181 thoughts on “TWO SCENARIOS, ONE STRATEGY

  1. Nada

    At the close on Friday, there was 180 million+ single order buy on GLD. It will not show up on wsj bow due to gold closing green.

    She is building a flag on daily. It would be lovely if gold made a higher YCH, but gap fill is all I expect, then a roll over into ICL to test the breakout range. 1230ish-1245ish for a final ICL. We can compare notes in about 23 trading days, when the cycle is on course to produce a normal IC timing band.

  2. Steffmeister

    What I mean by saying that Gary is naive is that this prolonged Autumn is very bad news imo, that is talking against a 10-15year bull! Funny thing is that the EW and Gary’s are on the same page LOL

    https://www.financialsense.com/sites/default/files/users/u111/images/2012/four-kondratieff-waves-1789-2003.jpg

    https://www.financialsense.com/contributors/christopher-quigley/kondratieff-waves-and-the-greater-depression-of-2013-2020

    How long can CB’s extend and pretend a FALL/Autumn here? We will most certainly enter a WINTER, give or take 3-5years and Gold will sky-rocket to the moon and the dollar will take a nosedive along with the western bakingsystem, just wait and see.

    The first juggle was back in -98 when Long term capital went down, the second subprime crash 07/08 the third ? I say 2019ish, the large fractals in finacials are telling us that 2019 is key!

      1. Steffmeister

        Wow Gary you have 2 scenarios just like most EW 🙂 there is hope for you!

        I can show you an example of a big fractal analysis that will blow your mind ! Just facinating stuff .. a measurment of the dollar connected to events from the past that is very similar to what is going on today.

        1. Gary Post author

          Again, did you even listen to the video?

          It doesn’t matter which scenario plays out the strategy is the same.

          It’s too early for me to tell, but I’m leaning strongly towards the first because I don’t think nature will reward years of QE with a secular bull market. I think it will create more bubbles.

          BTW the big multi year swings in the market aren’t driven by fractals, they are driven by fundamentals.

          1. Steffmeister

            but the fractals are a reflection of fundamnetal human action taken. It’s impossible to predict the future but if you are skilled enough to analyze the “vibration-id” you can predict market turns years in advance

    1. Nada

      One thing to note is that the implied volatility is expecting a move. Up or down is left for speculation, but I find it interesting for a few reasons. Last week we had a 31pt expected move – volatility expanded and this week, with only roughly 3 trading days the implied volatility is pricing in 20pts.

      and then there is gold.. with the continued whipsaw action. Not even worth a comment anymore until we see a clear upside or downside break.

  3. vin

    Interesting trading in bios today. Looks like a fight between elephants? Or, are the Big Boys losing the grip, a bit a time?

    A real interesting day in bios!

    Where are you, Don? What are your views at this juncture?

  4. Nada

    BIG contract dumps on /GC now. I guess those GLD 180+m boys sold instead of bought. The ask was tagged, but who really knows when it comes to accurate time and sales data.

  5. Robert

    Its looking like we may get the failed cycle. Hopefully gold drops into an ICL and puts an end to the nonsensical choppy trading. The sooner it drops the better for both sides. Shorts can finally take profit and the professionals can finally step in and put a floor in gold

  6. Gary Post author

    I keep warning you people to take everything in the metal sector with a grain of salt. Clearly Friday’s move was a fleecing of the shorts and set up to then rob the longs.

  7. Strike2

    From Marketwatch – same old story

    Gold moved sharply lower Monday, in part as the euro weakened and the dollar gained on the back of German political uncertainty.

    Market moves appeared to defy the underlying fundamentals that were generally bullish gold.

    “Gold futures worth almost $2 billion, some 15,000 contracts, were dumped on the market in less than two minutes,” said Mark O’Byrne, research director, at GoldCore. “The sharp decline is not warranted and suggests one or two market participants wanted the price lower today.

    “Such selloffs have been seen frequently in recent months and tend to be short lived and smart money will again buy this dip,” he said.

    1. Nada

      I agree, typically these type of sell offs are to get price where they want in a hurry. However, with the recent head fakes in both directions, its hard to say when the insanity will stop.

    1. victor

      that’s what “they” want to create, so far, I’m going opposite, look at s&p vix, -12% Friday, -7% today. I’m playing inverse. Will re-charge at 2600.

  8. Jimsee

    another tough cgold call (nov 18) – is this monday the end of the projected decline or did it flip polarity over the weekend and the Nov23 will be the nearby volatility/momo lo?

    converted all but 10% of remaining /gc puts to spreads after earlier sales in this cycle – it looked on Friday like the low was early – but clearly that scenario is off the table. I’ll be sad if we take out 1230 by friday as my upside is limited.

    1. Nada

      Jimsee did you ride those puts all the way up on Friday? If so, did you add or did today turn out to be a nice surprise. I recall your mention of Nov 23 as a possible high (not low), but maybe you can clarify.

      1. Jimsee

        I added 20% near comex close to the 1260 puts – sold them this morning ~11:00 – the rest I rode (free ride from Nov 14). sweet spot is ~1240 for me now – can’t lose but damn I’d like to make the max!

        On Friday I was confused – there was no clarity – either the low was in or we’d finish on Monday and run UP to Nov 23 was the assessment – I gambled the low was not in – no definitive analysis could predict it as far as I know. The gambling was informed by weak gdx:gld and other factors 0 hope that helps.

  9. Goild

    Good to be back to the usual routine.
    Added 500 JNUG shares for a total of 1500 around $14.75.
    Still have 1500 GDX for long term.
    Insisting with 200 UVXY shares at $14.73.
    Done for the day.

    1. vin

      Goild, I have a feeling that jnug will be an excellent price at 8. But, I will probably start buying below 10, particularly now that Gary seems to have some hints on Friday about a change of mind. Though he has not come out and recommended gold as a buy yet. I follow him with about 5 weeks lag.

  10. Lenapowich

    Guys, this gold market is getting sickening to watch. What was Friday’s strength all about? Now we get yet another rug pull. It only makes sense if the purpose is to scare people out of the gold market. Friggin criminals.

      1. Americano

        Guys most BASIC case period for Bitcoin.
        If it takes JUST 5% of gold market – Bitcoin is $25K.

        That simple – all other use cases….whatever. I think Bitcoin does that in 2018.

  11. Jimsee

    I believe 2018 should see a blitzkrieg of volatility in metals – usually that means everywhere else as well though.

    If there were options on BTC that would be fantastic!!

      1. Jimsee

        The Banks attempt to corner BTC? raise enough capital through selling futures/options to buy the market – seems like that might be the only way to both end up controlling it and not risk going BK on a short squeeze to BTC 10 Trillion or something,lol.

        Seems fishy to me – if they want to control the market they could just print a couple of trillion and buy’em up to whatever price.

        Opinions?

  12. Jimsee

    An interesting debate to he had on BTC – appreciate the inputs! BTC will not displace gold imo – nations cannot move to 100% electronic money – they know the risks of solar outages/ computing arms race (think quantum – we cannot predict algorithms today will still hold over that threshold), not to mention EMP warfare, etc…

    BTC is a nice alternative universe but being a true blue believer should be for the kids :0)

  13. Jimsee

    If BTC goes to 1,000,000 that’s 125X from here – that’s fantastic!

    However an active options trader can exceed that amount with less risk – most won’t due to human failings – but it is certainly achievable – requiring no earth shattering movements – in fact a nice rolling market that moves up and down 10%/year going nowhere fast is *perfect* as long as everyone THINKS it is going somewhere definite with plenty of emotion – and that’s what our propaganda media excels at doing. 🙂

  14. Jimsee

    It really looks for all the technicals like gold has flipped polarity here and will make a lo on Nov 23 – OK – cool. if so we should break 1260 for sure IMO.

  15. Steffmeister

    I am providing ancient knowledge to this blog and Gary acts as a dishonest man. This was a profitable trade for me almost +10% in a week.

    Gary’s cut&paste post:
    Gary Post author
    November 20, 2017 at 5:46 am
    Posted on Oct. 10
    “However I bought my second lot of JNUG on Friday, my forecast was spot on:”
    I’ll let others judge if you were “right on”
    LMAO Remember this was when I was warning that the cycle would top in a left translated pattern.
    You’ve shown no ability to make money and you won’t enter the challenge. So you don’t get the privilege of critiquing others.

    The original:
    Steffmeister
    October 9, 2017 at 8:39 am
    I am no real trader, I am working full time and a little bit more than that …
    However I bought my second lot of JNUG on Friday, my forecast was spot on:
    https://www.tfmetalsreport.com/comment/636417#comment-636417

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

    My forecast for the rest of the year in Gold
    1. Rally from here to a celebration date, I will enter the challenge here …
    2. After the 911 celebration we will turn down into a very dark place
    I will keep my edge to myself, I will not contribute to your blog more than the above few words 😛

    and the Outcome, just amazing isn’t it!
    https://www.tfmetalsreport.com/comment/637800#comment-637800

    This was the forth or fifth profitable full moon trade in a row. There is another FULL MOON trade coming up …

  16. Don

    The Russell 2000 has been out performing the other indexes over the past three days and is very close to a new all time high. Volatility is sliding back down, again. Nothing seems to faze this market anymore as it quickly reverses from every minor dip. Remarkable resilience.

    1. BeachandBiscuits

      Some interesting stats here: https://www.barrons.com/articles/mine-shut-down-heats-up-uranium-prices-1510854340

      Also, some good presentations/ interviews with CEOs and analysts on YouTube in the last few months (I just search “uranium”). This is a good one- https://www.youtube.com/watch?v=gfvAIor53Ig

      Based on several “experts” (prefer people in companies over analysts) it seems the consensus is for a pick up next year, but for things not to really heat up until 2019-2020. IMO it’s a good time to pick up good uranium stocks though because the market will sniff out the change and could tick up sharply (like early this year when a few $ increase in uranium spot prices made some stocks double or triple). Just my .$02 but I do watch it pretty closely.

  17. palobar

    My comment on October 24:

    Gold = ”…November 17-20 is a major turning point.”
    I had posted the 17 NOVEMBER date somewhere in the late summer. Notice the two large side by side bars. It is a very important time window here. Everything still on track.

      1. Steffmeister

        Yes the 17th was actually the anniversary of the 911 event exactly 16.18years ago.

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

        point 1 didn’t turn out as expected, in both ways.
        point two is inline with palobar, so what is the dark place?

        Oh btw, the full moon event coming up is related to bitcoin and the dollar, but it’s not as easy as you might think.

        I will show you later exactly what I mean.

  18. vin

    indl was in positive territory once again at the close. This one has performed well. And, looks like the best is yet to come, specially if Gary’s scenario of fantastic NA SM holds. Still holding labu. Down today with less than 1m shares traded.

    There were some large trades in bios today, mostly on down ticks. Though this one has been a real disappointment considering that semis are doing so well. Good news is that the volume for bios was quite tamed.

  19. vin

    “Goild, I have a feeling that jnug will be an excellent price at 8. But, I will probably start buying below 10, particularly now that Gary seems to have given some hints on Friday about a change of mind. He has not come out and recommended gold as a buy. I follow him with about 5 weeks lag.”

    After reading his (above) post, it could very well turn out that he is right on spot, just like the SM during last few months.

    But, I am in a no hurry to buy jnug, after having bought some gdx and gdxj a few days ago.

  20. earthkitten

    Gary. Hard to really have a parabolic move in stocks when
    you have so many skeptical people out there. By historical
    standard, you have a fairly low participation rate. Stocks will
    go up for the next 10 to 15 years.

    1. Steffmeister

      Thumbs up Goild finaly a person how pays attention to the past, the dark place is Winter Solstice 🙂 the Sun hardly manage to climb above the horizon here in Sweden …

      Then Gary claims that I do not earn any money in markets, sigh … thats the easy part, learning how things really work is a different matter.

      1. Gary Post author

        We no longer take people’s word that they make money. Now you have to prove it with real-time trades.

        So many of the blowhards on here that claimed to be great traders turned out to be the exact opposite when they actually had to make real-time calls in the challenge.

  21. Alexandru Popovici

    EURUSD and DXY shook their respective 10dma!
    Shall we have rejection from here down to DCL for USX and the b/o above 1.1880 for EURUSD ?
    Most likely yes.

  22. Gary Post author

    We should be starting the final run to 1362 in the semi’s, and the S&P should tag its bull market trend line. I think the dollar has probably finished its daily cycle low and I would look for a rally into the FOMC meeting.

    Let me say again that I would never ever trade currencies. They are the most heavily manipulated markets on the planet. You can play a long dollar trade by proxy by just buying the stock market as they should both go up together.

  23. Gary Post author

    If gold breaks through support at 1262 then we’re going to get the bloodbath phase and possibly a test of the triangle trend line down around 1200.

  24. Bluebellkid

    The US Treasury yield curve collapse continued its unending path to inversion overnight with 2s10s plunging to sub-60bps and 5s30s hits a 65bps handle for the first time since Nov 2007.

    2s10s has flattened for 3 days straight, 6 of the last 7 days, and 14 of the last 17 days to a 58bps handle…
    5s30s has flattened 3 days straight, 6 of the last 7 days, and 16 of the last 19 days to a 65bps handle…

    As a reminder, it took The Fed hiking rates to 5.25% in the last cycle before investors finally gave in and financial conditions tightened… for now as financial conditions ease towards record levels, despite a hiking and normalizing Fed, so the yield curve collapse accelerates…
    As a gentle reminder to all those shrugging this off, BofA reminds that in seven out of seven occasions in the last 50 years an inverted yield curve has been the prelude to recession.

    In fact, the last four times the US yield curve was at these levels, the US economy was already in recession…

  25. Gary Post author

    And the banks are busy whipsawing the shorts today after fleecing the longs yesterday.

    This market is a cash cow for the entities big enough to control the market and whipsaw the foolish retail traders that keep trying to trade this off of chart patterns and candlesticks.

  26. Gary Post author

    There’s lots of potential still for the stock market. Intermediate sentiment is almost dead neutral at 54% bulls.

    And smart money confidence Is at 60% bulls. I can’t find a single intermediate cycle that has topped until the smart money confidence drops to at least 30%.

  27. Gary Post author

    More egg on the face for Gross and Gartman and all the countless top pickers.

    Like I said. Someone will try to call a top every other day all the way up.

    Only when we get well into the parabolic stage will everyone turn bullish and any thought of lower prices will be forgotten.

    Just like bitcoin today. No one can see any possibility for bitcoin to go down. At some point we will see the same sentiment in stocks. Then we will need to start worrying.

    1. Gary Post author

      Tops are different than bottoms. Sentiment can stay bullish for awhile before the market finally forms an intermediate top.

      Bottoms on the other hand tend to form quickly once sentiment gets bearish.

      This reverses when an asset moves into a bear market.

  28. vin

    Gary, I know you are genius and you are ALWAYS right irrespective.

    And, you say that sox will stop at 1362 and then decline. I dare say NO. It will go to at least 1392.

    1. Gary Post author

      Where did I ever say the semi’s were going to stop at 1362?

      I said we are likely to get a pullback from that area but ultimately price is going to break through and go much higher.

      1. carlvan

        Gary, about the expected pullback around SOX 1362 (we are very close now), do you expect a DCL to start in the other stock market indices? Or even an ICL? Perhaps a Thanksgiving reversal this time, even temporary?

      2. vin

        The discussion is obviously about the pullback. It won’t occur at 1362. It will occur at a higher lever, may be much higher level.

        You are right in saying that you predict much higher sox in the long run. The reference was only the short term. That is where you make the hypothetical money.

        Long run …… so far your record shows that you change the scenario sooner or later. So, let us forget about the long run.

        1. victor

          Thanksgiving week should be quiet as usual. Good spot for Bitcoin to go down.
          2600 s&p and a bit higher I’m selling my inverse VIX in anticipation to buy lower on Thanksgiving week. Added to gold shorts today.

      1. vin

        Why worry about the cause, Don? The only thing that is measurable is the result. Drawing lines and coming up with new jargon is not the only mambo jumbo. The market is very old.

          1. vin

            That was my point. When it comes to future everything is a guess. You are right ii is a crude guess on my part.

            I can provide you the information how I arrived at a number. But, in my opinion that won’t be right because like many others I am sometimes right and sometimes wrong. So, it wouldn’t be proper for me to add another theory here when so many are floating around.

            However I would like to say to those who new like me to be very cautious with their money. There is one fundamental I 100% subscribe to. And, that is “Opportunities come and go. But, the lost capital is gone for ever.” It is ok to follow gurus and come up with new theories, but one should always remember that it is one’s own capital, and in most cases it is hard earned.

  29. Don

    I am having a hard time believing that TLT’s rally is sustainable. If the economy is booming, as the stock market would seem to be indicating, then long term interest rates will go up. That’s just how it works.

    1. vin

      Yes they will go up if they let them. In fact they will go up even if the economy is in shambles, if they let them.

      To-day addiction to spending borrowed money is as much an issue as gambling, drugs and booze.

    2. Nada

      My read is that the 5 year interest rate is rising faster than the 10y and 30y. What does this mean? It means money will become more expensive to borrow in the short term than it has previously.

      Lets think about that for a second. Money has been so inexpensive, that companies can borrow and in return buy their own stocks (buybacks). Well do you think they are going to be doing that with rising rates? I can answer that for you. NO. That is why you are seeing the turmoil. Like it or not, the liquidity is going to be tightened. We are getting closer to the day that the party is over and someone is going to have to pay the bill. I propose that somebody be Gary.

        1. vin

          You are right. Except for the line of credit, short term interest rates don’t affect large corporations. Furthermore many large corporations are sitting on real cash and they don’t know what to do with it. Interestingly they do not want to give it directly to the share holders, or raise dividends.

          However it could be problematic for small firms which need money. And, in due course of time it will hit real estate investments and the home owners who have mortgages.

          The situation is so bad that many large firm derivatives are probably worth many times more than the capitalization of the stock itself. And, with buybacks they are encouraging more gambling while discouraging real investors.

  30. JJHarmen

    I have come to the conclusion that an investor’s worst enemy is the media, especially a site like Zerohedge that dutifully reports pretty much everything that is bad news. It’s not that they publish false information, but that they always publish articles that are negative without providing anything positive. No balance.

        1. Nada

          Not so sure on the SM. What I do see is that implied volatility is expanding and it leads me to believe that market is starting to warm up to the idea of a correction. Topping is a laborious process, so I can’t even begin to imagine when. Volatility will be the tell and at this point we don’t have much of it.

          I mentioned on Monday that I thought it was rather interesting that the market was pricing in a 20 point move for 3 days of real trading. You have no idea if its going to be the upside or downside, but clearly we got our expected move outlined by the implied volatility. You can look at the weekly options data to see what the market is pricing in. I have a tos indicator that pulls the data on the fly from the options data;

          https://gyazo.com/e735b790130e92bfd1c8cab4b4ef40db

          The last few weeks are showing the hints of expansion. Remember, this week is based on 3 trading days so the chart does not show the expansion justly.

  31. Don

    JJ: Zerohedge does a good job of providing us with stories that the MSM feels the public should not be made aware of but you are right about the negativity issue.

    I always keep in mind that it doesn’t matter whether the news is good or bad, the market is very likely to go up regardless.

  32. Duuuuuude

    If you are seriously interested in upping your commenting game to a level where most of us can understand what you are talking about, I highly recommend buying some good screen capture and annotating software. I think Snagit is the best. You can share your ideas via screencast. It will be sold at a steep discount Monday.

    https://www.techsmith.com/products.html?utm_source=reg&utm_medium=email&utm_content=cm1&utm_campaign=cybermonday2017&spMailingID=55406479&spUserID=MTM5MDYyNzUyMTAyS0&spJobID=1283720014&spReportId=MTI4MzcyMDAxNAS2

    1. Nada

      I like some of the features shown. So one has to buy the software (discounted Monday) and then pay the monthly service at screencast to avoid any type of adds? I use gyazo subscription to avoid adds, because I hate advertisements. However, gyazo is around $4 a month. It allows some of the editing shown by snag-it, but snag-it appears to be more feature rich.

      1. Duuuuuude

        Unless something has changed, there is no monthly service fee. I don’t pay one but I have owned this for 10 years probably. Over time, it is very reasonable.

    2. Americano

      X100
      Snagit is “THE Bitcoin Standard” of screen grabbing & editing software.

      All the free MS snip etc is as middling & tired as Gold & Silver coin shops are gonna be in 2018.

  33. victor

    I use my 6yr old granddaughter skills printing a screen shot and asking her to connect an upper and lower dots.
    So, there’s a trend lines and channels, then I ask her where’s a market goes – “it’s goes up grampa don’t you see”
    She likes to call her “technical analyst”

  34. primetime

    Big money continually wants the little guy to chase sectors, because they are usually two steps behind. Thus always buying high and selling low to move onto the next hot sector. Human nature is to become frustrated and mad. We watch these numbers all day and torture ourselves. When a trade goes in our favor we become exuberant and get all excited. If we could demonstrate more patience with less frustration and actually hold a trade for a longer period of time, even several years if necessary, we could probably become more successful traders.

    In retrospect of his career, Lynch realized if he had just held onto most trades a little longer, his success rate would have been much higher.

  35. JJHarmen

    Given that the SM market gapped up at the open and didn’t sell off during the day, I was expecting to see a big surge near the close but that didn’t happen. I don’t know if that means anything. Probably not. No way I am shorting this sucker.

    1. JJHarmen

      Goild, well, it’s like this, when I looked at all the relevant markets and saw that they were in the green right after the opening bell and concluded that they were going up. Simple.

  36. Goild

    Today I did dome JNUG trading but mostly got into UVXY.
    At some point I was losing $3300 in the swing account.
    I ended losing $1745 in the swing account and making $1665 in the day trading account.
    Left 1000 UVXY shares on the table.
    We will see how good I get to trade UVXY.

  37. Goild

    I do not what in the world I get when I buy UVXY,
    If someone can tell me I would appreciate it.
    Are there any underlying securities?
    As BD would say: my dog Mutty knows better.

    1. JJHarmen

      Goild, by playing UVXY, you are getting the opportunity to have your investment lose money at warp speed as there is no other ETF out there that has such a built in high rate of decay.
      There are no underlying securities involved. It is a mathematical thing based on volatility and designed to steadily decay to zero although that never happens because of period reverse splits. It is strictly a gambler’s bet that you are going to buy it just before a significant market correction occurs and as you know, that hasn’t happened in a very long time.
      Good luck. you will need it.

  38. Goild

    JJ,

    Thank you!

    I think it is an excellent observation to look at relevant markets and if everyone is up, it is likely is an up day.
    I like it very much.
    As per UVXY…
    Maybe I have a trait of a gambler.

    1. ras

      Please keep it that way. Polemics and incessant arguments to highlight past missteps are unproductive. Trading activity is a lonely path. More than one can be a crowd. One can always share basic ideas without blowing hard. Need charts, explanations, hand holding, etc.? Consider subscribing to Gary’s SM letter and/or a stock picker service such as IBD. Info can come from anybody. It is up to the individual to do due diligence, required heavy lifting and risk management. Stay with what is going places. Avoid sectors not going anywhere in a hurry.

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