I really doubt it will. I think the jobs report has probably lost its ability to move the market at this point. Until we start to roll over into the next recession we are probably going to continue to see mildly positive jobs numbers for now. When we start seeing 200,000 and 300,000 jobs being lost again then we can look for the monthly jobs report to start affecting the stock market. Until then I think it’s not going to have much effect on stocks. With that in mind I really doubt the market will be coming back down next week in order to bottom on the employment data.
Now before everyone gets all excited let me point out that today was in fact an outside day and as such we don’t officially have a swing low yet. We can’t have a daily cycle bottom until the market forms a swing low. That being said, today was a 90% up volume day. That is a panic buying day and this late in a daily cycle that usually means smart money has recognized a bottom and is rushing to get back in the market.
I realize almost everyone is now convinced the bull is dead and we’ve started back down in the next leg of the secular bear market. Now maybe we have and maybe we haven’t. I’m reserving judgment until I see the last two of my bear market signs come to pass. Namely the 200 day moving average has to turn down and we must get a Dow theory sell signal (BOTH the industrials and transports must close below the July lows). Neither one of those things has happened yet. Until they do we are in no man’s land. As a matter of fact, according to strict Dow Theory the primary trend is assumed to still be in force until a sell signal is given. Since we obviously don’t have that, and aren’t really even very close to it yet, I’m going to abide by the rules and assume the cyclical bull is still alive.
Next I’m going to point out we don’t even have a confirmed down trend yet. So far the market is still making higher highs and higher lows. That is the definition of an uptrend. In order to reverse that the market would have to break below the July low or it will have to bounce out of this daily cycle bottom, stall out, and then move back below Friday’s low (I’m taking some liberties here and assuming Friday did in fact mark the cycle bottom.)
Now let me show you what no one is seeing. And when no one sees it that makes it all the more likely to play out. Of course we do still have the inverse head and shoulders pattern in play. That one actually has been spotted by a few hopeful bulls, but it’s certainly not mainstream yet like the regular head and shoulders top was and still is.
The real pattern, and one I put a lot more faith in than a head and shoulders top or bottom is the 1-2-3 reversal that is in play.
Notice how the initial rally into the August top broke the down trend line. That was #1. Now we are in the process of #2 testing the lows. As long as today’s bottom holds that test is going to be successful. The final piece in the puzzle is a move above the August highs. If that occurs we will have a confirmed trend reversal and the April highs will then be in jeopardy of being surpassed. I know that seems impossible at this point but I would point out that everyone assumed we were back in a bear market in mid `04 also. The market had been making lower highs and lower lows since March. Needless to say everyone was a bit surprised when the Fed cranked up the printing presses into the elections and the market broke out to new highs. I forget, what is happening this year? Oh that’s right, mid-term elections. Hmm…
There is also a yearly and 3 year cycle low coming due in the dollar (more on that in the dollar section of the report). Suffice it to say there will be plenty of liquidity the next several months.
More in the weekend report for subscribers...
Didn't Bernanke more or less say yesterday: "don't worry guys, I'll print as much $ as needed to keep the S&P heading up" (Talk about bullish for gold!!)
ReplyDeleteGary, interesting chart. The upside needs to be respected. Although I know you don't like EW, it's easy to count the waves with a bullish bias at this point. 5 waves up in a leading diagonal from the low, 3 waves down to a 61.8% price retracement and 50% time retracement, and now an implusive wave up as you have drawn. With CNBC and everyone else calling for the end of the world lately, I think you make a good point. The market always moves to adversely affect the most traders, and a implusive rally would definitely do that. Great post.
ReplyDelete"I think the jobs report has probably lost its ability to move the market at this point"
ReplyDeleteAn assumption. You are probably right in that a bad number is expected and won't shock investors into panic selling. A good number would in fact induce buying, however.
The breakout level of around 950 ish in the S&P from Spring 2009 will be tested. Perhaps next week, or perhaps as late as November or even into next Spring. I do expect that the ultimate bottom is in.
G
Couple of questions for the board.
ReplyDeleteIn the last two + years I have been putting my kids savings into mostly silver coins, CEF, and some miners..IAG, SLW, GDXJ. This is summer/part time job savings, grandparents gifts etc..so we are not talking big bucks. more to get a better return than savings account, so the contributions are 2-6 hundred at a time. What is folks opinions of SIL?
Are there any good discount online brokers in Canada? trying to get my parents and in laws to stop trading through full price brokers.
Nice update Gary.
@Natanarchist
ReplyDeleteAll of the five Canadian big banks have decent online broker services.
For example, TD Bank purchased AmeriTrade and ScotiaBank purchased eTrade (rebranded it as iTrade).
I use iTrade myself.
SIL is pretty good -- it gives you access to a lot of the big players such as Fresnillo, Penoles, Hochschild, Polymetal, etc. that don't trade in the US, and instant diversification amongst juniors like Great Panther, Endeavour, and First Majestic. I would think it'd be pretty good in a small portfolio.
ReplyDeleteThe best pure play on silver by far is SLW, though. SLW, SIL and GDXJ are my biggest positions.
David S.
thanks clayton..The old folks do not do large number of trades though. I will check out itrade.
ReplyDeleteThanks David.
Hey Nat,
ReplyDeleteI would stay away from TD. They lie quiet about their margin positions. Pure cash you are good with any bank.
Great week-end report Gary!!!!!
ReplyDeleteReally reminds us to remain old turkey!! I for won have lost the battle of trading and have similar results to trading in a bull market. You make money, but you wind up kicking yourself in the teeth for not making more due to a buy and hold.
I am fully convinced that the gold bull is a major to just buy and simply hold. (and yes I break my rule, due to boredom, but just on my margin portion...yes it is wrong, but of course I am a sinner)
I bought gold and silver bullion (physical) to simply avoid the temptation to sell. Miners I still ride but I understand my human nature during drawdowns. For any that don't have balls of steel, buy physical silver and ride the bull this way. It is soooo much easier. It will come my friends...it is easy to hold right now, especially if Gary is correct about this major C-Wave, but 99% of you I would wager are not willing to endure a D-wave(in Gary's terms) if you are wrong to gain 1000% gains. My 50% portion in physical gold and silver award me the guarantee of not allowing my humanity to get in the way. I say that not in pride, but rather to expose my own humanity to set the tale straight. Buy and hold in whatever you are able to do during this bull.
Gary, you are a great coach. No man in this world would suggest holding during a full bull market. Keep it up! I sure do appreciate it!!! Maybe when the final c-wave finally matures we can buy an island with all the smt followers together? (Save some on future vacations)
That's right, get off the tracks when the G-Train is coming to town!
ReplyDeleteNatanarchist,
ReplyDeleteAre the metals in CEF in "allocated" accounts vs. GLD for example?
Thanks.
On CEF..here is what they say:
ReplyDelete" Central Fund's Gold and Silver Bullion is stored in the highest security rated treasury vaults at a Canadian chartered bank on an unencumbered, allocated, segregated and insured basis."
My guess is the bullion is stored in Scotia Banks vaults in/near Toronto. Since the bullion is allocated to them at least the bank can't "lend" it out. Right or not, I have more confidence in CEF doing what it says than GLD..but thats my opinion.
http://www.centralfund.com/
You should know that there are two special tax implications to CEF, one good, one bad:
ReplyDelete1) as a closed-end fund, its long-term gains are taxed at the capital gains rate, not the higher "collectibles" rate levied upon GLD, SLV, etc.
2) unfortunately, since it's a foreign-based fund, you have to file a special tax form every year you own it.
David S.
it's amazing to see how many analysts out there are still bear on gold...
ReplyDeleteLotta people came out of the woodwork with positive "congrats" posts to Gary on fri, in case you didn't notice.
ReplyDeleteA subtile sign of some excess in gold for now. We hit an emotional trigger (just like when I said I felt I HAD to buy.)
COT shorts are rising as gold rises also. They are selling into these gains undeterred. A run on the comex or somesuch doesn't look imminent.
Pullback coming soon is my bet. Buyer beware (unless you aren't getting in leveraged and don't care about some temporary drawdown.)
--TZguy
Or if you are only lightly leveraged and a pullback won't hurt you :)
ReplyDeleteYou probably want to ignore the COT it's worthless for spotting tops. During a powerful C-wave the COT can stay at a max short level for months.
ReplyDeleteOn the chance that gold may be entering a runaway move any pullback of $25 to $30 should be bought immediately.
ReplyDeleteBoth silver and gold are approaching their previous highs. It is unlikely they proceed straight through without a pause or something to shake people around and out. They will either pause, pullback, and then break through. Or breakthrough then almost immediately pull back to hurt price chasers. Either way I think I get my entry.
ReplyDeleteI agree if no or lightly leveraged it doesn't really matter when to buy at this point.
-TZguy
Gary,
ReplyDeleteYou keep thinking I'm trying to call some major top or something. I'm simply trying to game an entry into this phase on a pullback. Nothing more. Maybe $30-50 or something like that, I agree.
When the BIG TOP of this move comes up, we can discuss. *I've* got some tricks too, but for now I'm just trying to avoid buying in mid-air on an almost straight up move of $100. I've got some battle scars too like you :-)
--TZguy
I've never thought you were trying to call a major top. What you are doing is risking missing a potentially big move because you are too heavily leveraged that you can't risk anything other than a perfect entry.
ReplyDeleteI'll say it again. This bull is going to be so big that no one needs to be heavily leveraged to get rich. Patience and time will produce the same thing without the risk.
PM's rally is over. Imminent collapse coming soon.
ReplyDeleteGary,
ReplyDeleteAll previous parabolic C moves have had and allowed the same entries that I'm gaming for right now. I have no reason to think this C will be different.
My leverage is enough that I don't want a $50 drop against me by buying after a strong 4 week up move. And the sensitivity is only on the first and initial entry. Once in, the rest isnt' too hard.
Like I said...we'll see. I'm not winning this trade yet.
(PS: and in answer to another of your leverage statements, actually *no* I do *not* think the gains I might make by being only 1x are enough or properly sized. We disagree on that. I think 2x or 3x is more suitable.)
--TZguy
TZ,
ReplyDeleteLet me just warn you, and I've been at this a long time so I know what I'm talking about, eventually this heavy leverage is going to destroy your account. No ands, if's, or buts about it.
This is the mistake that every trader makes at some point and it's usually the one that costs them their first stake.
Some give up at that point. Some learn their lesson and become profitable after putting toegther a second or third stake.
I know you won't believe me but I've watched it happen over and over and over and over.
Now if you are only using maybe 10% of your portfolio then you will be OK as you wiill only lose that 10% but if you are using 50 or 75% of your portfolio you are going to do irreparable damage to your account at some point during this bull.
I'm not really disagreeing with you on the waiting part, I certainly think there will be some kind of pullback before breaking to new highs. Will it retrace back to current levels? Who knows, personally I don't like the odds seeing as how the last pullback was only 27 points. (a pull back from 1265 would only be 1238) That's where gold is at right now.
All I'm really trying to do is to steer you onto a sane investing strategy so you don't blow this incredible opportunity we have at this time in history.
Hey Gary,
ReplyDeleteyou are holding AGQ and SIL only, am I correct?
Thanks
Basil
why is this site http://www.goldscents.blogspot.com/ posting the exact same article under a different name??
ReplyDeleteMight I add, TZ, that I find it a blessed relief not being highly levered any longer?
ReplyDeleteIt does do something to the peace of mind which is necessary for me to make good decisions.
To compensate for the perceived loss in large profits, I feel that the junior gold and silver producers and explorers will have their time in the sun quite soon now.
Interestingly the chart of the Canadian Juniors against the GDX:
http://stockcharts.com/h-sc/ui?s=XGD.TO:GDX&p=D&yr=3&mn=0&dy=0&id=p08564794026
shows the relationship beginning to turn up again.
And the triangle formed since Feb has just been penetrated to the upside...
J
why is this site http://www.goldscents.blogspot.com/ posting the exact same article under a different name??
ReplyDeleteGary, maybe you should set up a Newbie-Meter by counting the number of occurences of this question :-)
Anon, it's a pseudonym of Gary to track advertising effects.
Regarding the next stimulus package, I think there'll need to be another high reading in bearish sentiment before the next round of stimulus is announced.
ReplyDeleteThe Fed will be anxious that gold will not be in a runaway position when this happens.
The dollar would need to another rally - taking the S&P down and sentiment really low.... like a shock.
For gold in USD to go down, whatever factors created the environment last year between March and December [when gold and dollar were moving inversely with each other] would need to come into play again.
(Gold in euros would also have to be lower [or sideways] in order to get back to its 200dma - so the USD rally would not necessarily be brought on by new revelations of euro weakness.)
Another stimulus package can't be announced while bearish sentiment is diminishing [as I assume it is now].
The current surge on the heels of the latest news from the Fed announcing its preparedness to ease if necessary, was already pretty well anticipated and factored into the market.
This rally could be only a temporary release from the recent sustained bearish sentiment.
Could this fit somehow into you framework, Gary?
I think another package will come, and for that to happen sentiment will have to be pretty low.
You mentioned in your latest blog post that this rally has another week or two left. Perhaps after that.....would that stretch the cycle too far, do you think?
Thanks
j
Basil,
ReplyDeleteYou can see my positions in the free weekend report. I don't expect any of them to change for a while.
John,
ReplyDeleteI said a new daily cycle usually rallies a minimum of 2 to 3 weeks but it could last longer if the cycle ends up being right translated.
If we are back in a bear market then it shouldn't be right translated. That will be one clue. If stocks rally longer than 20 days it would be a positive sign.
Gary--
ReplyDeleteOut of the last gold intermediate cycle low in Feb we had an extended daily cycle (30+ days). What is the likelihood of that same extended cycle coming out of this intermediate cycle low as well?
Thanks
Who knows. The normal duration is about 20-25 days but form time to time a cycle will stretch and sometimes they shrink. There's no way to tell ahead of time and just because it stretched out of the Feb. bottom soesn't mean it will do so this time.
ReplyDeleteI predict if the Dow drops 30 points crash boy is going to come on at some point today and dish out his daily dose of the sky is falling. ;)
ReplyDeleteI have another by order at $118.20 in GLD if I'm lucky enough to get a slight pullback this week.
ReplyDeleteGary,
ReplyDeleteI know you don't think that gold is manipulated, however, lately there has been a ton of evidence in this regard. Do you still brush off manipulation?
https://marketforceanalysis.com/articles/latest_article_081310.html
Aaron.
There is certainly short term manipulation in the gold market like there is in most markets. But any effort to push price below market levels just increases demand and makes price rise faster.
ReplyDeleteSo for all our sakes lets hope there is manipulation we will get rich much faster.
P.S. Just ignore the conspiracy nonsense. I guarantee the governement couldn't care less about the price of a shiny yellow metal now that the dollar isn't backed by it.
That GATA article doesn't make sense on its own terms.
ReplyDelete"One could go further and say that if a trader had shorted gold on the AM Fix and covered the short on the PM Fix and then bought gold on the same PM Fix and sold it the following morning on the AM Fix and repeated this every day over the last 9 years the trader would have made $1,900/oz; a buy and hold strategy by comparison would have gained only $950/oz. ($250/oz gold price in 2001 to $1200/oz in 2010). "
Okay, so buy-and-hold nets a 500% return in nine years, and the price of gold has been systematically suppressed?
I want to believe these guys, since obviously their views, if true, would at some point translate into volcanic price increases for gold. But they don't make it easy ...
Anyone who listened to the debate between Murphy of GATA and Jeff Christensian on Financial newshour had a front row seat to just how big of a nut case Murphy is.
ReplyDeleteFolks Murphy is just running an age old scam.
Hey if the market doesn't do what I said it would do then blame it on some mysterious cartel so you don't have to take responsibily for a missed call.
stock market bulls are in denial.
ReplyDeleteStock market bears are jumping the gun :)
ReplyDeleteWish we'd get a bit of a sellof in Gold to 1220-1230 just to see where the buying/volume comes in at. It would be good for a sustained move higher,methinks.
ReplyDeleteFrank
Thanks for the reply Gary!
ReplyDeleteHow many chances do you guys want to get back in? 1235 has been tested like 6 times in 4 days already!
Sure, we might get to 1230, but time is running out for the greedy me thinks.
Aaron.
Gary, I'm a huge gold bug holding since 2002/2003. How do you reconcile the yearly cycles in gold with the last few years with alternating bullish/bearish September's? Last year was most definitely bullish as we know.
ReplyDeleteFrank
Last year is kind of meaningless to me. The setup right now is for the dolalr to move down into a yearly and then a 3 year cycle low. I expect that to drive the largest C-wave we've seen yet.
ReplyDeleteGary-great blog. Keep up the nice work:)
ReplyDeleteGuys, I am new to PM investing. What is a good way of buying physical gold. Will appreciate your feedback.
GARY:
ReplyDeleteYou are wrong (sorry for being so direct) that there is no 'conspiracy' (a loaded word, unfortunately), and that there is no reason for the govt/treasury to be concerned about gold.
I'm surprised you keep insisting this. I don't really want to go into the explanation now, however.
There was a little young guy named Greenspan who figured all this out way before. I recall he went on and seemed to do well for himself. Maybe you take a few min to read what he wrote (43 YEARS ago!):
http://www.lewrockwell.com/north/north204.html
--TZguy
Thanks for the email alert on Silver, Gary.
ReplyDeleteSounds good to me.
Before you possibly reply that Greenspan was mostly talking about a gold STANDARD and not just gold (or unbacked fiat dollars), which was sort of your previous argument, you need to realize he discussed the gold STANDARD in the article because that was what existed then as was a recent development.
ReplyDeleteHis comments should be read, as well, by replacing most of the uses of "gold standard" with simply "gold". Especially when he wraps the article with conclusions in the 2nd to last paragraph.
The conclusions are still correct and applicable now and illustrate the reason the purchase and use of gold must be fought:
"....In the absence of GOLD (strike 'gold standard' here; same meaning), there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves..."
--TZguy
Gold doesn't care where stocks go any longer.
ReplyDeleteTZ,
ReplyDeleteIf you will remember 43 years ago the dollar was backed by gold. At that time Greenspan was correct in that the price of gold had to be managed to money supply. That's not the case anymore.
So unfortunately no I'm not wrong. Sorry to be so blunt :)
To repeat the obvious: Gold is in a bull market nearly a decade in length. Alleged efforts to suppress its price (as opposed to the short-term shenanigans that exist in most securities markets, particularly commodities) suggest the most impotent conspiracy imaginable.
ReplyDeleteFor those of us who find all of this not particularly actionable when it comes to committing capital, it seems to boil down to a non-choice: If the conspiracy theory is correct, it's a win. If it's not, all we have is the fact of an ongoing bull market.
In the end, as PM investors, who cares?
Gary's right, TZ. The whole article is a defense of the gold standard while it was still in place. Slipping "gold" in for "gold standard" after its abolition changes the entire context of the piece.
ReplyDeleteThe enslaved fight for their slavery. Amazes me everytime.
ReplyDeleteYou both really believe gold doesn't serve a purpose and that that purpose isn't directly opposed to the interests of those running the fiat system? You are getting caught up on whether the dollar is backed by gold or not. It doesn't matter.
--TZguy
I have a proof, but it is too big to fit in the margins of this document. :-)
ReplyDelete--TZguy
The impulse to debase the currency is understandable enough, TZ. Governments have done it since the beginning. Greenspan himself was no stranger to it once the aughts rolled around.
ReplyDeleteThe point, though, is whether there is an *effective* conspiracy to suppress the price of gold beyond a timeframe of weeks or months. Still waiting to see evidence of that one.
When seemingly rational people point to the ten year gold bull market and say the "manpulation" isn't "working", it AMAZES me that they seem unable to recognize that such a statement is FALSE *if* the true gains of gold *without* measures taken to slow it or fractionate it would be dramatically higher.
ReplyDeleteI'm not looking for you to accept that gold SHOULD be higher. I'm only looking for you to AGREE and ACCEPT that *IF* gold SHOULD be $10,000/oz, THEN....the techniques used to keep it at *only* $1200 are "successful".
--TZguy
shaping up to be a big down day tomorrow. Dollar bull flag showing a big gapper upper tomorrow in the dollar.
ReplyDeleteTheft (the purpose if a fiat currency system) is a function of:
ReplyDeleteTaking X amount over T **TIME** = TOTAL THEFT
The total theft is increased by upping the TIME component.
To the extent that the fiat system can been delayed from collapsing or that the participants can be prevented from shifting to a more stable store of value, the THEFT component can be increased. The DELAY of the rise of gold (which is the counter-force to a fiat system) allows maximization of THEFT.
It's really that simple.
--TZguy
If gold were to cover the distance from $1200 to $10,000 in a suitably short period of time with no commensurate rise in non-PM commods, I'd be happy to credit the GATA folks.
ReplyDeleteAs it stands and in my opinion, they overstate their case.
But hey man, we're all on the same side of this deal. :-)
TZ,
ReplyDeleteIt simply isn't possible to halt a secular bull market or bear market for that matter. Any attempt to do so will just hasten the move.
As far as I can tell the gold bull just looks like a normal bull market going about the business of doing what bull markets do.
The regular daily and intermediate and 8 year cycles are progressing like clockwork.
But all that aside let's just use a little commonsense. The COT reports exhibit normal hedging behavoir. By that I mean as prices rise hedgers add to shorts to lock in high prices. When prices drop they lift those shorts.
If someone really was trying to suppress the market that would not be the pattern. If the government was trying to supress price then we would see shorts massively increassing as price dropped.
The manipulation theory just doesn't stand up to commonsense scrutiny.
It's getting pretty late in the dollar cycle at this point. Any upside from here will likly be givern back when the dollar drops into the cycle low.
ReplyDeleteGary,
ReplyDeleteA manipulated gold bull market looks JUST LIKE a regular bull market. It's just *lower*.
You are making this too difficult. Just tilt the chart DOWN. That's it.
GLD (written by very smart attorneys) alone is one of the top 2 or 3 means of keeping a lid on things.
If every share of GLD represented *actual* and segregated gold metal (as believed by most common buyers) then the price would be substantially higher. I suggest to you GLD is a fractional or paper holding. (For various reasons I will state that this is my OPINION and that readers are cautioned to do their own due diligence. Lotta links on net discuss the GLD prospectus. It's also in *english* so it can be read :-)
I will leave you with a teaser on GLD. When you have valuable assets in your possession, under what circumstances do you NOT insure those assets? And why?
--TZguy
TZ,
ReplyDeleteOK lets assume one believes in the manipulation theory. What do you different?
There is a likely tell for an impending "paper gold" implosion: Persistent and increasing backwardation in gold futures (which currently remain in contango). Until we see that, the manipulation theory remains just that, imo.
ReplyDeleteGuys-Can you help me with information on best way to buy physical gold. Thanks.
ReplyDeleteWhat an IDIOT we have for Prez! Who here thinks he is totally clueless? I see the teleprompters were messing him up during his speech. What a douche!
ReplyDeleteGod help us all!
www.golddealer.com
ReplyDeleteAnon @ 10:34 -
ReplyDeleteDepends on your situation. Lots of good ways. Try this: http://www.goldstockbull.com/articles/how-to-buy-physical-gold-silver/
Use Google. Lots of options. The forums at www.kitco.com have at length discussions.
I buy online from Gainesville Coins: www.gainesvillecoins.com.
I wonder why, if there were persistent price suppression of gold, the miners aren't raising Cain at every opportunity. Aside from a clear economic interest, they have a fiduciary duty as well.
ReplyDeleteMost of the shorts in the commercial catagory are miners hedging production forward at these high prices. The conspiracy theorist like to believe the commercials are a bunch of neferious bankers.
ReplyDeleteEven if the dollar cycle doesn't top right here, gold has been doing very well in this dollar bounce.USD has been crawling underneath that 50 DMA for days now.
ReplyDeleteFrank
Gary,
ReplyDeleteYou wrote:
"TZ,
It simply isn't possible to halt a secular bull market or bear market for that matter. Any attempt to do so will just hasten the move.
.
.
.
The manipulation theory just doesn't stand up to commonsense scrutiny."
I agree with you. However, you seem to make an exception when it comes to Big Ben, that he will be able to transform the stock market bear into a bull. If you believe this is true, then would you amend what you wrote to read something like this:
"It simply isn't possible to halt a secular bull market or bear market for that matter UNLESS YOU CONTROL THE CURRENCY. IF YOU CONTROL THE CURRENCY THAN YOU CAN HALT A BEAR MARKET IN ITS TRACKS."
You'd think the commercial shorts realize their hedging themselves out of a bull market.
ReplyDeleteThe Fed most certainly can not halt the secular bear market that we are in. They've been trying for 10 years and look at what it has accomplished. A credit market implosion and the second worst bear market in history.
ReplyDeleteThis last effort by the Fed is going to lead to a currency crisis at some point which will be even worse than the other two.
Anon,
Miners are just hedging some of their production at high prices. That is just good business.
Spoke to my local banker. The general feel to the average experienced banker is that rates will stay low for a very long time, double digit rates are completly unheard of in the next decade, and that the FED more importantly has all the tools in the world to keep rates low too. Having this view is not what fears me the most. Its the unawareness to the views which we discuss at length on this blog.
ReplyDeleteI feel like hiding under a rock and waiting 30 years.
I understand, but it's only good business if the prices then dropped. IF they continue higher, they have left lots on the table.
ReplyDeleteOnly time will tell, but it seems like they should know more about metal demand than us, and we are fully invested in higher prices. :)
Tues, Wed, Thursday= massive selloff. Time to bake in Fridays horrible jobs number.
ReplyDeleteS&P 950 by next Tuesday? Any takers?
Keys-
ReplyDeleteAmen- People--(experienced Bankers) seem to be completely unawares as to the consequences of artificially low rates and monetizing our debt. Breathtakingly frustrating and scary!!
yes we have some hard times ahead. But don't for get that this is when great opportunities are born.
ReplyDeleteWe can't get to the next secular bull market until the secular bear runs it's course. And when it does there will come a time when stocks represent a truly great opportunity. Kind of like the opportunity in gold in 2001.
Well since it's taken 4 and a half months to drop 140 points. I would say it's probably a safe bet we aren't going to drop 110 in the next 4 days.
ReplyDeleteI'm afraid who ever takes the oppositie side of that trade is going to take your money away from you like stealing candy from a baby.
Sometimes you perma-bears just make no sense at all.
Gary,
ReplyDeleteThanks, yes I agree with you. The Fed cannot stop the bear. Their manipulations can cause stocks to gyrate wildly, but they won't change the overall long term trend of the market and of the economy. In fact, they are likely making a bigger mess of it than it already is.
Gary:
ReplyDeletePermabear? Maybe my charts are the only charts showing the dollar is on the verge of breaking out again.
Anyone else see that?
Hmmmm. Looks like stocks will continue to drop. There is zero reasons to own stocks.
Down down down down, drip drip drip, no reason to own, no reason to own, no reason to own.
last day of the month is usually a down day.
ReplyDeleteI'm betting heavy that tomorrow is without exception.
Big downer tomorrow, with Wed. sideways to slightly down, and Thursday will be really nasty down.
Would those be the same charts that showed gold heading lower....right before it rallied 15 out of 17 days?
ReplyDeleteWhile you wasting your time trying to short stocks the miners have rallied 14% in 5 weeks. That's more than the stock market has lost in 4 and a half months.
ReplyDeleteNow do you see why I don't waste time and capital trading the stock market? And I certainly wouldn't do so on the short side.
Gary,
ReplyDeleteI'm burning up some valuable time monday so please allow me to table much of the response for later.
You are mostly correct: the goal of this game is to keep what you have and make more if possible. So *mechanically* since you are already investing in metals there isn't much of a change for you.
Knowing WHY this is happening and the GOAL/OUTCOME of this game is highly relevant though.
-TZguy
sold ESI
ReplyDeletelong TNA
Did something happen around 10 am again? Miners and pms seemed to get dumped(relative to the rest of the day) at this time.
ReplyDeletelong BLK
ReplyDeletelong UNP
EXK looks good.
ReplyDeleteWell I don't know if I would call -.6% move dumped, but gold dropped at that time and the miners followed.
ReplyDeleteFRG down big today...
ReplyDeleteFRG , i was looking for a buyback, bought a small position back today, will add when I see its bottomed, 50% FIB retrace is 7.20$ may add more then.
ReplyDeleteGary:
ReplyDeleteIn one of your earlier posts you mentioned how dollar was "crawling" along 50 day MA and then fell through
http://smartmoneytracker.blogspot.com
/2010/07/doin-crawl.html
So can't the same thing be said now for the Dollar? Crawling beneath the 50 day MA, poised for a rally up? Whether gold goes up or down on this dollar move up (should it happen) is anybody's guess...however, does it not send equities lower?
Definitely a possibility although this late in the daily cycle I would expect any rally to be given back as the cycle rolls over.
ReplyDeleteI'm focusing more on the bigger picture which is the yearly and 3 year cycle lows that are coming due. The daily cycles will end up aligning with those larger cycle trends eventually.
Gary do you become a dollar bull if the 3 year cycle in the dollar ends up becoming right translated when the dollar breaks over 88? Or are you going to stay in the permabear camp on the dollar?
ReplyDeleteWell 88 is kind of a meaningless number but if the dollar breaks above 90 it would signal a right translated 3 year cycle and it would then be very unlikely that the dollar would fall below the March 08 low.
ReplyDeleteAnother market doing the crawl is platinum, crawling right above the 200ema. I highly doubt if platinum breaks down that's a good signal for gold.
ReplyDeletePlatinum isn't "crawling. It's just consolidating below the 200 day moving average. Platinum and Palladium demand is affected by the auto industry. If we go back into recession industrial demand for these two metals will collapse again. That however is meaningless to gold or silver. Gold has virtually no industrial uses and thus is unaffected by a recession.
ReplyDeleteSilver is used in such small quanties in tindustrial uses that it is price insensitive.
In other words the little bit of siver in a cell phone is meaningless whether it costs $18 or $50 an oz. it won't materially affect the price of the phone.
Get ready for epic crash. Metalics due to crash biggest.
ReplyDelete>Get ready for epic crash. Metalics due to crash biggest.
ReplyDeleteYou gotta love these fruitcakes. Amazing that people simply don't have anything better to say or do.
It took a once in a generation crash to take down gold two years ago. The end result was a buying frenzy unlike anything we've seen since 1980. Every single oz. of gold was taken off the market.
ReplyDeleteSomeone doesn't understand how supply and demand fundamentals work.
It's very unlikely that we would get the kind of conditions that could cause a second crash in only two years and I think the gold market would completely ignore it this time just like it ignored the flash crash.
Suffice it to say gold investors have learned their lesson. Don't expect them to make the same mistake twice.
You can't have a mature discussion on this board. Anyone who is not 110% long is considered an idiot.
ReplyDeleteWhat's the difference between crawling and consolidating?
ReplyDeleteGold and platinum have had a very strong positive correlation since this bull market began, so I definitely would not discount a platinum signal that conflicts with gold, if platinum were to breakdown.
Now why would you think that? Justin and Anon1 come on all the time to debate their views. Granted quite a few bears just come on to tell us the market is crashing. It is a bit hard to have a debate with that but I certainly don't erase their comments.
ReplyDeleteMy stance is I'm bullish on gold and indifferent to the stock market. I will be happy to debate my views with anyone.
It's kind of difficult to debate someone who informs us the market is going to crash but then gives no reason for why.
Well I can say I certainly wouldn't panic out of my gold just because platinum started heading lower.
ReplyDeleteGLD appears to be in a coil on the daily.
ReplyDeleteFC,
ReplyDeleteI do believe you are right. Perhaps we will get one more push down for gold .
Justin,
ReplyDeleteA crawl is a specific action where price moves closely along a MA or significant trendline. Platinum isn't crawling, though you might be gratified to hear that the greenback appears to be along the 50dsma.
According to the chart I'm looking at platinum has been crawling right on the 200ema for most of the last 2 months, if that's what the definition of crawl is.
ReplyDeleteMore importantly, platinum's chart looks ugly to me, like a head and shoulders with a bear flag for the right shoulder. Just more evidence to put in my bear case.
If the Dpw and transports break below the July lows then I will join you on the bear side. Not on gold but on the general market. However I won't be wasting my time and capital trying to short stocks.
ReplyDeleteHi Gary (et al). Thanks for all your patient advice and guidance.
ReplyDeleteBased on today's equity market action, could you please revisit the possible swing low confirmation for tomorrow that you have mentioned over the last few days? Are you still anticipating a swing low and subsequent equity market rally within the next few days?
THANKS!
-BDS
If I thought gold had a chance of rallying during this next bear phase, I'd be long gold too, but since I don't I'm staying away from gold until we get a better buying op. Of course if gold does breakout to new highs then I would have to switch that line of thinking. I still don't like the dichotomy in the leading gold stocks vs. the laggards either, right now EGO, SLW, and ANV would have to go parabolic to continue their rate of price appreciation since the 2009 bottom. I just don't see that happening over the next 12 months.
ReplyDeleteThe market has to trade above 1065 and hold above 1039.70 in order to form a swing low.
ReplyDeleteDebating goes nowhere. Bears love debating and they usually win, but they're usually wrong about the market. One of those enigmas of life, I guess.
ReplyDeleteWhy would you think gold couldn't rally during a bear market? It certainly did during the 2000 to 02 bear market. It was performing just fine during the first 9 months of the last bear market until the credit market implosion took everything down in a sudden selling climax.
ReplyDeleteIt's not that I don't think gold can rally during a bear market, obviously it rallied during the 00-02 bear market. But according to the way I see the charts setting up I don't see gold rallying during this next bear phase, or at least rallying significantly enough for me to care about it.
ReplyDeleteMy plan is to get more interested in gold during the next selloff, when I see a nice bottoming pattern form from whenever the selling ends.
You don't think that beautiful rounded base this year is a bottoming pattern?
ReplyDeleteYes that could be a base pattern, but I just don't see the likelihood of another 200% in gains right after we've just had a 200% gain. Especially when the leading miners have rallied 1000%. If you weren't there to buy SLW back in late 2008 and ride this last rally, I'm afraid you probably have longer to wait for that to happen again.
ReplyDeleteCombine that with the fact that correlated asset classes to gold, including the PGM metals and silver haven't made new highs, and the fact that correlated currencies to gold including the Euro, Aussie, and Loonie are showing major topping patterns and/or confirmed downtrends and you start to see where gold could stall during another bear leg in the markets.
LOL I guess my crystal ball never worked that good.
ReplyDeleteOne other thing is I don't see people who are sitting on big profits in gold and the miners, letting those profits vanish during another bear leg in the markets. They'll take those profits off the table to counter their losses in other sectors just like they did before. Back in 00-02 there were no profits in the miners for anyone to protect, and also gold made a generational low back then anyway so there was nowhere to go but up hence the fact that gold/miners went up when the market went down.
ReplyDeleteMy gosh you are doing everything you can to talk yourself out of a bull market :)
ReplyDeleteI'll give you a very simple method to spot trouble in the gold market. If price moves back below the last intermediate cycle low then something is wrong. Either gold has entered a D-wave or the 8 year cycle has failed.
ReplyDeleteIt's that simple. As long as price remains above $1155 the C-wave is intact and one should continue to buy dips.
If gold moves below $1155 sell everything and go to cash.
I guess you're not refuting my arguments so you must see merit in them.
ReplyDeleteI'm flexible enough to understand when I'm wrong, but I hope for your portfolio's sake with the amount of leverage you've taken on you are also.
I think gold is probably going back to $1000 so at least you have you're stop.
ReplyDelete20% margin with a 2X ETF is heavily leveraged? Sounds pretty manageable to me.
ReplyDeleteIt does look pretty grim out there, even if gold is holding up pretty well for now (btw, the euro has been negatively correlated to gold since the spring).
I think miners tacking on 600-1000 percent in the next 12 months is pretty unlikely as well, Justin, though I don't see that by itself as a reason for them to sell off. If gold hangs in there, perhaps the momo will shift to relative strength plays. One scenario among many, including the one you've hypothesized. Who knows.
Hi Gary,
ReplyDeletewhat would that 'sell level' be for Silver i.e. where was that last intermediate cycle low in silver?
Thx
Basil
Basil,
ReplyDeleteForget about trying to apply any technicals to silver. It's too volatile. Just watch gold and base your silver decisions off what gold does.
Justin doesn't want anything to do with a market that only has 50% potential upside.
ReplyDelete