But back to the manipulation theme. Just as an example back in the spring of last year the Fed openly stated their intent to artificially hold interest rates down. They were determined to print as much money as needed to support the bond market and consequently drive rates down (interest rates move inversely to bond price). Let me show you what they accomplished.
What they accomplished was to put in a final top in the almost 30 year bull market in bonds.
Let me show you another one. In Sept of 08 the SEC in its infinite wisdom decided to ban short selling in financial stocks. The end result? Financials dropped much farther than they would have naturally.
Folks let me tell you right here and now whenever you see or hear about the government managing any financial asset run, don’t walk, to take the opposite side of that trade.
Now the big stink is that gold is being manipulated. For our sake I hope so. It will mean that gold will go up much much further than it would all on its own.
If one is interested in the topic they kind find innumerable articles, interviews, papers and speculation purported to “prove” the fact at the GATA website. A website basically dedicated to exposing said manipulation. I guess it’s no surprise they have a mountain of “evidence”.
But let me just throw out one warning. This is one of the oldest tricks in the book. As long as one can lay the blame for any mistakes on some mysterious manipulators they never have to take responsibility for any bad calls. Hey it’s not our fault gold didn’t go to $1300 like we said the government is suppressing gold.
Fact is any manipulation to depress price below the natural level of the market will only increase demand. Let's face it no one controls demand. Any attempt to force price lower than where it should fall normally will just bring in more demand from China, India, Europe, investors, etc.
If the governement is actually trying to control the price of gold it just means gold will go much higher than it would normally . We can only hope there is manipulation going on as it probably means gold will go to $10,000 instead of $5000.
Hi, Gary, How are you,
ReplyDeleteI have a question:
I found a blog (Toby Connor) which has almost same contents as yours. I don't know why?
http://www.goldscents.blogspot.com/
same person
ReplyDeleteAlthough I believe GOLD is the best place to be, there is no denying that DEFLATION rules the day.
ReplyDeleteYes, the criminal Fed (and all the others in the central banking cartel) have "created" trillions in new currency, but it's has only gone to support banks' balance sheets.
Ignore the gov't manipulated data from month to month, the world's consumers are broke, and getting poorer (as well as unemployed).
We've all been robbed, but take whatever is left and park it in gold/metals, as that is still the best place to be, even if they work lower. You'll be better positioned for the upcoming revolution!
Actually Ben halted deflation the same way Roosevelt did in the 30's, by debasing the currency.
ReplyDeleteI think we probably have a better chance of seeing hyperinflation than another bout of deflation.
Everything is manipulated.
ReplyDeleteDisagree somewhat! Mark-to-market accounting rule change resulted in this massive rally that we have seen since last March 2009. It is a manipulation, a pure one. You take that out of the picture, ask the banks to mark their assets to market, and they will be insolvent!
ReplyDeleteEverything is manipulated!
gold looking strong Gary. what do you think?
ReplyDeleteI continue to think the same thing I have for the last two weeks. The stock market is on thin ice. These extreme moentum moves often end with a big whoosh down as everyone heads for the door all at once.
ReplyDeleteIf that happens it's going to take everything down with it when it goes and that includes gold and certainly the miners.
The best play right now in my opinion is not to get sucked into this and continue to sit in cash until the correction comes.
Gary,
ReplyDeleteas we all know, a correction will always come - ultimately. I don't see there a momentum move as you call it. I see a slow grinding higher. There is no exaggeration in the market and nothing even close to parabolic, in NONE of the sectors. Some sectors seem to have topped in the short term, others seem to have bottomed, so it all seems quite balanced and orderly. If you are sitting in cash to wait for a 4-5% correction in the stock market you might lose out on some of the gains. Some PM stocks have already made 5-10% from the bottom. ALso, other world markets have already gone through a correction. And you could even argue that the DJT is going through a correction now, generating a bullish flag. Also, you have been suggesting a top in the dollar for some time; it didn't come then, but it might be in now? In other words, by clinging on to a correction-centric view of the US stock markets, perhaps you are losing sight of a bottom in the PMs?
I didn't say this was a parabolic move I said it was an extreme moentum move. The market has been up 25 out of the last 38 days (65%). That is a very strong moentum move. Very often these things end with a big whoosh down that will erase several weeks of gains in a day or two.
ReplyDeleteNow if you want to take a chance of getting caught in one of those be my guest. But I am not willing to go long on the 38th day of a daily cycle, with multiple days of SoS, with sentiment skewed wildly bullish and with breadth deteriorating badly.
BTW so far gold still hasn't even altered the pattern of lower lows and lower highs so I still wouldn't be willing to jump the gun yet especially with the sword of the stock market hanging over my head.
My savings has been in gold for quite some time, but I'll use margin to trade gold from the long side when Gary feels the short term bull is back on. I trust his instincts.
ReplyDeleteAs far as savings being parked in gold, it's as good a place as any. Not looking to get rich, just preserve purchasing power here.
Gary, gold is currently at 1126ish, how is that not a higher high?
ReplyDeleteThe previous high was $1133.20. Gold would have to rise above that level to change the short term pattern of lower lows and lower highs.
ReplyDeleteBut hey if you want to get long go ahead, just be prepared to hold on through what could potentially be a nasty correction soon. As long as you don't mind weathering a drawdown any entry should be OK in the long run.
So are you saying that it would change your mind to the long side if we break that? 1133.20... and would you then consider this an A wave advance where it would top at 1220 or a continuation of the C wave to a higher high?
ReplyDeleteThat's a tough one. The gold cycles are so messed up right now I really have no idea where we are. I do think that a break of $1133 would make me focus on miners when the correction comes and forego putting any capital in the CUBE's or SPYDER's.
ReplyDeleteGary
ReplyDeleteDo we still have daily lows ahead of us or is it behind us?
David
I certainly don't see anything that looks even vaguely like a daily cycle low so I'm going to say they are ahead of us somewhere.
ReplyDeleteI've heard theat the COTS report showed the comercial heavily long silver contracts. Silver is showing real strengh, along with Palladium and Platenum. Gold is not leading right now. My portfolios have several silver, platinum and palladium plays and are doing great. I never got out and I'm glad I didn't. I've judged this recent weakness on a portfolio performace and they showed real buying on weakness. I still feel like a strong hand, and haven't traded in and out.
ReplyDeleteif I may add something to the gold discussion ... if we look at the past 5 years ('05 thru '10), March marked the yearly lows 4 years of 5.
ReplyDeleteThe one exception being '08 ... which, came after a 3 year run up, and I guess you would call it the D Wave on a monthly ABCD Wave
So .. based on recent historicals .. wouldnt surprise me to see we are at Gold lows right here, right now.
Platinum and Palladium both running new highs. Gary, I believe you once referred to this as a signal for gold and silver future (higher).
ReplyDeleteWhat thinks you now?
I personally believe Gold is going to 1186 (minimum). It will hit this high within the next few weeks (not sure about timing exactly), when the market is near it's low (or temporary consolidation before exploding upwards again).
ReplyDeleteThis upward movement of gold will be the A-wave - which started on Feb 5th/8th.
The A-wave will noticeably have completed when it turns down again after reaching 1185.
On the other hand, if gold breaks down past it's Feb5th low (1150), then the D wave will continue (which I doubt seriously).
Two things: First I'm leery of that big gap on the GDX today. Those almost always get filled. Hedge funds are going to be shorting the crap out of miners to fill that gap.
ReplyDeleteSecond even if this is the start of a serious A-wave move, I don't think we need to chase as any serious correction in the stock market should reel miners back in and give us another opportunity to get in.
I just hate that the stock market hasn't corrected yet. This is the same mistake I made in January not waiting for the stock market to do it's thing. I really don't want to do that again.
Anon,
ReplyDeleteCommercials have never been "long" in the silver market. Sometimes they reduce shorts considerably. Right now they are about in the middle of the their historic range.
Gary ... any opinions on 1) my comment re. march marking yearly Gold lows 4 of the past 5 years .. and 2) USD looks like its at a critical point ... its at support .. if it breaks down from here .. whats your thoughts on Gold and the Miners going forward.
ReplyDeleteI think that kinda ties into your early call in January .. we all should have noted that Jan - March have been weak the past few years ...
If the dollar breaks down then gold should go higher. I have lots of concerns though. No C-wave has lasted past early to mid May. We appear to have run out of time for a C-wave continuation. If this is an A-wave then it's probably already more than half over.
ReplyDeleteThe big concern is still the stock market. If this ends with a big sharp correction like these things tend to do we could see gold take a big hit. Like 30-50 points.
thanks Gary. you are dead on ... these things die by spring .. and get started up again in July .. so, I guess if Gold goes back up over 1160$ you would re-asses ?
ReplyDeleteI will factor in were we are at in the cycles, stock market, etc. and put together several scenarios in this weekend report.
ReplyDeleteThe gap on GDX could fill. For now, matched with the gap down on 3/24, it does look like a large island bottom.
ReplyDeleteI don't see any gap on 3/24??
ReplyDeleteOn 3/24, GDX gapped down from 45.28 and never closed, finishing at 43.50.
ReplyDeleteOn the 23rd the intraday low was 43.44 and on the 24th the intraday high was 43.50. No gap there that I can see.
ReplyDeleteThe gap as measured by the close, not intraday. Not impressed? :-)
ReplyDeleteThere are literally thousands of those kind of gaps. The ones traders game are the ones that leave a hole on the charts.
ReplyDeleteFair enough, Gary. I'm not faulting your analysis, and your plan, to wait for gold to take out a key high, it rational and sound (though it did break the ST downward diagonal today). I perceive the GDX action from 3/24-3/31 as an area that now traps exiting shorts and stymies prospective longs.
ReplyDeleteFor today, at least, we have a runaway gap with a close on the highs for GDX. Perhaps it is a set up for a micro-panic in the coming days, and gold *is* at the range that prompted two waterfall selloffs in March. OTOH, a close comfortably above 47 on GDX before filling today's gap would be pretty exciting. One day at a time and all that. :-)
If the darn stock market had corrected I would say yes jump on it. But I'm worried the market is going to go through a sharp correction soon. I'm also a bit worried that the dollar is forming another bull flag.
ReplyDeleteIf the jobs number comes out positive tomorrow we could see the dollar put in another leg up.
Perhaps the stock market isn't correcting (or correcting sideways) because the dollar is rolling over. I also see the possible bull flag on the USD chart. Could be. If we do correct sideway, commodities would be a likely place to see sector inflows.
ReplyDeleteThere are key points that still need to hit (euro above 1.38, gold above 1133, dollar below 80, etc.) for the PM bull to confirm.
That said, the PM complex ex-gold is going great guns. Even copper is breaking out.
The problem isn't even so much that the stock market hasn't corrected but sentiment is very hot. Basically the same level we saw in January. You don't correct that by going sideways. The market needs to drop and scare investors.
ReplyDeleteI'm waiting for the inevitable correction in the market. It may not be a huge correction but it will be enough to give a pause and clear out the bullishness.
ReplyDeleteThis ALWAYS happens. Just look at the long term charts. Especially when it "feels" like the market will never go down. That's the place to get nervous about being long.
Well, the miners might not be immune from larger market action, but they sure are weakly correlated to it (today being a decent example). If gold starts taking out key highs, the long view would seem to advocate for measured re-accumulation of miners, stock-market correction or no.
ReplyDeleteI believe you may have called the FED ending it's mortgaged backed securities purchases at the end of March marking the possible turning point when the dollar would finally roll over. (Sell the news) The dollar looks like it finally is rolling over hard and the extreme action today in the miners would endorse that the long dollar trade is off for the time being and the miners are now catching a bid. Not saying chase this now, but a run away move in the miners is not out of the question. Even a bit of decoupling from the overall market could indeed take place with pm's. Different dynamics vs the market early in the year. (We were over due for a correction plus we had news driving the Euro into the toilet and the dollar getting action as a result sending down the commods overall.)
ReplyDeleteI'm about 25% in right now, but was hoping to get back in once we corrected. Extremely tricky year to trade these SOB's!
Still holding my SLW and GDX June calls. Down 25% SLW, GDX starting to come back a bit...Down 60%
Any significant corection in the stock market always seems to rub off on miners, usually harder. So I think we probably don't need to chase. Once the stock market corrects we should get a second chance anyway.
ReplyDeletePlus there is that darn gap on GDX.
There was surprisingly little selling on strength in major index ETFs today. I agree with Gary's expectation of an impending correction; therefore I would have been expecting shovelfuls of distribution at today's highs.
ReplyDeleteIt rarely occurs on an exact top. Not that I have any idea if today did or didn't mark a top.
ReplyDeleteBefore the Jan. swoon the selling was spread out over many days. So far this has been spread out too since the first week of March.
Gary,
ReplyDeleteI'm a loyal subscriber but I think you're all wet when it comes to "the gold conspiracy". Here is an example, below. And, NO this isn't an old story. This is from Ed Steer's Gold and Silver Daily:
Firstly is a GATA release from late last night. The headline reads "Sophisticated Attack Disables King World News site for 2 hours"... On Monday, their servers were hacked, and part of CFTC whistle-blower Andrew Maguire's interview was erased. Then yesterday evening [Eastern time] there was this cyber-attack on the entire server "grid" system that King World News is part of. Like I've said several times in the last week... you can't make this stuff up. The link is here.
Even Dennis Gartman had comments about Andrew Maguire's statement that GATA chairman Bill Murphy read at the CFTC's hearings about precious metals position limits last Thursday. Here's a quote from The Gartman Letter yesterday morning... "Turning firstly to the precious metals, the markets are taking into consideration the reports of “confirmed” manipulation in the gold and silver market. These reports circulate in the precious metals markets from time to time, and we have, over the years, always taken exception to what the conspiratorialists and the GATA people have to say in this regard. However, this time the reports… in a series of e-mails from one gentleman to the CFTC… have a sense of responsibility to them, allowing us to be more concerned about such activities than we have been in the past. If nothing else, the CFTC’s commissioners should investigate the allegations being made and do what they can to squelch them."
Dennis Gartman appeared on Canada's Broadcast News Network yesterday as well... and his commentary quoted above was front and center of the interview. The headline of the GATA release reads "Yikes! On BNN, Gartman acknowledges evidence of precious metals manipulation". Chris Powell's preamble to the story is worth the read as well... and the link is here.
In another GATA release yesterday is a story from the Daily Mail in London. The headline reads "Deceit, secrecy surround British gold sales as records are pried loose". The story is a must read... as is the preamble by Chris Powell. The GATA release is linked here.
Over at zerohedge.com... Tyler Durdan, aka Dan Ivandjiiski, the hero of Zero [Hedge], mused last night about the lying and obfuscation about gold reserves on both sides of the Atlantic. The most relevant question in the gold world now, Durdan writes, may be "just how much of the alleged U.S. gold holdings of 8,133.5 tonnes is actually real." The Zero Hedge commentary is headlined "UK Treasury Releases FOIA On Gordon Brown's 1998 Gold Sale, Catches Tony Blair Lying, Questions US Treasury's Good Delivery Standards" and the link to this story is here.
Greg I'll say to you what I just said to another.
ReplyDeleteFirst off answer me just a few questions.
Is there any country in the entire world that uses gold as a currency? Is there any country in the entire world that backs their currency with gold?
If you answered no, and you had to answer no because there are none, then why in the world do you think that gold competes against any currency. The vast majority of the worlds population couldn't tell you the price of an oz. of gold to within $500. Even if gold were to go to $5000 an oz. (which I think it will) no one would question their fiat currency. This notion that gold competes against all other currencies is just ridiculous. It's never going to compete against fiat.
Second if gold is never going to be used as a currency then what possible reason could any governement have for tampering with the market. Especially when to do so would just unbalance the supply and demand fundamentals and cause price to go much higher than it would normally?
Manipulation would only cause the very thing to happen that you conspiracy theorist seem to think the government is so afraid of.
I can tell you that no one and I mean no one has the means to change either the intermediate or long term trend of the gold market. Why? Because no one can control demand.
Any artificial suppression of price would just bring in buyers from China, India, Europe, investors, etc.
There simply is no way to supress price unless you can control demand and I'm here to tell you it absolutely can not be done.
And by the way not only would the gold market have to be controlled but so would the currency markets because gold alwasy rises when the dollar is falling. Now if you think anyone is big enough to control the currency markets, the largest markets on the planet, I have an ocean front property I'd like to sell you here in Vegas.
I'll also guarantee that GATA will still be claiming manipulation when gold is $5000+ dollars an oz.
This is one of the oldest tricks in the book. Any mistimed calls are just blamed on the evil manipulators so they never have to take responsibility for losing trades.
April 1, 2010 7:00 PM
Gary:
ReplyDeleteLets go from the specific to the general.
1) Specifically Andrew McGuires whistle blowing on the SILVER market. I trust you read the email correspondence with the CFTC at a minimum, which outlined before the event, describing what the event would be, time/date it would happen, and then he provided almost real time commentary to the CFTC. Perhaps you also listened to the interviews McGuire has done with King World. Having said that, one entity, in this case JP Morgan, is NAKED Shorting Silver 100-1. Now if you dismiss these specific claims, fine, then there is no discussion. However, if you allow that these activities as alleged are true, Is that legal or illegal? If it is legal, then again there is no debate. If it is illegal, then we clearly must agree that in this One Event should be investigated at a minimum by the CFTC. (You remember harry marko...I forget how to spell the fellows name, who told the SEC about Madoff years in advance) We don't need to find out 7 years from now. Now moving on..
2) McGuire also alluded to the same types of activities happening in the Gold Market, except instead of one single entity it is two or three..however just like in the Silver market, the CFTC can track who is making huge trades.
Now if we believe that the one recent silver event of illegal manipulation has occurred, can we not also conclude that these similar types of events have happened previously? Thats up to individuals to decide.
3)Suffice it to say, it has been said of the "gold bug/consiracy nut" that the Bullion Banks are the enemies of Gold, trying to cap the price. But I don't think that is a fair criticism. Most supposed 'Gold Bugs" have read or read Jim Sinclair. He has been clear on the these events taking place, is against leverage because of this SPECIFACLLY and outlined the strategy the Bullion banks use years ago and which as he has correctly called, the supposed enemies of Gold will make the most long Gold...except it is a crime. Jim Sinclair has also been critical of naked shorting that has or did go on the TSE exchange in Toronto on Miners. Is naked shorting allowed? Does any small investor have a chance in a market where trillions of dollars are exchanged as in the Gold Market, against one or 2 or 5 large entities who can naked short the commodity/stock? Do we at least want free markets, which therefore demand regulators look into all such claims, all the time.
end part 1
part 2
ReplyDeleteLastly, we have not even touched on things you keep referring to, which actually are not involved in the specific so called conspiratorial claims. Although, calling it a conspiracy is not accurate as it has been known for years. These points relate to Government and long term rise in price of Gold/silver or the continued bull market. That is not in question. The issue, at least for me, and I think many others, is what these CRIMINAL manipulating events do in stealing peoples wealth.
lastly for the small thinkers, I have done well since the '08 crash and have not lost anything recently/did not get stopped out of anything, and the issue is not about MY personal account.
And yes you are absolutely correct. I am sure absent any investigations, public or where the appropriate authorities whisper quickly into the offenders ears to cease and desist, GATA will be calling criminal trading in similar manipulated events all the way till the Jig is up on the Crimex/London. It could be 5000, no one knows.
I think almost every Indian/China man/Arab/and most other Asian peoples could tell you the price of OZ of Gold or the price of a british sovereign. I bet 30% minimum of Euro people's could. I bet most South Africans and other Africans where Gold is mined know the price too. Just like they know the diamond price. So while not using Gold specifically as a median of exchange/currency, it is a store of value..wealth protection to MOST of the worlds population. And Store of Value is the most Important property of MONEY, which is why Gold has proven to be the humans most superior form of MONEY for over 4000 years. it won't be changing soon.
So what I think you really meant to say was the vast majority of Americans or North Americans have no clue about the price of Gold.
Lastly, Gold will be part of any new system when the fiat world collapses. Be patient..it takes time. Not too much longer though.
Gary,
ReplyDeleteThe point isn't that gold is used as currency, it is a store of weath, or lack of it if America and the Brits dont have the gold we claim to have. The fact that the Fed's banks have sold so many contracts short that they don't even own is an attempt to drive the price down. If that isn't manipulation, what is it?
You say no one can control demand, but if the powers that be sell more contracts than they have gold to cover, that drives the price down. That is manipulation.
This whole scenario leads me to believe you should add Elliott Waves to your arsenal Gary. It seems to me you disregard them based on a dislike for Prechter. If you watched them you would know the Dollar and Euro just completed patterns. More importantly it appears Gold has just completed a 4th wave triangle (and breaking out of that triangle) that should lead to marginal new highs with less relative strength than the previous up wave. No dig here because I love your analysis, but I think additional weapons may help us all. Just thinking out loud here because I have read your disdain for this type of analysis. Whats is happening is no coincidence.
ReplyDeleteI'll say it again. All markets are manipulated to some extent. That certainly includes the gold and silver markets. But the fact remains that any manipulation will only serve to hasten what would already happen anyway.
ReplyDeleteI do realize this is like trying to convince someone that global warming is a scam. When people make up their mind that something is so, no amount of "truth" will disuade them.
I've had discussions with with irrate "environmentalists" who were just indignant that I would even think to question global warming. Despite the fact that nothing is happening today that hasn't happened umpteen times in the past. Despite the fact that the world has actually been getting cooler since the turn of the millinium.
Facts don't matter. When someone has made up their mind then it's so.
The fact is in a true bull market (which gold is) any manipulation that distorts price will only hasten what would already occur naturally.
100 to 1 naked short selling? Great! As soon as they have to cover that position price will soar higher. Fed selling contracts short for gold they don't have? Even better, when that gold gets called price will go through the roof.
This is just basic supply and demand people. Anything that artififcially depresses price will increase demand. If price gets depressed far enough you end up with shortages.
Case in point during the crash we saw margin selling force the price of gold far below were it should have been under normal conditions. What was the result? All physical gold was taken off the market. The end result was that price rebounded violently and gold was the first asset to not only recover all of it's losses but to actually trade at new all time highs. It did that expressly because price was forced too low.
Any manipulation to knock price below where it would trade naturally will just cause more demand. If manipulation is strong enough you end up with shortages. Then price soars.
You say that price would be higher without manipulation but that's a ridiculous statement. How on earth can anyone know where price is "supposed" to be. The market "knows" where price is supposed to be and will take it there. Any attempt to force price below it's natural level will only result in price rising faster and further than it would naturally.
It's like holding a beach ball underwater. The further down you push it the more violently it rushes to the surface when you let go.
Gold has consistenly followed the ABCD wave pattern through out this bull market. So no amount of manipulation has been effective in changing that.
Every C-wave has resulted in a parabolic move higher, several have resulted in massive parabolic moves. So no amount of manipulation has halted that process.
And let's face it just like every asset gold must obey the laws of regression to the mean. There is only so far something can stretch before it snaps back.
Gold only corrects when the dollar rallies. Now if gold were to drop when the dollar was falling I might buy the whole successful manipulation idea but that never happens does it?
Since that never happens, then if you think gold is being manipulated you also have to believe the currecny markets are being manipulated. Please don't tell me you think the largest markets on the planet are being manipulated with the goal of taking down the price of gold.
Folks if there is manipulation going on then it is directly responsible for those huge C-wave advances. So you should thank the government or Fed or JPM or whoever you believe is behind this for making you a ton of money.
All that being said I realize that I will never convince anyone no matter how much I try. The conspiracy believers need to believe. Just like the global warming crowd needs to believe despite all the facts to the contrary.
So go ahead and rail against whoever you think is screwing you. Personally if they are real I want to thank them for making me alot of money over the years.
Brian,
ReplyDeleteI've just never found EW to be useful. Precter has been consistently wrong and has underperformed a simple buy and hold strategy over the long term.
As far as I can tell EW works pretty good at predicting the past but I don't know how one can determine the wave counts in real time.
At least with cycles we have a long term history that tells us when to start looking for a change of direction. It's not a prefect timing devise but rather a system to warn us when to ease up and when we might want to be more aggressive. Or when we need to be prepared for a drawdown.
Gary you said
ReplyDelete"100 to 1 naked short selling? Great! As soon as they have to cover that position price will soar higher. Fed selling contracts short for gold they don't have? Even better, when that gold gets called price will go through the roof."
And I agree. That is exactly why I have not traded the PMs. I took my positions a few weeks after the markets bottomed and have not unloaded ANY. I believe we'll see 1500 an ounce gold, then 2k, 3, who knows. When everyone wants to own the mining stocks, I'll be a seller. My biggest account us up 78% and one I opened 2 months ago is up 9.78%. Trading just doesn't make sense.
in the near term , everyone better be careful ... the US started hiring for the Census program, so you will see Up employment numbers for the next few months ... with that, as Gary mentioned in the report, up USD , and we all understand the Gold/USD correlation pretty clearly by now I assume
ReplyDeleteThe fed has not printed any meaningful paper currency at all. Just a bunch of IOU's. Rates higher along with a much higher dawler because of the shortage in dawlers needed to cover obligations.
ReplyDelete10 yr bond was trading around 3.95% after (un)employment.
ReplyDeleteDo you think there's something clever about the word "dawler"? You use it constantly, as if you can't get over how cool it is and how cool you are for using it.
ReplyDeleteIt was stupid the first time you used it. Now it's stupid and boring, too.
Gary, I agree with your cycle thoughts, but you are marrying Elliott Wave Theory with Prechter's long term view. Many people can't get past his long term views, which will most likely be correct eventually because the waves are there, with what is happening short or medium term. In my view, EWT is a great tool. Knowing how to use it properly takes a great mind (that you clearly have). I honestly believe that if you observed the waves as I do, we would be better analysts. The results in the dollar are going to be very telling. 5 waves up in the dollar completes this rally. An ABC correction in progress that should push Gold and Silver to nominal new highs with lower volume. I am liking what I see in these markets.
ReplyDeleteI really appreciate the mkt analysis I get from you every day. You have really taught me to invest instead of trade. I know that statement is simplistic, but I'm sure you get what I mean.
Anon, agree that the use of "dawler" just makes the poster look stupid...perhaps we should start using the spelling "Gawld" or "Gould" lol
ReplyDeleteJoseph
Yo, Anon's
ReplyDeletedawler
yeller
feller
just ebonics baby...
Brian,
ReplyDeletePrechter's long term view? haha too funny.
He was wrong since the 70's! He missed just about every single multiyear bull market.
He makes things complicated, so insecure traders tend to cling on to him. He sounds so smart, so he must be good! haha
Brian,
ReplyDeletePrechter's long term view? haha too funny.
He was wrong since the 70's! He missed just about every single multiyear bull market.
He makes things complicated, so insecure traders tend to cling on to him. He sounds so smart, so he must be good! haha
Brian,
ReplyDeletePrechter's long term view? haha too funny.
He was wrong since the 70's! He missed just about every single multiyear bull market.
He makes things complicated, so insecure traders tend to cling on to him. He sounds so smart, so he must be good! haha
If I read history correct, he called the Bull you are referring to in the 70's. He was certainly early but quite correct on the Bear we are now in. The big problem for any analyst is forecasting tops in intermediate corrections such as the one we are now living and 2004-07. If you have read his work, pretty much his thought is to just stay in cash until the Bear is over, since they are so unpredictable. The one thing he knows for sure is that the pattern will complete. The question for all of us is when. The answer seems to me to be when the bond mkt will no longer finance all this debt at current rates. That's what I stay tuned to.
I do know Precther has been calling to short for some time now. Like I said in my Game plan post. Bull markets don't end because of technicals, they end when something breaks.
ReplyDeleteI think most retail traders want to believe they can be successful with technicals alone. I would say they are probably kidding themselves. There is a lot more to the market than just technicals.
Usually technicals are the last thing I consider. Sentiment, cycles and money flows are way more important in my opinion.
So is the smart money leaving equities right now or not? As your blog is called smartmoneytracker, I'd love to hear something about whether you base your current wait-and-see approach on what the smart money is doing or not? Also, I'd love to know how you can evaluate what the smart money is actually doing? What are your tools to determine their moves? Thx
ReplyDeleteWe have been seeing negative money flows out of the SPYDER's since early March. Also the commercial position in the NDX futures has reached a net short level that has preceded pullbacks in the past. So yes it appears big players are and have been exiting in expectation of a pullback.
ReplyDeleteSince it is now so late in the daily cycle I think it's probably too late to initiate new long positions unless you are willing to hold through a drawdown.
The safer strategy is just to sit in cash until the correction comes and then buy into it.
Prechter missed the 70's bull market like a girl.
ReplyDeleteHe was using some mumbo jumbo trendlines that dated way back.
And he got his pudding stirred sharply.
Brilliant! Thanks Gary!
ReplyDeleteSpeaking of this topic, the Daily Bell has an interview with Bill Murphy this weekend:
ReplyDeletehttp://www.thedailybell.com/940/GATA-William-Murphy-Explains-CFTC-Hearing-Andrew-Macguire-Whistleblower-Statements.html
The Daily Bell is a must read on a daily basis.
Gary, I thought you wanted to write a weekend report. Would love to see some new charts and some new thoughts on technicals. At this point in time, what I see are markets that don't appear as if they want to correct, and I see silver breaking out, including Some silver mining stocks. I wouldn't ming hearing from you why you think this market can't go up for another two months before correcting more severely.
ReplyDeleteGary,
ReplyDeleteI had pointed this scenario before, but market seems to be taking the path of run-up in to earnings and selloff once announcements are made. This argues for another 2 weeks of strength, selloff driven by profit taking on earnings, higher energy prices and Greek concerns later this month. I know you have been looking for daily cycle lows and several smart sentiment based traders I know are short given retail bullishness, but unfortunately, the crowd has been right loading up on calls. Even I am frustrated as I got out early (mid march) and sitting in cash, but watching this market melt-up to 1200+ and being sidelined isnt great experience. :(
A mini-crash would make me happy, but just dont see anything that will create, with energy just joining the party.
KK
Gold is pushing through 1133 and all is quiet??
ReplyDeleteSentiment has just become way too bullish and we are way too late in the daily cycle to risk long side trades right now in my opinion. We had this same scenario in Jan. and we know what the end result was.
ReplyDeleteSo if you want to jump on the band wagon now do so knowing that there's a good chance you are going to suffer a drawdown soon.
Gary-
ReplyDeleteI am not calling to initiate new long positions, but it looks like we got the signal to re-phase the cycle low to the 24th. What are the implications for this? Thanks
I still don't want to chase miners in front of a stock market correction. Especially with that big gap on GDX and most miners.
ReplyDeleteThe bottom line is that the odds are pretty slim this is a C-wave continuation and more likely a complex A-wave. So I don't think we are in the kind of environment where we can just buy and hold on.
That strategy will probably just result in months and months of up, then down, then up, then down.
We probably aren't going to make any big lasting gains till we get through the B-wave and the next C-wave starts in earnest.
That has always happened in the fall.
As long as you don't mind riding the waves up and down no problem. But if you think we are going to see another November I'm afraid you will probably be disappointed.
Can we get a correction already?
ReplyDeleteSheesh. As soon as I buckle and buy back in it's gonna turn, but not until then.
When the last bear caves, start looking for the exit. I think we're just about there.
Up and down is fine, as long as its in a range that does not break the FEB lows. One can assume that after the tame C-wave, minor D-wave, and quiet A-wave, wave-B down should be quiet and the consolidation following such a correction should be short as well. All contingent on this being the A-wave up of course. Seems to me there are some major macro events brewing and assets are starting to price those in.
ReplyDeletePatience is certainly tough during times like this, even after the example in Jan.
ReplyDeleteI wouldn't count on the consolidation being short. The last two lasted a year and a half each.
ReplyDeleteThe dollar appears to be in a cyclical bull market. We aren't going to get another big C-wave until that bull expires.
My guess is it will expire when Bernanke has to resume QE because none of their strategies work.
Right now there is absolutely no need for that as the stock market is going straight up. As long as that stays inflated and as long as unemployment doesn't crash again we aren't going to see Ben freak out.
However spiking interest rates and oil will eventually destroy the economy again. So sooner or later we will see QE re-instated.
The bond market is a much better gauge as to when we get QE, the SM is just for show.
ReplyDelete