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Wednesday, August 11, 2010

BULL OR BEAR

I'm getting flooded with emails wanting to know if I think the bear is back. Let me repeat again my three requirements.

1. Stocks have to move below a yearly cycle low. They did that in July. So this one is a check mark for the bears.

2. The 50 DMA must cross below the 200 DMA and the 200 has to turn down. We have half of that condition met. The 50 has crossed below the 200. Half a check mark for the bears.

3. We must get a Dow Theory sell signal. In order for that to happen both the industrials and transports must close below the July low. That clearly hasn't happened yet.


Until that happens we are stuck with only half the conditions and the market remains in no-mans land between those two lines in the sand.

If the red line gets crossed by both the Dow and the trannies I will have no problem calling the bear. But until it does there is simply no need to second guess what the market is going to do before it happens.

The mathematics of the short side don't require one to catch the top of rallies in order to make money.

Just as an example selling short at the recent top (1120) and covering at 600 (I'm assuming a bear market) would garner one 46%.

However a more cautious trader could wait for the signal that the bear has returned and sell short at 1000, cover at 600 and still make 40%. Is 6% really worth the gamble that you might be early to the trade? No of course it's not. A sophisticated trader understands this and waits for proper confirmation before he goes all in on a bear market.

I think we are probably headed into the daily cycle low. If the coil plays out true to the stats then we will get that bottom in the next 1-4 days.

If however the dollar has put in an intermediate cycle bottom then we would probably not see a final bottom for 2 to 3 weeks (the daily cycle usually runs between 28-40 days give or take a few in either direction).

Since today was the 28th day stocks are actually now in the timing band for that low. It just remains to be seen whether the cycle will bottom early in the cycle as the coil suggests or later in the cycle as is typical of most cycles.

182 comments:

  1. Gary:

    Regarding Selling On Strength: With retail investors absent from this market, you may not see that typical distribution days. This in fact makes the market more dangerous on the downside since the smart money is still in the process of closing old business before the market starts moving against them.

    I am not a big EW fan but we have seen a classic wedge formation from the July lows. One interpretation is that the rally from the May lows is a 3-3-5 corrective rally, with the last wave being the ending diagonal (wedge). This means that we have started wave 3 of 3 of the down wave which started early April. If the 2007 top was the start of a big wave 3 (2000->2002->2007-> now), this would make it the wave 3 of 3 of 3.

    In a lot of ways the ducks are lined up.
    ->The Fed is spreading fear of a double dip.
    ->The politicians in DC are up to their usual tricks.
    ->The tech honeymoon seems to be ending (PCs and Cisco)
    ->Uncertainty about Chinese growth remains high (Resources)
    ->Financials are under pressure (lower interest margin, chance of a double dip in housing, poor trading environment etc.)
    ->Global news is not great. Aussie unemployment rate crept up (proxy for Chinese resource demand); US GDP is likely to be revised downwards etc...

    This is one of those times, where sentiment can easily become more pessimistic than before. Obama might throw in a pre-election surprise (auto-refi of mortgages etc.). But the Street is betting heavy on the GOP this Fall and the GOP would love to see another swing down in the market.

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  2. Actually retail is meanningless. Retail isn't the group that causes a big selling on strength day. It's smart money unloading positions into a rally.

    Until I see at least one of those the odds that we've seen the final top of this intermediate rally are slim.

    Besides like I said there is no need to second guess. If we get a Dow theory sell signal then we will know.

    All the mumbo jumbo EW nonsense and wedge pattern this or that are just irrelevant.

    Just wait for the signal.

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  3. Hi Gary,

    I'm wondering if you have any interest in covering the market in treasuries as it xseems to be in the last stages of a bubble, and offers good long term profit potential for those who wish to bet against the seemingly overvalued state of U.S. treasuries.

    For those of us with a large stake in the PMs, playing this market from a bearish perspective can be a sensible way to diversify, and also take advantage of the potential for triple digit profits. I, for one would appreciate your view on the cyclical rhythms of the treaury market in the subcription service.

    Mitch

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  4. Unfortunately I haven't bothered to work out the cycles in the bond market so I'm not going to be any help with that one. Sorry.

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  5. People have been trying to pick a top of the bond market for years and have lost lots of money doing so, as is usually the case when trying to pick a top.

    With a slow growth economy and deflationary forces pulling things down while the Fed continues QE etc., we could very well see a few more years of dropping interest rates before it's over with.

    I don't KNOW that, but it's possible. It's hard to know just how this battle between deflation and inflation will turn out, and what the timing will be (which is key, of course).

    Look at how much money has been lost by those who thought rising rates this year was a sure thing. But I'm sure many will continue to short the bond market, and bleed money doing it.

    Personally I'm in the Rosenberg camp; buying gold and holding short term Treasuries and hi grade corporates (and a big slug of cash). For now, at least.

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  6. My opinion is a short term bear (2-3 weeks, -10% approx), followed by a massive bull leg up. That would mean a massive bull leg up for gold and silver as well (:

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  7. Cramer just recommended buying gold...hope this doesn't turn out to be the kiss of death

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  8. Cramer is always wrong!!! I would expect some pain now in the next couple days.

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  9. Hi Gary,

    I am trying to understand they way you interpret the selling on strength and buying on weakness signal.

    We just go to WSJ and look for SPY in the list (whichever of the two it may be). If it appears, it means than we have that signal. Is this correct?

    Just like TZGuy, I hope you can give us some more info on this aspect in nightly reports. You did a great job with cycle durations and sentiment. Hopefully can also help us novices with this selling on strength concept.

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  10. Excellent post, gary. One of the best!
    Most traders put far too much emphasis of picking direction rather than understanding the math behind the trade.

    They also complicate trading with over-analysis, such as aviat72 has done above. Assuming every one of his observations is correct, it still would be useless for predicting what happens next. How much is already factored in, how much of a move exactly are these observations worth, etc?

    This type analysis is not useful for traders, but rather academic debate between economists. Keep it simple!

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  11. Anon,
    WSJ = Wall Street Journal.

    You go to the WSJ and find the money flow data. If on an up day you see large outflows in the SPY ETF then that would qualify as a selling on strength day. The oppsite is true on a down day.

    If the guying on weakness data shows inflows on a down day then we can assume smart money is positioning for a rally soon.

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  12. Thanks Gary.

    I checked out WSJ and it turns out that yesterday SDS (inverse leverage SP500 ETF) was selling into strength!

    Maybe this downleg may not last too long!

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  13. The only thing that has any significance is the SPYDER's. You can just ignore everything else.

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  14. Is that because money flows for SPDRs (as opposed to other stocks and ETFs) are primarily due to the big boys?

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  15. Correct. Professional money managers measure themselves agaisnt the S&P. So if they think the S&P is ready to drop they will sell the SPY if they think a rally is coming they will buy.

    It also happens to be extremely liquid so they can get into and out of large positions wihtout moving the market.

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  16. Three days in a row, gold goes to 1210 and stops. Looks like it is stuck in neutral. One thing is certain: the gold market doesn't believe that Bernanke will print. Using labor cost as a comparison, the inflation adjusted price of gold is the same today as it was in 1931.

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  17. Which just goes to show how much further this bull has to go yet.

    Just climbing the proverbial wall of worry.

    I actually think gold is building a small bull flag as it builds up energy to break back above the 50 DMA.

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  18. Ummm okay! Bye bye 1210.

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  19. Anon

    What's that you were saying about 1210? LOL

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  20. Gary:

    The crux of my SOS comment was that the absence of retail means that there is no one to sell at the top. Hence a greater risk of everyone running for the exits.


    The one redeeming factor is that overall exposure to the market for many of the fast money players is not very high. Everyone including hedgies are losing interest in this market and it might be range bound for a long long time. But the overall bias continues to be down.

    BTW, I am not recommending a uber-short bias. This is a short-term trading market and I trade it like that.

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  21. There is always a bid in the market so I don't think we have to worry about smart money having someone to sell to.

    Yes the short term direction is down but the coil data would suggest it may be short lived.

    Jason over at sentimentrader noticed something that I missed last night. The arms index pegged over 6 yesterday. Historically that kind of extreme reading has signalled a bottom within a week, usually within a day. That kind of lines up with our coil data.

    All the bears that are piling on shorts may be jumping the gun. Like I said in the post it just isn't worth second guessing the short side. The risk of being early isn't worth the few meager percentage points you gain.

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  22. Which is also why the 30 year bond bull market has a way to go as well.

    The vast majority are sure it is in a bubble and NO ONE wants to get long the long bond.

    Even fubsy cooter is claiming it to be in the late stages of a bubble.

    What Gary just said about gold applies to the bonds "Which just goes to show how much further this bull has to go yet.

    Just climbing the proverbial wall of worry."

    Gold and cash (or long bond)

    Both should be up today together.... ;)

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  23. I'd be careful expecting a quick bottom. We have had an unprecedented number of volume and breadth extremes over the past few years, and many things that had historically worked have failed as we collapse or skyrocket higher. I am still 50% short (and glad of it this morning; down from 100% near yesterday's close)), and will likely just wait for a tape clue (oversold or a high-volume reversal) It could be "soon" but 400 points lower. Meanwhile, go gold!

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  24. Actually retail and employee 401K's have been massively piling into what they percieve as a safe bet (bonds) for sometime now.

    The bond bull is 30 years old. About as long as any bond bull has ever lasted.
    Rates are under 3% for credit to a country that has no realistic hope of ever paying back it's debt. A debt load that is rapidly approaching the level where we will have to borrow just to pay the interest much less the principle.

    Now you tell me does that sound like the kind of irrational behavior that signals an approaching bubble top? Or are dumb money retail traders acting rationally when they loan money to our bankrupt government at ridiculously low rates?

    BTW I think the bond market probably topped in March of 09.

    The problem with anon1 is he apparently lacks the commonsense to spot a bubble. But then Greenspan also claimed it wasn't possible to spot bubbles :)

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  25. Indeed, Gary, the $TRIN reading from yesterday is the third-highest in the past three years. That covers a lot of panicky days.

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  26. Yes but I would heed DG's warning. The bottom could come quickly but it could still be quite a bit lower. For all you traders there's no need to try and pick a bottom today.

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  27. Oh, I agree. $TRIN spikes often come just ahead of a ST bottom, not at the bottom. I just thought the magnitude was interesting.

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  28. "Now you tell me does that sound like the kind of irrational behavior that signals an approaching bubble top? Or are dumb money retail traders acting rationally when they loan money to our bankrupt government at ridiculously low rates?

    The problem with anon1 is he apparently lacks the commonsense to spot a bubble. But then Greenspan also claimed it wasn't possible to spot bubbles :)"

    Keep chirping. Your "proof" of a bubble is nothing more than conjecture that sounds no different then, let's see, Doug Casey, Porter Stansberry, Jim rogers, Marc Faber, the list goes on and on. Just about every newsletter writer, guru out there.

    Once again - you spew forth "wisdom" about fundamentals that sound good in theory, but are not backed up with facts. Bonds make up about 6% of investors portfolios - about half what they have historically made up.

    You don't get the fact still that Japan has been far worse, with higher debt to GDP as I have stated many times on this forum. Yet a crises hits - and what happens to the YEN, of which is printed probably more than the USD, and the YEN is not the world's reserve currency? The yen will crash before the USD in a fiat currency system, yet it is still seen as a refuge from the storm.

    2.5% in your lifetime

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  29. Hey if the S&P can make it down to the 1060 level we will have a much better head & shoulders bottom pattern forming. Well that is if it turns out to be a right shoulder and then goes on to break the neckline.

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  30. And who is to say 4% is "ridiculously low rates?

    All about your own perception again. In a 7% yearly stock market increase environment, maybe so. Stocks have lost money for over 10 years now though.

    So on a relative basis - 4% is VERY high in this environment. With Japanese stocks down 75% in 20 years - that 1.5% a year from government bonds there looks pretty attractive AND high now don't it?????

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  31. A little actual hard data for you instead of conjecture as you like to use.

    The spread of the 30 year yield over the yield for stocks is about 1.5%....... about the same as it was back in the 70's - when the bond began it's massive bull market.

    So your "ridiculously low rates" are the same today on a relative basis to stocks as they were 30 years ago.

    How bout them apples.

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  32. Actually it looks very unattractive. At under 2% one just doesn't recieve anywhere near enough risk premium. Rates are already under 3%. There isn't a lot of room left unless you think rates will go negative.

    But the downside is huge. especially if we resort to printing just to service the interest on our debt. That is a vicious cycle that will destroy bond holders.

    I certainly wouldn't lend money to the US at under 3%. And despite all your pontifications I really doubt you would either.

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  33. Now explain to me what the spread between bond yield and stock yield has to do with anything.

    In the mid 70's stocks were hitting bear market bottoms with dividend yields very high. Bonds were working their way down into a bear market low a few years later.

    Completely different cycles so how does that equate to today?

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  34. Data mining while it can be fun probably isn't the best way to analyze the markets.

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  35. Alright time for me to go climb some rocks. I tried napping like Nap Boy but I just can't do it :)

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  36. "There isn't a lot of room left unless you think rates will go negative."

    More evidence of Gary speaking before running the numbers.

    IF rates are at 3% on the 10 year, and they go to 1.5% like in Japan.....

    what kind of principal gain does that equate to?

    Try 100% gains.

    On the downside - as you like to say - the math doesn't work well. Can only go down 100% MAX.

    3% may not seem like a lot to you - but in the world of scared baby boomers who are now retiring and have lived through two massive bear markets in the past ten years, the appetite for stocks is shifting. Tis why the redemptions of equity ETF's and mutual funds continue in the face of a massive rally we just saw. For about the first time ever, the "dumb" money has had enough.

    They can't afford another market drop.

    The bond bull has a LONG way to go still. A bond collapse is not imminent. We are almost 2/3 done with the year. All the gurus who were certain rates would go higher this year are yet again looking foolish as bonds are the best performers again. That is a list that also includes Jim Grant and Richard Russell, who many people follow. You sound like the herd. About the most contrarian trade in the retail world is to like the long bond.

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  37. Either way, GOLD if going to the moon!

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  38. "Now explain to me what the spread between bond yield and stock yield has to do with anything."

    Because on a valuation basis - bonds today are no richer relative to stocks than they were 30 years ago.

    So the thinking is - if bonds are in a bubble currently - where are stocks?

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  39. Here's a rhetorical question.

    Are bonds in a bubble when everyone seems to realize that bonds are in a bubble?

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  40. Stocks bears patting themselves on the back for S&P's down .5% while they could've made double that in the easy trade gold long if they only had sense enough to follow the G-train.

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  41. Anon1,

    Interesting comments on bonds. You're correct there is no reason to short the bond market right now, especially since the mid range bonds are breaking out to new highs. The long bond will probably be following shortly.

    I like it how Japan can't even get it's own currency to go back down, yet many believe that Bernanke will be able to knock the dollar down. With the pollution of false information on the Internet it seems there are plenty of people willing to take the other side of my trades.

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  42. Justin-
    What do you think bernanke and he Federal Reserve will do if the economy worsens and they worry about deflation. At what point to do you think our currency will fall pretty hard-- Debt to GDP of 150% 200% ? We cannot seem to get a handle on paying our interest debt now, and good luck to Obama on raising taxes.

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  43. "especially if we resort to printing just to service the interest on our debt. That is a vicious cycle that will destroy bond holders."

    Yeah - been a real bummer for those Japanese bondholders the past decade. Japan's printing press works late a night too....... all those poor bond holders. They haven't been hurt in 2 decades...... but it's coming, Gary is sure of that!

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  44. Daniel,

    When bonds put in a top and start trending downward, and when the dollar tops out again, then the inflation trade will probably be in play. Let the charts show you the way, ignore theories about what Bernanke will and will not do.

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  45. Lordy, the miners are on fire!

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  46. Just to be clear, I'm not calling a top, only observing the behavior of the bond market over the past 30 years, and noting the liklihood that it is in the final stages of a bubble. I have no idea how long thr topping process will last. Could we head into a depressive decade or two and have treasuries tickle higher, sure, but I see a lot of risk in the supply demand equation in which the US is going to have to issue unprecedented amounts of T-Bills to fund its deficit spending, and the rest of the world may get tired of paying 4% for a 30 loan to an insolvent nation. When the pendulum swings the other direction i can easily imagine a world with double digit interest rates. And ebing short gov bonds will pay more than 100% in that scenario.

    mitch

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  47. Cooter says:

    "Just to be clear, I'm not calling a top"

    but then says:

    "noting the liklihood that it is in the final stages of a bubble"

    "the rest of the world may get tired of paying 4% for a 30 loan to an insolvent nation."

    I can't make this stuff up!

    No offense cooter - but you provided absolutely zero analysis to back up your claims of a bubble and did nothing more than regurgitate what you are hearing on the net from the gurus. It is currently the most over used logic on the planet that continues to be wrong.

    Your claims sound good in theory and would probably help you sell lots of subscriptions to a service or blog if you started advertising them, but the fact remains that it's purely a guess and conjecture.

    Theory sounds good - but the facts are proving you wrong.

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  48. Survey: Where would the board put any extra moneys they may have if shy gold holdings in ones IRA?- GLD, SGOL or IAU? or, another Gold ETF you know of...

    Note: IAU just had a 10/1 split this past June.

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  49. Forgive me - my numbers were wrong......

    We are only about 2% bond holdings.

    So much for that idea that dumb money has piled in at the top.....

    http://www.ritholtz.com/blog/wp-content/uploads/2010/06/btab100d_31407_image001.png

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  50. SGOL -

    They can't lend out the gold.... and it's held in swiss banks.

    Thats my vote

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  51. I'd look at 4% on the 10 year bond as a good initial marker to judge when the trend has changed in bonds. Areas around that level have been tested numerous times over the past 10 years.

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  52. I've got to go with Justin on this one: "When bonds put in a top and start trending downwards..." You can philosophize all you want and yell that the markets are "irrational" and "in a bubble" and Bernanke will do this or that" but arguing with the markets is a good way to lose money. Probably SOME DAY bonds will tank and the U.S. may even default, but pointing that out has nothing too do with whether you want to be long bonds. I am still long bonds and making very good money. If they "irrationally" rally another 15% I will "irrationally" deposit the profit into my bank account. Arguing macroeconomics is great, but making the right trade is better. The market itself will tell you when the game is over. Why guess about the future when you have real-time clues?

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  53. If someone actually desires to loan the U.S. (a virtually bankrupt nation headed further into bankruptcy) money for 30 years for such a low rate--
    Well then--
    There should be a large demand for swampland in the Southwestern Desert-- (It is a bargain)

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  54. Risk-reward is still not justified. Can yields fall? Of course, that is not the point. Bonds are mathematical beasts. They are easy to calculate, easy to generate portfolios with whatever duration you like. Outside of the 30, we have the 10 at nothing, the 5 at nothing.

    I don't understand your logic. Can yields go up? Yes, so what. I can pile all my money into a penny stock and watch it triple in a day if I wanted to. The bond market is dangerous as a risk reward investment. You are wrong about comparing bonds to stocks, you have plenty of other devices. Cash is probably the easiest one. No rational investor, baby boomer, or whatever, would lend their money to a bankrupt US for 4% for 30 years! The key note is rational.

    Bonds are a mathematical product that displays risk via yield. Also we are talking 30 years to get 4%, not 10 years, not 5, the interest rate sensitivity to duration is massive! And the only way to generate 4% inside of a portfolio is to basically buy long-dated bonds. The only way you can reduce duration risk is by basically putting a portion of your portfolio into cash, which in order to create a portfolio of bonds with a duration of 6-8 years, the yield would be about 1.5%-2%. That is unheard of!!! Right now a 30 year bond with a 4% coupon and a 4% yield will have a duration close to 18. So each 1% interest rate move will result in an 18% change in bond price....I am ignoring convexity at this point because it doesn't make a difference to the claim. Grant it yields could go down and duration is only good for small changes, but the risk is incredible!!!

    This is a gambler’s trade. I would love to short the bond market at this point, but there are too many problems with it. The biggest is that the Fed could keep rates low for a very long time through simply buying bonds with QE. To be clear I am not calling a top, I am stating that bonds are in a bubble because the risk-reward is not justified and not sustainable.

    Anon1 you clearly have never managed bonds and are living within your own world. Maybe you should speak with some bond investors(not traders). This market is clearly nuts! I would rather put all my money under a mattress than give it to a bankrupt country. Anybody managing pensions is going crazy at this point! You really need to understand the nature of bonds a little bit. I hope others on this blog are not buying into your debate, because not only are you wrong, you are dangerously wrong. If you are an investor for a long-period of time, bonds are the last place you want to be! Fun for debate I guess, but I hope nobody is that stupid or following somebody that is stupid enough to buy into bonds at this point. If rates ever get to double digits the case might change.

    Again I don't trade, I invest for years if need be so this is my perspective. Trading is a different beast.

    FC said
    “When the pendulum swings the other direction i can easily imagine a world with double digit interest rates.”

    This is what scares me as well, since we are dealing with real life. Japan, the US, etc, seem to be all pushing rates down. A world, not just the US, may venture off into double digit interest rates. You want to see hard times, try this!

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  55. Shorts have some hard decisions to make now, with stocks headed positive on the day.

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  56. Keys -

    You spew forth the same that the gurus do. You don't think I don't get what you are trying to say? Like I'm just blind and sitting here going - wow - I never thought of that.

    The bottom line is that we are in the beginning of a long and painful debt deleveraging process. As I have showed many times - the government has not printed enough to offset the amount of debt destruction going on. (See Fed Funds Z1 report)

    I lost a lot of money 19 years ago following a guru who had us buying put on Japanese bonds because of all the reasons you just mentioned.

    He is still wrong 19 years later. The sure fire guarantee never worked out.

    Neither will yours anytime soon.

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  57. Read Martin Armstrong. People fled to bonds during the depression (and the dollar which was GOLD at the time unlike today, in addition the US was the largest creditor nation in the world vs today largest debtor nation in the history of the world). The bond holders were WIPED OUT as every country defaulted. Same thing will happen this time, maybe not in the next year or 2 but it's coming. Money will not flow into the USD this time or the Euro or any other fiat. It will be gold that gets the flight to security play this time. Of course, the criminals will figure out a way to steal those profits from the peons like us.

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  58. And buy the way - I manager plenty of money Keys, plus a true hedge fund.

    Don't make accusations you know nothing about as an attempt try to strengthen your already wrong presumptions

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  59. anon1,

    Clean out your ears. Keys didn't say he's short bonds.

    And buy some gold while you're at it. That's the EZ trade.

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  60. PMs are no good.

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  61. Good insight from Jesse on inflation/deflation/what about Japan?/Pretcher, etc..

    http://jessescrossroadscafe.blogspot.com/2010/08/zerohedge-richard-russell-slams-robert.html

    "All things considered, the Russian outcome seem more likely to me, except the US is short on natural resources, so it is hard to forecast what will finally trigger the recovery. The dominant industry is financial fraud, demand that seems to be on the decline in US' trading partners, unholy alliances amongst central banks notwithstanding."

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  62. Anon -

    Ears are fine. Clear out your eyes. I never said he was short....

    Just that his guarantee that the bond market is overpriced and clearly nuts is wrong.

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  63. Khalid -

    Time to take profits on the Gold added at 1160 that was posted on this forum.

    Back down to 60% gold and 40% cash from 75/25.

    Gold and cash folks.

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  64. I didn't say short the market. I think I was clear on that, and my point was not to convince you, but others that might be reading your stuff and believe bonds are the same as stocks. They are not.

    What I am saying is not guru crap; it is math and simple common sense. You can derive your own duration numbers, it comes out to the same thing. Duration is a calculation and a measurement, but you seem to believe it is a probability.

    Would any of you bond buyers at this point, take their surviving elders’ money and put it into bonds? Or if managing passive money, would any of you suggest buying bonds to your clients?

    You want to trade this market, then by all means. I was clear that I wasn't a trader. If you manage other people's money (passive money that is) and suggest bonds are an attractive investment, you are clearly a moron.

    But your arguments are not sound. They are dangerously incorrect, and anybody acting as an investor buying into your logic is facing a dangerous risk.

    Cash would be a better alternative, or even better a portfolio of different currencies. (Gold and PMs are even better, but not part of this discussion)

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  65. A lone voice in the wilderness:

    John Taylor - manager of the world's largest Currency Hedge fund with $12 billion AUM........

    "At FX Concepts, we have been calling for a recession next year, and as the
    Fed – and the market players – come to realize this, equity markets, commodity prices and currencies
    (except the yen) should all decline. At the same time, liquidity should tighten dramatically, credit
    spreads should widen, and government bond markets should rally strongly. Although the US signaled
    the beginning of the coming recession, the Eurozone is still naively expecting its €750 billion rescue
    plan with austerity thrown in to save the day. Our analysis argues that this plan will start crumbling
    within the next few weeks, sending the euro sharply lower once again and ushering in the deep
    recession of 2011

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  66. Anon1,
    Thanks for the input. I appreciated it.

    GL all.

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  67. Anyways,

    Enjoyed the chat, but too much time at the computer(addictive piece of crap that it is), time to get outside!

    So copy and paste for other arguments I need to make.

    Good luck all!

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  68. Yeah Keys -

    I have been a moron for the past ten decades. My returns for clients are ridiculous. I shoulda had them in stocks.

    Thanks for the help.

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  69. errr- I mean 10 years.

    Now that is bad math ;)

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  70. Anon1, if you expect bonds to continue to go up, why are you in only cash and gold?

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  71. Re bubbles: Maybe the bond market is in a bubble. So what? That doesn't tell us anything useful because any financial instrument can be in a bubble and continue to appreciate in value far longer than most people can imagine.

    Will the bond bubble burst this year? Next year? How about 2020? I have no idea. But I think Justin and Anon1 have the right idea: Let price tell you whether to trade it or not. If you are long bonds, why not continue to hold them? Why sell an appreciating asset?

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  72. Pima canyon -

    I have said gold and cash (or the long bond) many times....

    ReplyDelete
  73. o.k., I am now light again. The great thing about trading is you can wait indefinitely for the pitcher to make an error and then swing like hell. It was completely clear to me we were going to tank this week, so I went all in. Now I just don't have much of an opinion (I am keeping my euro and GE shorts for the time being as they may both eventually go to near zero). There are always a few intelligent reasons to go long, and a few intelligent reasons to go short, but philosophizing about what the market should do doesn't make any money. I will post the next time things appear extremely lopsided to me which these days ought to take about a week(!), and will probably be at the next tradable bottom.

    ReplyDelete
  74. "The most striking episode of bond-price pegging occurred during the years before the Federal Reserve-Treasury Accord of 1951. Prior to that agreement, which freed the Fed from its responsibility to fix yields on government debt, the Fed maintained a ceiling of 2-1/2 percent on long-term Treasury bonds for nearly a decade. Moreover, it simultaneously established a ceiling on the twelve-month Treasury certificate of between 7/8 percent to 1-1/4 percent and, during the first half of that period, a rate of 3/8 percent on the 90-day Treasury bill. The Fed was able to achieve these low interest rates despite a level of outstanding government debt (relative to GDP) significantly greater than we have today, as well as inflation rates substantially more variable. At times, in order to enforce these low rates, the Fed had actually to purchase the bulk of outstanding 90-day bills. Interestingly, though, the Fed enforced the 2-1/2 percent ceiling on long-term bond yields for nearly a decade without ever holding a substantial share of long-maturity bonds outstanding. For example, the Fed held 7.0 percent of outstanding Treasury securities in 1945 and 9.2 percent in 1951 (the year of the Accord), almost entirely in the form of 90-day bills. For comparison, in 2001 the Fed held 9.7 percent of the stock of outstanding Treasury debt.”

    When Bernanke delivered this sermon, the inflation rate was 2.2% (1.1% today), the core inflation rate was 2.0% (+0.9% today) and the unemployment rate was 5.8% (9.5% today). With that in mind, the case for more bond buying is actually pretty strong. And, if we do end up going to 2.5% on the long bond with the help of Helicopter Ben, that would imply a total return of well over 30%. It has taken the stock market nearly 13 years to achieve that result

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  75. When buying bonds - you are the direct recipient of the printing press. All printed fiat goes directly into buying bonds.

    Gold is an indirect recipient. It takes time for the printed money to make it's way into the economy and affect the prices of everything to increase inflation.

    If the government was printing money to buy teddy bears, would you say that owning teddy bears was for morons?

    Don't fight the Fed in the short and intermediate terms.

    ReplyDelete
  76. And people say it's hard being a trader! Look at all the length macro-economic discussions taking place about what will happen next. Then you place your bet and if you're wrong you get killed because you have an opinion and don't use stops. That approach can work like any style can work (if done well) but it sure the hell ain''t for me! I have no idea where interest rates are going to be a year from now, and fortunately don't need to. I do have an opinion and that opinion plus a nickel is worth about five cents.

    ReplyDelete
  77. Gary, you still like natural gas? Or you just let your option trade run out?

    ReplyDelete
  78. Anon-
    Do you have any approximate time frame when Gary mentioned Natural Gas? I have not been a member of this blog or a sub very long!
    Thank you!

    ReplyDelete
  79. Gary,
    Good article.

    But... the reason why it pays to get the top and short on it, is b/c of a little invention called the "leveraged bear/short etf".

    Simply put my friend, it allows you get a return on the short GREATER than 100%, whereas with a traditional short, you'll max at 100%.

    Indeed, IT ALWAYS PAYS to find those pivot points.

    Lastly, TBT and PST - our only ray of hope for stock market bulls! (Crash little bonds, crash!)
    pH14

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  80. Oh oh, Cramer kiss of death for PMs.

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  81. Why would anyone buy the U.S. dollar? Can someone explain to me why the dollar is going higher since the Fed announcement?

    ReplyDelete
  82. Fed said they'd buy US debt. So bonds go up, b/c people think that their words add confidence that US won't default on their bonds. Suppy and demand... bonds go up.

    Overlay chart of UUP with TLT. First historically, you'll see that generally they are directly proportional to one another. But recently, there's been a divergence: You'll see that USD was oversold at the Fed mtg versus TLT.

    Herein, USD is playing catch up....

    But here's the twist.

    To play catch up, bonds can crash as well - said another way, bonds were were overbought (not USD oversold).

    Crash little bonds, crash...
    pH14

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  83. It is called speculation. Nobody has a flying fucking clue what market is going to do what at anytime. We all can post charts, use history, stats, etc...but in the end it makes no difference whatsoever. In the end we are all dead. So place your bets and pray that you get lucky in whatever you speculate it in, be it the dollar, gold, stocks, real estate, or stamps.

    ReplyDelete
  84. Looks like my little comment stirred some passion. Good. I was a little surprised at the venom that Anon1 sent my way, but he obviously has a lot of emotion around this issue.

    Look, if the bubble doesn't burst I won't be ruined....except as a citizen in a nation that is either in a deflationary spiral that holds rates down, or a nation that continues to monetize its debt to hold rates low. I believe the latter scenario is the most dangerous as it will likely increase potential energy in the market that will someday be realized, and *could* drive interest rates to the other extreme...namely 20 to 25% on the 30 year as a result of misguided policies that deter the free market from appropriately valuing US debt.

    Anon1, I don't believe I need to over think this one. Its really pretty simple in my eyes. T-Bills rose as much during the last two months of '08 as they did during the prior 6 years. That is a parabolic move. That is the type of move that alerts me to the possibility of a bubble in its final stages, especially as it came after a 30 bull run, and is hitting historic extremes. I did fairly well shorting T-bills in
    '09.

    Now, do I know whether they will go higher? No. Are the odds increasing that the end game is near? I believe so. So, all I was asking of Gary is whether he had interest in keeping an eye on the cycles of treasuries for his subsription service. His response was that he hadn't done so yet, and didn't appear intersted in starting. Clear answer.

    I'm not jumping into a trade with guns a blazing. But I very well may if I see the signs of another parabolic rise. As Gary so often states, reversion to the mean is as close as you can get to a sure thing. So, my eyes are on Treasuries for a move that indicates irrational, and (as I'm seeing here) an overly emotional investing community that are driving prices to unsustainable heights. The same thing I will watch for in Gold when it goes parabolic.

    Anyway, the discussion here is thought provoking, and I hope this comment doesn't offend anyone, as some like Anon1, appear to be somewhat sensitive around this topic.

    Mitch

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  85. "Why would anyone buy the U.S. dollar? Can someone explain to me why the dollar is going higher since the Fed announcement?

    Anon - 10:16 AM"

    Because the dollar is priced in against other currencies. If the Dollar goes up, other currencies go down. If the dollar goes down - other currencies go up. Can you tell me why other currencies like the Yen and Euro should go up and the dollar should go down considering the news in Europe and the declining work force and increasing debts in Japan?

    All paper currencies will fall against gold. You saw gold and the dollar go up together this past year.

    Get used to it.

    ReplyDelete
  86. Tim Knight is pile. Look at his recent BOOM call. The moment he posted that reco, the stock went parabolic.

    LMAO! Bulls make money, bears lose a boat load of it.

    ReplyDelete
  87. Venom cooter?

    You are funny. You are a bit sensitive.

    I was only pointing out your obvious herd like claims that bonds are in a bubble without any data to back it up, just what you "think" will happen, even though reality is doing the opposite at the moment and has been for 30 years.

    ReplyDelete
  88. Last word Anon1. I win because I spoke last. Doesn't matter what I say, as long as I make sure I spend my entire day typing at the computer.

    ReplyDelete
  89. Long some TNA right here, a shade over $36.

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  90. Nothing to do with the last word. Now you are stretching for personal attacks because you have nothing intelligent to add to the conversation nor provide data to tear down my argument.

    My kids do that when they know they have lost - they revert to mudslinging......

    Nice work. We are all now more intelligent from your input.

    I watch the markets from 5:30 AM until 1:00 PM...... so yes I am at the comp. It gets a bit boring - so I read. When I read drivel from lemmings who don't think for themselves, it makes me want to bring the truth. Nothing I have said is not based on fact. I did make some predictions for 2.5% rates, but think the fundamentals of supply and demand are at my back. At least I'm willing to stick my neck out and say it. What do you contribute lemming?

    Now we are even with the name calling. See how quickly a debate goes down the drain?

    ReplyDelete
  91. Which monkey here said gold can't go up without stocks?

    ReplyDelete
  92. AGQ: still waiting for mid $55...like $55.60 ish.

    ReplyDelete
  93. I just woke up to take a peek and I'm pleasantly surprised. If napping while on the right side of a monster trend is all I have to do to get rich, somebody wake me up in January!

    ReplyDelete
  94. Anon1
    You speak in judgements and call it data. In your judgement it appears I'm not worthy to contribute to a message board. There, I've provided some data.
    Fubsy

    ReplyDelete
  95. hahaha TK recommended shorting BOOM and it blew up.

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  96. Well, Tim is short 200+ stocks now, so what else in new?

    Gary was in UNG last year and these were a small % of his port...like 5%? in a longer term deep in the money option play. I seem to recall they expired worthless in January of this year and he couldn't care less about natural gas or any other commodity. He's long big time silver with various vehicles.

    ReplyDelete
  97. Correct on NatGas. I haven't been in that for sometime.

    All the debate on bonds is useless IMO. Since the March hig still hasn't been exceeded I'm still of the opinion that bonds topped last year when Ben stated he would artifically depress rates. The market immediately corrected his mistake.

    Long term cycles in bonds turn very slowly. This is just about exactly what I would expect. Now if bonds exceed the high of last year then I will say that yes the bubble is still intact. Until it does that I think the long term cycle has already turned.

    ReplyDelete
  98. Notice the 30 year yield is still 1400 basis points above the 09 level.

    Sorry folks the bond bubble has already burst and is now in the very slow process of deflating.

    ReplyDelete
  99. Wow, miners are riiiiping.

    ReplyDelete
  100. Shortholes could get carried out on stretchers in the morning.

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  101. You sound so sure Gary...... you should put your money where your mouth is and short them then if you are calling a top. Put a stop at a new high. Great risk reward wouldnt you think?

    For all the stock bulls out there - here is a little dose of reality:

    http://www.nanex.net/FlashCrash/CCircleDay.html

    The rally is pure manipulation from illegal quote stuffing to rip prices higher. With the retail investors pulling out of the market in droves, yet the market ramping on no news almost daily, you are the ones living in a house of cards. Gary doesn't believe in manipulation...... then how does he explain that?

    The bond market is ALWAYS right. With yields tanking (bond prices ripping) - stocks will follow.

    http://finance.yahoo.com/news/Treasury-Bond-Yields-Pointing-cnbc-1494984968.html?x=0&.v=1

    There's your dose of reality.

    ReplyDelete
  102. Lest I forget to then newbie quoting me leveraged short ETF's as a reason to catch the exact top.

    First off you will double your losses if you are wrong. That alone is more than enough reason not to play with fire.

    But also the math still works. If you used a double ETF and caught the exact top and covered at the exact bottom you would score 92% with a double ETF.

    If you waited for confirmation you would score 80% and drastically reduce the odds of destroying ones account.

    The risk still far outweighs trying to catch the exact top. You will still make plenty of money and more improtantly you will not be risking the destruction of your account (well you still will but the odds will be greatly reduced).

    Trying to pick a top is a classic novice mistake. It just doesn't need to be done.

    Don't forget 100 to 0 and 2 to 0 are still the same 100% gain.

    ReplyDelete
  103. Why short bonds when gold is in the clearest of trends and near all time highs?

    No offense, but you don't sound like you manage money, anon1

    ReplyDelete
  104. Can you give me an example of miners you guys like?

    ReplyDelete
  105. Here's an idea. We can ask Wrong Way TK what he thinks about bonds and do the opposite. That is the only sure bet.

    ReplyDelete
  106. Anon1,
    For someone who claims to be an experienced hedge fund manager you certainly do make some obvious novice mistakes.

    Other than the very short term it simply isn't possible to manipulate the markets. They are way to big for anyone to manipulate.

    Sure the Fed can print trillions of dollars and maybe abort a 4 year cycle low but they can not and will not be able to stop the secular bear.

    Also nothing anyone does will stop the gold bull.

    I knew we would start seeing this manipulation nonsense at some point as this rally progresses. Bears almost always fall back on this excuse when the market doesn't do what they want. (Of course the bulls do the same thing)

    Inexperienced investors are alwasy looking for someone to blame for why they didn't make money.

    Now why on earth would I want to waste money shorting bonds when the easy money is sitting right there in the corner waiting to be picked up (secular gold bull)?

    ReplyDelete
  107. Why not short bonds when one is as sure about it as Gary and the other folks on this forum?

    Sorry I don't meet your qualifications of what a money manager "sounds" like. Doesn't change that fact.

    It's not a novice mistake. Once again - you blow off clear evidence that opposes your view Gary. Puerile in its most basic form.

    In the same way you NEVER responded to the proof that your claims of debt going up were wrong via the Fed Funds Z1 report (well you did bring up the novice concept of the debt clock), something tells me you won't respond directly to the illegal quote stuffing that is seen with the naked eyes.

    Whether it matters or not - its there. You can't deny it...... but you will.

    ReplyDelete
  108. I'm out after covering my last 300 SPY. I'm long a little and short a little and all told net flat. I also noticed Gary's favorite money flow is positive.

    ReplyDelete
  109. anon1,

    A real money manager wouldn't have the time or need to nag Gary all day is what I meant. Take a hint.

    ReplyDelete
  110. Here's your track record in our ongoing debate Gary:

    Gary says: $12 trillion sloshing around

    Anon1 shows him its not $12 trillion actual dollars, so quit using that statement.

    Gary says - "Overall debt is not deleveraging, the government is MORE THAN MAKING UP for any private debt destruction. Total debt is spiraling out of control"

    Anon1 shows him the Z1 report and what page to look at and asks him to respond and admit he was wrong. Gary moves on to a new post and never responds.

    Now Gary is calling me a novice because I show him proof of illegal quote stuffing. He lowers himself to character attacks like a child would when there is nothing else to say, and doesn't respond to the evidence presented.

    And people pay you for this insight?

    ReplyDelete
  111. I think stocks will be up 2-3% tomorrow.

    ReplyDelete
  112. If you haven't noticed - I am not on here every day - like most of you,

    only when I see obvious mistruths and self-aggrandizing that goes on with this forum in regards to economics.

    Gary is pretty good at the gold bull, I agree with him there.

    When he gets into economics, he shows his ineptitude.

    Maybe you and he should stick to talking gold instead of economics?

    Take a hint

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  113. And who cares if I do or don't manage money. For all it matters to you - maybe I pump gas and flunked college.

    Still doesn't change the fact of the data being provided that strongly refutes the generally accepted thesis on economics for this forum.

    Stick to gold Gary - you are good at that.

    ReplyDelete
  114. Mr Big-Time money manager, anon1. LOL! I highly doubt and obsessive-compulsive like yourself is making the bacon. You're far too uptight to make money trading.

    You're not even a subscriber, and you make more demands on Gary than anybody. Go trade, we get your points whether we agree or not.

    ReplyDelete
  115. I'm not a trader mocker man. We make moves in our client accounts maybe once every quarter maybe. Most of the time - its researching balance sheets, cash flow statements, and creating hedge models to offset risk.

    And 30% of our clients wealth is in gold and gold equivalents.

    Not that I need to justify myself to you, as Gary said - trading is for idiots.

    By the way - how did you know that I am not a subscriber?

    is that you Gary under cover as Anon?

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  116. Listen up dopey anon1,

    I didn't make one comment about the bond market, cuz I don't give a rat's ass what it does while I'm riding the best chart I've ever seen.

    However, I am getting tired watching you chase Gary around like a 5yr old screaming "I'm right! I'm right".

    We get your point, enough. It's not like people never disagree in this business, so let it rest awhile. For Christ's sake, Gary's not even in bonds. SUrely you have an audience someplace that might really be interested?

    ReplyDelete
  117. "is that you Gary under cover as Anon?"

    Paranoid, too? Obsessive-compulsive and paranoid is not the best combination for a "money manager", despite what your boob-tube is telling you.

    ReplyDelete
  118. LOL...good stuff good stuff.

    And last-word-anon1 says .........

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  119. I take that back -

    We do trading in the hedge fund. We do currency arbitrage with algorithmic models in a small portion of our fund. Best way to screw the banks since there is no centralized market for currencies.

    Buy $2 million EURUSD at BofA and sell it to JPM and make a $200 pop.

    Next to gold - its like printing money.

    And if you need proof - shoot me and email at chartguy2000@yahoo.com

    I'll send you 2 years of statements with over 10,000 trades each making $500k a year

    Maybe that will shut you up about my credentials.

    ReplyDelete
  120. anon1, what's the name of your firm?

    I might want to throw some money your way.

    ReplyDelete
  121. anon1 has time for all that, and enough left over to badger Gary.

    He makes it sound so easy! :)

    ReplyDelete
  122. Anon1, if you think name calling is not the way to go about debating (and has other negative effects as well), then why engage in it? Because someone else started it???

    If something is harmful, then there no reason to do it, regardless of what anyone else is doing, no?

    ReplyDelete
  123. If you can show those statements to me, not knowing me, then you can show them to all of us.

    Go ahead, I'm calling your bluff. I'll apologize if you can produce.

    ReplyDelete
  124. Gary:
    There are two items I want you to review. One is Richard Koo's thesis on Japan; especially how in spite of a huge decline in asset prices they maintained positive GDP growth with government spending replacing private spending after the debt bubble burst. The second is Ray Dalio's article in Barron's about two months ago.

    All this talk about USD crashing is meaningless without context. What is it going to crash against? The EUR where the Argentina treatment is more a question of when but what or JPY or GBP? USD might crash against emerging market currencies but their share in the US index is small.

    Things WILL change dramatically when the emerging markets reach a point where they stop holding OECD currencies as reserve, as their currencies become reliable enough. But it will take a long time before that happen. Would you own Chinese Yuan as a reserve, when you know that you absolutely no recourse if they decide to show you the finger? The Indian economy is semi-open and they have no intention of integrating fully with the global world. Russia hardly has a legal system. The only country left is Brazil which I feel has a great future. Other currencies like AUD, NOK, CAD will do great but their economies are too small for them to become major reserve currencies.

    Also tax rates in the US are much lower than Europe. Our ability to service our debt is not as bad as you make out it to be. And the latest statistics are showing that the domestic ownership of US debt is increasing. That trend is unlikely to reverse simply because of demographics. Boomers recovered 50-60% of their losses and they have no interest in losing that buffer. Bonds will have a bid as long as their uncertainty and that uncertainty will last a long time; something all PM bulls are banking on.

    ReplyDelete
  125. I'll be glad to email them.

    They are massive files.

    They are from Deutsche Bank.

    They are there for who ever wants them. But they have to be emailed.

    It's not a bluff. Why would I claim 10,000 trades in two years at $500k a year?

    Send your request. I'll email you.

    ReplyDelete
  126. For the record I said the Fed printed, loaned or guaranteed 12 trillion...which they did. So nothing false about that statement other than maybe it was 13.9 or 14.1 trillion. Close enough.

    I tried to find the Z1 report but the link you gave didn't work. The fact remains that when congress changed the mark to market rule it stopped a big portion of the debt destruction. Banks could simply carry the bad loans on their books at full value while receiving free money from the Fed.

    A great many home owners have now quit paying on their mortgage. The banks aren't in any hurry to foreclose because they can keep the loan on their books at full value and keep taking the free handouts so no debt destruction there.

    In the meantime the US is increasing it's total debt by astronomical levels. Heck we effectively doubled government debt when the government took over FNM and FRE. That alone added 5 trillion to the Federal debt. So despite what ever this Z1 report purports to say the government is in fact increasing total debt massively.

    And finally illegal quote stuffing doesn't equate to market manipulation. Like I said the markets are simply too big for anyone to dislodge other than in the short term.

    ReplyDelete
  127. anon1,

    Actually, I'm not interested in the least, but thought others might want to see the proof, since you made the offer.

    And I was kidding about putting money with you to manage. I wouldn't give funds to somebody that would show my account around to strangers just because his pride got in the way.

    ReplyDelete
  128. Let's see, who should I have more faith in, Marc Faber or anon1?

    ReplyDelete
  129. Gary:
    I am not sure I understand your comment about how there is always a bid in the market. Of course there is a bid but smart money needs time to distribute and if the distribution did not happen, it indicates a greater downside risk.

    Also the market moves MUCH faster than before. Instead of daily SOS numbers perhaps looking at hourly SOS numbers will start becoming more relevant.

    Frankly almost all classical technical techniques of analyzing the market are falling. We get 90% days almost every week. We get huge TRIN readings. All this happens because assets now trade in a binary risk-on/risk-off mode and the differentiation is lacking.

    The only indicator I trust now is sentiment. Because at the end of the day sentiment is what drives market behavior. However, even here what defines extremes of sentiment will have to be adapted.

    Bear markets end when investors become absolutely and completely disinterested in the market. I feel that we have yet to see those depths. That is why I believe that sentiment could plumb depths it has not seen in recent history.

    BTW, unemployment claims are a great coincident indicator of where the economy is; it is not a lagging indicator like the NFP. So if they are ramping up it does not portend well for the economy. I do not care if it officially qualifies as a double dip or not; there is certainly little growth visible.

    ReplyDelete
  130. So 1250 a quarter, but your hedge fund doesn't trade much. But you forgot about currency arbitrage.

    You just said "Not that I need to justify myself to you, as Gary said - trading is for idiots."

    Are you a trader then?

    ReplyDelete
  131. Well its prop money - Im not looking for you money. Wouldn't take it either.

    I just wanted to see if you would live up to your word and be a man about the apology.

    I knew you wouldn't.

    If I was interested in my pride - I wouldn't be hiding behind Anonymous.... I would want the world to know.

    Pride is not my driving force, the truth is.

    I believe I have done that in regards to economics.

    ReplyDelete
  132. Well its prop money - Im not looking for you money. Wouldn't take it either.

    I just wanted to see if you would live up to your word and be a man about the apology.

    I knew you wouldn't.

    If I was interested in my pride - I wouldn't be hiding behind Anonymous.... I would want the world to know.

    Pride is not my driving force, the truth is.

    I believe I have done that in regards to economics.

    ReplyDelete
  133. Gary is definitely good with gold and he is smart, but he's quite fixated in his own way. If he believes markets can't be manipulated he'll stick to it until hell freezes over. There will be no way of you convincing him otherwise unless you take him personally into the hedge fund world and let him see it with both his eyes. Other than that, it will be a debate in everlasting futility.

    ReplyDelete
  134. G-train,
    You were right on the money about the bull flag.

    You've been on fire for the last month. If the coil plays out we are going to have to change your name to guru master G-train :)

    ReplyDelete
  135. No we are not traders in the normal sense of the word where we look at charts and say HEY - the market iwll do this.
    As Gary says - that is stupid.

    We basically are what the NASDAQ is to MSFT stock. Everyone who has a bid and ask for MSFT has to route it through a centralized exchange. So when we look at the price - we both see the same price.

    It is not like that with currencies. JPM and BOFA might have slighty different prices. We route 20 bank feeds through our computers and make markets. So if you consider a market maker a trader - then sure.

    What I am not is some guy sitting at a desk and looking at charts and day trading my way to the poor house.

    How about you?

    ReplyDelete
  136. "Gary is definitely good with gold and he is smart, but he's quite fixated in his own way. If he believes markets can't be manipulated he'll stick to it until hell freezes over. There will be no way of you convincing him otherwise unless you take him personally into the hedge fund world and let him see it with both his eyes. Other than that, it will be a debate in everlasting futility."

    You are right Anon. I am realizing he only sees the world from his perspective. I might be fighting this battle unfairly in that I talk to the trading desks of some of the largest banks including Goldman. I know what is going on. I was only trying to provide a bit of proof. But as my debates have gone - its like running my head into a wall. Not sure what my point is in trying to bring the truth to those that don't want to hear it.

    ReplyDelete
  137. "I just wanted to see if you would live up to your word and be a man about the apology.

    I knew you wouldn't."

    There you go again. You haven't shown anybody anything as yet, and I'mnot giving you my email either, as I think you're only slightly better than spam.

    You can send it to Gary at his address, and he'll relay the info. THEN you get an apology, but only for being a real manager, not for being a dick. :)

    ReplyDelete
  138. sigh let me say this again. Markets can be manipulated in the short term. No doubt about it. I was actually hoping for that as my final entry into AGQ when gold slightly broke through the May pivot.

    But the markets are way too big for anyone to successfully change the long term trend and other than Ben's historic printing spree last year I don't know of any other time in history where even the intermediate term was successfully manipulated.

    ReplyDelete
  139. Man is this blog filled with a bunch of nuts! Great times! I guess you have to be a little crazy to go 100% into pm's(myself included). Can't wait for the next drawdown, it seems the blog has collected quite a few loose cannons.

    Anon1, are buying just US bonds or bonds from Japan too? Do you have any etf’s you run, I would like to short them.

    ReplyDelete
  140. "Anon1, are buying just US bonds or bonds from Japan too? Do you have any etf’s you run, I would like to short them."

    Judging by your input - I wish I did. I would love to take the opposite of your trade...

    ;)

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  141. anon1 is full of crap. Prop firms are for active traders managing one account (firm money), and possibly some of the trader's cash too, so he has skin in the game.

    A trader or "manager" at a prop firm doesn't have clients or investors.

    And I'd also short the piss out of anon1 every time he gets aggressive.

    ReplyDelete
  142. Here you go Gary:

    http://www.zerohedge.com/article/fed-claims-it-did-not-manipulate-currencies-q2

    You and the Fed are in the same boat.

    HAHA

    ReplyDelete
  143. Look dilrod -

    If your read up - we manage money AND a hedge fund as stated earlier.

    We do have clients for normal asset management - that is the stuff that trades rarely.

    If you want to go head to head - than lets go play in the FX land. Ill take you on.

    Let's each put $10,000 in an escrow account. We'll run our trading for 3 months. Whoever wins - gets the whole $20,000

    You game big man?

    ReplyDelete
  144. anon1 gets so excited he can't possibly trade profitably. Check out the double post above.

    If your trigger finger is that itchy, he buy twice as much as he intended. Some trader!

    ReplyDelete
  145. We set it up as a hedge fund for ease in opening accounts. Also get the institutional feeds.

    If you think I am full of crap - let's wager.

    How bout even $1000 in an escrow account each?

    If I can't provide proof I am who I say - you WIN! Easiest $1000 you ever made since you are so certain?

    Game on?

    ReplyDelete
  146. OH NO! He's calling out my manhood!

    LOL! I'd like to, but I'm fully invested in gold as I've said before. I think making money is more important than proving "I'm a man, dammit" to some anonymous nag.

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  147. I am think Anon1 needs to repond to everything posted about him. Let's see if this works.

    Hey Anon1...your dumb!

    and last-word-anon1 says....

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  148. "anon1 gets so excited he can't possibly trade profitably. Check out the double post above."

    Then you are set to make a quick and easy $10,000, right?

    Not taking me up on the offer I noticed.....

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  149. Sure, what the hell.

    I'll just park the money there and not do any trades, handily beating you by 20-30%. LMAO!

    ReplyDelete
  150. Gary needs to rename the forum douchebagtracker........

    there are some obvious ones here

    Im out - my day is over - get back to pumping your gas

    ;)

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  151. See you tomorrow, thanks for stopping by! :)

    ReplyDelete
  152. See you later last-word-anon1...make sure you come back around midnight when nobody else is here and make the last post. :)

    LOL! I think I am going to pee myself!

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  153. Anon1,

    What's your outlook on the dollar? I'm thinking of shorting the EUR/USD cross along with my long dollar ETF positions. I'd like to maximize my gains as I think this is likely the biggest trade out there over the next year, or at least the biggest one I see right now.

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  154. Friendly fella, isn't he? Oh well, all in good fun.

    Gary, where do you find these jokers?

    He's obligated to send you all his client statements, even though it's against the law. LOL! Good day today, all around.

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  155. Justin -

    I think you are a wise man.

    We are scaling in short EURUSD from 1.30 up to 1.35

    Our target is 1.10.

    I think you will make a lot of money.....


    now - truly out.

    ReplyDelete
  156. Well last word anon says:

    obligated nothing. When its our money for our fund - we can.

    I didn't offer to send you individual client statements.

    Just mine.

    ReplyDelete
  157. HAHAHA!
    "Justin, I think you are a VERY wise man, mostly because you agree with me, or you actually are me."

    ReplyDelete
  158. I'M GREAT! I'm GREAT, GREAT, GREAT!

    and I can prove it!

    ReplyDelete
  159. I think we can add multiply personalities to the list too?

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  160. Geez give it a break guys. You are making me dizzy!

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  161. Anon1,

    That's pretty much the trade I was looking at too. Hopefully you stick around this board!

    ReplyDelete
  162. Bond holders will ultimately get raped, but for now it should work. Get some gold bitches just in case this sommabitch falls apart.

    ReplyDelete
  163. Multiple personalities might help him trade better, as long as he was getting different perspectives from each one?

    ReplyDelete
  164. Alright, I'll give it a break on my end. I swear, half the fun I have getting rich is blasting the clowns when they pop up!

    See ya later. :)

    ReplyDelete
  165. Anon1: "And people pay you for this insight?"

    Since I started following Gary a couple of years ago, my returns have gone from an average of about +5%/yr to about +50%/yr. So yes, I am gladly paying for his insight and will continue to do so for as long as Gary continues to not die on some cliff somewhere.

    And here's a tip Anon1 - since you're obviously smarter than Gary and the rest of us (yet for some reason you hang out on this little blog all day instead of 'running your money'), why don't you start up a newsletter and offer your insight to the unwashed masses?

    ReplyDelete
  166. Gary,
    I know you addressed this earlier, and decided that it would be too much hassle for everyone to sign up for comments, but I gotta say, I'm finding a lot of froth in the comments that are simply annoying. All the bickering etc...

    I wonder of that would lessen if people had to sign up for a user name to comment. The whole anon thing allows too much space to be an A-hole.

    Mitch

    ReplyDelete
  167. You could always do what I do ..ignore it:)

    ReplyDelete
  168. Gary,

    Do you think that gold and the PMs will top together at the end of this C wave? I ask because gold basically doubled at the end of 1979 but the miners were basically flat during that time. However, AFTER gold topped (although people didn't know it at the time) then the miners went absolutely ballistic on the upside for the first 9 months of 1980 even while gold was coming back down. Do you think they will top together this time or perhaps will there be a delay with the PMs and say gold tops in the Spring with the PMs topping later in 2011?

    Thanks!

    Steve

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  169. I really have no idea. I can say that once I get the feeling the bubble has gone far enough I will get out and not look back.

    I'm pretty sure I will be early and have to watch gold continue higher without me. But I can also tell you that I won't care one little bit.

    I sold all my real estate about 6 months too soon also but I'm not complaining. Better early than sorry when it comes to bubbles. That especially applies to silver. One can't get caught on the downside at all with silver. When it cracks it can lose 50% in a couple of days.

    ReplyDelete
  170. Are you talking about this C wave or the end of the bull when you say you will get out before the bubble pops (or both)?

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  171. Both. I will always try to exit before getting caught in a D-wave if possible.

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  172. Didn't someone a couple of weeks ago warn us about how bad gold was looking and how it was headed to $1000?

    I have a question. If gold was looking so bad then how in the hell is it now trading at almost $1220?

    The G-train squashed another flea!!!!

    LMAO

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  173. Yes, squished like a bug is right. And it's almost time to put up the troll meter again, too, with new trolls steeping with names and everything. I smell toast!

    ReplyDelete
  174. Get some gold while it's still cheap, the next couple weeks is going to be fantastic!

    ReplyDelete
  175. Anon1,

    Are you still out there? What do you think about gold, I'm still waiting patiently for a big pullback, especially since leading stocks like ANV and SLW are still likely putting in tops after their huge runs. Plus we still have negative divergence on the weekly and no buy side volume as of yet. I think a pullback to $1000 is in the cards.

    ReplyDelete
  176. Justin,

    anon1 gave us his email yesterday, so you can contact him directly. Why would you want to get in front of so many people that believe gold will never hit $1000 again in this bull? Is it just to agitate?

    ReplyDelete
  177. Gold is going much higher, and if I have to take a little pain along the way, I can't risk being out when the move higher occurs. In my situation, I hope gold does go down to 1k so I can add extra funds.

    P.S. Today looks like a snooze fest, my favorite kind of "fest"!

    ReplyDelete
  178. Justin -

    I am long 60% gold in my account. I keep a core 50% in there.

    I think gold and the USD will continue to rise against all other currencies like they have most of this year.

    Gold does very well even in deflation. Take a look and study the Kondratieff Cycle and you will see that.

    ReplyDelete

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