Usually the daily cycle runs about 20 -25 days. At this point it is probably too late to chase the move.
There are also a couple of gaps on the GLD chart that need to be filled. The first one is filling today. I expect both will get filled at some point during the coming cycle correction.
If you already have a position then just hang on. If you still need to add I would advise waiting till we see the dip down into the cycle low.
Whatever you do don't short. Remember in bull markets the surprises come on the upside. I think the recent 3 week move has demonstrated that, probably painfully so to anyone who fell victim to the technical chart pattern and shorted the break of the May pivot.
Like taking candy from a baby, buying the 9:45 am puke was too easy.
ReplyDeleteFor an insiders look on when to buy bonds.... buy them before the POMO days. Exit the trade on the close of the day before and maybe even buy TBT on the close before the POMO days for a day trade. Could even buy the SP 500 for a little spike trade when the POMO closes that day at around 11 AM EST
ReplyDeleteShould be a good little system.
Here are your clues for day trades:
August 19, 2010 August 20, 2010 Outright Treasury Coupon Purchase 8/15/2016 – 8/15/2020
August 24, 2010 August 25, 2010 Outright Treasury Coupon Purchase 2/15/2013 – 7/31/2014
August 26, 2010 August 27, 2010 Outright Treasury Coupon Purchase 2/15/2021 – 8/15/2040
August 30, 2010 August 31, 2010 Outright TIPS Purchase 1/15/2011 – 2/15/2040
September 1, 2010 September 2, 2010 Outright Treasury Coupon Purchase 2/15/2012 – 1/31/2013
September 7, 2010 September 8, 2010 Outright Treasury Coupon Purchase 8/15/2014 – 7/31/2016
September 9, 2010 September 10, 2010 Outright Treasury Coupon Purchase 2/15/2013 – 7/31/2014
September 13, 2010 September 14, 2010 Outright Treasury Coupon Purchase 8/15/2016 –
List from Nic Lenoir for disclosure purposes
ReplyDeleteGold stocks not moving much. Agriculture stocks are better.
ReplyDeleteOne can certainly chase the hot money but usually what happens is you just end up entering at tops then sell for a loss as you jump to the next hot sector.
ReplyDeleteYou will make a lot more money by just staying focused on a bull market.
BTW 7.5% in 3 weeks isn't too shabby.
ReplyDeleteExcept the 30 year bond market right Gary?
ReplyDelete;)
I'll pass on that one. I doubt rates will go negative so the upside is limited.
ReplyDeleteThere is no limitations to the upside for gold.
BOING! Shorts have problems now.
ReplyDeleteC'mon Gary. Give the long bond guys their due. A lot of people have been warning about the collapse of the bond market for over a year now and they've simply been wrong. No one is saying bonds are better than gold, because you can buy both or neither. The bond bears have simply been wrong, that's all. If bonds collapse someday, great. But in investing timing is everything, and the bears have blown the call (and I have been very happy to have ignored them). "Someday they will tank, but good for you for having gotten it right so far" would probably end the recurrent back and forths. You can even throw in an occasional "The government is screwing everything up." (Which they are).
ReplyDeleteDoes anyone have any opinions on what might happen to the mining stocks in the event of another large stock market sell-off? It seems like there are ample economic reasons for a panic selling event, not to mention other international events like an attack on an Iranian nuclear plant, etc.
ReplyDeleteIt seems likely that there would be a move to physical metals in a big sell-off, but the miners seem to be a different story.
Don't forget if one bought the Bernanke top then they are still underwater on their bonds (unless you bought 2 year).
ReplyDeleteUntil we break to new highs I'm operating under the assumption that the bond bubble has already burst. Now if one wants to trade bear market rallies be my guest, I have much bigger fish to fry :)
Went long ESI
ReplyDeleteJohn,
ReplyDeleteWe already had the flash crash. Gold AND miners completely ignored it.
Unless we were to see another selling climax like we saw in 08 I doubt if gold or miners will really care one bit what the stock market does.
We've only had three real crashes in the last 100 years. The odds of another one following right on the heals of the last one are probably vanishingly small.
People are panicking, they gotta have GOLD!!!
ReplyDeleteHmm... we got the signal I mentioned in last nights report.
ReplyDeleteTroll samwiches for lunch. Hey, where's 950 S&P boy?
ReplyDeleteI knew TK shorting gold was all the fuel we needed. Without that signal, I might've started peeling some off into all this recent strength. :)
ReplyDeleteChoo Choo! The tracks are going to be littered with bears today :)
ReplyDeleteFair enough about the bond blow off, but one could have said the same thing about the tech top in 2000. I would have been very sorry to miss the bull market from 2003 to 2007 because there was a blowoff in 2000. I also believe we won't get above the bond high, but there has been a hell of a lot of room between here and there, just like we won;t see stock highs again but buying in March of 2009 was pretty good, even though we are in a bear market. O.K.---I'm done beating this horse.
ReplyDeleteFWIW: We had some decent Buying on Weakness this morning that will go away as the SPY is now up for the day.
ReplyDeleteOn weekly charts, TRIPLE POSITIVE DIVERGENCE is quickly forming on GLD... We will particularly become vulnerable to a significant breakdown in price when new highs are reached (or we close close to $123 again.
ReplyDeleteph14
Shorts would be wise to catch the next G-train home.
ReplyDeleteDoes G stand for Gary, or Gravy? :)
correction - - (Triple Negative Divergence...) on GLD is coming in the coming weeks... price must go higher form this pattern.
ReplyDeleteI assume you meant to say "NEGATIVE" divergence, ph14? On the weekly MACD, RSI, etc.?
ReplyDeleteIf I knew the bond cycles a little better I might be able to time the ups and downs to some extent but since I think this has probably morphed into a long term bear market I haven't bothered.
ReplyDeleteAlthough, bonds do appear to top quite often at the same time stocks bottom. Since I think we now have a cycle low in place on stocks holding long bond positions right now might be a bit risky.
Oh yeah, what's a "triple positive divergence"?
ReplyDeleteWow, gold spiked again. If this keeps up, we'll be at $123 of GLD this afternoon. This is no market to be short, stocks or gold.
Wrong-Way TK is in the driver's seat now. LMAO!
ReplyDeleteFWIW I was thinking gold would probably tag 1240 before heading into the corrective part of the daily cycle.
ReplyDeleteWe'll see. GLD also appeared to have a weekly NEGATIVE divergence in the first half of 2009 as well, and that didn't break down (quite the opposite). Something to watch, of course.
ReplyDeleteOne can quickly go broke trying to trade divergences. You will probably be better off trading the cycles.
ReplyDeleteI've been napping for 2 1/2 days and just woke up to take a peek. I see the siestas are really paying off!
ReplyDeleteI'm gonna grab something to eat, then turn in for some more zzz's. I wish I wasn't forced to relax so much, but if that's what it takes to retire early, I'm with the program.
WARNING: a reliable indicator of mine just gave a short term sell on GLD. Short-term, remember, so if you sell be sure to get back in! As this fits with Gary's cycle stuff I will be acting on it.
ReplyDeleteWaiting for a breakout with a volume spike in GLD to get short with TK. Actually, when he covers, I'll get short.
ReplyDeleteGary,
ReplyDeleteOkay, now I'm getting nervous. (I tend to get more nervous when looking at profit than when looking at losses.) I'm sitting on some nice profit here since I bought part of my position near the recent intermediate cycle low, and I'm tempted to take some of it, but afraid I will miss out on further runup.
So talk me out of taking profit! Or, how about taking a little at 1240 (your price target prior to move down into daily cycle low) and then buy back in at the daily cycle low??
Forgive me if I jump in Pima, but I like trading around a core position. I get a little too heavy at what I think is a bottom and a little too light at what I think is a top. I sold enough GLD just now that if we go down I won't feel much pressure, but if we go up I will still be there with a good amount. Gary's right, though, you don't want to be too light in a bull market, but, for me at least, i don;t want to be in a position where I can be scared out because I have too much should the daily cycle get a little out of hand.
ReplyDeleteMy suggestion was to lighten up a bit at $1240 if you are using margin but don't touch your core position. Remember this is a bull market and the surprises in bull markets come on the upside.
ReplyDeletePlus this is only the first daily cycle in a 20+ week intermediate cycle.
No need to get nervous at this point. We'll get nervous when gold and miners get stretched above the mean.
Dg,
ReplyDeleteI would disagree with your view that our debate on bonds is incorrect. Most did not say short bonds, the concept was are bonds in a bubble.
Some of you active traders can still make money on the bull side, or not.
But standing on the tracks saying that we are wrong because the train hasn't hit you yet, is a not accurate to our argument. Some of us have better things to do with capital, like getting on the train instead...the g-train. Thought that one fit in here.
To anon re bonds: I guess the difference is time frames. The tech bubble was obvious and one could have said "avoid tech as the bubble has popped" and missed a subsequent three year bull market. I'm just suggesting that when someone says "avoid bonds" they clarify it by saying "The LONG-TERM prospects are poor." Then there's no confusion over what "avoid bonds" means. People have different time frames and "avoid bonds" means one thing to some and something different to others. I am waiting to bail out of bonds (I have a lot) as I believe you will be right some day, but not yet. You are not wrong: we are talking about two different things.
ReplyDeletethanks, Gary and DG.
ReplyDeleteI am not margined. So I'm probably okay to hold till 1240 (if we get that high). Might sell part then and repurchase lower. Sounds good on paper, but the market doesn't always work out the way I'm expecting it to!
Gary-
ReplyDeleteOn a first cycle bottom in an intermediate cycle, what type of correction do we typically get in gold? 20 DMA?
Jay,
ReplyDeleteThere's no way to put a target on it. I just watch for a swing low in the timing band for a bottom.
Obviously we haven't even made a swing high top yet.
If one REALLY wants to know exactly what bonds will do, check out TK, then do the opposite. Besides the G-train, ole wrong-way is the single best indicator I've come across in my career.
ReplyDeleteRight, bit the recent lows should not be broken I would assume?
ReplyDeleteI really doubt it. I think that buying opportunity is long gone.
ReplyDeleteAnon,
ReplyDeleteRegarding TK and bonds, what's he doing now with bonds? And with stocks and gold for that matter?
TK is loaded short stocks and gold and getting crushed.
ReplyDeleteI don't yet know about his bond positions, but if he ever comes out with a post that he's buying 'em long term, that will be my signal.
Jeez, 950 S&P troll should be heading down to get food stamps about now.
ReplyDeleteLooks like a scond try at that 1100 resistance today.
ReplyDeleteI wonder how many people have to learn cycles before they stop working.
ReplyDeleteI'm not sure they will quit working because cycles are really just an expression of human emotions. But they could certainly start to lengthen or shorten.
ReplyDeleteSLW is now approaching an all time high. It has not closed above 21.36.
ReplyDeleteOn another note, read the following written in 1999 about Japan:
http://mises.org/daily/322
Interesting to learn about the 1995-7 carry trade. The 2001-6 QE in Japan fueled the carry trade.
TK piling on the shorts. All out buy signal has now been triggered :)
ReplyDeleteWhy are people obsessed with Tim Knight here. he has a stop on every position and while I dont agree with most of his perma bear calls I am pretty sure he makes money since he takes profits and keeps tights stops. I dont like his trading style, but he is not by far the worst trader I have seen.
ReplyDeleteGary,
ReplyDeleteDo you still think we get to 1240. In took off some margin but still have a bit more and wondering if you think we still have another 10 points in gold? Thx
Steve
Yeah, I have also wondered about that obsession. Maybe he dissed Gary at some point. I have read his site and he seems fine to me too. Oh well.
ReplyDeleteLooks like a gold dip may have started. After selling some GLD I also shorted 1000 DBA at 26.18 (stop at 26.30---reshort at 26.70), so maybe commodities are ready to rest for a while? Wheat has certainly been on the front pages.
I think the obsession with TK is
ReplyDelete#1 he is a Bear
#2 his blog has hundreds of comments on every post
#3 his site is very user friendly
Hard work being a bear...He handles it well all things considered.
It looks like only one Anon has an interest in TK. I know there's no bad blood between Gary and TK at all.
ReplyDeleteI even think TK subscribes to Garys Newsletter. He mentioned it a while back when I used to read TK's site.
ReplyDeleteI have not done so for a while since the inmates are in charge of the assylum now overthere.
Gary,
ReplyDeleteCan you comment on Energy/Oil?
-Rob
Tim is a good friend. I certainly wouldn't trade like he does but in my opinion he's a good guy.
ReplyDeleteSteve,
ReplyDeleteThat is the next logical resistance level but that doesn't mean it has to get there before the cycle correction begins.
Oil is also due for a cycle low anytime now, if it hasn't already made it.
ReplyDeleteEnergy is one of the drags on the market right now. As soon as oil puts in the bottom I expect we will see the maket gain more traction.
The anons are those who has been banned by TK and wants to rant here. Tk's 250 positions make no sense to anyone except himself.
ReplyDeleteTK is an entertainer, not a trader. Looks like more people had an interest than John V was aware.
ReplyDeleteAnybody that thinks TK makes money because he uses stops needs their head checked. Ridiculous.
There are very few narcissists that are "good guys."
ReplyDeleteI don't think Tim is a narcissist, though I agree trading 200+ is nonsensical. He's a lot more willing to mention his losses than most blog traders I've seen. If you want to see narcissism and reported trading results of dubious quality, xTrends would be a better candidate, imo.
ReplyDeleteLOL! I remember how deeply pleased he was that we finally elected a black man for President, as if that solves anything.
ReplyDeleteTk even shared a "true story" about racism when he was a kid. A little black chap was concerned about entering Tim's house b/c it belonged to a white family. It hurt his dearly to see his friend feel like this, but Mamma Knight made it all better somehow. What a joke.
ReplyDeleteTime to short again. You bulls just don't have the fire power to get it up do you? Pretty hard when 20% of you are unemployed.
ReplyDeleteS&P 950 is coming. Oil will lead the way--just follow it.
Geez if you are going to fight the trend at least have the patience to wait for a Sos day. Your odds of making a successful trade will go up greatly if you can get big money behind the trade.
ReplyDeleteNarcissism is an abnormal love for one self, or being very self absorbed or self centered. It is related to ego and vanity though not synonymous. The opposite of narcissism is humanitarian, although some narcissists hide their narcissism by participating in humanitarian efforts -- basically pretending to be something they're not, to win public support or admiration.
ReplyDeleteGary,
ReplyDeleteYou said:
"We already had the flash crash. Gold AND miners completely ignored it."
Perhaps, but I got a great deal on my SIL purchase that day.
As to TK, I'd be willing to bet that a lot of people here got burned there. I made quite a bit of money trading with his guidance. Unfortunately, I didn't know when to quit, and I lost it all. At that point, I saw a post of Gary's explaining what's wrong with trading short, and it described my experience to a "T." Voila! Here I am. I don't blame TK. I take responsibility for my own trades -- EVEN HERE.
BTW, you Anonymous posters. One of the great things that TK did was insist that EVERYONE post with an ID and an avatar. It makes for a great community, and people here might learn from one another if we were more forthcoming about taking responsibility for our posts.
Best to all of you.
I'm not sure what your point is. Tim Knight is a bad guy because he doesn't hate black people?
ReplyDeleteThe beef most intelligent, non-racist people here have with Tim Knight is that he is (usually) short gold. That doesn't make him a bad guy, it just makes him (in my opinion) a man on a tragic fool's errand. He is also a bit of a contrary indicator, because he tends to read every dip in gold as an imminent collapse - a "setup" - when in fact every dip for the last 10 years has been just that -- a dip. He seems to be addicted to touching the hot stove again and again.
As someone who used to short stocks, I know the feeling of betting against the herd. It makes you a little smug, like Tim Knight.
But being deeply pleased at the election of a black president is perfectly understandable, unless of course you hate black people.
Narcissism to the degree of a personality disorder doesn't appear to be one of Tim's faults (one might instead include persistent bearishness, whether the action justifies it or not, and a misplaced faith in the power of broken trendlines to set off waterfall crashes).
ReplyDeleteAn obsession with Tim's personality qualities and what he's trading might also rate an entry in the DSM-IV if taken to extremes, but to each his/her own.
Interesting gold sentiment perspective from Mark Hulbert:
ReplyDeleteGold's sentiment foundation is weakening
Gold market enthusiasm has returned in force over the last couple of weeks, as bullion has reached a six-week high.
Unfortunately, this enthusiasm could prove to be a problem for gold in the not-too-distant future.
For now, though, the resurgence of this enthusiasm is not enough to cause contrarians to throw in the towel on gold's short-term trend. A short-term sell signal would be forthcoming from contrarians only if gold-market excitement were to continue jumping in coming sessions.
In any case, the current sentiment foundation does not appear to be a strong enough foundation to support gold making a major move right away into new all-time high territory.
I base these comments on current gold market sentiment, as indicated by the average recommended gold market exposure among a subset of short-term gold market timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Gold Newsletter Sentiment Index, or HGNSI). This sentiment benchmark currently stands at 44.9%.
As recently as the beginning of this month, in contrast, the HGNSI stood at just 9.2%. So while the rally in recent weeks started out climbing a very strong wall of worry, in the process that wall has become markedly less robust.
To be sure, bullish sentiment is not yet so high as to be triggering immediate short-term sell signals. The HGNSI remains well below the 61% level to which it rose in January, or the 68% level to which it rose last December. And since gold bullion on both of those prior occasions was well below where it stands now, we know that a wall of worry still exists out there to some extent.
The most bullish thing that could happen right now for gold, from a contrarian point of view, would be for bullion to pull back a bit and for gold timers to react by beating a hasty path to the exits. In that event, contrarians very well could then be forecasting an imminent major gold move into new high territory.
The most bearish thing, in contrast, would be for gold enthusiasm to give way to even more excitement and then outright euphoria. That could very well happen in just the next few days, should gold continue to rise at the rate it has in recent sessions.
In that event, watch out below.
Gary, one caveat
ReplyDeleteYou say 'fight the trend' by waiting for SoS, but im not so sure the trend is up. The S&P is below the flattening 50 and 200 day MA's, and there's a big resistance at 1100 which has held twice. It's not like gold where it's a strong bull market.
On the other hand, cyclical bulls usually last like 2.5 years, so this one being half that length would be a little bit suspicious. Still, maybe the fed's monetary policy has made this the one time it could be different.
One last thought on Tim Knight. Garys' posts on Tim's site got me subcribing to Gary's SMT back in 2008. So for me, Tim's site was very beneficial.
ReplyDeleteJohn,
ReplyDeleteGold is now up 14 out of 16 days (87.5%)
Certainly that kind of clip can't last.
There is a cycle correction approaching so my guess is gold should probably drop down to test $1200 soon. But don't forget this is a bull market and in bull markets the surprises come on the upside.
So I certainly wouldn't recommend anyone lose their core position.
regarding TK, couple of days ago, TK commented he shorted RTH with stop price. of course stop price hit around 3:30PM and wrong way TK insisted he still short RTH after the close.
ReplyDeletenow , that's why TK is so entertaining to watch.
Slope can be used profitably. There are some intelligent commenters there--Pussy comes to mind. Best thing to do is skip TK's stuff tho imo.
ReplyDeleteHelpful gold chart:
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$GOLD&p=D&b=5&g=0&id=p18113741042
"But being deeply pleased at the election of a black president is perfectly understandable, unless of course you hate black people."
ReplyDeleteThat's about the stupidest comment I've ever seen here. How does making fun of Tim's ridiculous story make one a racist. Pull your head from your butt.
You probably think that because Obama is black he's a great President too. That makes YOU the racist, just against whites. It's not about race, dumbass.
I've found that TK's trading is at best, shooting from the hip. If you're going with the trend, then that strategy might look like it's working. Truth is, he changes his position frequently, sometimes right after a proclamation like today and as we all know it's easy to post only the winners and very small losers. Eventually that strategy eats your account.
ReplyDeletebut yes, it is entertaining :)
Notice that TK's friends and the people that like him all admit he trades like a monkey, so to speak.
ReplyDeleteI haven't been banned from his site and I've never even commented there. I trade to make money, but his site is a failure as far as trading.
I used to pity the people that listen and trade alongside him, but now I realize they deserve their poor results.
Any site that has to ban people is not credible, just like Bolshevik Russia had to censor everything as they whacked 60 million Christians.
ReplyDeleteIsn't it obvious? TK has a gambling addiction.
ReplyDeleteAnyone trading 200-300 positions isn't seriously trying to make money, they are feeding an addiction.
For those that think TK adds value, what are you doing here? Gary and TK are clearly two entirely different traders, and you must decide how you'll trade.
ReplyDeleteThe bottom line is that Gary is getting quite popular because he converts ideas and analysis to cash...no singing, dancing, or star trek.
I'm not too far from being in the position to buy out all Gary's subscribers and keeping his analysis all for myself, and that's no joke.
anon@3:16
ReplyDeleteYou got that right. And any idiot that thinks TK's stopouts somehow make him profitable is delusional at best. Being stopped out of 98% of your positions every time doesn't pay the mortgage.
Thanks to G-money, I no longer have a mortgage or any other debt, and now own plenty of land, gold, and ammo.
ReplyDeleteThanks G.
anon@3:16
ReplyDeleteI actually think TK is addicted to blogging. he just too casually lose money to be addicted to gambling IMO.
What is the obsession with Tim Knight over here? Over the past three days the snark o meter is on full tilt. I thought you guys are all experienced investors and don't sweat a guy like him. Man up and identify yourselves and go over to his site and bash him, or better yet, if you have enough net worth ask for his prospectus. He is required to produce his trading results. Then you'll know.
ReplyDeleteProbably most of the bashers have no coin and are playing small ball. Tim probably made more money today in the selloff than most here's net worth.
Finally, I don't trade Tim's trades but he has a good blog and a decent guy, and I am a subscriber to this blog, and am interested in what Gary has to say/teach, not what you guys think of Tim.
"But being deeply pleased at the election of a black president is perfectly understandable, unless of course you hate black people."
ReplyDelete"That's about the stupidest comment I've ever seen here. How does making fun of Tim's ridiculous story make one a racist. Pull your head from your butt."
> You don't have to think Obama's a good president to be pleased at the election of a black president. It represents something good about this country -- a kind of progress, however small. But if the election of a black president makes you angry in and of itself, you probably have a little hate problem.
"You probably think that because Obama is black he's a great President too."
Not really.
"That makes YOU the racist, just against whites."
Thinking Obama is a great President doesn't make anybody racist any more than thinking George Bush was a great president does. In both cases, you'd be wrong, but not racist.
"It's not about race, dumbass."
In your case, I'm afraid it is.