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Wednesday, August 11, 2010

COILS IN S&P AND SILVER

We now have a volatility coil forming on the S&P and silver. Contrary to what one might think the initial move out of a coil, although it is often aggressive, usually ends up being a false move soon to be followed by a more powerful and durable move in the opposite direction.



Yesterday was the 27th day of the daily cycle in stocks so it is possible that stocks are dropping into a slightly early daily cycle low.

The dollar is bouncing which may signal a slightly early daily cycle bottom there also. However that opens up the possibility that the dollar could have another entire daily cycle before the larger intermediate cycle bottoms.

The total lack of any selling on strength days during this rally suggests that a breakdown out of the coil will be reversed soon as the odds suggest. In the last 5 years only one intermediate rally has topped without at least one of these large negative money flow days. With no sign of smart money selling yet it is unlikely the intermediate rally is finished.

And sentiment still hasn't reached bullish extremes either. Intermediate rallies don't usually end until sentiment reaches extremes and that includes bear market rallies.

117 comments:

  1. Now we're talkin'! SPX futures down 16.00 Thanks to all the guys who felt sorry for the shorts the past few days. I am not convinced that we are starting anything significant to the downside and Gary is probably right about the idea that this decline will be a short one, and I expect to cover during the day.

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  2. Got to like the action in gold.

    It certainly looks like gold has now decoupled from the dollar. As a matter of fact an intermediate dollar rally could very well drive this next intermediate leg up in gold.

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  3. Interesting. Jason at sentimentrader.com points out that there have only been 9 times the SPX gapped down over 1% the day after am FOMC meeting, and the market dropped sharply in the next few days after that 7 of 9 times. Hmmm...

    And. yes,gold is impressive. I have been short the euro and long uup, so the decoupling is a welcome sight.

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  4. I hope the decoupling applies to miners, not just gold.

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  5. This is the same thing that happened in 2008 over and over: the market starts depending on the Fed, the Fed doesn't deliver, so the market starts plunging downward. I wouldn't expect things to transpire differently this time around.

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  6. DG, I am surprised you are not more bearish. Bernanke has essentially admitted that we are in a depression and that he is going to apply the Japan prescription, even though it is a proven failure.

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  7. As an investor, I am sure glad I am out of stocks. Those that trade, best of luck! All pm's!

    Time for the pool

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  8. I am unsure right now. I never pay attention to Bernanke or anything other than the technicals because you never know what is already priced into the market. The market discounts the future by about six months, which is why trading off today's news is a losing game. Gary is right that we never had all that much bullishness at the top so a major decline from here is unlikely. The problem is we never had that much bullishness at the top in 2007 either! I am undecided, but given Jason's stats will be a little slower to cover. I will have "strong hands" status with my shorts and will let some of them run given my good entry points. If i see a bottom ii will post it.

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  9. In 07 the advance decline line was already diverging. The intermediate score was in overbought territory.

    Now we have the opposite. The advance decline line is making new highs and sentiment is just now turning neutral.

    With no large selling on strength days yet I have to think the coil will probably play out as it usually does.

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  10. True on the A/D line, but that was at the end of a multi-year bull market. This has been a bounce in a bear market so I do not believe an A/D divergence is necessary. All that has to happen is for the money to run out and the causes of the bear to re-emerge...which is why I am short the euro again. I am not discounting what you are saying but am definitely open to the other leg already having started, perhaps on the way to yet another October collapse. Not sure how to play this...

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  11. Sweet Jesus, gold is UP on the day!

    How anybody could miss getting long is beyond me.

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  12. The next intermediate cycle low is due in late November but I would be hesitant to call a bear market until we break the July lows. As long as that holds I think we have to give the cyclical bull the benefit of the doubt.

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  13. DG is freakin' awesome, even better than Wrong Way TK.

    Who wants to bet TK is out with lots of posts today, busy mixing it up like he's firmly in control of the trade. LMAO! It's some of the best entertainment we get each day.

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  14. http://www.zerohedge.com/article/gold-crash-proof-time-around

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  15. It's probably pretty unlikely we will get a second crash following on the heals of the last one. That crash was initiated because the financial system had about 700 billion in debt that needed to be rolled over. Which it couldn't in the middle of the credit market meltdown.

    We don't have the fundamental conditions in place for a second crash. It's probably more likely the next leg of the bear will unfold like most bears...a slow grind down over a two year span.

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  16. All this looking at chart stuff is fine, but the only reason that gold tanked was due to Hedge funds gone wild. They had to sell...this was quite easily one of the best buying opportunities we had during this bull. Temp pressure on any asset class, from owner's that don't want to sell but have to, only leads to massive gains later. If gold ever tanks again like in 08 (which I doubt) lines on a chart would not be the reason. I respect the lines, but I rather look at the reason behind it and the sustainability of an event. The 08 drop in gold was not sustainable with what the FED was doing. If gold ever tanks that far again, I will be the first one to be at the bank putting a triple mortgage on my house (I exaggerate slightly).

    I would be hesitant if the fed or governments waged war on gold for some reason(indirectly). Change to a strong dollar policy. They choose to allow rates to rise 10%. Ben is so panicked he actually comes out naked to his next speech. :)

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  17. Talk about improved quality of life, besides getting paid to snooze, my wife has now figured out that naps are where the money's at.

    She now insists I take naps, and when I say I can't sleep b/c I'm so well-rested, she decides to wear me out, so to speak!

    Thanks to Gary, I get "paid" a couple times/day! :)

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  18. I find it strange that the dollar is rallying with QE2 on the way. Anybody in the forex market notice anything strange in the Euro?

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  19. I think the dollar is rallying because of deflation fears. QE2 is too little too late and the markets know it. Gary, for what it is worth, Grantham (one of the very smartest hedge fund managers on the planet) has just come switched to the deflation camp after abandoning his expectations of inflation. I believe we will need another serious leg down before the Fed truly panics again. maybe this is the start of it...?

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  20. Gary;

    Are you still on margin with AGQ?

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  21. I think the dollar was already discounting QE2 and it is now selling the news so-to-speak.

    But the funamentals can't be ignored forever. If the Fed has the printing press running, and I think they do, eventually the dollar will follow the fundamentals.

    In the real world you just can't print trillions of dollars out of thin air and not have something bad happen.

    I would point out Soros, Rogers, Faber & paulson are all positioned for inflation. I would have to go with these guys over Grantham.

    Rogers in particular is a history genius and he's been right on the money for the last 10 years.

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  22. Nothing strange about the Euro: it needs to go to 0.85 or lower. Otherwise, the union will fail.

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  23. Just an observation. When do the most violent rallies occur? That's right in bear markets. Take a look at the dollar. Does that look like the grind higher typical of a bull market or the violent explosive move typical of bear markets?

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  24. Gary,

    What is your positioning aren't you like 100% long miners with 50% AGQ? I think Rogers will probably close his Euro long position before the next big downleg in the euro.

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  25. Agreed, the dollar is in a cyclical bull. They can last a while...in a depression.

    Gold won't take off until the US goes Argentina. That's at least a year out.

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  26. 100% in juniors and sliver miners and 20% margin in AGQ.

    Rogers has clearly stated he intends to sell the dollar. He anticipated the rally because everyone was bearish last year but he also said the bear market was far from over and he expects the Fed to ultimately destroy the currency in it's attempt to print prosperity.

    He also sees inflation over the last year and a half and expects it to get much worse, just like it has every other time in history when a country has embarked on monetary policy to debase it's currency.

    I agree with him. In a fiat monetary system deflation is a choice simply because the governement can print money and mail checks to the population. For the last year and a half the Fed has been giving the money to the financial system and that's why we are seeing asset inflation.

    As soon as they progress to dishing out money to the rest of the population we will see inflation in everything.

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  27. I would point out gold has been taking off since last Sept. with the normal intermediate corrections keeping the wall of worry intact.

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  28. I'm happy for gold that it's doing so well. Unfortunately, I'm completely invested in miners! :-)

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  29. Rogers has actually gone long the dollar in the past. Currently from an interview he just did a couple weeks ago he was still long the Euro but said that trade had probably already ran most of its course.

    I'm not sure if he will get long the dollar or not during the next big move upward in the dollar, but I'm sure when the dollar breaks 88 it will attract more attention in the financial community.

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  30. I think I've watched every Rogers interview he's given over the last 5 years and I don't remeber him ever saying the rally in the Euro was over. I know he just bought the Euro about 3 months ago and Rogers isn't a short term trader. I find it ver hard to believe he's already selling the Euro after only 3 months.

    Do you have a link for that interview?

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  31. Justin,

    When the dollar breaks 88?

    You're an idiot. How long you going to wait before you do something, and if it's not till the dollar breaks 88, why not take a few months off instead of posting every 5 minutes?

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  32. Uh oh, the USD is doing the coil and/or crawl Gary often refers to. Today's strength could be followed by lots more downside if he's correct.

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  33. Well, if you believe in "buying when it's hardest to buy" I suppose now would be a nice time to add to an AGQ position.

    At the gap down this morning I put in a limit order for more AGQ at $57 figuring "it'll never fill today." Wouldn't you know it...

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  34. I just listend to Jim's latest interview and he again stressed that the US dollar is a terribly flawed currency and is already in the process of losing reserve currency status.

    He also pointed out the US is the largest debtor nation in the history of the world. That is not the fundamental basis of a sound currency.

    I continue to believe the dollar has been infected with the cancer that started in the Euro, and is now in the beginning stages of working it's way down into the 3 year cycle low and what I suspect will be a currency crisis at that time.

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  35. Don't bet on it. Three years is too soon. Raise it up to 10.

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  36. Justin,

    Quit being a blowhard, and put a trade on! Changing to 'anonymous' won't work.

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  37. $USD appears to be neither coiling (a period of tight, range-bound movements following a period of higher volatility) nor crawling (hugging a significant moving average or trendline).

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  38. GDX might be working on an inverted H&S on the daily, downward sloping neckline around 50.40.

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  39. Gary
    WTF are you looking at in equities. This shit is going down. Be very careful of MARGIN call liquidation int gold market.

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  40. It's all over. Dow is going to 0. Ambushed.

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  41. Hi gary,

    Some market experts say "If the Fed expands its balance sheet aggressively, then gold shall rally and it shall rally dramatically; but if the Fed chooses to deflate its balance sheet, gold will plunge. The Fed has effectively “marked” gold at $1200/ounce as its
    target price.'

    The Fed’s decision yesterday to target its balance sheet rather than reserves or interest rates signals a major shift in its operating scheme. What impact will it have on gold in future?

    The dollar has rallied as the policy rates are same and today gold is also rallying. Decoupling?

    Regards
    Vipin

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  42. I am hoping for gold to get clobbered so I can buy my tits off. Strong hand status, baby.

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  43. A lot of capitulatory internals:

    $TRIN
    $NYDEC:$NYADV
    $NYDNV:$NYUPV

    etc.

    Doesn't mean this marks the bottom going forward, but panicky readings on those metrics often attract opportunistic buyers.

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  44. I don't thnk anything the Fed does will effect gold more than temporarily. Secular bull markets always run their course and they often end by completely decoupling from the fundamentals and reason.

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  45. If the market closes here we will have a Bollinger band crash trade in effect.

    BTW these coil breaks tend to last 2-5 days before reversing. So I doubt if today is the bottom.

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  46. CREE...bollinger band crash trade.


    LOL! BB crash trades work as often as any other trade folks.

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  47. Actually they have probably the highest percentage win rate of any trade. About 85 to 92% depending on what one trades. The index ETF's tend to produce the highest win rate.

    That doesn't mean they are hugely profitable though. The very few losers can give back a big chunk of what one makes on the winners.

    All in all if one sticks to the indexes the BB crash trade has a decent positive expectancy. I also tend to think if one would wait until we are deep in a daily cycle before accepting one of these they could bump the win rate up to probably 99%.

    Of course you wouldn't have anywhere near as many trades. But you could modify the rules somewhat to let the trade run longer on the expectation that the bounce out of a daily cycle low is going to be good for a much bigger run up than just a positive close.

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  48. Nahh, no BB crash trades for me. I'll stick with GOLD!

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  49. Nicely done, I agree.

    Managed to get the last three swings right, now long.

    I am however, booking 1/2 of all my trading profits immediately in PMs.

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  50. Lots of fear today. If this event throws you off the bull, you may be too levered. The gold bull is a nasty beast...I wasn't kidding in one of my previous posts that gold is not a trade for those faint of heart. You buy and go have a nap like Nap Boy, and leave things alone. Nothing has changed for gold...I am wrong, the fundamental story has gotten stronger. Ben has had the opportunity to see what the first round of QE did, now he wants QE2. If you are a value investor you are picking up more today. I already hit my limit, with some margin on Gary's last call, but will add if we go 2008(which I don't think will happen).

    The danger with using trader knowledge as an investor is that traders watch price action, value investors look for cheap prices and buy in. Opposite views of the same event.

    Good luck all.

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  51. Have they put the D-word back on the table yet?

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  52. Afternoon fellas:

    Nasty little storm out there today isn't it?

    Looking for $36.93 on TNA...going long there for a daytrade.

    Buying more BAC down here.

    Watching AGQ...I'd like it in the $55 area.

    If FAS can find its way to $20, I'll load up there.

    Might go long some UNP prior to the close as well. The gap at $69 has me a little spooked though.

    later dudes.

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  53. GLD's beta now only .07

    It's not nearly as volatile as most would have you believe.

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  54. As predicted, TK's posts are flying off the press fast and furious. I'm surprised some of his readers don't call him out on the big hole he's put in his portfolio since the beginning of the July "breakdown".

    Then again, he now censors people with beliefs contrary to his, just like Bolshevik Russia.

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  55. Unless I'm mistaken Timmey has been heavily leveraged short throughout the entire July rally. He probably doesn't have much capital left to earn big profits.

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  56. Gary,
    Would you take one night on the paid report and elaborate on selling-on-strength (selling on weakness, buying on strength, buying on weakness??) issues. New subscriber and read a number of weeks back and still don't have the basic on this. It also isn't in the 'terminology' page.

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  57. It's just the money flows on the SPYDER's. It's available in the WSJ everyday.

    Almost invariably we will see a large negative money flow day prior to an intermediate term top and vice versa at a bottom.

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  58. TK is a depressed douchebag. If everyone on his blog voted him a narcissist he'd still try to reason himself out of it.

    His linear charts are so bad it simply amazing that he has any followers at all.

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  59. What a great day. When I said we'd be down 150 by Wednesday I never hoped for this much. I am covering a moderate amount, but I was heavy enough that there's plenty left. Trouble is, moves like this can be the end or the beginning of a move. Hope I can figure out which this is. Will post if it becomes clear to me.

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  60. TK has 264 positions short, but still hasn't realized individual stocks are more highly correlated than ever before. Some money manager, with zero adaptability.

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  61. Thanks Gary, the market is falling off the cliff.

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  62. I went long the IWM and SPY today for the simple fact that everyone has turned bearish. The bearish extremes are sorta funny.

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  63. Thank me for what?

    You can't seriously be long the stock market. I've been doing everything I can think of for the last 3 months to try and get people to leave the stock market alone. I knew months ago we were going to see these kind of extremely volatile conditions. Go back and read the June 28th report (its free).

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  64. How can TK be depressed? When the market rallies, he always has SPY longs. Whenever market crashes, he sold his SPY hedge the day before the crash and his 170% short positions are highly profitable. He is the best trader.

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  65. Gary says: "usually ends up being a false move soon to be followed by a more powerful and durable move in the opposite direction."

    Seems like the pot calling the kettle black. Didn't you just rail Justin for using anecdotal evidence? "Usually"?

    How is this any better than saying the market "usually" does XYZ after a certain technical chart pattern? You have any data to back up and verify what you claim here?

    Thanks for providing it so we know you remain consistent.

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  66. Gary, PMs aren't doing any better than stocks.

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  67. Historically the initial move out of a coil is a false move 75% of the time.

    Anon,
    Are you serious? Gold is 5% from all time highs. Miners are 13% from all time highs. Do you understand how to work a calculator?

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  68. Gary said: "Historically the initial move out of a coil is a false move 75% of the time."

    Says who? Is this based on your interpretation of a coil? If so - do you have the dates and data to verify and what are the hard and fast rules you use to determine what a coil is. Your coil might be my bull flag and vice versa, so you need to define a coil. Otherwise you can data fit your patterns to be what you want it to be.

    And most importantly, you say 75%. How many occurrences do you have in your data set? You need at LEAST 30 occurrences to have even a remote statistically significant sample. Anything else is just random.

    My bet is you are doing the same thing you accused Justin of yesterday.

    Pot - meet kettle.

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  69. Time to get the troll meter back out.

    PS I don't count I am a resident troll with a working visa and everything. I imagine the troll meter is for the trolls that only come out from under the bridge.

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  70. Funny - not sure why when Gary gets debated and shown some hard truths - why it's a troll.

    I'd rather be a troll than a lemming like most on this blog.

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  71. Nice try anon1 but no cookie. The data comes straight from Jason Goephert at sentimentrader and as DG said he's simply the best stats and sentiment guy on the planet.

    You can choose to ignore the facts if you want, and probably will if it doesn't support your bias, but that won't change history.

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  72. So you are telling me Justin has a data set of failed coils? Again - that still doesn't answer the question...... what is the coil? How does he define it? You drew the coil on the chart in your report- not him. Is he writing lately about failed coils and providing the data of past failed coils? Or are you "seeing" the coil and using his data of failed coils to present your case?

    Whose coil pattern are we seeing in the charts you are drawing on your blog is the question. If they are his and he has the data set to back it up based on your interpretive drawing of the recent coil, then I retract my statement. Otherwise - still seems like pure conjecture on your part.

    Just want you to be consistent so that you are not lumped in as a troll.

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  73. Gary is debated on this blog, civilly and otherwise, all the time, Anon1. I guess we all see what we want to see.

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  74. I tried to find the exact quote as to how Jason defined a volatility coil but it's buried somewhere in the last 4 years a market updates.

    Basically he defined it as a collapse in volatility with closes in a tight and narrow range.

    That is what we have seen the last 6 days and the explosive move out of that range is also typical of a coil. All in all I think we can safely assume we are dealing with a coil. Will this be one of the 25% that the odds fail? Who knows, maybe.

    Would I be willing to make a bet with the odds 75% against me? Not in a million years.

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  75. What's your affinity with Justin? Are you Justin? You sound like Grandpa Simpson; I hear what you are saying but I have no clue to what you are talking about.

    You seem like you are asking for the definition of a potato? Does a potato have three sprouts or four….ah you don’t know, therefore what you are talking about is not a potato. Everybody else is saying the definition of a potato is, well a potato, it’s a freaking potato.

    Where are going with this coil nonesense?

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  76. If a pattern worked 75% of the time - it would quickly not work.

    My guess - its closer to 50% like most patterns.

    We shall see.

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  77. I realize you would prefer it only worked 50% of the time but wishing won't make it so. Historically 75% of the time the initial move turns out to be a false move.

    You can certainly fight the odds if you want to and maybe you will catch one of the 25%.

    I just prefer to let low percentage trades pass me by and wait for something better. (obviously right now all I care about is riding the gold bull so I won't be wasting capital on the stock market either long or short).

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  78. Well lets do this. Next month a new software package is coming out that gives a trader market movement stats in minutes. You drag and drop the examples into the analysis box and push a button and it tells you how many times the market moved higher or lower after that point.

    So the challenge is this - you find out what a failed coil is. We will drag and drop it into the software, and see which is right. You have provided nothing but conjecture, so let's verify this.

    You can get a demo at quantumcharts dot com. Let's use that software to see just how accurate this 75% number is. If you are right - I will shut my mouth from here on out. If you are wrong - then you admit it publicly.

    Deal?

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  79. Jason already ran the test.

    If you are adamant about finding the test results you could always buy a subscription to his service and dig around in the archives until you found it.

    Like I said if you want to bet that this is one of those 25% then be my guest. I have no intention of wasting time and capital on the stock market. Certianly not shorting the stock market as long as the gold bull is intact

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  80. Sorry, gold cannot go higher without stocks going higher.

    It makes no sense to trash all the stocks to Dow 5000 and having gold rallying. With Dow heading towards 5000, the last thing anyone will be worrying about is buying gold stocks.

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  81. Added to my short trade at the close, hadn't touched it in a while. Still riding my dollar long position too and will be adding more on good technical action.

    Curious as to the hubbub on the coil pattern, I thought Gary said before he doesn't care much for chart patterns, only sentiment and cycles. The head and shoulders pattern on the indexes is still in play.

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  82. For all of you who somehow think the stock market should continue to rip higher...... this is all you need to look at:

    http://www.consumerindexes.com/commentary_2010_dailygrowthindexvsgdp_full.png

    This indicator tracks true GDP on a daily basis, not 3 quarters delayed. You can see it is running at a -4.5% clip. Expect reported GDP of 2.4% last quarter to be revised WAY down.

    The double dip is here folks.

    Batten down the hatches.

    Cash (or the long bond) and gold.....

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  83. Gary, double-check your cycle count. I have the daily equity cycle on Day 28 today. Yesterday's break of the daily cycle trend line was portentous, and we are almost certainly descending into a daily low. I would now consider the next swing low as marking a new daily cycle whether or not it occurs within the typical timing band.

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  84. Dow down almost 100 after hours......

    Is that a bear I hear growling?

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  85. Gary said: "It's just the money flows on the SPYDER's. It's available in the WSJ everyday."

    Is it available online too? I only found
    http://online.wsj.com/mdc/public/page/2_3022-mfsctrscan-moneyflow.html?mod=topnav_2_3022
    and there are no SPYDER's

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  86. yes we are on day 28 and yes I think we are heading into the daily cycle low. At 28 days we are actually in the timing band for that low although still on the early side.

    We never did get a short cycle after the extremely long one into May so I wouldn't be surprised if this cycle does run a bit short.

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  87. That's because there was no large money flows out of the SPYDER's yesterday.

    Hint: it will only show up on an up day. Smart money tries to sell into strength and buy into weakness.

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  88. Anon, there are to SPYDERS because there was no major money flow into or out of them today. The list is ranked by size of money flow in/out.

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  89. I mentioned Paulson and Soros' investment in Nova some time ago on this blog.
    (Faber's also invested in NG, I assume, as he's a board director, now, I think.)
    My point about Paulson and Soros is that their bets on Gold are essentially hedges. These hedges will make them a lot of money and negate losses from other investments in case things get really dire and gold does exceed 5K or whatever. Whether this junior miner is poorly operated or not, and management knows what it's doing, is not important. Should a gold bubble develop then its mining claims will be worth several multiples the stock price Soros and Paulson's stakes are based on.
    My point last time was that gold and other PM investments of these people should not be overestimated, as Gary seems to overestimates them.
    They are not like Gary, who is totally invested in PM equities.
    As I mentioned last time, I doubt people like Paulson and Soros are more than even 15% (of their wealth) invested in the PM sector.
    Same goes for Rogers.
    Gary can't just invoke Rogers whenever Gary talks about hyperinflation and the Dollar's devaluation and whatnot when Jim Rogers can take a few big hits, and can afford to be wrong about gold from hereonward, especially after being invested in it since the late nineties, say.
    Rogers' wealth is also pretty spread out, diversified, in our parlance.
    His "portfolio" is nowhere anything as concentrated like Gary's. We all know, for example, Rogers' obsession with Ag.
    Also, that guy literally scours the earth looking for opportunities.
    The variety and range of his investments and investing style is a world apart from Gary's fundamental outlook on money and the economy (wchih I think is ultimately flawed), as well as Gary's intense belief in a gold bubble materializing (which I agree with... "after all, it's a bull market" that's yet to climax).
    Summary: Paulson, Rogers, and Soros and Faber are useless to us in thinking of what gold and PM's will do. They could be wrong and stand to lose very little of their wealth.
    Rogers is one of my idols. I met him and his secretary on a plane to Cambodia from Singapore. He was checking the place out, doing due diligence, as usual.

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  90. Record earnings reported by SLW after hours.

    http://finance.yahoo.com/news/Silver-Wheaton-reports-record-prnews-1936960711.html?x=0&.v=15

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  91. Clarification: Fundamentally Rogers and Gary's justification for gold investing is the same, and I don't buy their reasons.
    In any case, I doubt these big super investors are more than 10% invested in gold and PM equities.

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  92. Let me be clear. I don't think we are going to have hyperinflation anytime soon. It is a long process to arrive at that state, but we are on the road that leads to it. Will we get off the road before it happens? Who knows.

    Am I concentrated in PM? Yes I am. For the same reason Soros is buying PM (even if he is diversified) because it is a bull market and they always end in a bubble. Gold more so than most other assets as it is easier for the public to get into the PM market.

    If you don't believe in the gold bull then for heavens sake don't follow my lead. If you aren't prepared to weather healthy drawdowns, again don't follow my lead.

    I suppose if I was worth multiple millions or billions I would diversify across a wider spectrum of commodities but I'm not, so I prefer to concentrate on the one sector I think will ultimately outperform all others, at least during this stage of the commodity bull.

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  93. I just bought 500 QLD at $55.20. This just seems like some type of selling climax happening in the after hours.

    Fading a move of this magnitude seems right, but we'll see.

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  94. for those who care, goldman sachs just put out a note saying gold will be at $1300 within 6 months.

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  95. SLW has such a great business model. I am a big owner % wise in terms of my silver holdings. The thing has cash cow written all over it.

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  96. Speaking of coils and crawls, I offer the $GOLD daily (and its 50dma) as an example of both.

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  97. Time to put the troll meter up again!

    Khalid, 10-15% of any multi-billionaire's portfolio is a huge amount, and in Paulson's case it's also his largest position which tells us all we need to know. Are you arguing for diversification, or that the gold bull bull is done?

    If you agree that gold is going higher, then that is the only issue here. Risk control is up to the individual, and the fact "only 10%" of a billionaire portfolio is in gold says nothing about where the billionaire thinks it's headed.

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  98. I'm on the G-train to riches!

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  99. Maybe sorta kinda. I'm guessing gold is forming a bull flag. We should know in a few days.

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  100. I will add billionaires may not be even able to put 100% of their money into anything without blowing up the market. Silver is already a small market, can you imagine any really big player saying 100% of their managed portfolios are going into silver.

    A better question would be, if the billionaire in question had a choice, what % would they allocate to pm’s?

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  101. Give us a break Justin. You expect us to believe you held on to your shorts through an 11% rally? The very same person who scolded us time after time about pain free trading and avoiding draw downs.

    Please, you already locked in losses and now you've shorted into a big gap down. Maybe you should change your name to son of TK!

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  102. Yep, the fact is they have some of their largest concentrations in GOLD!

    Me too, btw, and I am unconcerned even if it goes lower, where I plan to buy more. Bottom line is it's real money, and keeping my purchasing power isn't looking so bad these days. Is a dollar ever going to gain real value against anything except other false paper promises? I don't believe so.

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  103. Justin's head is on fire!

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  104. At best the super investors or "smart money" as Gary likes to call them, have invested 10% in gold and miners and explorers.
    At best.
    These people's investments in gold-related stuff are probably more in the range of 2-5% of their wealth.
    I happen to think Soros and Paulson's stakes in Nova, not the best management or company out there, is simply a call option on gold. Sure, to us this is massive, but it's an option that will take balance any losses in the rest of their portfolios and gold hits the roof.
    I'm not a troll. I'm just extremely wary of Gary's overconfidence in this gold bull reaching the moon.
    I am invested in gold bullion, miners (large-cap, GDX, etc. as well as select juniors, probably pick up GDXJ as well if goes lower.)
    I also like cash. A lot.
    All's I'm saying is it's wrong for people on this blog to give a damn about what "smart money", the named ones in the news, say or do about gold, because they can afford to take the hit at the end of the day.
    I like gold fundamentally but not for Gary's or Rogers' reasons about debasing the Dollar. Rogers has other reasons of course, that I fully agree with.
    I also have the brass balls to weather drawdowns in gold and miners. I purchased more bullion recently close to the top.

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  105. anon says "Sorry, gold cannot go higher without stocks going higher."

    It's going higher right now, mellonhead.

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  106. As of Aug. 09 Paulson had almost 1/3 if his capital invested in the PM sector. I have no idea if that % has increased or decreased since then.

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  107. I'll forego the mellonhead moniker and point out that gold and miners went higher during the 2000-2002 bear.

    And gold has recently decoupled from the dollar so I would think gold and miners could very easily rally while the rest of the market falls. It will pretty much have to if the Dow:gold ratio is going to ultimately reach 1:1.

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  108. Right, Paulson's 1/3 invested...
    Whatever. Who knows what he's invested in personally.
    Part of my investment M.O. is that I don't put too much stock in such "facts" and figures given to me by hedge funds or any other institution, even if monitored by an overarching authority like the SEC, somewhat largely useless, but not as useless as its analogs in the rest of the world are.
    We should have learned this lesson once and for all by 2003.
    Such numbers don't mean squat to me. That's as conspiratorial as I get, however. Weirdly, I find myself more interested in actual economic and monetary figures nowadays, like the stuff the government or Fed churns out regularly.
    Anyway, who cares. Once East Asia experiences a real estate crisis they'll gobble up all the gold producers will offer, and at what price, it won't matter.
    Middle East/Asia/Africa they always believe gold is a store of wealth, whether at 250 an oz or 10 000. They'll think this way for a few more generations.
    They'll just keep buying. But where will the price go to, I have no idea.

    I actually entertain the possibility they may buy all the way down (price). And I don't care about the supply of gold, because we all know people are willing to bid up oversupplied stuff anyway.

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  109. Get buying tomorrow. Rally time.

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  110. Wrong-way TK is patting himself on the back for being so prescient the last several months. LOL! His self-congratulatory posts are indicating the decline is closer to an end than I would have thought.

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  111. All that's missing now is Bob Prechter making the obligatory appearance in a newspaper/magazine or CNBC right when the market bottoms!

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  112. Gary,

    Tonight's report is understandably confusing with all of the cross currents in the various markets. Can you give us your take on how you think this will play out for the PM stocks especially if we have a simultaneous dollar rally and stock market down period. Thanks

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  113. I think the miners will just continue to follow gold.

    My stance on gold hasn't changed. It's a bull market.

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  114. 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?

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