254 thoughts on “Long term trends – stocks up, gold up, oil sideways, dollar down

  1. BeachandBiscuits

    Thanks Gary.

    You’ve been adamant (and it make sense to me) that QE is going to lead to a blow off top of 10,000 in the Nasdaq, maybe 20,000 in the next 6-8 months.

    In this vid you seem to be hedging a little on that and saying it might play out as a multi-year bull market instead.

    Are you seeing things to make you question the 10,000 in 6-8 months expectation?

    1. Carl

      You cannot predict a long time move just by an overnight price movement. We are looking at the weekly/monthly chart and the last 12 hours are far from enough to convince me that we are suddenly in a big correction. Sure, this shooting star candle is not pretty, but you always need a confirmation.

  2. Steffmeister

    SPX looks like a bearush ending diagonal. Be careful here with your calls Gary. Remember from a year ago you were very bullish Gold and we got two horrific declines within the next couple of months.

    #Nada, the 911 magic, look at 911 from last year you got a new president and a top simultaniously with a breakdown in Gold I am expecting something similar. Maybe we are already there?

  3. Robert

    Also look on silver. Its acting as if it put in a short DCL already. Maybe we needed a short cycle after that long one. Nothing is going to be easy to predict again, for all we know stocks could head back down now and gold heads back to 1300

    1. Gary Post author

      Gold is due for a bounce soon. Maybe it’s already started. My best guess is that it would test the 200 DMA first before bouncing. But gold still needs to complete a failed daily cycle so any bounce shouldn’t last long.

      1. Nada

        No Gary, you said over and over that THIS was the drop into ICL. Even this morning you said trendline would be broken, again. You are now trying to walk back those comments with this new stance of “Gold is due for a bounce soon”.

        I bet a lot of peeps on this board will be changing their minds on gold soon.

        1. Gary Post author

          I think you need to read my comment again.

          This is the drop into the ICL. The IC top occurred on Sept. 8th. I exited long positions on that day pennies from the exact top.

          The market isn’t going to go straight down. I’ve pointed out numerous times that all ICL’s form as at least a 3 wave decline. (That doesn’t mean it can’t be more complex but it has to at least have an ABC pattern before the ICL is finished.) That is the failed daily cycle I’m waiting for.

          I also don’t believe we are likely to get a final ICL with sentiment at 47% bulls (basically neutral). And I think the commercials will need to cover more of their shorts before the ICL is complete.

  4. Gary Post author

    It looks to me like the euro is forming a nice little bear flag. Gold should bounce until the flag breaks lower. So perhaps we already have the short term bottom and we aren’t going to get a test of the 200 first.

    Ultimately we’re just talking about short term wiggles. The big picture hasn’t changed. Gold still needs to complete a failed daily cycle before the ICL will be complete.

  5. earthkitten

    Thanks Gary. I believe it could go either way
    in regards to the final top. On one hand QE
    & the other hand a breakout of a 17 year consolidation
    that could produce a multi-year grind higher. Will
    be interesting to see how it plays out.

  6. Goild

    A couple of days ago Gary said that the chances of a double bottom were 1%.
    As we all know, no one has The Crystal Ball.
    If any one feels like competent, a good way to show it is by listing the good and bad calls. If the good calls are like 70% then you got something going on.
    Oh, paper calls do not count. The ones that count is those were your money is talking.
    Another way to show competence is by the bottom line in the account.
    The SMT sells what? Calls? I guess so.
    An even if you crystal ball is not so cloudy, the other problem is trade execution, which ain’t easy either.
    It as been a long day today. Tomorrow I need to be fresh to get paid.
    My usual accounts are all in cash.
    Only keeping long term the 2K GDX shares somewhere else.

    The scenario is still grim for gold. The candles are not bullish and the economic situation is not favorable.
    Hopefully we will see some more hefty drops.
    The key is to be patient till the opportunity calls by itself. Do not force it.
    If you miss is, there will be next a second chance. Be patient.
    And of course BE KIND.
    It is ok to be greedy.

    1. Gary Post author

      You are not quoting me correctly.

      I said the odds of a double bottom occurring early in a cycle are very slim. Those almost always go on to break support and continue down. It’s just too early in the cycle for a bottom.

      The time that a double bottom has greater odds of forming is when the test occurs late in a daily cycle. Then there is a much better chance of a double bottom or quick undercut.

      It’s still too early in gold’s daily cycle for the cycle to bottom. That’s why I say the odds are not high this will be a double bottom but only a temporary bounce to relive the oversold conditions.

  7. mrsschroeder

    Oil is trading on fundamentals, even though price lags because of hedging and long term contracts and refinery capacities. Now the futures are finally in backwardation after contango first set in in october 2014, but more importantly the calendar spread jan-jul for the WTI is in backwardation for the first time in three years. The oil market is definitely tightening.
    Meaning: I’m not sure the price will remain in the trading band, seems unlikely looking at the past. Whenever oil tightens the price movement is strongly upwards.

    1. Americano

      Not all 😉
      ( I have the JNUG correlation chicanery to thank for my “ take this job & shove it” moment)
      BUT – As mentioned over & over before – Bitcoin doesn’t start till 2018.
      Bitcoin only has to capture 5% of the gold market to reach $25K.
      Leaving the 95% of the remaining gold market ( that is estimated @ $8T & can always make more or more can be found just don’t look in Ft Knox lol – not that you ever could) to oscillate $300 a year up & down.

        1. Americano

          By spring folks will realize the the black hole of wealth holding just a single Bitcoin makes you money WITHOUT selling it & without the protection against fiat inflation no brainer arguments.
          60%+ of my principal has been paid to me due to the Bitcoin Fork coins. (Bcash,Bgold). I got them in the same# of Bitcoin I have.
          Bitcoin forking is going to happen over a dozen times in 2018 at least! These coins are not Bitcoin, they do not dilute the Bitcoin 21million cap.
          This will START to get known late spring 2018 when Bitcoin is around $15K.
          This is THE edge with Bitcoin. If you don’t recognize it now it’s ok. Bitcoin fools the smartest & richest because it comes at angles not recognized by pros with lifetime trackrecords of trading unlimited assets without out actuarial proof of the exact number of said assets.
          In time they will. Everyone will unless it’s an ego/stubborn thing.
          https://mobile.twitter.com/MacroScope17/status/926093056696291329

  8. dboz

    Do we all think it will be that easy to wait for the end of the year again to be able to saddle up on gold for a third straight year? I thought bull markets SURPRISE to the upside! I have not seen a surprise happen yet?

    1. dboz

      So either it’s not a bull market, or we are about to witness a surprise. It can’t be an all aboard sound off from the station that the train for the big ride is going to be announced over the PA speaker, can it?

      1. Gary Post author

        Well you aren’t exactly quoting correctly. During the advancing phase of an intermediate cycle surprises come to the upside. During the declining phase of an intermediate cycle surprises come to the downside.

          1. dboz

            We seem to have much longer declining phases that go much deeper than advances phases that push us higher considering it’s almost 18 months since a higher high has been seen. Not exactly bull market behavior?

          2. Gary Post author

            It is basing pattern behavior. I have explained why it is happening. The dollar is in a megaphone topping pattern and hasn’t broken down yet. Until it does I wouldn’t expect any huge moves out of the metals market. Certainly no breakout above $1400.

          3. dboz

            The dollar is probably due a decent bounce, which will tank gold. Unless it is a true bull and gold could/should rise with the dollar?

          4. Gary Post author

            You think it’s going to take years for the dollar to break down out of that megaphone top?

      2. dboz

        This little dink and dunk moves are garbage. We need to see a BIG swift surprise move at some point. A slow gradual here we go get on now everyone can see it coming signal does not sound like the way it will go? I am thinking more on the lines of a 50 to 100 move that just happens and then the chase is on combined with a short squeeze. We are going to need serious fuel to muster a break out scenario (if it’s a bull and I grow more skeptical by the month) and a gradual climb is not going to do it.

  9. dboz

    We are back to the same place we were in the metals and miners. Low prices, low revenue, low interest, dead money, no interest, miners struggling market. Meaning it’s a bear. Not a sentiment, just the way it is. Until we get higher highs and shallower pullbacks why would any idiot put any money in the sector? They wouldn’t and that’s we we are where we are. It’s nothing but gold bugs that get toyed with by the banks as they repeatedly clean out the bugs.

    1. Gary Post author

      We clearly are not in a bear. I went over that in detail in this video.

      I commented in detail yesterday in response to somebody’s question as to what would drive gold bull market eventually higher. And it’s two things. One the dollar will eventually break down out of the megaphone topping pattern and start a bear market in earnest. That should ignite the adolescent phase of the bull market. Instead of this frustrating sideways grind will start a pattern of three steps up two steps back.

      Smart money will start to come into the market if we get a bubble phase in stocks like I believe. Once the bubble starts to mature, and indexes start to stretch extremely far above the moving averages smart money will recognize that the bubble is getting mature. They will anticipate central banks will make the same mistake they did the last time a bubble popped and print huge amounts of money when the bubble bursts. So liquidity will start to leak out of stocks and move into the gold market in anticipation of a repeat of the process that happened during the last bubble.

      The gold bull market will accelerate when this series of events actually starts to unfold.

      So far everything is playing out pretty much exactly as I have been anticipating. Now we just need to see the vertical phase transition from a runaway move into a parabolic move. If it does, then I think we have the set up in place for a bubble in gold over the next four or five years.

  10. Gary Post author

    The euro topped on September 8, and gold topped on September 8.

    The euro formed a daily cycle low on October 6, and gold formed a daily cycle low on October 6.

    The euro rolled over into a left translated daily cycle on October 12, and gold rolled over into what I believe will be a left translated cycle a few days later on October 16.

    It’s not unreasonable to expect that gold will complete its intermediate decline at roughly the same time that the euro bottoms and the dollar tops.

    Since the currency cycles seem to have a evolved into longer timing band’s that can now run up to 40 or even 50 days, my expectation is that the intermediate degree trends in the currencies will reverse in December, and gold will find its ICL in December, and the dollar will begin the breakdown from the megaphone pattern in earnest in December.

  11. Goild

    I had mentioned that relevant indicators were/are at extreme.
    The extreme mood did not change yesterday after the FED. Meaning that there was not force big enough
    to produce the chance of paradigm.
    I take gold is channeling a few days, perhaps today and tomorrow, and perhaps early next week the big decision will be taken on whether to go beyond the extreme or retrace.

  12. Robert

    Just like I said. The S&P has been acting very weak for this daily cycle and now it is looking like it will rollover while gold and silver are moving higher.

    1. Gary Post author

      Or the Fed prevented the DCL from completing its move in order to have the market moving up for the FOMC meeting and it’s now going to complete that correction over the next few days.

      The fact that the S&P never actually closed below the cycle trendline was a bit weird.

      The NASDAQ looks like a completed DCL. But most of the other indexes look like there should be a larger dip.

      I’m going to watch the McClellan oscillator over the next few days and see if we get a move to deeper oversold levels. It might be that I prematurely called the DCL and didn’t take into account a possible intervention to prevent the market from trending down into the FOMC meeting.

    2. vin

      You are wrong, hopefully. BULLS have a long way to go either in the form of a vertical up market, barring that it is 16 years BULL. To-days action doesn’t count. It is a temporary phase in a very strong BULL. It is either one or the other.

      If it is neither we will let you. Wait!

  13. Goild

    This looks like indeed a double bottom.
    Though tomorrow or Monday will be different story.
    We are channeling to the meet the daily averages to then fall…

  14. JJHarmen

    And the S&P always rallies after a news related sell off. I think we are seeing a pattern here folks. BTFD never gets old in today’s managed markets.

    1. Gary Post author

      Actually I think it’s just as simple as, traders buying dips in anticipation of the markets continuing higher at least until the semi conductor index reaches the 2000 highs.

      1. vin

        Gary, I don’t know whether you will be proven right or wrong. But I sincerely admire your confidence. Your trust in your predictions is astonishing. I still haven’t sold SM though it did look like this morning that someone with deep pockets was taking profits. It now seems to have stabilized. As you say probably someone cane in to the rescue. Best of luck!

    1. vin

      Yes! To-day it looks like a LABU day after a looooong wait and a big paper loss. Hopefully it will continue for a few days. Not withstanding politicos are Gary as pointed out, the butchering was over done.

  15. Lenapowich

    The miners can’t seem to get any momentum going. Are the rug pulls meant to discourage us from hanging on to our positions or does it mean that more downside is on the way? Watching GDXJ go no where day after day is challenging. Maybe I should quit checking it 10 times a day. LOL.

      1. Gary Post author

        It’s weird, in most other endeavors in life human beings tend to take the easiest path. But when it comes to investments they seem to gravitate towards fighting trends.

        1. jyoung3759

          Gary,

          Intelligence and ego are a disastrous mix. People want to be right in this game and they will go to unusual lengths of pain tying to prove that. Like staying in horrific relationships thinking things will change. However, this game exists due to those characteristics of human nature.

  16. Christian

    Folks, it pays to be bold but bold and silly seldom go hand in hand.

    Every day on this blog you are given solid advice and like ALL retail traders you continue to challenge the obvious. Respect the trend!

    So let me give you the low down ONE MORE TIME:

    *The buck is consolidating for another PUSH UP — get ready!

    *Gold is stuck in a FLAG FORMATION which will eventually roll over and break 1260

    *Miners are consolidating in a SYMMETRICAL TRIANGLE which is a continuation of the current trend type of pattern

  17. JJHarmen

    The S&P is still having issues and may not get into the green today. If you bought the dip, please be aware that ‘They’ are working on the problem.

  18. Spanky

    $CDNX has been consolidating in an absolutely ridiculously tight range for the last 4 months or so. I’ll admit the chart from a long term perspective look superb. However, in the short run, it is certainly vulnerable. The first potential support comes in at the 89 WMA. I do really do not think it is going to be testing the 144 WMA any time soon, although it can’t be 100% ruled out.

    I don’t think the mining indexes can rally without $CDNX (there are alot of miners in CDNX but a lot of other types of companies too). If $cdnx heads to the 89 WMA over the next coupe of month, it will probably correspond with a sharp move lower in the miners. But the fact that the $CDNX chart looks so good leads me to believe that a catastrophic breakdown in the miners isn’t happening. You want to buy any and all touches of the 89 WMA IMO.

  19. GMoney

    The new tax plan? Look at the rates & brackets chart. The middle class just got screwed again. The 25% bracket that previously started at $153,100 for married couples, now starts at $90,000. The 25% bracket for singles previously started at $91,900, now starts at $45,000. Then take away most of your deductions with the left hand while the right hand so generously “gives” you a higher standard deduction. That will leave a lot of people who actually work and don’t pop out kids at the welfare pace, worse off than they were before.

  20. Jimsee

    if u r bored – lookat the hourly volume on the /gc dec contract, perfect 1 fist pattern telling us plainly how ‘they’ feel about us lowly retail traders 🙂

  21. Spanky

    GDX’s 600 dma is at 21. That is a very important moving average and more or less equals the 200 WMA currently. That is also Gary’s target for the ICL.

    GDX really should not drop significantly below its 600 dma at this point, since it is now sloping upwards. It should in theory provide the necessary energy to kickstart then next IC, which should absolutely result in a higher low, although it really is anyone’s guess at this point how long it will take to retest and then break above the 2016 high.

    http://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=2&mn=0&dy=0&id=p82694198028&a=554347287&listNum=1

    1. Lenapowich

      Jimsee, the government provides plenty of welfare and subsidy support for not-so-smart women to be baby factories that produce plenty of not-so-smart kids that the government erroneously believes will be the not- so-smart workers of the future. I say erroneously because most the the kids just want to live the same way mama is, forget that working nonsense.
      Jimsee, you do not qualify because you are obviously way too smart and also because you are a man. Too bad but someone has to pay the taxes needed to feed and house those not-so-smart baby poppers.

        1. vin

          I couldn’t agree more. In Canada now with Trudeau’s policy of bring more welfare recipients from his vote-bank countries, only makes it worse. Canadians pay quite a bit more income taxe than Americans.

        1. mexican

          500.00 extraction, 200.00 cleaning 3,000.00 root canal 2oo.00 Xrays, Implaints ????
          Should have listened to Ma and Pa to be a dentist, puts trading on the back burner!!! LOL! But it is what it is!! Legal corruption!
          NO VIN NOT A DENTIST…….Retired Mechanic Same like a dentist i guess LOL!

          1. vin

            mexican. my post was intended in response to that of Nada: “Yeah I forget what assets I am holding all the time” I thought one has to be real rich not care about one’s holdings.

  22. JJHarmen

    Those who bought the S&P on this morning’s dip might want to take profits. The ‘fix’ cannot be guaranteed to put the S&P into the green for the day although that is the plan.

  23. mediatik

    I don’t know about your oil call Gary, oil trades a lot more on fundamentals, reason why you had such a hard time trading it earlier this year . We were oversupplied so you kept missing on the rally call now supply is tightening and we are probably aldready in a deficit … chart is strengthening nicely could see a move to 70$

  24. Don

    The Russell 2000 has been showing a lot of volatility since last Friday. I have no idea if that means anything although it’s not the small caps that interest the central banks.

  25. Don

    When I saw the S&P futures down last night, I suspected the S&P would close up today. I don’t have any statistics but it does seem that Asian trading is rarely permitted to lead the American markets. The gold market is the same but in reverse. Gold up during Asian trading often means a sell off when the US markets open.

  26. jacob2

    Gary, So if we are in the early stages of a stock market melt up what will be the specific sector/ industry that will be the focus of the markets ( 90’s internet bubble redux) ?

      1. Nada

        Let’s see. Amazon is about to start accepting bitcoin as payments and CME will be launching bitcoin futures, potentially by end of year. So all signs, point to Bitcoin.

        I think someone called it a bubble that would soon crash, but I forget who.

        1. jacob2

          And Starring us right in the face all along. The big new idea. A big new idea stepped in controversy that fundamentally alters the way the world does business.

          BArrons: BTC blasted,through 7000 today with it increasingly displacing gold the go to alternative currency in investors portfolios. Look for it to hit 25000 in 5 years.

          Instead of perseveration on gold we should of…… al too likely me thinks.

          1. jacob2

            The next big investment thing. Not semiconductors, not amazon, not biotech, not gold, oil, EV’s, TSLA or China but the investment from far left field ….BTC. It’s what you don’t pay attention to that frequently turns out to be most important.

  27. Nada

    For the remaining gold bulls who are not hiding or tried to convert their previous riddles of bullish to bearish meaning, here is a little sunshine for your day;

    Gold made a higher high.
    Gold made a lower low.
    Gold closed above to 10ma.

    Tomorrow we have NFP and ISM Non-Manufacturing data. I will end the suspense. They both will be bullish reports.

      1. Nada

        First, everything is bullish SM, so lets throw that one out the window. Second, in regard to “NFP suggests raising rates sooner rather than later” – There is no sooner. The next meeting is Dec 13th and the Fed will hike, regardless of NFP.

        Lastly, raising interest rates is bullish for gold, not bearish.

  28. jyoung3759

    My cycle/spectral analysis suggests that a significant low occurred on August 21st and that price continues to move up and may make 2750.00-28000.00 at the final top which my occur around end of August to early September but this will likely be a double top that first peaks in April then drops sharply into late May/early June as the initial false break down rises back to similar or slightly new highs in the August/September time frame which is likely to be the start of a exceedingly long and painful bear market into the fall of 2024 with lows likely under 1000.00. That is a very big picture but of note is the near term where this blow off move continues unabated for the most part and finally tops at the end of next summer/early fall. Timing is more important here then price levels as those are never as accurate as time. Price will not act and move higher if time is up. Near term, there may be some weakness the week after Thanksgiving into the first week of December and then some weakness just before Christmas into the 8-10th of January but after that a pretty strong move into March/April should occur with little problem. This matches Gary’s 6-8 month move very closely. So basically up thorough April then down into May early June and then repeat of the April top into late August /early September. This is certainly not advice to trade but cycle scenario base on spectra analysis.

  29. Goild

    Dboz,

    Nice charts on the 6 reasons.
    From the bonds market there are also several reasons.

    Actually not reasons. Everything points out to a critical point.

    Unfortunately, the economics say gold will go down.

    1. victor

      I guess gold going to be elevated Sat/Sun as US bombers flying around NK, “NK mighty army under the rule of all loving leader KimChen…” should respond somehow …

      1. dboz

        What case could you make to LOAD up on stocks in a confirmed multi year bear market! Bottom feeding? Wanting to go bankrupt? Miners will be shutting down if the bear gets that deep again. High risk and no reward in an $8 JNUG world.

  30. dboz

    The interesting thing to me here is no one but a select few of us are IN the metals/miners. Many are short, most are sideline sitters. EVERYONE says end of year. Maybe we are about to get our surprise upside coming right soon. No one is expecting or prepared for it here. Well, I am and NADA is, maybe Primetime. That’s it. The boat is awful empty on this side.

    1. dboz

      No trucks are loaded, no trucks are even rented. No one is prepared for an upside move. The market has conditioned us for more down and a bloodbath into end of year. You really think we all get rewarded for the third year with THE SAME PLAN?

    2. Gary Post author

      Maybe that’s because many people have listened to me and are finally paying attention this time when I say gold has to complete a failed daily cycle before the ICL is finished.

      On the other hand, some people just keep doing the same thing over and over and making the same mistake time after time. They are betting on the long shot. The trade that only happens 1 in a hundred times.

      Yes they may get lucky and catch that very low percentage trade eventually, but in the meantime they will wreck their portfolio with loser after loser trying to hit that lottery ticket.

      1. Gary Post author

        I’ll say it again, the time to lean against the trend is when sentiment is excessive. Sentiment in gold right now is dead neutral at 46% bulls.

        So many of you are pretend contrarians yet you don’t even have a subscription to sentimentrader so you can monitor actual sentiment levels.

        1. dboz

          Gold 33% and silver 42% bulls on a daily indicaror. Not exactly smoking with bullishness.

          Crude is 88% and NG is 12%. I am loaded with UGAZ yet it still lost 30% in a week with mainly bears.. Oil has gone straight up when it’s mostly bulls. So you cant just point to sentiment as the indicator for moves. Gold and silver are on the wrong side of bullishness here. In the toilet? No. I will not argue though, you have called it right for the most part. Although you were looking for the same thing in July.

          1. Gary Post author

            You are looking at short term sentiment. Look at the intermediate sentiment levels. Those are what you need to track to gauge ICL’s.

    3. vin

      dboz I have a permanent position in PM and related stocks for years. Of-course there is a difference between investing and gambling. I will bet on jnug etc. if and when it gets close to 8. It could happen earlier if the technicals look much better and/or there is some fundamental change eg very low dollar, international circumstances, high price inflation etc.

  31. dboz

    Very good advice. And another huge drop to GDX sub 20 ends a bull case IMO. No reason to buy dead money. The market will be soaring and BITCOIN will be on its way to Mars. 100k people signed up yesterday. Amazon is going to accept payment in crypto. I think we missed the chance of our lifetime. Had we bought BTC a year and a half ago we would all be millionaires.

    1. Gary Post author

      Yes we missed the beginning of the bitcoin bubble. But it’s too late to jump in now as you are almost certain to get caught when the bubble pops. I’m going to predict maybe 1 in 100 people will actually make any money off of bitcoin because they will hang on too long and get caught when the bubble pops. They have become conditioned to view every correction as just a temporary pullback. But one of them won’t be a pullback. It will be the end. At some point one just has to say “I’ve made enough” and get out. But almost no one is able to control greed in a bubble and they all get caught when it implodes.

      I’m trying to get people in at the beginning of the stock market bubble, but very few people are willing to buy. Just like they were unwilling to buy bitcoin two years ago.

      On one hand stocks have real earnings and at least some kind of fundamentals to drive a bubble. Bitcoin on the other hand is a pure Ponzi scheme. So you can’t fault people for having some common sense.

      1. Nada

        Nonsense. Bitcoin is not a ponzi scheme. You missed the boat, so now you criticize the asset to make yourself feel better. Typical human nature and it never changes.

        1. Gary Post author

          It is a Ponzi scheme.

          There is absolutely no value in a bitcoin other than someone else’s willingness to pay you more for it than you bought it for.

          10 years from now we are going to look back and wonder how in the hell we could have fallen for another round of tulip bulb insanity.

          1. vin

            Gary, in a way I agree with you. But, isn’t that by definition what “money” is?

            ” There is absolutely no value in a bitcoin….”

            Is there any value in the paper we hold except the assumption that we the people will be willing to be taxed by the politicos for ever?

            And, gold? It is probably the most useless substance known to mankind. How useless is it? They tell us that almost all the gold ever mined still exists that is almost none has been ever used. LOL!

            Stocks? Most of the companies only exist because they float share now and then. Or, they borrow money against their market valuation. Talking about Ponzi?

          2. Gary Post author

            There are so many wrong assumptions here.

            Money issued by a country has value based on the GDP of the country, along with the government’s ability to tax. So there is very real value in the currency. The only time the currency becomes valueless is when the government becomes too greedy and starts to counterfeit money far above the ability of the countries productive capacity.

            Gold is far from useless. Is one of the best conductors of electricity in the universe. It also has unique properties that no other element has. It also has a limited supply that can’t be increased easily with a printing press.

            And most companies not only have earnings but many make products that are absolutely essential for the continuation of life on planet Earth. So to say that these companies have no value is extremely false.

          3. vin

            “Money issued by a country has value based on the GDP of the country”

            NO! If that was true then then money supply would be limited to GDP increase/decrease rate. Furthermore, what has GDP to do with the government? Money supply is a government invention based on printing press with no logic except that they can get away with the intrinsic permission of “we the people”.

            “..when the government becomes too greedy …” Government? You mean politicos? Do you meant that once in a while they are not greedy? I suggest reading history of ANY nation China, Japan, USA, UK, Germany, Russia, France ……

            “Gold is far from useless. Is one of the best conductors of …”
            Then why all the mined gold is still UNUSED?

            “Stocks? Most of the companies only exist because ….”
            Incorrect. There are VERY few public companies today which can survive without more borrowing and/or frequent floating of shares. Please read the history of your favorite company and surprise yourself.

            Ponzi? I forgot to mention the banking system and the individual banks.

            LOL!

          4. Gary Post author

            LOL you need to quit reading the perma bear sites.

            Most of the time money supply does grow in line with the productive capacity of the country. It’s only when we get into these periods of stagnation that governments try to jump start the economy by printing money. It usually ends up creating bubbles as we have seen over the last 17 years.

            One of the unique traits of gold is that it is virtually indestructible. That is why every ounce of gold ever mined is still available.

            And most companies don’t exist only because they can borrow money to retire shares. That just tends to increase their share price but it has nothing to do with the viability of the company. If a company is turning a profit then it is a going concern and at little risk of going bankrupt.

            Sure during periods of excessive money printing and extreme emotional greed share prices can get out of line but that doesn’t imply that the company has no value. It just means human emotions are running hot and the company value is probably a bit high.

          5. vin

            “LOL you need to quit reading the perma bear sites…”
            I didn’t know yours was a ” perma bear site”

  32. bluelagoon

    Looks like gold may be confirming a bounce out of its DCL – right on schedule with this weekend’s full moon lol.

    As for bitcoin, watch the Netflix documentary and you will likely want to buy in now.

    1. Gary Post author

      There is no way I would ever buy any asset stretched 300% above its 200 day moving average. That doesn’t mean it can’t go higher, but it does mean the odds are extremely high I would get caught when the bubble pops and just end up losing money anyway.

      During a bubble greed overwhelms common sense.

      That’s not a bounce out of a daily cycle low, it’s a bounce out of the half cycle low. This will establish the downtrend line that will need to be broken to confirm the daily cycle low.

      1. Gary Post author

        Not that it was a bubble, but we made that mistake with silver and held on just a little bit too long. Many made that mistake with gold in 2011 and held onto long.

  33. Don

    A 900 billion dollar company that also happens to be the biggest component of the S&P, is almost totally dependent on the sales of one key product. It’s a gigantic house of cards built on the success of a bloody phone.

      1. vin

        No doubt it is an excellent phone. But, people buy it with the money they don’t have to impress the neighbor they don’t like. It is great as long as it continues.

        1. Gary Post author

          I think we can safely assume that people are going to buy communication devices for the foreseeable future.

          We are a social species after all. And like I’m fond of saying, human nature never changes.

          1. vin

            That is not keeping this company afloat. What it is keeping it afloat is people changing their phone very often and people buying the “best” to impress others. Now, they are entering India is a big way. I won’t be surprised to see they keep on performing well for the time being.

  34. Don

    Yes, a big percentage of the world does own an Iphone and Apple’s continued success is dependent on convincing everyone of those Iphone owners to ditch their current model for the newest model. Do you think that business plan is going to work forever? Not a chance in hell.

    1. Spanky

      Eh, in my household, with three kids aged 8, 10 and 12, phones are a much bigger focus than the PC. For instance, I get all my news on my phone. I get all my sports highlights, news commentary etc. on my phone. Same with my kids. I personally don’t watch TV at all except for English Premier League football, and even that I often stream to my phone to watch.

      People have no problem dropping $1000+ on a good PC, so I don’t see why it is such a stretch to think that if people spend 10x as much time on their phones as their PC or watching TV, they wouldn’t want the best experience possible and be willing to shell out for it.

  35. JJHarmen

    Opening Gap …check
    Dow makes new high….check
    Sell off….. check
    Now into churning till the last hour….
    Forgot to add…stomp on goldbugs…everyday.
    The market has become a low volatility zombie. No fun.

  36. Gary Post author

    And there it is, a new low in GDX.

    The next leg down is about to start.

    The pattern fooled us this time. Instead of gold bottoming on the full moon, it bottomed a bit early and the countertrend bounce more or less topped on the full moon.

  37. Spanky

    There we go. Gold and silver down in a flash.

    Do we get another 4-6 straight weeks literally straight down into the yearly cycle low yet again (’15 and ’16)?

  38. Spanky

    I fully expect UUP to tag and then bust through the 600 dma fairly significantly before it tops. If this really is the beginning of a bear market for the dollar, then that should be its last hurrah for a long time. We’ll see.

  39. zkotpen

    Gary,

    You missed bitcoin, mate. It was ur black swan, and you missed it. You missed the monster move of the decade. Missed it, bro. Now you want to call it a Ponzi scheme. Missed ur black swan, buddy.

    Sounds a lot like 2012-13, when you missed the monster move down in precious metals.

    So you’ve gone from daily manipulation talks, to daily ponzi scheme talks.

    And your running “4-5 years” in gold. Remember, that’s what you said back in September, 2016. Seems like it has not gone from “4-5 years” to “3-4 years”.

    I don’t know about manipulation and ponzi schemes, but I do know a personality cult when I see one.

    1. Gary Post author

      I don’t mind missing the bitcoin bubble. It is a Ponzi scheme though. And I guarantee 10 years from now we will look back and wonder how we could of bought tulip bulbs again.

      We still have at least two bubbles to go. I’m in early on the stock market bubble and I intend to be in early on the gold bubble.

      Let’s face it almost no one bought early in the bitcoin bubble. And those that are buying now are going to end up losing a ton of money because they were too late to the bubble and they are going to hold too long. Like I always say human nature never changes

        1. Americano

          Gary using Ponzi is rhetorical device IMO. Because this is a family blog – he probably used that instead of a bad word that comes outta Bulls lol.
          I think if he really thought that he would specify.
          I have nothing but thanks for Gary because his teachings allowed me to recognize Bitcoin I earlier & I finally pulled trigger in early March large.
          Bitcoin requires MANY passes at very smart accomplished folks before they actually get it ( see Kyle Bass explanation as to how his fault with Bitcoin was that he didn’t take it seriously enough for deep thought & now – Bingo).
          Thing about Bitcoin is it doesn’t care – just watch the price. Especially – Spring 2018.
          I see $15K by summer. $25K EOY 2018.

  40. Gary Post author

    It looks like the big rally in silver two days ago was bait to sucker in gold bugs for fleecing. Like I always say, I take everything in the metals sector with a grain of salt.

    1. Spanky

      That is pretty odd even for silver to get two candles like that spaced a coupe of days apart. TBH I am really surprised there is any bullishness in the metals given how weak/vulnerable the yen looks. The COTs at least last week for silver looked terrible, especially in light of silver’s decline over the past month. Commercial shorts actually went up the last 3 weeks as silver price has declined! Not a good sign at all. Very similar to action after the post election massacre where the COT commercial short position remained stubbornly high. And I suppose unsurprisingly, silver ended up making a lower low after that ICL (while gold did not).

  41. Spanky

    For whatever reason, yen hung on for a while before going red today. Yen looks incredibly vulnerable on the weekly and monthly charts IMO given its relation to the 20 month MA and the lower bollinger band.

  42. zkotpen

    Gary,

    “I’m in early on the stock market bubble and I intend to be in early on the gold bubble.

    Let’s face it almost no one bought early in the bitcoin bubble. And those that are buying now are going to end up losing a ton of money because they were too late to the bubble and they are going to hold too long.”

    Regarding the first point, I strongly encourage you to retire in between your two “bubbles”. Go out on top — which, you will say, seems to be despite human nature. The human tends to overreach.

    As for your second point, I appreciate it — thanks! I have been contemplating the black swan all my life — since the days when nobody cared about that bird. And 300 years before that, it was deemed, by definition, to not exist.

    So sure, “nobody” makes any money off of these things, because nobody sees them coming. And even when they do, their minds are full of incredulity and even contempt — that lasts for centuries.

    Most earthlings have not even gotten on board the Copernican Revolution train, much less other more recent trains that didn’t even shake up the world. Believe it or not, at the level of belief, it has been my observation that most people still believe their hometown is the center of the universe.

  43. Christian

    Folks — You can’t say I didn’t warn you yesterday when I gave you the low-dow. If you stubbornly trade against the trend you’re gonna get Ass-whipped!

    DUST — breaking out the Pennant and going gangbusters 🙂

    1. Gary Post author

      Commodities are just waiting for the dollar to rollover and begin the bear market in earnest. Oil has just reached a significant resistance level. The only thing wrong with a commodity complex is that it’s not moving fast enough for inpatient traders. But it is doing exactly what it should be doing.

      1. Spanky

        I fully grasp the enormous chart damage inflicted on the CRB/CCI over the last 7 years. We are so far below the really long term MAs, like the 200 month MA, it isn’t funny. This sector is going to be basing for years and years IMO. Sure, it may be a in a general uptrend from time to time, or even spike up to key MAs, but the longer term picture is set in stone IMO. There is no getting around it. While the 200 WMA may shape up, there is still the 200 month MA to contend with, which is currently light years away.

        The BoJ and Fed knew exactly what they were doing. They have created one hell of a tail wind for US and Japanese companies for likely a decade or more. Well done.

  44. Goild

    Got 200 shares of UVXY at $15.04.

    Have 14K JNUG shares with a loss of $1500 at JNUG $15.1
    Wonder how much will the damage be today or if I will get even.

    Good and wise trading to all.

  45. victor

    Bitcoin worshipers are going to be punished. Those who holds boldly thinking it will fly to the sky will have a loss. Those who is jumping in and out will never catch the top because all bubble corrections is looking like it is the top (last correction was abt 40% down) so they will hold to the end thinking it just another correction but it isn’t. But the biggest losers are going to be those who convince themselves that this “future money” never collapse and will buy at the top.

    1. Spanky

      That is a nasty looking head and shoulders that I am sure everyone can see. Also, consider that the COT commercial shorts in silver actually went up the last couple of week as silver price was down to flat.

      I really do hope you are right, but I can’t see it.

  46. Spanky

    The 38% retrace in the dow:gold ratio from the 2000 peak (when the all time high was made) comes in at around 19.74. That number also coincidentally corresponds to the 233 month MA of the ratio.

    I don’t expect any let up in the dow vs gold until that Fib level is tagged. At 1250 gold, that puts the Dow at 24,625.

  47. Spanky

    Since the low in 2016, the daily stochastics on GDX have not remained oversold for more than 3 weeks before bouncing, typically fairly significantly even if there was another downleg subsequently. I would expect GDX to hit a significant low sometime in the next two weeks. I imagine based on the FOMC in mid-December, we will get a very sharp decline after a 2-3 week consolidation this month.

    If GDX is setting up some sort of waterfall decline right here, however, all bets are off, and the daily stochastics could remain oversold for months (see June-Aug, 2015).

  48. Christian

    DUST — Picking up a few more shares on the pull-back and/or a RE-TEST of the triangle breakout.

    @27.50 BUY LIMIT ORDER in place 🙂

    This is REAL TIME trading folks.. none of that ‘in hindsight bs’ some like to indulge in every now and then — grrrrr

      1. Christian

        I am here to help you UP YOUR GAME. I don’t need to win a contest in order to do that. You can either take it or leave it — entirely up to you!

        IF, however, you could stop obsessing over me Harvey Weinstein 🙂 that would be pretty amazing!

        **That’s my new nickname for you Primetime; it’s somehow very fitting, Lol!

  49. Spanky

    GDX putting in a tiny little inverted hammer on the weekly chart. I wouldn’t bank on a reversal next week necessarily. But it is clearly possible based on the daily stochastics.

    1. Spanky

      It’s hanging by the barest of threads on the weekly chart. If the ICL for gold lies 5-6 weeks from now, you will be seeing silver in the 15s and probably lower than that IMO. Nothing but air beneath silver on the weekly chart. The CoTs look horrendous too. Commercials actually increased short positions as price dropped over the last few weeks. They are gearing up for an absolute smash.

  50. JJHarmen

    So, we got fresh new highs for the DOW and S&P (by a whisker) and the week ends well for anybody holding over priced stocks because now they are even more over priced.
    The Russell 2000 isn’t partying along but that’s mostly the retail crowd anyway and the central banks don’t give a rat’s ass about those folks.

    1. Spanky

      It’s the fascist business model. The biggest companies will own and control a larger and larger % of capital. The Dow and Nasdaq 100 are probably the biggest beneficiaries of because there is zero risk in owning them. Why on earth would you buy a small risky company when you could own TBTF Goldman Sachs? There is zero risk in owning them. None.

  51. Don

    Fresh all time highs on a day that declining stocks out number advancing. That used to mean something but in this age of machine trading and managed markets by the central banks, divergences don’t seem to mean what they used to.

    1. Spanky

      Just BTFD on a levered Dow fund. It’s by far the smoothest, prettiest chart. Zero risk. Just leg in slowly on every single red day. Free money, as Gary says.

    1. Americano

      But it hasn’t gotten away. Bitcoin doesn’t even start till next year & that’s just early adopters.
      $25K Bitcoin is JUST 5% of JUST the gold market.
      $50K Bitcoin is JUST 10%.
      This ignores ALL OTHER use cases.
      Do you REALLY THINK 10% of the gold market won’t go to Bitcoin?
      That leaves 90% of gold market to continue with their Zombie returns.
      That IS the bet.
      Price IS the scoreboard.
      I think $50K by 2020. Why? That’s the. Next Bitcoin Halvening. Today 1800 Bitcoins made per day. In 2020, 900.
      We are currently at about 17 million – only 21mil can be created.
      For proof – watch price.

  52. jacob2

    A, you might be right, it”s only just begun. Like many confused about how to invest and afraid of chasing and the likely outcome. Did buy some OSTK this spring which has extensive holdings in various crypto platforms. More then doubled but nothing close to what some have experienced.

  53. Spanky

    OK guys, for real this time, I am done posting, at least for a long time. I’m sure most if not all of you are sick of my bearish rants.

    Good luck to everyone and maybe someday I will be back to invite you all to my private beach in Fiji when the $hui hits 5000.

    Adios.

  54. vin

    Gary, is this what you mean by vertical up?
    labu up 4.99
    soxl up 7.92
    tqqq up 3.60

    WOW! Thank you Man!

    Unfortunately jnug down -0.43
    gdx down -0.15
    gdxj down -0.30

    1. Carl

      I was expecting faster move up. Nasdaq is not yet at 6300 and semiconductor are really close to 1350. If we have a pull back when semiconductor reach 1350 with only 300 point over 6000, this is an average movement speed. It will need to move much faster than now if we want to call this a vertical phase. I still have hope but my doubt are growing stronger every day.

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