. Gary Post author

      Sentiment is getting a bit excessive in energy stocks. There will be a short term pullback at some point.

      Watch what happens.

      The amateurs will again come out and tell me how wrong I was.

      Then price will resume going up and they will again miss the move.

      Just like many have missed the move in metals. I gave everyone a perfectly good formula for success. Get off leverage but stay long. That way you will catch all of the rally and not get left behind. Then when we do get a correction put your leverage back on. So simple but instead many thought they could outsmart the bull and started trying to pick a top. This is how many traders destroyed their portfolio’s during the baby bull.

      It’s dangerous to short during the advancing phase of an intermediate cycle. It’s really dangerous to short during the breakout from a multi month basing pattern.

    2. JJHarmen

      Gary, I think most of your predictions will come true. I also believe Pedestrian will take the exact opposite view. He has already made it clear that hes sees crude and gold going down and the dollar going up. Not sure where he stands on the stock market. Gary, what is Ped’s position on the stock market?

  15. primetime

    Gary,
    I am turning into a believer. It has taken a couple years, but I can see the light. It is as good a gamble as any. As you know, I am and have been old turkey. In 3-5 years I will have a lot more or less, but I believe risk/reward ratio is in my favor.

  16. GodoftheMachine

    Ya know what I find fascinating?

    That people will buy and sell a virtual currency, not tangible mind you, dependent on an electrical grid- with no barriers to competition. And it trades at roughly one bitcoin to 4 tangible ozs. of gold.

    Bitcoin reminds me of the dot.com and tulip bulb markets. The madness of the herd.

    1. Gary Post author

      Bitcoin is exhibiting all the signs of a bubble. Another thing most don’t realize is that it’s almost impossible to cash out. The fees and slippage are gigantic.

      This is nothing more than another ponzi scheme. I predict 10 years from now people will look back and wonder how they could have been so stupid… just like people are doing now with real estate with the benefit of hindsight.

    2. Americano

      Then you’re in for a treat as your fascination will triple in 6 months time. What smart people don’t get after several dives of “trying to get” Bitcoin is that it’s actually real money. That in turn will allow you to realize how fiat gold is. I thank the moon & stars for the thievery of JNUG that they sent me to Bitcoin.
      Bitcoin is now 1% of gold market ( will be after breaking $4900 again). Think it’s gonna go to 2% ? How bout 5% ? That still leaves 95% of gold market in tact mind you…..so gold fetishists can roll around in coins or more likely hypothecated derivatives of “gold”. That’s the play.
      Price of Bitcoin is NOT a cue to babble about bubbles or tulips ( you lose your voice as it is with the stock market on that).
      Price of Bitcoin is a cue to say ok……WTF might I be missing here? EACH Bitcoin is around $5K EACH & Im the smart guy? Hell no. It’s a clarion call to grasp what you’ve missed & when you do – you’ll get it BIG TIME.

  17. Spanky

    As I have pointed out, the 7 month upward move in the miners in 2016 came down to about a dozen trading days. The rest of the trading days were nothing but churn, consolidation during which time bulls were right and bears were right on any given day. The real point is is that you have to be in to win, and unless you time the absolute perfect entry, you WILL suffer a drawdown and most likely a longish, frustrating period of choppy sideways consolidation. That’s why 3x ETFs are for absolute mugs, because no one with a pulse will be able to hold during those less than happy times.

    The more leverage you pile on, the more exact you have to be with timing, which is why it is so evil and most societies/religions have banned leverage outright over history. You can have a 100% correct thesis, but if your timing is off, the leverage will hammer you and could potentiall ruin you before you are proven correct. 3x ETFs are equivalent to going to the horse track. It is essentially like playing roulette–Russian roulette.

    1. Gary Post author

      Or you have to have steel balls to just hang on until we get to the bubble phase.

      Very few retail traders have that kind of discipline & patience though. Maybe 1 in a 1000 could do it.

      1. Spanky

        Again Gary, its about degrees. 50-100% margin is one thing (even that can ruin you) but more than that is getting you closer and closer to pure gambling, IMO.

        An investment thesis can blow up, even if your fundamental analysis is 100% correct. For example, gold could ultimately go to $10,000, but what if you have every penny in mining stocks, and at some point countries start nationalizing mines en masse, even supposedly politically stable countries like the US, sending share prices plummeting? How is holding onto that 3x ETF going to look then? Or what if you played gold using futures, and your broker or the Comex goes belly up a la MF global?

        1. Gary Post author

          I prefer not to base my investing decisions on wildly unlikely scenarios.

          Mines weren’t nationalized in the 70’s during the last great inflation. Energy stocks weren’t nationalized during the great oil bubble in 2008.

          Why would they be now?

          1. Spanky

            I am not saying it will come to pass! I was just using that as an example of how the wrong vehicle can screw you even if you nail the fundamental analysis.

            And in any event, I absolutely would not put it past the US to nationalize mines as a “matter of national security.” Sure the odds are extremely small, but to say the risk is zero is delusional.

          2. Spanky

            Collapse of Bretton Woods II and the fact we have a fraction of the gold we had in 1970 seems like pretty good justification to grab gold and potentially silver mines.

          3. Spanky

            Or what if the custodian of the ETF, say a Deutsche Bank or JPM blows up? (Yes the Fed or governments will likely bail them out, but maybe not!)

  18. Jimsee

    FWIW: my gold ‘fundamentals’ are showing , if the weekly closes here, the biggest gain in a week since may 10. Puts a damper on ‘it must correct hard’ sentiment. It could, of course, but the new money coming in under the market makes it way more risky then ‘normal’ after a large rally.

  19. dboz

    Look at the monthly DXY. It looks to me like we are starting to round out a serious bottom here. The previous two fractals I see similar we saw 14 point moves. I say if the dollar is not rebounding strongly sometime around the end of the year, it is in serious trouble and down into the 88 range in a near free fall from here. So, if the dollar drops hard I am going to say the fear that something is wrong should start popping up. Maybe we do see a major market crash coming sometime in the next 12-18 months should the dollar implode?

    1. Spanky

      More likely we will get a Zimbabwe moonshot in equity values if the dollar truly blows up.

      It’s bonds that SHOULD crash, but the Fed will never ever let that happen as they will just buy them all. Thus, the ultimate victim has to be the USD and Bretton Woods II.

  20. dboz

    Dollar crash means massive inflation. No case I can see that will be good for business. People are already stretched thin. Last thing we need is for prices to skyrocket. Economy will totally tank.

  21. dboz

    Does anyone really think the market is going to blast off here when metals are rising like this, bonds, volatility, dollar etc all screaming something is lurking? I guess they all could be wrong and a rising market be right, but I don’t think so. Just pondering this.

    1. Spanky

      In the short run sure, things could head south. But how long before the Fed steps in with more QE or Congress gives them the authority to buy stocks and ETFs outright? Do you really expect there to be a crash in nominal terms in the US markets while Bretton Woods is still in place? I don’t. Not after 2008. The Fed and US govt are “all in”.

  22. Bigdaddy

    FB is doing it’s usual “making Bigdaddy sick” routine. I think it bugs me because it’s run by a punk who thinks he’s God’s gift to the world and it’s not worth what the stock market says it’s worth. They produce manufacture NOTHING.

    1. Nada

      “run by a punk who thinks heโ€™s Godโ€™s gift to the world” . Yes is a real POS in my opinion. Think of all the money he recently diverted to a charity to avert paying taxes so he can later yes said money for his political ambitions. This little POS will be running for office soon enough.

  23. Gary Post author

    During the initial phase of an inflation everything should go up together. Thats what is happening now.

    Thats also what happened during the initial inflation phase from 2003 to 2007. Everything roae together.

  24. Kruzoe

    It may be time to make another trade soon. Of course, we all want it to be a profitable one. There is always a profitable trade somewhere ๐Ÿ™‚ The trick is to recognize one.

  25. Bigdaddy

    I just bought another 2000 SPXU at 14.78 That gives me 50000 SPXU with an average of 14.98. That’s right folks, i am betting very heavy for a correction that is going to scare the hair of the monkey.

  26. Spanky

    EXK and AG are at very interesting thresholds right here. If the MACDs on the weekly chart flip positive, they have the potential to really explode upwards. Plenty of room to run on the weekly charts.

  27. Sassybabe

    I have no positions on anything right now. I think the market is going to fall soon. I am leaning towards buying one of the inverse ETFs but not a triple leveraged. What double leveraged would be better to buy , SDS or QID? Anyone have an idea?

      1. JJHarmen

        Goild, I was not aware of SDS. Do you think the double leveraged SDS would have substantially less slippage than the 3X variety? I just bought some LABD today and noticed that LABU and LABD were both down for a period, presumably due to slippage.

  28. Kruzoe

    Goild, I wrote the software for this fairly complex system. It’s difficult to explain on a public board. Suffice it to say that when I enter a trade the system gives me a 50%, 70% or 90% chance of a profit. There’s always at least a 10% chance of losing. So far, I have lost on 2 out of 18 trades. But I’ve learned to cut my loss to less than $1k and let my profit run. I have made a trade earlier to-day and the system gives me a 90% chance of a profit. So, I’ve gone fairly heavy. By the way, I no longer post my trade. Good luck on your trade. I believe you have the right temperament to be successful.

    1. JJHarmen

      Kruzoe, I can understand why you don’t want to post your trades but can we count on you to provide direction. No one can make perfect trades but you have been quite impressive. Do you see gold moving down from here?

  29. BobUK

    I found that video very interesting about the snap-back.

    Looking at numerous PM analyst sites today and yesterday it seems that the vast majority are incredibly bullish now. Few are talking about the price of gold and silver dropping at all from here let alone going back down below $1300. If anything, lots are now beginning to talk about $1375 and even $1400.

    I have no idea of course so found the video very interesting.

  30. Spanky

    I expect tomorrow to be a nothing day, although it will probably be volatile between open and close. Point being, if there is going to be a break up or down across markets, it will start on Monday next week. Potential fireworks IMO. Commodities are certainly poised for large gap type move. Silver still hasn’t really done much vs gold. I expect this trend to end with a bang, likely next week or the week after. Again, I can dream.

    1. Nada

      Do not short it. Especially running into a FOMC meeting. I like shorting as much as the next guy, but with the SM, I only try a scalp. It will punish you given the chance.

  31. dboz

    In my personal accounts, I have no short positions as I have no patience. In my contest account I am essentially short or long something bad to happen. That is the problem with gold etc. You end up sort of rooting against good things happening. Same with being short the market. It is not something I really like, it’s just business. Right now my business is failing miserably.

  32. dboz

    If the market is going to drop, I expect a large gap down open that traps many people and creates an instant stop run. It’s too easy during the day. It will surely start after hours and create a huge opening sell off and run to really get things moving. I am not expecting a crash, I just think we need a correction of more than 1-2%.

  33. Kruzoe

    JJ: I am sitting with 8k Jnug with a $11K paper profit. What does that tell you? I’ll be placing a stop loss in 20 minutes. There’s always a surprise after market close.

  34. dboz

    Had a chance to board the train yesterday, did not. Would have been an easy buy and set your stop at break even. Just like I thought, the move up is not going to give you a chance to board. Just shorts covering and side line sitters chasing. Waited almost 2 years and now I am missing it. Amazed.

    1. dboz

      Starting to look like there will be no pullbacks at all. Just a brief drop like yesterday. Minimal time to pounce. Not even looking that bullish on sentiment either. Of course we have had low sentiment before and it still rolls over. Just about ready to pack the tent and move on from metals. Too irritating for me. Waited lost, waited lost, waited lost. Finally bailed and now THIS is the move.

  35. dboz

    Only thing I can see right now is the miners should be going ballistic with this metals move and they seem rather docile. Maybe that is the better way. Keeps things cool and slowly progressing. SNEAK ATTACK.

  36. dboz

    Oh, HELL NO, I am not buying here. Gary taught me that! Never buy this late in the cycle. Like Gary says this is where most retail buyers start to come in. At the END of the move. Then get raped on the down draft. Not doing it. There is always somewhere to make money. No sense taking a huge risk here. I thought about it yesterday but trying to remain somewhat disciplined.

    Now in the contest, I took a HUGE risk and it is biting me in the ass. NEVER chase. You get too emotional and make bad decisions.

  37. TraderPete

    It looks like gold wants to go to $1,400, since it broke through and closed above its top channel line today. If that happens, silver should go to $19 or higher, since it also broke through and closed above its bottom channel line today.

  38. Andy

    Shorting IAG. Started yesterday at the close and last trance today at $7.21. Way wayyyyyy over extended and anemic volume on this entire rise….will look to cover once it hits the 10 DMA.

  39. loneranger

    Does anyone here keep up with Joanne Klein? For those who do not know her; Google “above the green line”. I find that her stuff can be a good additional resource to trading.

      1. Pedestrian

        I have never given you to price target before. This is the first one. I have refined my technicals a little so will test this out and see how close I come. At the end of tomorrow we will see if I learned from my mistakes or not. I just gave you golds cyclical price-high before the next reversal begins. As of this minute that is just about exactly 10 dollars overhead but as far away as a moonshot given the behavior of metals lately.

        What is your target for how high gold will go?

  40. Spanky

    It’s dumb to short a bull market. And it’s dumb to go long in a bear market. The reason is is the momentum oscillators can stay pegged overbought or oversold for longer than you think possible. They can also negative diverge from price for a long time.

      1. Spanky

        I believe it is a bull market in gold and miners.

        Could I be wrong? Absolutely. But the greatest rewards come before the primary trend is made crystal clear. No risk, no reward.

        1. Pedestrian

          Well, people have been telling me that for years now and I still don’t believe it. Sometimes I wish I could be as positive as you guys who see a silver lining in every gold rally. But I guess I am just going to be condemned to be negative on this asset class until it proves itself to me.

          That has not happened yet.

          1. Spanky

            For the miners, once we take out the 2016 highs, it will be hard to argue that they are not in a bull market (higher high and higher low will have been clearly established).

    1. Spanky

      If someone can articulate a fundamental thesis as to why the stock market has topped, then why not go short?

      For example, it could be that the stock market will fall as the Fed’s balance sheet is reduced (i.e., the opposite of the fundamental situation on the way up). (Just throwing that out there btw)

      If you can’t articulate such a thesis, then shorting what is clearly a raging bull is monumentally stupid and takes you one step closer to pure gambling and away from investing/speculating.

  41. jabalong

    Gary (or anyone else), any chance gold put in a DCL on 25 Aug at Day 34 with an intraday break of the daily trendline and the 10DMA moving sideways or thereabouts?

      1. jabalong

        Yeah, I thought it ought to be on a close below. But I suppose I was wondering if there was a small chance where it doesn’t confirm. Though even if so, better to plan on the highest probability.

        I have another basic cycles question. They day count on daily cycle lows is from DCL to DCL. But the count on daily cycle highs is from previous DCL to DCH (ie, how many days into the current cycle).

        But do cycles analyst ever keep track of the count from DCH to DCH? I’ve seen some analysts broadly counting days between highs at times, but they weren’t cycles analysts per se.

        1. Nada

          No. You are being too literal. Cycles are only a tool and are as unreliable as the next. They can be stretched, shallow, half, etc etc. You need to use them with other tools. Learn support, resistance, patterns, structure (Elliott Wave) and top it off with cycles to help in your trading endeavour. Maybe, using all referenced tools keep you on the right side of the tracks.

        2. Nada

          As an example. You were using a close below the 10ma intraday to signal a cycle low. The close is all that matters. I utilize ema vs ma for additional reliability. To top it off, you need 2 closes below the 10ema to signal a top. It’s subjective and always will be. Sometimes patterns, circumstances repeat. Other times they do not. Best advice is to use all the tools I have mentioned with sentiment, COTs and psychology.

          1. jabalong

            Yes, I use the EMA too. That two closes below is good info, as I’ve noticed you do often get once close below as a kind of fake out.

            Thanks for the advice. Am not taking cycles as gospel, just trying to understand them better. I look at some of the others, but not all. Good food for thought.

  42. dboz

    Metals are not going to pull back. I am really surprised how bad miners are lagging. We are nearing last year’s highs in gold and miners are no where even close to the levels we were at then. Not sure what to make of it. Volume seems to be modestly up but nothing like early 2016. Seems no one cares.

    1. Dday

      “….Metals are not going to pull back”. falling into the same trap again, higher highs mean metals can only go higher. Could the miners lagging possibly mean that pm’s are due for a correction? Rather than the miners are due to rally. I’m not having a go just an observation…..

    1. ARends

      I mean some opinion will be appreciated, the point possibly is that we never know where the top is , and we surely passed the previous tops on recklessness of investors before previous crash

    2. Gary Post author

      I’ve been seeing these kind of articles for 8 years now.

      When the ROBO ratio starts showing massive public participation similar to the last two bull market tops then I’ll start to worry.

  43. Pedestrian

    Copper finally cracked lower. Down better than 2% today. I have been waiting patiently for this day and now we are here. You doubted me Gary but I warned you the top was imminent. We can’t always get the precise number or the day but this is close enough.

    1. Gary Post author

      Well you said the top was in, not imminent. And then copper just kept going higher. You’ve been trying to call the top in gold since 1275.

      You are missing very nice trending moves by trying to fight the advancing phase of intermediate cycles.

      I took profits on our metal positions in the premarket for a very nice profit. For the life of me I can’t see any good reason to have missed that trade when we were clearly in the advancing phase of the intermediate gold cycle.

      My opinion: You need to learn how to trade the long side of the market. It’s much easier than the short side, plus the big money is always going to be going long, not selling short.

      1. Pedestrian

        You are out of your depth Gary. I have written quite a number of posts on copper in the last two weeks saying we were headed for a major reversal and you argued with me every last step of the way. Now you are trying to say I missed it. Are you freaking brain dead or something?

        You need to stop being so arrogant all the time and learn to appreciate that there are times other people see things that are not visible to you. What you should have done in your post above was acknowledge that I was in fact correct identifying the top.

        Instead, you ignorantly just pile on more criticism. This is exactly why people dislike you Gary.

        1. Gary Post author

          I’m just debating strategies with you.

          When you started calling for a top I pointed out that copper was making a nice breakout above the 200 WMA. That’s not something I would want to fight.

          Yes at some point it will pullback, but the odds now favor that the bull trend is intact and price will not be going back below the 200 WMA. So rather than fighting to make a few pennies shorting a bull trend it’s safer and easier to make money buying dips.

  44. dboz

    Maybe we could see a couple days of pullback here and create a good buy opportunity. Looks like something is in play for the metals here. Maybe the dollar finally takes a bounce.

  45. Lenapowich

    Dboz, you really are a likeable fellow. Your frank honesty is refreshing plus I enjoy reading your commentary. I hope you get into a winning streak soon.

    1. Nada

      Why do you think miners would ignore golds move? I need to go check sentiment levels, but I clearly see they are in the stratosphere this morning.

      As I see it, gold is in a rising wedge and has had 5 waves. It looks bearish to me; using pattern, structure and harmonics and one stretched cycle; A break above/below and test back will be the best spot to get long/short.

      https://i.imgur.com/eRh949o.png

      1. Christian

        I’m not much of an Elliott Waves kinda guy but you really have to squint in order to spot wave 3 and 4 on this one, don’t you?

        And I agree with the rising wedge – not good for Gold – but then again.. I pointed one out in the Miners a couple of weeks ago and look what happened, Lol We got F*cked!!

        1. Nada

          Yes EW is very subjective, but its good to have as a tool. Yeah I would not be surprised for this freaking thing to break out of the rising wedge to the upside, lol. In that case, I would wait for a test back of the b/o and long. God help us if that happens ๐Ÿ™‚

      2. Jimsee

        iindicators I follow show tremendous underlying strength, the miners will be driven by quants who direct funds to find value trends, these are shifting towrds favoring miners even now despite gold’s chop up or down.

        1. Nada

          Not buying it. If gold heads into a DCL, miners will be punished. Hopium is all over the place in regards to these prized miners. A DCL should fix that. Jimsee, not saying you are full of hopium, so no disrespect there. I am referring to sentiment levels.

          1. Jimsee

            thx nada – good to have various opinions – that’s why I am here ๐Ÿ™‚ I wil point out that my indicator-based analysis is *attempting* to front-run a sea-change – *new money* coming in in proportion to swamp the existing base of traders – perhaps the old needs to be washed out a bit foist. I can certainly be wrong – price will announce that loud and clear – but the setups for real fundamental drivers to change for months-years doesn’t come around that often. Like a good poker player I have to take that action with good money management.

  46. Lenapowich

    I don’t think the miners are going to pull back much before another launch higher. I am considering adding to my GDXJ holdings that have been quite rewarding so far.

  47. Christian

    Gary โ€” instead of wasting your time with Pedo, answer me this: You’re always criticizing others for picking a top, so why are you exiting your unleveraged Miners position??

    1. Gary Post author

      Keep in mind I’m not shorting, just taking profits as gold hit a major resistance zone this morning. I’m prepared to jump tight back in if I’m wrong.

    2. Spanky

      It’s called not practicing what you preach.

      Not saying that Gary won’t come out a winner on this, but would be too hilarious if we get a massive gap up next Monday. Commodity complex (GCC) certainly looks like it wants to make such a move and the mining stocks could go along for the ride.

    3. Spanky

      He did the exact same thing in early 2016 and missed a very large chunk of the move. He tries making up for the underperformace by using 3x ETFs, but he would have done sooooo much better just holding a full position of vanilla GDXJ (which he happened to have at the exact bottom). Oh the irony.

      1. Gary Post author

        We already booked a huge gain from the trade. How could I not come out a winner?

        And it wasn’t me that missed the baby bull.

        I was one of the few telling people to ignore the bearish COT levels because during major trend changes the COT’s can be wrong for a long time.

          1. Spanky

            I am Old Turkey since Oct 2015. I’ll be taking a 20% capital gains on a 10,000% move in a few years.

  48. Wiggum

    Poor poor poor SMT & Gary…

    As soon as he starts gloating that his garbage ERX is now looking like a shiny diamond, it reverses course. Of course, Gary will still hold on to this turd and set his eyes on breaking-even after months of holding the stupid paper trade while his subs are puking every day.

    Nice work!!

    1. Gary Post author

      Right on cue.

      I said yesterday that the energy stocks were getting a little too bullish on the short term sentiment and would be due for a pullback of some kind. I predicted we would see this exact response from the usual crowd.

      If only there was some way to bet on human nature…

      1. Wiggum

        When someone brags about being right, berates others for not holding destroyed trades for decades and then announces he’s “showing the trolls” by looking forward to breaking even, what can I say, this “advisor” needs to go and register for some economics/finance courses.

        1. Christian

          Except that I only brag about being right when I am right because it feels good to get it right. And breaking even is the LEAST I can do when I mess up a trade doofus.

          So what if I was early? It happens. At least I don’t hide it, and at least I don’t panic and sell at the bottom like you and all the other Goombas. I exercise a little thing called PATIENCE.

          1. Wiggum

            Bragging comment was not directed at you Christian, unless you’re Gary posting on two accounts which wouldn’t surprise me.

  49. Spanky

    In the miners, if this is going to end up being a “pretty” rally like the ones in 2010 and 2016, I think the 50 period MA on the 1 and 2 hour charts are as good a point to get long as any.

    For GDX for example, the 50 period MA on the 2 hour chart is 24.26 and rising sharply.

    Obviously the risk is that once the 50 is hit, the 100 period MA will be next. Anything is possible, but I remain cautiously optimistic that this is a “special” rally, similar in character to 2010 and 2016.

      1. Spanky

        Roger that.

        But for me, this isn’t about trying to pick an exact bottom. It’s simply about picking a lower risk entry than today. I’ll stick by my call that the 50 period MA, especially on the 2 hour chart, should be extremely strong support for GDX.

          1. Christian

            You’re trying to cherry pick in order to construct an argument but you’re forgetting the obvious.. we’re now in the adolescent phase of a bull market. The rules are SLIGHTLY different ๐Ÿ™‚

  50. JJHarmen

    Gary
    According to this article (http://www.businessinsider.com/who-actually-owns-the-stock-market-2016-5), the biggest holder of US stocks are the various retirement funds at 37%. That is the public and that is shrinking as the boomers retire and stop contributing. The person sitting behind their computer, trading ETFs, hardly registers.
    Where do you think the money is going to come from to drive the stock market into a bubble? Foreigners?

      1. JJHarmen

        QE ended nearly 3 years ago. If QE 4 were to be initiated, there would be fresh money to drive a stock bubble. As it stands, the FED is shrinking stimulus, not expanding. That is not a recipe for a bubble.

        1. Christian

          It’s called the domino effect JJ.

          The bubble will be THE RESULT of QE and the devaluation of the US dollar; it doesn’t matter that it “OFFICIALLY” ended 3 years ago. The damage has already been done.

  51. Spanky

    Commodities (GCC) look very good on the weekly chart. The set up is there for an explosive move next week to test at least the upper bollinger band/50 WMA. I can’t see such a move being anything but bullish for the miners.

    Perhaps the gap created this week gets filled next 1-2 weeks, but there is a very good chance it doesn’t get filled, especially if we start next week off with a bang. I will admit I will be pretty disappointed if it drops back to the 20 WMA and decides to consolidate for longer.

    http://stockcharts.com/h-sc/ui?s=GCC&p=W&b=5&g=0&id=p47462949467&a=543458421&listNum=1

  52. Christian

    Spanky โ€” Youโ€™re trying to cherry pick in order to construct an argument but youโ€™re forgetting the obvious.. we are now in the adolescent phase of a bull market. The rules are SLIGHTLY different ๐Ÿ™‚

    1. Spanky

      2010 was part of a baby bull???

      The bottom line is you still have smart people like Ped who do not believe this is a bull market. Think about all of the retail sheep that have gotten their asses handed to them trying to go long this sector since 2011. When the coast is crystal clear on the charts for every time frame, retail will pile into gold into a blow off IC top. If anything, this leg could be even more powerful than 2016 because retail absolutely did not participate.

      I’m not calling for some sort of moonshot or epic rally with certainty–I am prepared to ride the miners back down to the July lows if it comes to that. But to say that gold and especially the miners are going to operate in perfect daily and intermediate cycles right now, with absolute certainty, (at least enought to short using 3X ETFs!) is extremely naive.

      1. Christian

        I didn’t say anything about 2010 Spanky.. I was just merely pointing out that Gold is currently in the adolescent stages of a bull market and will behave differently then 2010 or any aforementioned date.

        A 50% retrace and a break of that trendline is very likely in my opinion.. but then again, my opinion means bananas on this blog so…………… nevermind, Lol!

    1. Troy

      BD,

      I’m holding my Oil and Energy stocks. They needed to cool off a bit but they should resume their rally soon. FWIW.
      Also, holding my TQQQ and SVXY too. Sold JNUG on Tuesday.
      Too much red on my screen, may just turn off the monitor until Monday. :-O

      Troy

  53. Bigdaddy

    The slightest pullback in gold or crude causes their related stocks to crater while the rest of the market holds up just fine no matter how bad the news is. What is that all about?

  54. Christian

    Looks like LABD is ready to bounce..

    I’m gonna join JJ on this one and see if I can make a bit of lunch money ๐Ÿ™‚

    I’m only buying 500 shares btw @5.10 so no biggy..!

  55. bluelagoon

    Looks like a bear’s day today with oil, gold and Naz all down. I would’ve thought gold would go up as the mkts go down but that’s just too mainstream I guess. ๐Ÿ™‚

    Notice miners hit hard today while Gold not as much….is this the September turn? Early month winners become losers? Seasonally – GDX, USL are weaker this month.

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