188 thoughts on “A SIMPLE STRATEGY FOR TRADING COUNTER TREND MOVES

  1. Gary Post author

    Both mining indexes and many miners on the SoS list today. I have to wonder if the banksters just baited the hook the last two days and we’re about to see another fleecing.

    I’m still not convinced the dollar has completed its daily cycle rally, or the euro its daily cycle decline.

    1. Nada

      We saw something similar on Friday:

      10/6/17 GDX -170.59
      10/6/17 GLD -45.58

      and still rallied today. But yeah you never know, futures could be down 20 pts in the morning in /GC πŸ™‚

    2. Christian

      I actually think you’re being a bit paranoid on this one Gary πŸ™‚

      We’re due for a small ‘intraday’ correction in Miners and Precious Metals and we’re likely gonna see it over the next couple of days but make no mistake sugar bunz — Gold is headed up to $1300 to sucker in gullible Bulls first…

  2. itsinthedna

    It’s pretty easy to spot swing lows and highs. Do know Gary what the winning % is on these trades, that is if you only hold 2 to 5 days with a stop below the previous day’s close? Would be interesting to know.

    1. Gary Post author

      The problem nowadays is that the banksters will often manufacture 1-3 false swings before the cycle bottoms so it’s not as easy to catch the bottom as it used to be.

  3. Carl

    Do you think QQQ will follow the same pattern as SPY. Compared to SPY it just broke out of the 6000 ish price. QQQ is overbought but not as much as SPY. SPY had 5 days up after the break out and i think that QQQ will go up now with a pullback later. I want to buy a few 27th october Call of TQQQ. I’m not sure if i should buy now or wait a few days in hope of a better entry point.

    1. Gary Post author

      Don’t ever buy options on the triple leveraged funds. It’s a suckers bet. The liquidity is too thin, the spreads are too wide and the extra volatility is already priced in.

        1. vin

          For qqq what are you looking at? Would December 150 be a good bet? Or, are you looking at a shorter period?

          I have tqqq and I have written call options on it. It buys one one some safety while making a few quick bucks, but then there is a potential of missing big time specially if Gary is proven right.

  4. zkotpen

    Gary,

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

    There is only ONE way to OBJECTIVELY define risk: By setting a stop loss before entering the trade. That way, you OBJECTIVELY determine how much you are willing to spend on any particular trade, before you cede that trade as a loss. Otherwise, it’s SUBJECTIVE, and therefore NOT definitive. Sure, position size is part of the equation — the equation whose outcome determines one’s stop loss.

    At any rate, I will enter the contest as a data point — as a scientist, I’m always up for a little experimentation and observation. And we always need a “control group” — this will be my control group. After all, I do have an open mind: What if… the Gary trade is the best one? Maybe Gary is reaching his grand super cycle peak here. I’ll go along with the video and scale in over the next 1-2 days followed by 4-8 days, without overthinking the matter. Who knows? Maybe your system is more profitable on this occasion and will lead me to victory. And, of course, I can do that in entirely detached fashion — which is actually the best approach to trading. In that regard, this becomes more than a control group for me: It becomes an alternate scenario. Again, my open mind welcomes that — how with it play out? What conclusions will be drawn? Who knows, but I am interested in finding out!

    Now that that’s out of the way, on to the real issue:

    We have had this discussion on MONDAY.

    But I’m asking you why you felt the need to don the armor, the helmet, grab sword and javelin and spear and rush into combative mode on SUNDAY? Surely you knew there would be a backlash.

    But why the attachment to attack and defend?

    When one is constantly on attack and defend, it seems to prevent openness.

    Attachment to endless heroic battle is a form of suffering.

    Case in point: I made it clear on Thursday gold and GDX had NOT produced “daily” cycle low signals. No hindsight there. Specifically, I said GDX was likely in wave B of D — you’re calling this a “minor” daily cycle. Well, that’s often the nature of wave D, which I said was likely to be in progress last week and even as early as mid-September. Again, no hindsight.

    The 100 week and 200 week SMA’s are not in play in a yearly cycle decline for gold. Sure, they might be visited, and due respects paid if so. Other indicators would provide more likely targets — and they may correspond to the 100 week SMA.

    Bottom line is, these indicators are invisible to one who is in constant battle mode, fighting for a fixed viewpoint of the ever-changing world.

    I thought of bringing these indicators up with you in early June, shining some light on the cycles-related portion of my work for you. But too much risk of having to don armor and helmet, and grab sword and spear and javelin. The battlefield is no place for such a discussion.

    Jung learned a lot from Freud. But in the end, the latter just remained stuck in his ways, long before examination of the subject matter at hand had reached its end. It will never reach its end — that’s the beauty and the mystery of life.

    I suppose that’s the reason for retirement: One tires of the beauty and the mystery of the journey. Can one retire before one’s bubble pops? The only two options seem to be either (1) toss aside the armor, the helmet, the sword, the spear, and the javelin and open the mind to the ever-changing nature of everything; or (2) retire after the stock market peaks, but before gold begins its next “multi-year” move down into its bear market low.

  5. jacob2

    OKtoberfest?

    Sell in May turned into a rally. The annual September swoon morphed into a rally. Nothing stops this unstoppable bull. . Everything turned on its ear. If all iseasonality is reversing Wonder if we will get our year end rally?

    1. Gary Post author

      I’m going to disagree with you on oil. That was a half cycle low and it’s not finished. Oil is on it’s way up to make another higher high before the daily cycle tops.

      Look at the energy stocks. They’re telling you this isn’t the top.

  6. Gary Post author

    Since the euro has completed the DCL before it could give us a failed daily cycle we can expect this cycle to left translate. It looks to me like the euro is forming a head and shoulders top.

    1. Gary Post author

      The yen still has to close below that intermediate trend line. This is just a counter trend move, the same as the euro and dollar. The larger intermediate trends still have further to go.

      This is the rally that I’ve warned about that sucks gold bugs back in prematurely before the next leg down.

      No one ever listens to me during this bounce and then they always end up getting caught when the final leg down begins and they panic and sell during the blood bath phase.

  7. Troy

    Another meaningless SOS for GDX & GDXJ. I decided to sell 1/2 my JNUG AH yesterday to play it safe. Oh well.
    Unless these SOS’s are adding up because this cycle will be topping out shortly as Gary has been saying.

    Everything green this morning. SM, PMs, Oil, Energy and Bitcoin too.

  8. AT

    Added 1 more tranche of DUST

    New trade: Oct 10 BUY 25% DUST 23.09

    Oct 6 BUY 50% DUST 23.92
    Oct 6 SOLD 100% JNUG 19.20
    Sep 26 BUY 50% JNUG 18.83
    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

    1. Christian

      Not sure why you’re posting trades that date all the way back to Jul 18th AT. Just post your REAL TIME entry and exit ON THE DAY please πŸ™‚

      btw.. I’m interested in why you decided to buy DUST today @ 23.09. I think you might be early but perhaps close enough?

      1. AT

        It’s easier to select all and copy/paste – current top new trade is always real time. This are my real trades and also sent them to Gary as challenge trades.

        I am always a bit early, I find it very hard to catch the absolute top or bottom. Close enough is very good as long as I continue making profits.
        Why adding DUST? I think the NK fluff will wear out, and Gold will resume the move down soon, perhaps later today or tomorrow.

        Plan to get back in JNUG again when getting closer to 17-18, after selling DUST.

        1. Nada

          “Why adding DUST? I think the NK fluff will wear out, and Gold will resume the move down soon, perhaps later today or tomorrow.”

          What NK fluff? Kim has been a very good boy lately. He did not launch on the 10th for NK Holiday.

  9. Nada

    Said this last week.. Gary you have continuously stated that currencies were not your forte and you had given up on cycles due to CB manipulation. Why is it now you think you have a handle on them?

    You seem very confident in your stance that gold is going to make a LT cycle, dollar not finished bouncing, euro not finished with DCL, and yen headed into YCL. I agree that there are signals that one should be paying attention to, but you seem to very overbearing with the bearish sentiment.

    If gold breaks out of this triangle, its on like donkey kong;
    https://gyazo.com/03ec69cb18fc8ac9fa3d33b47dbb1863

      1. Spanky

        Nah, although I see the yen spiking down, but I don’t think it will be easy breaking down too much on the initial down thrust as it has built up a bit of a base for the last year. A sharp downthrust could be the catalyst for a move in the opposite direction as well.

  10. Nada

    With that said.. the word of caution is appreciated. The potential H&S on the /6E is something to be aware of. I am more curious about why the confidence in the currencies calls..

  11. Spanky

    Gold COTs really haven’t come down as much as you would have expected given the price drop. Hard to say how this will play out, but I suppose one of the more constructive ways would be for gold to form a triangle consolidation with higher lows and lower highs for another month or two and the CoT commercial shorts worked off over that time. More likely, gold just get’s its teeth kicked in as we are so used to seeing.

    1. Nada

      You can’t put a lot of weight on the COTs. They are a useful guide, but certainly can not be used to pick tops or bottoms. Commercials are hedging machines, so you can’t always understand the nature of the position. Obviously something to make note of.

      The thing is.. Its pretty easy to make a bearish call here. If you are wrong, no one is really going to care. You simply get to say that the currencies markets are being manipulated or stretched. If you are right, then you get all the accolades of looking like you knew exactly what was going on, when in reality it is a coin toss.

      1. Spanky

        It’s possible gold makes a higher high and the drop into the subsequent ICL could burn off commercial shorts. Obviously, that is not what Gary envisions, and given where the yen is, I don’t envision it either. That being said I am still old turkey my miners.

  12. Spanky

    The monthly bollinger bands (20,2) for GDXJ are the narrowest they have ever been. Barring an epic spike up or down into month end, they are due to get even tighter by next month.

    It’s true they could stay in a relatively narrow range for a long time, but that hasn’t really been the MO of GDXJ or really any of the miners, at least on the monthly chart. It’s usually straight up or straight down.

  13. Christian

    SOLD USLV @12.60 for a hefty profit πŸ™‚

    The 1 hour chart looks overextended and turning down.

    TIME & PLACE and STRATEGY is how you make money on a countertrend move.

    1. TraderPete

      Yeah, they said gold was going down to $1,000 or lower. Never happened. Those guys are idiots, and anyone that listens to them are also idiots. 😎

      1. Nada

        Right. They write an article like that because they love giving free advice away to everyone. BS, they write an article like that to acquire.

        Just like they upgrade a stock and then tell their clients to sell into. Crooks.

    1. Nada

      I am curious Goild.. The account balance from the other day was listed as 166k? You are trading a 3x leverage fund at fidelity that requires a 75% exchange requirement.

      With that said, 21k shares * 19.80 = 414,800. A balance of 166k / .75 would make roughly 221k available on margin. You seem to be quite a bit over, how exactly is that?

  14. JJHarmen

    Walmart announces a stock buy back of 20 billion over two years. If they have that kind of money to flush down the toilet, why don’t they lower their prices for the made on China junk and offer some real competition to Amazon? The problem with old and established companies is that the shareholders won’t allow them to operate on the razor thin margins that is Amazon’s trademark way of doing business.

  15. Jimsee

    a nice gap up to 1305 or so tomorrow in gold would be a sweet short (buy puts) setup – decision time and place nearby – gap up action allows partial profit opportunity,etc…Goldman would love to manufacture this IMO…get the short term emotions fired up, fade the buy-side volume….

    1. Nada

      You are still observing the cyclic work, no? I believe you listed the 12th as a bend significance to reach 1320. We still got some time Jimsee πŸ™‚

      The bears may be right, but man everyone it seems has a negative outlook on gold. Maybe the invasion of NK has been stopped since NK hackers stole the plans πŸ™‚

      1. Jimsee

        yah oct 12 is the day – but price is always negotiable πŸ™‚ a gap and fade the day before would be good enough to get me to start laying in some puts…London time (my bad I sleep,lol) would be a logical target for the highs unless the hedge funds are running amuck in NY.

    1. Nada

      Ah I see Goild, you are a slippery one πŸ™‚ I saw some GDXJ on BOW but it looks to have fell off. I still see gold filling the gap at 1348ish (spot reference), but I think I am the only one πŸ™‚

  16. Spanky

    Huge divergence between miners and metal today telling you all you need to know about direction in the near future. Put a fork in it.

    Also, silver miners are hanging on a cliff and have been absolute turds since the “bottom” in July.

    I personally, don’t think there will be any real break out until next February/March. Before then expect the hammer to fall, as it always does.

  17. Jimsee

    if we make this oct12 peak zone short oct 20 rings a large bell imo…would love to see a smash to 1200 by then – go bears (aasuming we do not break 1320 .

  18. Spanky

    Russell 2000 just biding its time waiting for yen to get flushed. When it does, the ramp job will continue. Entering its 5th week of stochastics being overbought on the daily chart. That is ridiculous. Just buy every single dip with both hands and feet.

      1. Spanky

        Ugly day. Outside day down. Typically means more downside, although I suppose it’s possible to make a higher high before the miners finally roll over. I personally think the miners topped today.

      1. Nada

        It will be interesting to see the final print today in regards to the miners. The current SOS/BOW are insignificant at 15m and +2m. You see this appear and drop off throughout the day.

      2. ziasDad

        tiny amount on GDX, I doubt that it’s significant. Amount on GLD is larger, but still small. So I wouldn’t give either one of these any significance. Unless the amounts get much larger by end of day.

          1. Nada

            Yes bankers like to rotate between GDXj and GDX. GDXJ got shook the hardest (.45 cents vs .17 on GDX), so you saw the weak hands handing over their shares.

            You will not see GLD on BOW because it closed green.

  19. Spanky

    Indexes are all green. US market is anticipating the imminent torching of the yen. If the yen does break down, gold and silver could have dramatic sell offs.

  20. victor

    Goild, that’s how you can destroy your account, what are you thinking to buy 21000 where bounce can last 2-4 days? 8k loss is a 10days of your lunch money and what if FOMC triple it? Please consider to trade with no more then 10k if you are uncertain where it can go in the next 2-4 days.

  21. Goild

    Victor,

    Thank you for the care.
    I just sold 11K shares at $19.38.
    Left 10K shares. So far the loss is about $5300.
    Risk of ruin is not an option. So cut risk and be patient.

  22. Goild

    Let us not forget that help from others here can be precious.
    Once one is heavily in, the judgment is impaired.
    Do not trade entirely alone, ask for help whenever needed.
    Thank you πŸ™‚

  23. ocram

    I’m really startin to doubt that gold and miners are in a bull market……too much time has passed since the baby bull rise.
    From the top in august 2016 we have been in a limbo for more than a year and still we are going nowhere.
    And now even goldman sachs have said today that gold will fall to 1100 (and even worse).

    1. Spanky

      The Fed can’t afford to let commodities rise. They have total control over the complex in conjunction with the BoJ.

      The Fed can modulate risk/commodities simply by playing with USDJPY.

  24. Idontknowwhatimtalkingabout

    palobar
    October 4, 2017 at 3:20 pm
    The September inflection point that was mentioned well in advance in the July discussions is behind us and we are approaching the first of the two strong turning points for October. I had previously mentioned the 10th of October but I omitted to mention the 8th which is equally important, thus making 8-10 the first strong timing window. However, the 8th falls on Sunday. Also, by experience, highs or lows can fall off one-two days. Therefore, the time window between 6-11 most likely will provide the first meaningful swing point after the high we saw in September. Either the ”8-10” or the ”20-23” October should provide a nice LONG trading opportunity. Nevertheless, making a low here (instead of a high) suggests that we are NOT yet in a bull market. The possibility of seeing one more sharp decline later is still on the table.
    ———————————

    Timing window 1: check

  25. dboz

    Time for DWT for me. Out of metals and miners ahead of Fed Minutes today. I see a nose dive coming. Silver looks ready to Cascade down. Or at least it’s close enough to the cliff that I decided to bail out.

    And long UGAZ since yesterday.

    Shorting oil, long Natty, nuetral metals but no position.

  26. Jimsee

    if we drop hard in gold to oct 12, a sharp move to 1320 would become a good probability imo…strangle time…up 70%, down 30%…b/e on down for option trades.

    1. Christian

      GOILD goes from winning lunch money every single day with a strategy that would put to shame every hedge fund in the world, to suddenly losing thousands of dollars — strange I say πŸ™‚

  27. AT

    DUST sell order filled

    New Trade Oct 11 SOLD 75% DUST 24.48

    Oct 10 BUY 25% DUST 23.09
    Oct 6 BUY 50% DUST 23.92
    Oct 6 SOLD 100% JNUG 19.20
    Sep 26 BUY 50% JNUG 18.83
    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

  28. Gary Post author

    This is why it’s so hard to trade counter trend moves.

    I’ve been doing this for a long time. I’m not kidding when I say that counter trend trades will cost you in the long run. No successful money manager would ever trade like this. Yet most amateur traders will ignore me and try anyway. And if they win once or twice at it they will take that as a sign that they are smarter than the market and just keep doing it until many years later it occurs to them that they ultimately just lost a lot of money with this strategy.

      1. Gary Post author

        This is where the one or two winning trades convince one to keep trying.

        But I guarantee by the end of ones career you will have more money in your account if you don’t make counter trend trades.

        My mentor tried to beat this into my head early but like almost everyone I had to lose money before I finally realized he knew what he was talking about.

        1. Christian

          Except that I’m no amateur and have been at it long enough to tell you that TIME & PLACE and STRATEGY with a little INTUITION is how you make money on a counter trend.

          What you failed to highlight is that most people don’t understand TIME & PLACE and/or don’t have a STRATEGY in place or lack INTUITION all together. Which one are you?

          And furthermore, most people HATE TO ADMIT — EGO — that there are certain things they’re just not that good at. You are most certainly one of those Gary.

          1. Gary Post author

            Except no one is going to believe any of that until you are willing to put your balls on the line and enter the challenge.

          2. Christian

            How did I know you were gonna say that, LMAO πŸ™‚

            I already post my trades in REAL TIME on this blog. That should be good enough to show people that you can make money trading a countertrend move.

    1. Spanky

      Absolutely not out of the question. That being said, the 89 WMA positively crossed the 233 WMA already. I would be pretty surprised at this point if we get a solid weekly close below the declining 233 WMA, which is coming in at 1245 currently and should be flattening out soon. The same is true for GDX. It’s 233 WMA is coming in at 21.94.

  29. AT

    Another new trade today – added also JNUG after selling all DUST

    New Trade Oct 11 BUY JNUG 50% 18.56

    New Trade Oct 11 SOLD 75% DUST 24.48

    Oct 10 BUY 25% DUST 23.09
    Oct 6 BUY 50% DUST 23.92
    Oct 6 SOLD 100% JNUG 19.20
    Sep 26 BUY 50% JNUG 18.83
    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

    1. Nada

      AT after you copy/paste, can you clean it up a bit and just include the relevant section – showing your trades all the way back from July.. come on man, work with us!

      1. Christian

        Ha! That’s what I was saying the other day. October will suffice AT. We don’t care what happened back in July. And we get it — you’re amaze-balls and probably own a villa in the South of France facing La MΓ©diterranΓ©e πŸ™‚

    1. Spanky

      I think the path of least resistance is down. The market is looking for any reason to sell the yen, and I think they will find it. Yesterday’s candle was black, so I expect any meager rally from here to be given up soon.

    2. Herman

      Yes, it would be. But we are on the 3rd day after the DC already and the 4-hourly looks very weak. Only thing is, 1298 has not been touched as of yet. Maybe short spike after FOMC.

  30. AT

    3rd trade today, back in cash with a good profit

    NEW TRADE: Oct 11 SOLD JNUG 50% 19.39
    Oct 11 BUY JNUG 50% 18.56
    Oct 11 SOLD 75% DUST 24.48

    Oct 10 BUY 25% DUST 23.09
    Oct 6 BUY 50% DUST 23.92
    Oct 6 SOLD 100% JNUG 19.20
    Sep 26 BUY 50% JNUG 18.83
    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

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