95 thoughts on “TRADING AGAINST THE TREND

  1. Troy

    Nice divergence between Gold/Silver and the miners who did not make a new lower low. Looks like all the weak longs were flushed out this morning. Wish I bought more JNUG earlier. This is only a ST trade.

  2. Lenapowich

    I added a few hundred more shares of GDX to my stash this morning at a good price. Now I wish I had bought a lot more. The miners are now doing much better than gold and that has got to be a bullish sign. (I hope)

  3. Idontknowwhatimtalkingabout

    IdontknowwhatimtalkingaboutOctober 5, 2017 at 7:20 am

    1268 retest coming for sure
    ——————————————————————————–

    Idontknowwhatimtalkingabout
    October 6, 2017 at 5:32 am
    As of now, i think it will hit 1278-80 again

    I’ll decide what’s next once it gets there πŸ˜‰

    1. Christian

      That’s like the second time you’ve posted this, Lol! Clearly someone wants a pat on the shoulder and a slap on the Ass (left or right?), so here it is:

      DUDE! You’re awesome πŸ™‚ Turn around…

      SLAP!!

  4. JJHarmen

    The SM looks poised for a dump. Yes I realize that has been said before by a lot of people over the years. I bought 200 SQQQ at 23.78 for a short term trade only, If it goes against me by 25 ticks, it will be closed out.

    1. Gary Post author

      In a normal market this would be the timing band for a drop into a daily cycle low. However we are now entering the vertical phase of a bubble so there’s no guarantee cycles are going to operate on a normal timing band.

      1. Gary Post author

        Virtually everyone has to learn this rule the hard way, and many never learn the lesson. The risk is they make money every once in awhile with one of these trades and that reinforces their desire to continue.

        But then of course by the time their trading career is over this strategy ends up costing them thousands and thousands of dollars all because they win maybe two or three times out of 10 and that’s enough to keep them making the same mistake over and over.

    1. Christian

      You’re absolutely right on this one JJ πŸ™‚

      Gary will argue that ENERGY was in the timing band of an ICL and that he was confident in the trade no matter what, but the reality is that ERX could’ve continued to stretch some more and by the time the bounce came out of an ICL; it woulda been too late and he would’ve had to stop out with a loss.

      1. Gary Post author

        Actually it was in the timing band for a larger yearly cycle low. After getting stopped out several times it became apparent that I wasn’t going to be able to pick a bottom and would only manage to stop out multiple times in a row and destroy my mental capital. As it turns out I was correct, I would have gotten stopped up 7 times in a row before the final bottom occurred.

        So the better strategy was to hold until the weekly charts return to overbought and trust that the rally out of the yearly cycle low would rescue the position. As it turns out I was correct.

        1. Christian

          “… and trust that the rally out of the yearly cycle low would rescue the position.”

          You can’t really trade on ‘Trust’ in these managed markets Gary. That yearly cycle low could’ve suddenly turned into a left translated cycle and stretched some more. Look at the dollar.. that was the longest IC EVER. It just kept going.. so much so that it even had you convinced that it wouldn’t even bounce up and instead would continue down well into the 80’s.

    2. Gary Post author

      I take them only when the asset is deep in the timing band for an intermediate degree bottom and sentiment and the cot reports suggest the risk is worth taking.

  5. Christian

    I very much like the video Gary and I think it is an especially important lesson for anyone just getting started.

    That being said.. you cherry picked a little here and there — who would be dumb enough to pick a top during the advancing phase of a baby bull?? That’s like trying to pick a top during a bubble phase, c’mon now!!

    Also, just like everything else in life.. there is a TIME and PLACE and it’s got nothing to do with trying to outsmart the market, which is nearly impossible; it’s about having a STRATEGY in place that works consistently.

    For example: If GOLD (or ENERGY, another great example) is stretched way below the 10DMA and long over due for a DCL. One could easily place a *small trade using an intraday chart (1hour/30/15) once a swing low has been struck. Your margin of error is very low and your stop-loss is very close, meaning your risk vs reward is actually quite favourable. I do it all the time.

    *Hopefully you understand the importance of ‘money management’ which means you’re only using a very small percentage of your overall portfolio when trading against the prevalent trend.

    Do I always win? No. Sometimes I lose and sometimesI have to cost average down, but at the end of the day, I win on average 7/8 times out of 10, and I’ve never once stepped foot in a Casino πŸ™‚

  6. JJHarmen

    I am going to risk taking a loss of $50 on my SQQQ trade. I have a stop in at 25.53. The stock market is over ripe, nothing goes up forever and a sudden drop could produce a $500 gain in a big hurry. I’ll take my chances.

  7. isavage

    Gary has oil hit your target for the next leg up?. It’s looking so for me so opend 1st position in OILU

    If further weakness 2ed position with GUSH for diversification.

    1. Gary Post author

      I thought maybe oil had tagged the half cycle low yesterday but since it made a lower low today one would have to again wait for another swing before taking any further action.

  8. jacob2

    Many miners on the up considered buying but decided it’s not worth the effort. Mid October – early December almost always terrible for miners. I’ll wait. Thanks for the reminder.

  9. Christian

    Getting out of USLV with a small profit — The 15 minute chart is overbought and heading back down — I think I can get back in around 11.25 πŸ™‚ Let’s see what happens.

    1. Christian

      Perhaps I was wrong.. Gold’s flag consolidation is a ‘tell sign’.

      Entering a partial position in USLV. I don’t want to get left at the station. Will buy more on Monday if conditions are favourable.

      1. Bluebellkid

        Posted this on the last thread but KL is breaking out of a new issue base – volume is not what I would like to see but nonetheless I am a buy at the pivot of 13.84.

          1. Bluebellkid

            Here lately I have been more tolerant of pullbacks than in the past. The markets are pretty volatile at times so if the fundamentals of a stock are good (and I don’t buy many that the fundamentals aren’t good) then I will sit thru a pullback to the 50 day and then see how it holds up there. KL had a profit of 8 cents/share in ’15, 19 cents/share in ’16, an expected 68 cents/share this year and projected $1.11/share next year – 146 funds owned it in the Dec. qtr. and 243 now own it.

        1. Bluebellkid

          KL closed at the highs of the week on the heaviest volume ever so at this point the trade looks good. The fact that it closed the week on the highs on heavy volume is about as good as it gets. The idea that one never knows is BS – watch the price/volume action – it’s not the ultimate answer but does indicate what is happening in real time.

    1. Christian

      The dollar IC is still very much in its infancy so I can’t argue with Gary, but I also can’t argue with that very convincing bounce today.

      This is what AG from Gold Predict told me when I emailed him and mentioned the possibility of a left translated cycle in Metals. Unlike Pedestrian, I was interested in his point of view and wasn’t so quick to dismiss him.

      “At minimum, it should be a daily cycle low, but perhaps an intermediate low. I was going to take a partial position and see how well prices rallied. If they began to rollover in a left translated manner I’d exit. Correct, the dollar’s rally is young. It’s something I’m considering.”

      So I think it wouldn’t hurt to have a core position to begin with and if the cycle starts giving any indication that it wants to roll over, then like AG I would also exit.

      If, however, the rally continues then I might add to my position. I’m really liking Silver this time around πŸ™‚ Our ‘risk vs reward’ ratio is very good right now.

      What are you currently holding? GLD still..?

  10. Strike2

    Nada,
    Yeah, I noticed the sharp bounce off 61.8% fib – textbook. Gary’s point here is to avoid the trap of a declining cycle. If he is correct about this turning down shortly into lower ICL, there is very limited upside here. But $30 of $GOLD upside translates into about 20% in JNUG or NUGT. Temptation!

    1. Gary Post author

      I’ll say this again. I take everything in the metals sector with a grain of salt. One never knows when a move is being manufactured to get traders on the wrong side of the market to be fleeced the next day.

      This seems a bit too early for the dollar to form a cycle top in a first daily cycle. Especially on an economic number that everyone knows has been skewed by the hurricanes.

      1. Strike2

        The dollar factor is the biggest factor IMO – the elephant in the room. That’s why I’m typing instead of clicking.
        Thanks Gary for your tireless efforts.

      2. Strike2

        Gary – Took a look at $USD chart again. Why is 4 trading weeks since the Sep 11 presumed ICL too early for a cycle top?
        Separately, what if it devolves into a left translated cycle, therefore putting the Sep 11 ICL into question?

        1. Gary Post author

          The dollar has completed a weekly swing and is back above the rising 10 week moving average.

          The evolved currency cycles have tended to run 35-45 days now. So unless something has changed I would expect a first daily cycle in the dollar to rally for 25 days or longer before topping.

          Also something else of note. The euro still has to give us at least one failed daily cycle before the intermediate decline is finished.

    2. Nada

      Correct, gold even undercut the 61.8 fib. Oh I get what Gary is saying and it is very good advice. What I am questioning is the short cycle scenario – that is why I placed the chart above showing the last IC vs the current IC.

      If its RT then we get a new high, but if LT then who knows where it will go.

      1. Gary Post author

        I think in order to assume gold is going to make a higher high you also have to assume that the dollar hasn’t made a final ICL yet.

        I think the odds are pretty good the dollar has made an ICL and still has 3-5 weeks yet before the intermediate cycle tops.

  11. kinik007

    Oct 10 = DPRK holiday. Oct 15 = joint US-S.Korea navy ops. Both are triggers for Kim action. Missiles in position. Oct 10-15 is test window.
    – Jim Rickards Twitter.

    This morning’s jobs report should have tanked GOLD and did but it has reversed hard on volume on the 2hr chart with an engulfing candle and has been consolidating since.

    In 4K shares with NUGT @ 33.96 a few minutes ago. Let’s have some fun for a few days at least until a NK missile launch…

    1. Bluebellkid

      The lower than expected jobs number should not have tanked gold – you have it backwards – and that is why gold rallied by the end of the day.

  12. bluelagoon

    Anyone else think we are just beginning to head into cycle low for oil? Thinking next week and this month will be down for USO. USO looks like it’s going to close below the 10WMA.

  13. Christian

    PEDESTRIAN — If you’re reading this (and I know you are).. Today’s post is a perfect example of how things should be on this blog my friend.

    You’ll find a bit of friendly banter here and there thrown in for good measure. People are posting their opinions without it turning into relentless arguing. People are asking questions and helping each other out.

    No one (so far) has gotten their nose all out of joint and taking it 1 step too far. No one is name calling or getting pissed off!

    THIS IS HOW IT SHOULD BE FROM NOW ON πŸ™‚ Gary, I think you’ll agree?

    Please keep this mind next week when you come back from your hiatus. Thx bud.

    xo

      1. Christian

        A friendly dig, that’s all πŸ™‚ But from now on I’m gonna try my best to be a part of the solution, instead of being a part of the problem — not that I’m always a part of the problem but you know what I mean.

        And if I slip up.. You guys are welcome to [gently] bust my beautiful balls πŸ™‚

  14. palobar

    @Ztokpen, Jimsee
    You are welcome. I am glad you find my comments helpful. Regarding why I mentioned in my previous comment ”or” and not ”and” is because Gold was in a strong downtrend during the past month so the next turning point normally would be a low. Also, the cycles here were related to previous highs (like the 2016 December low) were usually the polarity gives a low. I cannot rule out what you say that both dates can give a low as you wrote. I would like to see how the market will respond against the bar(s) that we will get around the 10th of October. It does not matter whether it will be a higher price level. Overall, I still expect the July low to be tested later.

    1. palobar

      While I believe that overall the decline is not over, I have to admit that in the past this ‘first’ time window we just entered in most cases gave a very strong move. Whether this repeat again is something we will learn on the next days. Nice w/e to all.

  15. Robert

    Thanks Gary.
    Very helpful. I experienced it and had it confirmed in some of your comments and videos.

    I’ve been trading for nearly 1 year, so all the information you give is VERY helpful (I realize that for more experienced traders this is a lesson learned and maybe boring to hear it again πŸ˜‰ ).

    After failing many times and thanks to your advices, I’ve been able to correct many of the errors I had: buy high, sell low; not giving time to winning positions to develop, the error explained in this video.

    What I’m not good at now is holding a position to make bigger gains. Sometimes the selling works: the stocks turn back down, but it is difficult to time the ins and outs and in general the gains are less than simply holding the position.

    The fear is of being late and catching a pullback/correction. As a solution I’m adding to a position when there’s a dip. The market is so conditioned to buy the dips: it works, but it is dangerous if there’s a significant dip.

    During the vertical phase are there indicators (technical, sentiment) to spot the pullbacks; you said there will be some hard ones (10% in 2-3 days)?

    1. Gary Post author

      The market will get more volatile as we get deeper into the vertical phase. Other than pure luck you aren’t going to be able to time the exits correctly and more importantly even if you do time an exit well you won’t time the re entry.

      This is probably the most critical time to learn the lesson of Old Turkey if you really want to make life changing profits during the bubble.

      The vast majority will do just like I’ve been predicting. They will waste at least half of the vertical phase trying to call a top every other day. And the really stupid ones will lose money trying to short. Then when they finally decide to get on board it will be late in the vertical phase and they will end up holding on too long and fail to control greed and get caught when the bubble pops. So when it’s all said and done most people (probably 90%) will lose money during a bubble phase.

  16. Goild

    AT,

    I am glad to hear about your trades. Congratulations!
    I am working on following your style. I missed leaving shares on the table before the rocket.
    There is a lot of money to be made in swing trading.
    It seems we will have a nice weekend. πŸ™‚

    1. AT

      Golid, unfortunately I don’t have time to do lots of daily trades as you do; I am left with swing trades strategy every few days, and works well for me so far because I am getting closer to recover from my mistake I did last Oct holding Jnug too long; Looking forward to be on the green soon πŸ™‚ … I am on the 5th place so far on Gary’s challenge trading only JNUG and DUST

      Have a great long weekend everybody!

    1. Gary Post author

      The risk of course is that these things can collapse in the blink of an eye. Alex had his subscribers heavily into NAK and then the thing lost 70% in two weeks.

      1. Bluebellkid

        Just goes to show you that folks that don’t have a clue about stocks shouldn’t be buying them. Why would anyone buy stock in a company that is losing money?? And penny stocks are penny stocks for a reason!!

    1. Gary Post author

      The Euro hasn’t completed the failed the daily cycle yet so I’m concerned that the banksters just manufactured another trap for early longs.

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