BREAKOUT – Value Line Geometric Index

The Value Line Geometric Index ($XVG) is an equal weighting of all the stocks on the NYSE. It has been consolidating sideways for almost 20 years. In the last several months it has broken out to the upside. This suggests a powerful and sustained move higher in the stock markets is likely to take place, and soon.

Like our new Facebook page to stay current on all things Smart Money Tracker

135 thoughts on “BREAKOUT – Value Line Geometric Index

  1. jacob2

    Gary, Where are we ? A question I’m always asking my self. A secular bull no doubt but how long does it go and how does it end? Very long the sm and subscribed to your thesis that we are approaching a top of some sort …. soon. Now, not so sure. Caught Jim Paulsen and Jeff Saut ( mainstream technicians), long since 2009 ascribe to a much longer bull market then any anticipate, 6 to 7 years:

    https://www.cnbc.com/2017/09/29/strategist-jeff-saut-this-bull-markets-got-another-6-to-8-years-left.html

    Something to think about. Stay flexible. Thanks for the big picture up date.

    1. Gary Post author

      I’m tracking sentiment levels to determine when the bull may be over. As I’ve shown in previous videos the ROBO ratio is nowhere near euphoric levels yet.

      Also watching for bubble behavior, such as a 100% move in a year or less.

      1. ocram

        Gary,
        since you are thinking now that the SM bull could last for minimum another couple of years ,what will happen to gold (and commodities)in this timeframe?
        I know you think that gold is in a new bull market,but how can it be if the SM will continue to rise?
        Could miners go up along with the SM while the price of gold remains flat ? (it happened in the 90’s)
        Or could all things go up because of the enormous amount of liquidity the CB are creating?

        1. Gary Post author

          The norm over the last 17 years has been for everything to go up together. Look at 2003 to 2007. Gold and stocks went up together. The same from 2009 to 2011 and again from 2016 to the present.

          The inflation is present it’s just jumping around from one asset class to another. Right now it is focusing in the stock market. Once that is finished then it will focus somewhere else. Probably commodities.

          1. optimal

            Gary,

            I know u are focused on stocks. I am with you. However, if Gold breaks 1300 with conviction, will the decline be over and signal where we can open long positions for the long term?

          2. Gary Post author

            I think you can open positions for the long term at any time. But I don’t think the intermediate cycle has bottomed yet.

            The time to buy isn’t at a breakout. As we’ve seen breakouts rarely deliver big trending moves in the metals. In the adolescent phase of a bull market. the pattern tends to be a stair stepping pattern. Waiting for breakouts in that environment will only cause you to buy close to a short term top.

            Buying breakouts works best during a baby bull and during a final bubble phase. The middle part of a bull market you need to buy cycle bottoms and sell into breakouts. This would be a good topic for the next video.

      2. vin

        Gary you are of the opinion that the SM is headed straight up from here for a year or so and then the BUBBle bursts and SM will fall like a rock.

        The second part of your scenario is a buying opportunity a couple of years thence.

        I have no comments on the first part except that I hope you are right because I will follow you.

        Though I completely disagree with you on the second part. If the first part of your scenario happens to pass, then SM is done for a loooong time. Decades? Maybe for ever.

        When the collapse occurs, whenever it happens, it will take everything down with it. It will be drastic. It will be fire works. It will be remembered for ever. It will change the human thinking, a new era will emerge.

        Please don’t equate the SM BUBBLE, particularly after a spectacular rise (as predicted by you) with other (tiny) bubbles. It is not just the SM it is also the derivatives attached to it. Last real collapse occurred in 29 and not in 87 or 2001 or 2007/2008. Those were small events, shadows of the coming EVENT. Now the stage is set. Numerically speaking the present economy (system?) is beyond comprehension.

        Good luck.

        1. Gary Post author

          A buying opportunity for gold once the stock bubble pops.

          I think the liquidity will come out of stocks and flow into commodities focusing mostly in the metals as I expect we will then be in severe currency turmoil.

  2. trendyfollower

    Gary, you hinted on this before – and I think this is on even fewer people’s mind: SM and interest rates going up together. Eventually, this could cause a crash – the assumption that as risk assets like stocks fall, T-bonds will go up (lower interest rates). Too much money invested in these risk parity strategies. This could be it next time. But right now let’s concentrate on riding the bubble and making money.

  3. earthkitten

    Thanks Gary. The charts you are showing are
    screaming from the mountain top “BUY!!!” People
    need to forget about gold & oil for a while. We may
    never get an opportunity like this again in our life.
    But like you said Gary, many will miss the boat.

  4. Steffmeister

    We are getting closer to a correction in stockmarkets, we are at the top of a final wave 5 up …

    October is a traditional month for a correction in common stock.

    The rise in SM is just a compensation for a declining dollar, no real growth, just a walking zombie. Buy real assets instead.

    Almost everyone here is bullish right now, when all of you are thinking the same nobody is thinking..

    We are at the top of the range:
    http://farm5.staticflickr.com/4510/37517916606_9f3612e048_b.jpg

    Is this just the beginning of the bull? 1-5waves is just the first major wave 1 up, this would mean that the crash is going to occur as a 100 year jubilee of 1929 … a major wave 2 down could go on for 2-3years.

      1. rborna

        Be careful listening to Daneric, he doesn’t know what he is talking about. He is a Permabear. He was talking about stock market doomsday in 2009-2010 when the market exploded after March 2009. I lost money listening to that idiot.

    1. Bluebellkid

      Actually September is the worst month for the SM – October has the biggest and most memorable selloffs. And right now the distribution days are low and institutional selling does not seem to be a problem – that of course could change in the coming weeks.

    2. Gary Post author

      Yes historically Sept is the worst month. Also historically when Sept is calm October also tends to be calm.

      It’s like I said back in August. Whereever the summer/fall ICL occurs the rest of the year into December tends to produce the best gains. It came in late August this year.

      I really don’t know why anyone pays any attention to the EW nonsense. It’s the single best tool ever invented for trading after the fact. Unfortunately I don’t think anyone has a time machine and can go back in time so it’s completely useless.

      Human nature is following the script perfectly. There is a top caller every other day just as expected.

  5. earthkitten

    Hey Gary. Can we throw that Elliot Wave Theory out the
    window in this market environment? Ive heard analysts talking
    about being at the top of some wave for months now & they
    keep getting it wrong.

    1. Gary Post author

      EW is completely worthless. These weirdo’s always have two or three alternate counts. And they’ve perfected the art of squinting to the point they can always see what they want to see no matter what the charts say.

      Ignore that nonsense.

      1. Steffmeister

        Unintelligent post! You sound scared from real knowledge. I’ve been following a skilled EW frpm Sweden and he has multiple scenarios yes but they are also connected to a price, if we close above a price a bullsih scenario is in play and it works very well, takes the emotions out of the trade. The same thing for a correction, of course.

        You’ve used a-b-c ew terminology yourself in the past, so that makes your post even more stupid.

        1. Gary Post author

          ABC correction. 123 correction. It’s all the same. It has nothing to do with the EW nonsense.

          All I’ve said is that a larger degree ICL in gold should have at least 3 waves down.

          That makes sense as a larger degree correction needs to keep bulls hoping and holding. The counter trend rally is what does that. Then the next leg down causes everyone to panic and sell at the bottom. That’s when selling is exhausted and smart money starts to buy.

          Alternate counts are great for claiming a perfect trading record. One of them has to pan out. Again this is why I started the challenge. Use your EW voodoo and get into the contest and we will see whether it works or not.

          The caveat is of course you can’t trade an alternate count. In the challenge you have to place real trades along with percentages. πŸ™‚

        2. vin

          “real knowledge”! LOL! Is mambo jumbo “real” knowledge or “unreal” knowledge?

          After reading your post I couldn’t stop laughing, specially when you were so serious.

          Thanks.

          1. vin

            There are patterns both in nature and human behavior. But, to say that we have cornered them with simple algebra is a bit stretch of imagination.

            In fact that they are finding that there is order even in the behavior microbes.

            btw have you heard about akashik records, a new age mambo jumbo derived from ancient Hindu/Buddhist tradition? Or, for that matter the concept of yugas? They were nothing but attempts to tame the patterns that govern the phenomenal world.

        3. Nada

          Agree. EW is very useful and being able to reconigize structure is significant importance. It’s just another indicator though and certainly can be very speculative with the counts and why you see alternate scenarios presented.

          What is not subjective though?

          1. Steffmeister

            Tx Nada, when a limit breaks it’s almost like having a crystal ball in your hand!

            It’s not easy to explan the third dimension for 2dimensional folks.

            By real knowledge I mean that charts are fractal and EW tries to figure out the pattern.

            I think the ICL-DCL stuff that Gary uses is “EW for dummies”. A simplyfied watered down version.

          2. Gary Post author

            Then get in the challenge and let’s see real time calls with percentages and we’ll see if anything you say has any merit. The days of these empty boasts are over. If you want anyone to take you serious you have to prove it with real time calls.

  6. Steffmeister

    EW is a wonderful tool to use, but it requires a fully functional brain. Thats why so many got stock in all the wave counts. Every wave is measured with a fib retracement tool, the same one as Gary been using on a regular basis, so he is barking up his own tree.

    1. Gary Post author

      As anyone who has ever used Fib’s knows these also are not perfect trading tools. Many times markets turn at points in between the Fibs. I just use them as potential targets but in real time it’s impossible to know whether price will make it to the 38, 50 or 62% retracement, or maybe even deeper.

      EW is nothing more than an exercise in staying busy. During a move you ask 10 EW practitioners and you will get 10 different counts. Everyone of them will say the same thing. You have to know how to read the charts correctly. They all assume that they are the only one who really understands the “correct” way to count.

      After the fact though all 10 analysts will come up with the same count as proof EW works.

      So like I said, EW is the single best tool ever invented for trading the markets…in hindsight.

      There used to be an EW analyst here by the name of Paul Marks. By all accounts everyone agreed that he knew EW and had perfected it to a very high degree.

      He consistently lost money over and over.

    2. spectrum2105

      “Pareidolia” is a psychological phenomenon for seeing patterns in random data. Faces in clouds, a human figure standing in the bushes at the Grassy Knoll. Or, if you zoom in close or far out enough, whatever count you want with EW.

  7. Idontknowwhatimtalkingabout

    Every blog, trader, website, TV show I look at is calling for 2800, 3000 and above S&P. Where are these 9 of 10 newsletters? lol

    1. Gary Post author

      Show them to me.

      The only person I’ve seen calling for much higher prices is Chris Ciovacco & Armstrong.

      Intermediate sentiment is neutral. The ROBO ratio and Dumb money confidence level aren’t even at levels that trigger intermediate corrections much less a bull market top.

      1. vin

        Gary, I wouldn’t know the statistics but for sure there are many who are calling for a breakout here, upward. In last could of weeks I have received many letters saying that one should be ready for an upward thrust here. Even some MS analysts are in agreement.

    2. Adrian

      Same here, Jus Tom McClellan and Demark are signaling top or correction ods, and are among the best, not permabear/bulls, but newspappers are as bullish as they are before corrections.
      Even Harry Dent is no longer saying that here’s Te Top right now, and not for idiot, but because his demographic account do not value 15 agers, as right now we have in USA, just like the 1970’s, and is the way relentless markets are responding, with my top calculation by 2019.
      Right now I’ve a very small Short position in SM USA 500 CFD 1X300 with 20 bucks just in case.
      That’s because the ECRI Weekly Leader Index has a strong divergence with SM since a while, coming fron +10 to -0.1.
      God trading all

  8. zkotpen

    He was a giant, six foot nine at least, wearing a bronze helmet and full body armor. He carried a javelin, a spear, and a sword. An attendant preceded him, carrying a large shield. The giant shouted out: β€œChoose you a man and let him come down to me! If he prevail in battle against me and strike me down, we shall be slaves to you. But if I prevail and strike him down, you will be slaves to us and serve us.”

    I think we know how that story turned out.

    The analogy is clear is day.

    1. zkotpen

      We will see gold below 1046.

      It’s gonna take a few years.

      Warning to Goliaths:

      Be careful:

      Javelin, spear, and sword do not work in “modern markets”

      In fact, the only place they work is in modern museums

      of ancient history.

  9. zkotpen

    Pre-FOMC forecast from last Thursday for GDX is tracking right along, as evidenced by the fact that GDX did not make a new low on Friday whereas gold did. Once again, I’ve seen no signal of a “daily” cycle low thus far.

    No modifications to Thursday’s forecast at present.

  10. Pingback: Economics & Investing For Preppers – The Prepper's Daily

  11. zkotpen

    vin,

    “That is fine as long as we see gold at 5021 before we see 1046.”

    Not likely. Possible, but not likely.

    But let’s keep it in the present: You’ve seen my GDX forecast from last week — still on track for FOMC minutes this week. Friday’s bounce came as no surprise (what I called likely wave B of D of triangle, even as gold was still languishing in the doldrums). B of D will finish up & then down to C of D, to complete that wave, likely “daily” cycle low. (Though there’s nothing “daily” about it).

  12. zkotpen

    Gary,

    “EW is completely worthless.”

    Let me remind you when I downloaded Prechter’s video course:

    April 17, 2013.

    Remember your favorite year?

    I just looked around the premium site and asked myself: Who’s crying and who’s cheering? Who’s raking in the the profits and how are they doing it?

    That was also a year when you were a stock market crash caller yourself, as others have pointed out here from time to time.

    You did call wave A of the current bear market rally in gold — well done.

    But you don’t have a time machine to go back to October, 2012, and reverse all those calls for the stock market to top and gold to go to directly to $5000.

    I realize sometimes we’re right and sometimes we’re wrong. No big deal about that.

    But hey, you in the glass house… stop throwing stones!

    1. Gary Post author

      Here’s the difference my friend. I make real time trades and none of these EW analysts do. In fact almost no newsletter writers do. So there’s no way to really judge if any of them are making money. Like I’ve pointed out many times. One can produce a winning trade 90% of the time and still lose money. One can also win 20% of the time and make fortunes.

      So if anyone want’s to convince me EW has any merit other than as a hindsight trading tool then get in the challenge and prove it. Alternate counts don’t fly in the challenge. You have to choose one. If at the end of the year all those alternate counts produced nothing then we can regulate EW to the trashcan where I think it belongs.

      Until then here’s your chance to prove me wring.

        1. Jimsee

          bluebell – options make this eminently possible. 1 proper trade in the last 5% of a bubble or a crash with premiums exploding can make more than a lifetime of 8% plodding.

        2. Gary Post author

          Blue,
          If you’ve been trading as long as you claim you have to know this is true.

          As an example the Bollinger band crash trade has a winning percentage of 86-90%, yet it doesn’t have a positive expectancy. Why?

          Because the winning trades tend to be small, while the losers are big. The few losing trades overwhelm the many small winners.
          Day trading is the same for most people. They make a bunch of small winning trades then they hold one losing trade a little too long and wipeout all the gains.

          1. Bluebellkid

            Well, I’m talking about stock trading period – not options, not BB crash trades or any other exotic trading. If someone has the savvy to pick 9 out of 10 winners then they will have sell rules that prevent them from losing it all on one trade. And the only way you can make fortunes only being right 20% of the time is by having sell rules which you don’t Gary.

          2. Gary Post author

            Our stops are below cycle lows where they should be.

            Unless placed correctly stops can be a very effective weapon for destroying ones portfolio.

            Surely you have to know this stuff.

      1. victor

        My experience not even close to your Gary, but my total 9 yrs trading and 3-4 yrs following EW charts I can tell EW is a way to lose money in a planned manner, EW look visually good and understandable for novice maybe that’s why it’s so popular.
        People, please do not mix counts like A-B-C or 1-2-3 as EW, sometimes Gary use it.

  13. zkotpen

    Gary,

    You can choose your market analysis system, and, following your own numbers, you can succeed by flipping a coin, if you have the right strategy.

    I am learning from the following guidance:

    “[Trading] is a pattern recognition numbers game. We use market analysis to identify the patterns, define the risk, and determine when to take profits. The trade either works or it doesn’t. In any case, we go on to the next trade. It’s that simple, but it’s certainly not easy. In fact, trading is probably the hardest thing you’ll ever attempt to be successful at. That’s not because it requires intellect; quite the contrary! because the more you think you know, the less successful you’ll be.”

    As you can see, that guidance requires that market analysis — chosen by the individual trader to suit their preferences — (1) define the risk, and (2) determine when to take profits.

    Your challenge not only does not allow defining risk, but forbids it.

    Your challenge also restricts profit taking by not allowing it on the same day — that could have been disastrous on a day like Friday, or any other day with a significant reversal.

    If you were my trading coach, then I suppose I would do it your way.

    But the challenge is a red herring in the present discussion:

    Why the need to throw stones?

    You can be successful at what you do without sword and spear and javelin.

    In fact, I’ll go out on a limb: You would be MORE successful at what you do if you abandoned those relics altogether — donate them to the Smithsonian or something.

    Think about it: How do you accommodate innovation?

    There were no smart phones or personal computers when you were a child. Those things did not have immediate popular appeal, but rather evolved into it. It took at least a couple of decades for the mobile phone to become computerized and deified. The personal computer took about a half century. Etc. among so many innovations of the modern (i.e., science-based, calculus-dependent) world. At what point do you stop fighting them and adopt them? And that’s for physical objects in the material world, which change much faster than beliefs.

    That comes full circle to the trading. Success at trading, I’m learning, is a lot more about beliefs and attitude than it is about market analysis. Vital to correct beliefs and attitude is the belief in uncertainty, and that means defining risk is an absolute, it must become second nature. If the trade doesn’t work, it’s no big deal. You just get stopped out at your PRE-determined price level, and simply move on to the next trade. You monitor your win-loss percentages, as you hinted at, and you keep the losses under tight control, while allowing your wins to reach their optimum level (which is always less than 100% of the winning move), thereby causing each win to be substantially greater than each loss. That way, even if your win/loss percentage is not the best, you can still be successful. In order for that to happen, you must get stopped out when the trade qualifies as a loss, you shake it off, and move on to the next trade. Do that as often as you can, and your income statement will come out in the black overall.

    That is the system of belief that I am working very hard to instill in my own mind and behavior. Once I get that nailed down, it will soar on my innovative approach to market analysis. Spear and sword and javelin will not help with that.

    1. Gary Post author

      Complete nonsense.

      You define the risk. Some traders in the challenge are swinging for the fences on every trade. Some are taking small bites.

      I’m trying to give my subs the best advice with the least risk. I only swing for the fences when I think an asset is at an ICL. Yes sometimes I miss like the energy trade and the ICL takes a lot longer than anticipated.

      You can either enter the challenge and earn some credibility or not.

      1. JJHarmen

        Credibility known to who besides yourself? The names of the leading contenders in your contest mean nothing to anyone else, not even those in the contest. Without handles, no one has clue, except for you Gary. It would seem that you are the only beneficiary by gaining the knowledge of what the crowd is doing.

        1. Gary Post author

          I have no idea what people’s handle is unless they tell me. If you want to be known by a handle then email me and I’ll attach the handle to your account.

      2. Nada

        I really do not understand why one would not enter the challenge. Gary is offering a free prize of 500 dollars or lifetime subscription to his services, how can one pass that up?

        Who cares if the rules are not to your exact liking. It certainly is not “too much work” to send him an email when you see a setup you like. Using the “no day trading permitted” as your excuse is a cop out. You can’t expect Gary to input data at the frequency of 20-30 trades a day, so you adapt a bit to give yourself some creditability.

        If you don’t want to enter thats fine, just don’t come in here and trade in hindsight and not be expected for someone to call BS. For those that are posting in real-time and not entering the contest, then this does not apply as you are providing creditability.

  14. Jimsee

    if you trade options long – ur sweet spot for trend/cycle trading is less than 50% – let the big ones run with partial positions (free after selling cost portion) is where all the money is made – without this ‘option’ I don’t know why anyone would spend a life studying trading – hell – become a vet and work with animals or something else rewarding and less stressful.

    1. zkotpen

      What’s concerning is:

      Why did he choose to pull out the sword and spear and javelin in the lead up to a FOMC minutes week?

      Why step out of the glass house and start throwing stones on that particular weekend?

      What is the benefit of doing so?

  15. JJHarmen

    The main stream media is full of bullish news on the economy and the SM. Sure, there are the die hard bears who are predicting a crash every chance they get, like Peter Schiff, for example, but Gary is not alone with his call for an imminent huge upside move.

    1. Gary Post author

      Of course I’m not the only bull, although I’m one of the few who think we have a huge move coming. As I’ve been saying intermediate sentiment is about neutral right now.

      Until it gets excessively bullish and the COT reports confirm I’m not going to start looking for a top. And if this is a vertical phase then sentiment will stay excessively bullish for a long time.

      Go back and view the ROBO ratio in several of the previous videos to get an idea of what a final bull market top looks like.

  16. Troy

    Doubled down on JNUG at 19.37 and added a little more GUSH pre-market at 22.45. (that was a sweet fill, but only half my order filled)

    Looking to add some more GBTC at 700 – missed it this morning. This position is only 2% of my portfolio.

    TQQQ breaking $120 was nice to see. I think it usually splits 2 for 1 when it gets around this level.

  17. Jimsee

    why would any serious trader not want to use options? let’s see…My best opportunity to manage risk and create outsized gains as a part of my trading portfolio – naaw – that’s for the other guy???? Do you trade or run an ice cream truck for a living?

    1. Duuuuuude

      I have studied options but found that most of the time, the people who make money consistently are the ones who write the options. You have to time entries well, pick a good time horizon, and even if correct can loose money due to volatility crush. I know people who make money buying them but I was always frustrated by them. For myself, the easier, more straight forward way to trade was just to use futures. The risk is a lot easier to manage. Using them along side cycles and sentiment make them profitable for a simpleton like myself.

    1. Nada

      Morning Jimsee. I might have missed, but can you expand a bit on your Oct 12th date? I gather you are expecting a 10 day uptrend if gold hold these levels on said pivot date or what is your summary. Agreed on options as they are the ultimate hedging tool and I typically trade exclusively. Buying yourself time is the most important principle in my opinion, unless using as a hedge.

      As Duuuude pointed out, writing options in a non trending market is ideal scenario – theta can be your friend.

      1. Jimsee

        the next ‘bend’ of significance is the 12th in cyclic work, if we do not elect a close above 1320 by then the odds heavily favor a 7-10 day downtrend from there. much like sep 14, this bend will indicate a stronger trend UP if it’s associated hi is meaningfully broken.

  18. Jimsee

    hell – waddyIknow – I’m buying oct 31 way below mkt spx crash puts,lol. 30-1 too good to pass up on off-chance this volatile mix of gaseous politics condenses.

  19. zkotpen

    Gary,

    Good points, but why the need to be combative?

    What is the driver?

    Again, you can be successful — even more successful — at what you do without going out on the warpath.

    What’s the advantage of all the combat?

    1. Gary Post author

      Whenever you come up with a nonsense statement like this then I’m going to require you to enter the challenge and prove to us that you know what you are talking about.

      “Your challenge not only does not allow defining risk, but forbids it.”

  20. Steffmeister

    I am no real trader, I am working full time and a little bit more than that …

    However I bought my second lot of JNUG on Friday, my forecast was spot on:

    https://www.tfmetalsreport.com/comment/636417#comment-636417

    I were waiting for my flight home at an airport in Stockholm, when I bought the second lot in JNUG on my mobile … due to a struggling wifi I missed the bottom by half a dollar …

    My forecast for the rest of the year in Gold
    1. Rally from here to a celebration date, I will enter the challenge here …
    2. After the 911 celebration we will turn down into a very dark place

    I will keep my edge to myself, I will not contribute to your blog more than the above few words πŸ˜›

    1. Nada

      Hey Steffmeister, what is the “celebration date”? You mention after the 911 celebration we will turn down, but I am a bit perplexed on what you define as 911. GL with your trade.

        1. Nada

          I am in GLD and SLV options for late Nov and Dec expiration – various strikes. I believe miners will outperform gold in this cycle, but the 64k question is will the cycle be LT or RT.

  21. Goild

    Good morning,

    Christian,

    So you like the concept of lunch money?
    I think it is a good one. It provides direction and challenge for one to make money today, toady, and today.

  22. Lenapowich

    I hope we don’t get another rug pull with GDX today. The miners struggle just to pick up a few percent only to have it wiped out in a few minutes . Then there are the tech stocks that go up effortlessly, just like they are doing today and keep their gains. It’s frustrating.

      1. Gary Post author

        That’s what I’m doing with my money, and what I’ve been advising people to do for months and months.

        I’ll take safe steady gains over difficult trading any day of the week and twice on Sunday.

  23. Lenapowich

    Can anybody explain why the day’s highs for silver and gold are usually before or after regular US trading hours? It seems like we are always watching gold back off from over night highs.

        1. Gary Post author

          No not really. If you are a novice Trader I was wondering why you would pick such a difficult sector to trade. I’ve been doing this a long time and I find it difficult to make money in the metals sector. A much easier sector for your internship would be the stock market where you have the FED protecting your back.

    1. Nada

      Reaction from different markets. Asia and London do their own thing. At times prices like to come down into comex open, because those boys are going to get their entry one way or the other. It’s a difficult market to trade Lenapowich, but if you know its behavior it can be a very profitable sector. With that said, its also very high risk.

      Gary is giving very good advice for the PM sector. He is being cautious due the cycle timing and why you see some disagree with him, because they want the launch to the moon. He may miss a run, but more importantly he will most likely save you a lot of money. I don’t always agree with his outlook, but I certainly take it into consideration.

      Statements like the ones below are given for free, so he is providing a real resource to the folks on the blog;

      “Never go long during the declining phase of an intermediate cycle. The surprises come to the downside”

      “The safest strategy is buy dips during the advancing phase of an intermediate cycle and sell rallies during the declining phase. You have a margin of error with these strategies because the dominant trend is in your favor. Playing counter trend moves you have no margin of error.”

      Here are some others to add for gold

      1) NEVER be long metals into the FOMC week
      2) NEVER be in position on opex
      3) NEVER be in position when Yellen speaks

        1. Nada

          options expiation for gold
          http://www.cmegroup.com/trading/metals/precious/gold_product_calendar_options.html

          Here is an example on the options expiration. Typically market makers move price where they want it for max pain pin on the day before expiration. This gives them a little cushion. So lets take the last expiration as an example;

          We had a pop on gold due to a NK issue which caught market makers with the pants down. No worry they had time to get the price back to max pain pin. If you were thinking like a crook, then you would have shorted this on Friday open in anticipating the MM move.

          https://gyazo.com/2cad79877673f77c661095afaace6935

          1. Nada

            Anyway, the price action described above is not any sort of guarantee. Its an example of the land mines in the sector and a variable of many that has to be taken into consideration.

            Options expiration are a big dot deal. The amount of money flowing through is mind boggling. The sweet thing about options data is that the SEC dictates that time and sales data is in real time. Flows can be most useful, but highly liquid environments like SPY are useless trying to make sense off. Options are mainly used as hedges and the big boys are hedging fools.

    1. Lenapowich

      Bye Goild. I love the way you make money in the markets. If your wife ever decides to leave you, I am available ( batting eye lashes), that is, unless she is leaving due to a bankruptcy.

  24. Lenapowich

    Just for the record, I bought GDX and sold at a profit, bought GDXJ and sold it at a nice profit and now into GDX again with an average price of 2.39 on a 1050 shares.
    I am not making huge dollars but I think I am doing okay for being a dummy.

  25. Lenapowich

    I think Nada and Christian know their stuff but I am missing Bigdaddy, Don and a few others that were good reading. Okay, gotta get back to work, Good luck everyone.

  26. Anthonyo

    http://stockboardasset.com/wp-content/uploads/2017/10/2017-10-07_08-24-36.png

    Everything that happened after Election Night last November has been FLUFF over FLUFF over more FLUFF.

    We need a real PURGE to happen to lose the weak and speculative hands before the stock market could resume its bull run on a final leg which may take it to Dow 39,000 by year 2020.

    ANYTHING could trigger this avalanche anytime now.

    SPX as low as 1500-1600 Cannot be ruled out.

  27. Gary Post author

    I’m not sure we will get a dip this week, but if we do you should buy buy buy as this would be an extremely right translated daily cycle.

    10,000 is going to be a piece of cake. 20,000 isn’t out of the question when we get to the really nutty phase of the bubble.

    1. Gary Post author

      I’d say the odds are pretty good gold has completed a daily cycle low. The problem now is to exit without getting caught at the top of a left translated cycle so you don’t get dragged down into the bloodbath phase of an ICL.

      A decent rule of thumb is to exit once the 5 day RSI reaches overbought. In the declining phase of an intermediate cycle overbought conditions don’t last long before the next leg down begins.

      1. Nada

        “The problem now is to exit without getting caught at the top of a left translated cycles”.

        Yes, great advice. With that said, we are being a bit presumptuous, as this cycle has the potential to be right translated. The dollar put in a swing high and unless a miracle happens, will close below the 10ema. Its in the timing band for a hunt for a DCL, so once we have a trendline break we will know a bit more.

        Yes there is very good reason to be cautious and you may be proven correct, but unless we have the luxury of Goild hindsight we do not really know πŸ™‚

    1. JJHarmen

      primetime. You know as much as I do. The valley is a long ways north of my location. It has been very dry so the fires are not going to burn out anytime soon.

      1. RTTPD

        Lives downtown. Tried calling him three times today, at work and at home – can’t get a hold of him or his wife. No email contact either. It’s pretty bad from what I’ve read.

  28. bluelagoon

    VXX is on the move now – anyone have any idea why? It seems to do well back half of this month. I have an option on it which I plan to sell closer to month end.

  29. JJHarmen

    The S&P drifts down one quarter point and everyone loses their shit buying the dip. It’s crazy. Nice to see GDX hanging on to the day’s gain though.

  30. JJHarmen

    In hindsight, I should have kept my SQQQ. I decided to pick up 500 TZA in after hours trading at 13.23. I think SM downside is coming and I won’t run such a tight stop this time.

Leave a Reply