I'm going to make the weekend report available to everyone one more time this week along with the discounted yearly subscription offer.
I suspect quite a few traders and investors were unable to buy the dip last month as gold put in the intermediate cycle low. These intermediate cycle lows only come around about every 20-25 weeks and are the single best buying opportunities one gets to enter or add to positions in a secular bull market. If you miss it you will have to wait another 5 to 6 months for the next one ... or you will have to chase.
Gold is now due for a pullback into a smaller daily cycle low soon (it may have started on Friday). This will be the next best buying opportunity one will get to enter or add to positions in this bull market.
If I didn't convince you last month to get on board the bull I'm going to try one more time this week.
Here is the link to the premium home page. I've unlocked the link to this weekend's report.
If you would like to take advantage of the discounted yearly subscription offer click here and follow the Paypal link.
Current subscribers can add one year to their subscription at the discounted rate as long as they didn't already do so last month.
Gary, excellent post. There is a Wall Street Journal article that analyzed the correlation of gold prices to the dollar. It is a minus .65 which is significant and .08 with inflation, which means no correlation.
ReplyDeleteI know you find that as no surprise, worth the read.
Interesting report as always, Gary.
ReplyDeleteWhile it has its flaws as a leading indicator, it's perhaps worth noting the $BDI has been pushing up since mid-July, with a notable up-shift in ROC since the start of August. FWIW.
Gary, can you provide examples of the previous times you have found SoS useful and what the readings were like?
ReplyDeleteIt would take forever for me to look through all the money flow data but I can tell you there was several large SoS days in Dec. 07 right before the initial waterfall decline.
ReplyDeleteIf you want to research it just look at the up days leading into any intermediate top.
Gary-
ReplyDeleteJust looking for an opinion here, but I'm wondering under what situations where you would purchase options on SLV/AGQ instead of just shares of the double ETF. Seems like if you got deep ITM wIth enough time you'd most likely net out much better.
Thanks
I subscribed a few weeks ago and bought AGQ and UGL. I recommend that the lurkers jump on board Gary's discount offer. At $12 and change per month it's a great value.
ReplyDeleteGary, you've sold me on gold and silver heading considerably higher (hence my investments in the ETFs) but I hope that you can offer your thoughts on the following. It keeps rattling around in my head and I can't make sense of it.
Premise #1: the Banking Cartel (aka the Fed) represents the TRUE "powers that be," ie, the big banks. Thus, the US Government and the American taxpayers are NOT the powers that be, the Banking Cartel is.
Premise #2: The aforementioned Banking Cartel has the US Government and the American taxpayer by the short hairs, because both the Government and the average taxpayer are DEBTORS and the Banking Cartel represents the CREDITORS (ie, the big banks).
Now, with those two premises in mind, can you explain to me why a substantial drop in the dollar (i.e., inflation) is the most likely outcome in the coming months and years? Think about it: dollar inflation would SCREW creditors big time and HELP the little guy (ie, John Q. Taxpayer).
Why on earth would the "powers that be" (ie, the CREDITORS) deliberately shoot themselves in the foot by INFLATING the currency and hence letting their debtors (the US Govt and the taxpayers) off the hook? Have the "powers that be" ever willfully screwed themselves in all of recorded history?
Furthermore, consider our FOREIGN creditors (China, Japan, Saudi Arabia, etc.) They hold much more of the US Government's debt than the Fed. Don't you think China, Japan, et al, would move heaven and earth to prevent the further debasement of the USD? If the USD keeps inflating, then as our creditors, they get screwed.
My (tentative) Conclusion: usually the guys with the most power win, because they ultimately can twist arms (like the arms of Congress) to get what they want. Well, "the guys with the most power" in our day and age are the Banking Cartel and our foreign creditors. Why would they ever allow the USD to inflate much more than it already has?
IMO, they don't want to hyperinflate, yet they must reflate to keep the game going, or they not only lose control but many will hang.
ReplyDeleteCat,
ReplyDeleteThe banking system is insolvent. They need the government to keep handing them money. Since the government is for all practical purposes insolvent also they will either have to print the money or borrow it or more likely a combination of both.
Unfortunately it's only a matter of time before the rest of the world notices the King has no clothes. When that starts to happen interest rates are going to rise as creditors start demanding a higher and higher risk premium to loan money to a bankrupt government.
So certainly the bankers are a big influence on politics but even they can't alter the laws of economics.
JJ,
ReplyDeleteOne could purchase very deep in the money options if they choose.
Just remember only purchase the same amount of contracts to control the same amount of shares as if you were buying shares. AKA DO NOT LEVERAGE UP TO THE MAX.
If for some reason you are wrong you will have destroyed your account.
So let's say you want to take a 20% position similar to what I have. If your account is worth $100,000 then that would work out to a $20,000 position. At Fridays closing price you could buy 347 shares of AGQ with $20,000. That means you would buy 3 maybe 4 call options on AGQ.
In order to get a delta of 95 you would have to buy the Jan 12 45's at $2510 each. There is also a $1.00 to $4.00 spread on those options as they are fairly illiquid.
Personally I will just stick to the ultra ETF.
Gary wrote:
ReplyDelete"Unfortunately it's only a matter of time before the rest of the world notices the King has no clothes. When that starts to happen interest rates are going to rise as creditors start demanding a higher and higher risk premium to loan money to a bankrupt government."
So it looks like you agree with my tentative conclusion from my first post: inflation will inevitably be halted by the people with the most power and money (the creditors) when they force interest rates UP. That would seem to usher in crushing DEFLATION, not inflation. Bad news for asset prices, good news for the dollar.
Do you expect the coming deflation to coincide with gold and silver's tops?
I just depends on when the government gives up on their Keyensian policies. Hyperinflation happens when a government tries to ignore the market forces and just keeps printing faster and faster trying to stay ahead of a collapsing currency (AKA the currency is devaluing faster than the governement can service it's obligations.
ReplyDeleteThat is the ultimate fly in the the punch bowl with trying to inflate away an unpayable debt. If the currency starts to collapse the government runs the risk of hyperinflation.
Once we get to the point where we can't service just the interest on our debt without borrowing or printing then the end game is near.
Gary wrote:
ReplyDelete"Hyperinflation happens when a government tries to ignore the market forces and just keeps printing faster and faster trying to stay ahead of a collapsing currency"
Well, aren't credit expansion and "running the printing press" two different things?
I don't think I'm nitpicking in saying that the US Gov't does not (and cannot) print to service its debt.
Rather than printing, the US Gov't has been asking for and receiving credit from JP Morgan, Goldman Sachs, and the rest of the Banking Cartel we know as the Federal Reserve, and it can and does ask for and receive credit from foreign banks....and most of the credit expansion is courtesy of the foreign banks.
So, to be clear: what we've seen since the early 1980s is a massive expansion in credit, not an expansion of the currency supply...not printing, in other words.
Furthermore, this credit expansion has been UNSECURED. As Karl Denninger likes to say, unsecured credit expansion is a NAKED SHORT on the currency, here the USD. The US Gov't is on the "short" side of this particular naked short trade.
So Gary, isn't THE chief concern for you, me, and every other PM investor the inevitable short squeeze on the USD? I think you were touching on this when you wrote "Once [the US Gov't] get[s] to the point where [it] can't service just the interest on [its] debt without borrowing or printing then the end game is near."
Seems reasonable. But the "end game" would come in the sense that the US Govt's creditors (the Fed and China) will STOP expanding the credit supply...which would trigger a massive rise in the USD, a massive rise in interest rates on US Bonds, and a plunge in asset prices...including, presumably, our PM investments.
(With all that said, I invested in PMs because I'm convinced that they remain in a secular bull, and I share your belief that riding a secular bull is the way to go.)
Karl is a deflationist so he is going to find reasons for why deflation and not inflation will take place.
ReplyDeleteFirst off the banks don't lend money to the Fed it's the other way around.
Second there is no limit to how much money the Fed can print since now it's just an entry in a computer. We don't even have to chop down trees anymore.
The government expands credit by issuing bonds. Now either those bonds can be purchased by foreigners (China) or if demand fails the Fed can buy the bonds.
When the Fed buys US debt they do so by printing money.
Now if the US were to decide to default on its debt then that would be extremely deflationary. Prices would collapse and the dollar would soar.
However we are not going down that path. The Fed has already chosen QE once they will do it again (and probably already are).
I would suggest you regulate Karl to the trash can were he belongs and instead listen to Jim Rogers, John Paulson, Marc Faber, George Soros just to name a few. People who actually know what they are talking about.
The deflationist are assuming a 1930's scenario is upon us. What they fail to take into account is that unlike the 30's all currencies are now entirely fiat.
In a purely fiat system deflation is a choice not an inevitablity. In the 30's deflation was halted by devaluing the currency. We are doing the same thing right now.
We have the same problem as the 30's but the mistake we are making this time leads to runaway inflation not deflation.
Gary,
ReplyDeleteIs this going to end up being a contrarian indicator? You giving everybody just ONE more chance (how many is this now)? They are starting to stack up. I'm starting to get concerned you don't allow your work to speak for itself.
I've made two reports available in the last two years. Do you consider that stacking up?
ReplyDeleteGary wrote:
ReplyDelete"Karl is a deflationist so he is going to find reasons for why deflation and not inflation will take place."
I hear you, but I try to judge his arguments on the merits, as I do with yours. Unlike you, Karl hasn't yet gotten any of my money.
Gary wrote:
"First off the banks don't lend money to the Fed it's the other way around."
I know. Sorry if I made that unclear.
Gary wrote:
"Second there is no limit to how much money the Fed can print since now it's just an entry in a computer. We don't even have to chop down trees anymore.
[...]
When the Fed buys US debt they do so by printing money."
Now if the US were to decide to default on its debt then that would be extremely deflationary. Prices would collapse and the dollar would soar.
However we are not going down that path. The Fed has already chosen QE once they will do it again (and probably already are)."
So if it gets to the point where the US Treasury has trouble coughing up interest payments to China, the Fed will most likely step in and take still more US Bonds onto its books and create USD out of thin air for the US to send to China... further debasing the USD. I'm getting it.
Isn't it actually illegal for the Fed to monetize US Govt debt (ie, to buy US Bonds that foreign central banks won't buy)?
Not to keep bringing up Karl Denninger, but I remember him going berserk because the Fed did precisely this just days after a Treasury auction went poorly.
The US Gov't is NOT going to default on its debt...this I believe with some conviction. I guess we both agree that to come up with the money to pay China, Japan, et al, the Treasury will just hit up the Fed for more QE.
Do you think we'll get to the point where the US Govt's interest payments on the debt are so huge that the Fed becomes the sole source of the majority of federal revenue? I mean, if Beijing cuts off our credit card, where else would the money come from but the Fed's keyboards? Am I on the right track? This is Alice in Wonderland stuff.
Gary wrote:
"I would suggest you regulate Karl to the trash can were he belongs and instead listen to Jim Rogers, John Paulson, Marc Faber, George Soros just to name a few. People who actually know what they are talking about."
Heh heh...well, I like to get both sides, so I'll probably still keep reading him.
Gary wrote:
"In a purely fiat system deflation is a choice not an inevitablity."
I'd like to hear Denninger's answer to this.
Buying or selling treasury bonds is the Fed's main vehicle for expanding or shrinking the money supply. And it is perfectly legal for the Fed to do so.
ReplyDeleteKarl probably isn't happy about it mostly because it doesn't fit into his deflationary scenario. :)
Gary, I thought I had seen that many in the last few months, but don't take it wrong. Selfish thought I'm sure. Just so I am clear. Your good work stands on it own. You don't need to sell it. Referrals like I do, and I am sure many others do will ensure that. Quite frankly, instead of a troll meter, what all your subs are going to need is a "New Sub Meter". At the end of this run your subscriber base will explode and we will all need that info to help us get out!(Sadly for may it will happen at the top.) With all the attention you may get crazy on us and forget all your good advice! The blog posters get pretty silly, but you always stay on message and stay focused.
ReplyDeleteDon't ever think, I don't appreciate you coach.
LOL I am actually planning on adding a gold bug insanity meter as we near the top of the C-wave.
ReplyDeleteHi Gary,
ReplyDeleteYou said "Now if the US were to decide to default on its debt then that would be extremely deflationary. Prices would collapse and the dollar would soar.
"
I am curious about this...if the US defaults on its debt, wouldn't investors dump the USD? And the USD will plunge? And that would be great for PMs.
My premise is that whether the US defaults or debases the USD, PM bulls win either way.
The massive credit expansion by the government is what is holding the deflationary pressures at bay.
ReplyDeleteIf the government were to reverse course and default it would unleash a tidal wave of deflationary pressures on the world. Dollars would get sucked down a deflationary hole and as we know from basic economics too little supply and too much demand equals higher prices. Which in this case would mean greater purchasing power for the dollar.
We saw this for a brief period in 08/09 before Ben cranked up the printing presses.
I see.
ReplyDeleteBut what happened in 08/09 before Ben started cranking up the printing presses was panic caused by insolvent financial institutions. Investors needed to get out of assets and into cash. USD was a safe haven and so it soared.
Now, it is the US govt's standing that is in question if they default. I was thinking that if this happens, then the USD also becomes worthless.
Who would want dollars?
But if you are right, we should first expect more printing. Gold will soar. Then when it is obvious this is no longer feasible, the US will default, gold will plunge and the USD will soar. It is here that we get out of gold. Is this a good description of the endgame?
I wish I knew how the endgame plays out. Maybe at some point someone in power comes to their senses and we stop printing and suffer through 2 or 3 years of severe depression.
ReplyDeleteMaybe the new technology is invented and it unleashes a massive wave of productivity that allows us to work our way out of this debt spiral.
It's anyone's gues.
Catbird,
ReplyDeleteJust follow the trend in the dollar and bonds and that will show you what market forces are in charge. Any theories, including those of Gary, will ultimately be useless if they are fighting the trend. There's solid evidence that the dollar is in a new uptrend that will last longer than most believe.
Actually as I pointed out in the weekend report the dollar is still making lower highs and lower lows since March of 09.
ReplyDeleteThat is the definition of a down trend.
You can bet agaisnt the yearly and 3 year cycle if you choose. I certainly wouldn't waste my capital on it.
Besides by far the strongest trend anywhere on the board is in gold...and that is where my bets are placed. :)
Hi Gary,
ReplyDeleteIn terms of a couple real world issues, do you think real wages are / will be declining for the coming years, and if hyperinflation arises as you suggest in 2011-2013, do you think real wages will rise with it?
Moreover, do you think housing will continue to fall or bottom here - IE when is the bottom in real estate relative to hyperinflation and the dollar. These are two real world issues of interest to me as they effect life plans etc...
I have some PMs but do have quite a stash in dividend stocks biding time to buy a home for our family and want to affect the decision with some forethought.
Catbird, your "reasons" are a little bit wobbly, but your thesis is otherwise sound. The logical conclusion of which is that gold is priced for deflation, or credit stress if you prefer.
ReplyDeleteThe Fed isn't monetizing anything. Why would they? Look at the interest rates on treasury bonds: no shortage of demand, as is obvious from the pricing.
Calling government expenditures "credit expansion" is misleading. Debt would be a better choice of words.
We have 2.61% yield on the 10yr and people are talking about hyperinflation. Can we suspend the use of the word "hyperinflation" until the the yield crosses 10% ? (Granted, that's not even close to hyperinflation, but at least the idea will be relevant.)
The US devalued the dollar back in the thirties. That was possible because the dollar was backed by gold. Today, the only possible way to affect the value of a dollar is by credit expansion in the public sector. Credit in the public sector is collapsing, which is why the dollar is going up against the currencies of other governments. The US thinks that increased government debt will offset this collapse, but so far it is actually increasing dollar value. That is because everyone knows that the debt must be paid back, and higher taxes are coming.
Gary,
ReplyDeleteYou said...
"If the government were to reverse course and default it would [...] mean greater purchasing power for the dollar."
According to this...
http://tutor2u.net/blog/index.php/economics/comments/the-sovereign-default-option-is-costly/
...a consequence of a sovereign default is a collapse in their currency.
Also Marc Faber recently said that if there were a deflationary scenario ala Prechter (altho he does not think it likely), then gold might go to $500 but bonds and cash would "go to zero".
You can check it out here...
http://www.blogtopsites.com/outpost/d3e1188a8061ecd67ab974c5179684bc
Either way to me PMs are still the best bet :-)
Ooops,
ReplyDeleteI only included half the Marc Faber url in the previous post.
Here is the full url...
http://www.blogtopsites.com/outpost/d3e1188a8061ecd67ab974c5179684bc
S&P 950 is coming. Don't be surprised if it happens within the next 50 days.
ReplyDeleteGood analysis on the weekend report, however, Gary.
No news= bad news right now for the markets.
Actualy the dollar obeys the same laws of economics as every other commodity. To much supply equals falling value. Its why the dollar has been in a secular bear market since 2001 and why it remains in a bear market. If I start seeing higher highs and higher lows then I will consider the notion that the dollar has entered a new long term bull market.
ReplyDeleteThe first opportunity for it to do that will come at the next 3 year cycle low. If it can hold above 71 then we will have the first half of the equation.
If it then also moves above 90 the dollar will have broken the pattern of lower highs and lower lows.
The fact remains that since Ben began QE there has been no signs of deflation other than a slight decrease in the price of housing which actually isn't a sign of deflation but a sign of tremendous over supply and depressed demand.
And if the fed doesn't print money then how did it's balance sheet expand by almost 2 trillion dollars?
"Slight decrease in the price of housing"....haha...that's a good one. Try telling that to people in Florida, Arizona, California, and even your home state of Nevada. Do you live in a bubble Gary? Housing markets all over the U.S. have lost 40-60% in value and there is a huge population of people who are underwater on their mortgages.
ReplyDeleteThe dollar is now putting in it's second higher low, and all it needs is a break of 88 to really rattle the dollar bears. For confirmation on the trend change in the dollar, all you have to do is look at the Euro, which is in a confirmed downtrend with multiple lower highs and lower lows, and bonds have broken out yet again on high volume. Couple that with a massive head and shoulders pattern that is forming in the stock market (which is also the same formation that preceded the 2008 crash) and you have multiple indicators suggesting the dollar is going to continue higher and the market is going to reverse back lower.
Ultimately all you have to do is follow price action and if things do change and all these formations are negated, then adjust accordingly. But there's no reason to believe in a theory about Ben Bernanke when the market is suggesting otherwise.
Gary would love to hear your take on nominal and real wage guesses, as I believe that affects the future of the housing markets and if it's able to stabilize in the near term.
ReplyDeleteI'm talking about housing prices since the 09 bottom. In Vegas prices have actually risen slightly during this period. The rest of the country has seen minor declines during this time.
ReplyDeleteIf the dollar can better the April high then we will have a higher high. But until we put in the 3 year cycle low it's just meaningless to guess what will happen.
The extreme left translation of the current three year cycle and inability of the dollat to break above the March 09 top along with lower yearly cycle lows still puts the odds squarely in favor of the dollar moving to a lower low at the coming 3 year cycle low. If the dollar reverses and breaks below 80 anytime in the near future the dollar bull theory will be blown out of the water.
So we have two well defined lines in the sand. Break above 89 and we probably have a secular bull under way. Break 80 and the dollar is toast.
Sorry I have news for you the head & shoulders top has already failed. The only pattern that is still valid is the inverse H&S. If the market drops to 1050ish and then reverses out of the coming daily cycle low to break above 1130 the pattern will be complete.
I must say I find it strange that you will buy into the bond bull theory after 30 years with no attempt to pick a top. Yet the single strongest trend on the board right now is in gold. That market you want to pick a top in???
That bias caused you to throw away the single best buying opportunity since Feb. in the single strongest trending market in the world.
JL,
ReplyDeleteI don't think we are going to cure the employment problems until the next big technolical break through unleashes a massive productive wave on the world. (I don't see anything right around the corner yet so....)
I also think governments will continue to try and print prosperity which will just lead to rising inflation. Inflation only benefits the initial users of the money.
You and I are not going to be those recipients so we will continue to feel the effects of rising commodity, health care, taxes, etc. but without the benefit of rising wages since there will continue to be an oversupply problem in the labor markets. Economics 101 too much supply = falling prices (or stagnate wages in this case).
For those discussing gary's 2nd discounted newsletter deal, notice something....
ReplyDeleteHe offered the first one JUST BEFORE the major intermediate bottom a few weeks ago. Promptly got a bunch of free cash from new subs and then dumped it into the lows to immediately profit.
This current 2nd discount this weekend is also just before the first pullback likely this week and again at low prices before the expected large gains of next 3-6 months.
Yes...he loses some money by offering the discount, but what he has done will make up MULTIPLES of that by investing it for the upcoming gains.
He's no dummy :-)
--TZguy
Small correction, the cash he gets isnt' free - he works for it and deserves it.
ReplyDelete--TZguy
As a recent subscriber I would also point out that both of the recent offers have come at the most opportune time for a subscriber to make money and easily pay off his subscription.
ReplyDeleteI've already made many times the subscription price just in the first month.
Happy Sub
Happy boy,
ReplyDeleteAs a long time sub...you ain't seen nothing yet. Just ride the G-train brother :)
Gary, I am already heavily invested in the PM's, but would like your opinion on another matter.
ReplyDeleteIf the future is indeed inflationary; would a wise move be to buy a home and have an mortgage, since the mortgage would be paid back with inflated dollars, versus having cash in the bank and renting a house?
thanks for you advice.
Anon wrote:
ReplyDelete"... gold is priced for deflation, or credit stress if you prefer."
Yep. Hence I listened to Gary and got long silver and gold.
Anon wrote:
"The Fed isn't monetizing anything. Why would they? Look at the interest rates on treasury bonds: no shortage of demand, as is obvious from the pricing."
T-Bonds have been on a tear lately, but I distinctly remember reading about the Fed having to quietly monetize US Gov't debt buy buying US Bonds in 2009 a couple times.
Anon wrote:
"Can we suspend the use of the word "hyperinflation" until the the yield crosses 10% ?"
There's been no hyperinflation since 2001, but that hasn't stopped gold's secular bull, has it?
Anon wrote:
"Today, the only possible way to affect the value of a dollar is by credit expansion in the public sector. "
Right.
Anon wrote:
"Credit in the public sector is collapsing, which is why the dollar is going up against the currencies of other governments."
Wait a sec, the US Govt's credit is COLLAPSING? A second ago you were saying (correctly) that there are still plenty of BUYERS for T-Bonds. China, iow, hasn't cut off Congress' credit card yet.
Furthermore, my contention is that the Fed stands ready to monetize Treasury Bonds if China balks.
Anon wrote:
"The US thinks that increased government debt will offset this collapse, but so far it is actually increasing dollar value."
All the buying of these T-Bonds creates demand for dollars because foreigners first need to acquire dollars before they can purchase the US Govt's bonds. Similarly, the fact that the USD is used in oil trading props up the dollar's value because if you want to buy a barrel of crude, you first need to buy the dollar.
Anon wrote:
"That is because everyone knows that the debt must be paid back, and higher taxes are coming."
Ah, but higher taxes will not put a dent in the debt. If the federal income tax rates went to 100% across the board we would STILL have a budget deficit in the USA.
And yet, I don't think the US Gov't will ever "default" on its debt. Thus I am pretty much forced to include we will try to inflate our way out.
Gary, sometime ago you wrote, that catching the top with cycles is much more difficult than catching the lows.
ReplyDeleteBut when using cycles for forecasting currencies: Why not just turn the chart by 180 degrees?
Currencies are symmetric in contrast to USD/ounce, USD/barrel or USD/stock...
Anon 12:09,
ReplyDeleteMy opinion is the best place to have your wealth is in gold or silver. Housing may stagnate but there is still a big oversupply problem. Why not make a big chunk of money in the gold bull and then use it to buy two or three houses during the depths of the next recession/depression?
Spot,
ReplyDeleteIt's not as easy as turning a chart upside down when trying to spot tops. Markets go up differently than they go down.
Often a bull market top can drag out for months to a year. The flip side is that often a bear market low can be a single panic event and then it's off to the races.
Smart money understands the biggest gains are had by entering as close to a bottom as possible. That's why we often see the market just take off for 6-10% gains out of an intermediate cycle low.
Look at the money that was made by brave speculators that bought potential bankrupt companies in March 09. Many of those companies that were tettering on the edge have rallied over 1000% since then.
This is why it makes no sense to push the short side deep into an intermediate cycle. I tried to warn the bears again and again in June and July. The big money wasn't going to be made by pressing on the short side. The big money was going to be had catching the bottom.
We are in the same position again and most of the bears still haven't learned their lesson.
Gary, obviously I couldn't make my point clear.
ReplyDeleteYou said "It's not as easy as turning a chart upside down when trying to spot tops. Markets go up differently than they go down."
Your're definitely correct for stocks, commodities etc.
But not necessarily for currencies, as currency-pairs are "symmetric": An EUR/USD chart is principally the 180 degrees rotated version of a USD/EUR chart. Both are fiat currencies.
Why should the USD top/bottom differently than JPY, EUR or CHF?
Up or down? I need the help.
ReplyDeleteWell I guess one could use the inverse cycles but I'm not sure that will allow you to spot the top of a dollar cycle either since there is usually several weeks leeway for a bottom to form. I'm just oging to stick with my cycles analysis timing bands and my two lines in the sand. Above 89 good chance we have a new secular bull starting. Drop below 80 and the dollar is toast.
ReplyDeleteGary,
ReplyDeleteThanks to your good timing, I already paid for my subscription when I joined last month and could easily afford the 2nd year too!
Are new subs able to add a second year at the discounted rate?
Thanks and keep up the great work.
Yes anyone can add one year to their current subscription.
ReplyDeleteIf the February bottom in gold was really that significant, there are plenty of miners I could buy right now that are still at the lows and make back any supposed gains I might have lost, assuming this gold uptrend is really continuing. Also, the gains so far off that low are meaningless compared to real gains that would be made off of a true breakout.
ReplyDeleteBut more importantly, why would I be so concerned with missing another big move in gold, when we've already had it. The odds of the HUI going up another 100%, after it has already gone up 200% in about 20 months, are probably minimal. Rather more likely we will have more chop in the miners at best to work out excessive bullish sentiment and complacency, and at worst we will have a nice washout selloff before the next real push higher.
So with the HUI so close to making a new high I'd rather let everyone else experience the emotional mess of trying to pick a bottom, and just sit by and wait for something real to happen. In the meantime there will be plenty of money to be made being long a sector that everyone is bearish on, but is in a new uptrend.
Let me show you why you want to buy dips as close to the bottom in bull markets as possible.
ReplyDeleteLet's just speculate and say the HUI goes to 650 during the remainder of this C-wave, which is a totally reasonable target considering the gigantic size of the consolidation.
If you wait for miners to break out above 519 before buying you will rack up a 25% gain. Not to mention you will probably suffer a draw down if you buy the breakout especially if it is getting late in a daily cycle.
Now if one entered at the bottom of the intermediate cycle and held to 650 they would rack up a 51% gain. Twice as much as the timid fellow who waits for confirmation before he can pull the trigger.
Now you see why smart money runs stops so they can enter at the best price possible. They don't need confirmation, hell we've already had 10 years of confirmation what more does one need.
So one needs to decide whether they want to invest like the smart money and maximize gains or like dumb money and mimimize profits.
BTW if the dollar were to rise from its current level and break above 89 one would rack up a meager 7%. Miners can do that in one day.
ReplyDeleteGetting long the dollar is in my opinion an incredible waste of capital especially since the gold bull is just now starting to charge again.
BTW Aug. & Sept. are the single best months seasonally to invest in PM.
First of all like I said there are many gold stocks sitting near lows where any gains that you think you've already garnered off of the Feb lows could be captured, so no worry there.
ReplyDeleteSecondly, waiting for confirmation is what smart money does, not blindly risking money with no basis for doing so. And experienced traders are fully capable of taking drawdowns, it's what separates real traders from people who suffer catastrophic losses.
Now the fact that you are already leveraged 120%, including 50% juniors, says to me that you are gambling heavily that this next breakout has already shown it's hand and you think you can time it ahead of time. That's fine if you are right but if you are wrong you are going to suffer one heck of a drawdown, including taking an extra heavy loss on your double long AGQ which will get chopped up on the volatility if the market doesn't go your way.
So basically you are setup for extreme success or extreme failure based on what gold's next move is. If I was really interested in playing this next gold move, which I'm not due to reasons already mentioned, I would at least have a smaller position size going into the next breakout in case I am wrong, and then step it up after confirmation.
I've seen many traders get heavy like you are doing in the miners without confirmation only to get shaken out or panic on a washout before the uptrend resumes. Unfortunately it will probably happen to quite a few gold bulls again.
That's assuming gains in the miners will be there. If not then any gains I make while miners are going down will only give me more buying power to play the next real up move in gold.
ReplyDeleteIn actuality though a dollar move from 85 to a little above 100 nets about 20%, 40% or so if you are using the double long ETF, and even more if you use leverage in the forex market.
I have a very clear line in the sand at this point so I would only take a very small draw down if I'm wrong.
ReplyDeleteThe intermediate cycle low came in at $1155. If gold drops below that then the odds rise massively that something is wrong and gold may be entering a D-wave.
If that were to happen I would start cutting back immediately. And since I entered at least half of my margin right at the bottom I would lose very little.
Traders might wait for a breakout and minimize profits but I assure you value investors try to buy the bottom of the dip for the reasons I just pointed out (massive outperformance).
I am value investor. I want to make the most out of the bull possible. Draw downs don't bother me because I trust the bull to correct any timing mistakes. That's why I don't fret about entering in a short term down trend like I did at the July bottom.
For some reason you've convinced yourself that the dollar which just finished a parabolic spike up followed by the usual collapse is in an uptrend all the while choosing to ignore the cycles data I've pointed out.
And instead you worry about gold which is doing exactly what bull markets do, creep higher.
Much safer in my opinion to stick with the strongest trend on the board rather than try to fight a market that is clearly heading down into a yearly and probably 3 year cycle low.
I suspect if you would just take the time to study the historical data you would be taking that dollar long position off in a big hurry.
I doubt you will though because you've obviously made up your mind and you refuse to even consider anything that would suggest otherwise and you certainly won't take the chance of examining hard data the might refute you bias.
LOL and if you are using leverage and the cycles forces overwhelm your position then you've just done serious damage to your portfolio.
ReplyDeleteThis talk of leverage making up for subpar moves is just ridiculous.
Hell I could just leverage up on miners and gain 100% instead of 50%.
The end result is the same percentage moves in the dollar are miniscule compared to what one can make in the PM market.
I've already listed the corroborating evidence for my long dollar position, including: downtrend in the Euro, strong bond market, and topping formation in the stock market. There's topping patterns in many other currencies too. That's plenty of good data to support a long dollar position.
ReplyDeleteIf that supporting data turns out to be true there's probably much more gain potential in the dollar, so there's no reason to abandon that position while the charts are supporting it.
Gold may have a long term uptrend, but I'm just not that interested in a market that has gone up 200% in 20 months without a major pullback. Maybe I'll be proved wrong but I think there's a good chance the miners will have another big pullback before making a real breakout, or at least more time to consolidate to work off excessive complacency after such a big move.
If the gains are so big in the miners then why have you leveraged yourself? Especially with no breakout confirmation, that just doesn't make much sense to me.
ReplyDeleteSeveral reasons.
ReplyDeleteFirst; gold just put in an intermediate cycle low. Like I said these are the single best opportunities one gets in a bull market. If one catches the bottom of one of these not only is it the lowest risk entry but it is also going to deliver the largest gains.
Two; miners and silver have just gone through a year long consolidation (apparently thats not long enough for you but it's plenty long enough for me)
Three; gold is now entering the most positive season of the year as demand starts to crank up into the holiday season.
Four; gold tested the 1025 breakout and held. The odds of dropping below that for the duration of the bull market are very slim.
Five; two years ago gold dropped down into it's major 8 year cycle low. It is now in the initial stages of the next 8 year cycle.
Six: The dollar is due to drop into a yearly cycle low and then a major 3 year cycle low. Every C-wave advance has been powered by the dollar moving down into a major cycle bottom.
Seven; the size of the consolidation from March 08 to the recent breakout in Sept. of last year is huge suggesting a massive move higher. The pitiful little move to 1265 is way too small to be a final C-wave advance.
Eight: C-waves end in giant parabolic moves stretched extremely far abve the 200 DMA. Gold and miners both are practically sitting on the 200 DMA. They have now consolidated the breakout move last year and allowed the 200 DMA to "catch up".
Those are my main reasons.
Right but price action hasn't confirmed any of that so getting leveraged here isn't going to do you any good until a breakout happens.
ReplyDeleteLike I said before all you're going to do is amplify your gains or losses and if it is losses it could potentially shake you out before a real move happens. I've seen this happen plenty of times to people who get impatient before gold starts a new upleg.
That's were cycle theory comes in my friend. Gold already put in the bottom. If it breaks back below the July low then this is probably a D-wave.
ReplyDeleteOne needs a lot more than just price action to make money in the markets. It's why I consider price action the least important thing I look at.
Cycles and sentiment are many times more important than price action. Price action is simply a record of history and it will break down at turning points.
Cycles and sentiment help one to spot those turning points.
Gary isn't exactly geared to the gills, Justin, and he's defined his risk. Seems like a reasonable trade set-up to me.
ReplyDeleteJustin might consider putting his money where his mouth is and shorting gold.
ReplyDeleteAnybody that can argue gold should not be bought until "confirmation" or because it's already up too much, would have no interest in the dollar. He's blind to his bias. Not only that, he needs help with his math if he think gold has gained 200% in 20 months. So Justin, has gold gone up too much, or has it not done anything afor years, as you suggest with the miners?
This boy don't make no sense!
It's all a big scam:
ReplyDeletehttp://globaleconomicanalysis.blogspot.com/2010/08/former-fed-governor-mishkin-paid-124000.html
Today's gap higher= terrible for bulls. Delaying the inevitable.
ReplyDeletebought some QID
Buying an inverse fund 36 days into the daily cycle on a swing low probably isn't the safest move.
ReplyDeleteThis late in a cycle one should be looking to go long not add to shorts... unless they are day trading.
Looks like another perma-bear just got run over by the G-train.
ReplyDeleteSheesh, when will these fleas ever learn!
Garry -so with a day trading hat on you would still expect the small pull back in gold you have suggested will occur?
ReplyDeleteCycles and sentiment are derived from price action, so saying they are more important is counterintuitive. Gary is basically just all levered up so either he will make a bunch or lose a bunch, only time will tell.
ReplyDeleteThe hui, not gold, is up 200% since October 2008. I'm just less interested in a market that has had that kind of move with no major correction.
I do still expect gold to correct into a cycle low sometime this week.
ReplyDeleteJustin,
Cycles and sentiment have nothing what-so-ever to do with price.
Cycles run their course whether price is rising or dropping. They are just a measure of the cyclical nature of human emotions.
Sentiment is a measure of how extreme those emotions have become.
It is entirely possible to get an extreme sentiment reading at one price and then several months later to reach an opposite extreme at the same price level.
Gary thanks for the info.
ReplyDeleteI'm going long AGQ right here at $57.80.
The setup looks good to go higher.
thanks again
More than likely you are going to have to weather a draw down buying AGQ right here because gold hasn't moved down into it's cycle low yet.
ReplyDeleteIf you don't mind holding then fine but if you are expecting to get the exact bottom and will frakout and sell for a loss if you don't, then I would recommend waiting till later this week.
Gary, you've mentioned exiting a position when it gets stretched too far in relation to the 200 ma. What % do you consider stretched?
ReplyDeleteOn a flight all day without wifi (darn it). I hope the GDX I posted to short Friday stays down. I definitely don't want to overstay this one!
ReplyDeleteAt C-wave tops the HUI can get stretched 40-60% above the 200 DMA.
ReplyDeleteJustin and Gary, thanks!
ReplyDeleteJustin, you pose excellent questions. And Gary, thank you for your patience and thoroughness in answering those questions. I really appreciate your 8 point answer to the question about using leverage here. Also, it's good to know what your line in the sand is for deciding that a D wave might be underway. Very nice summary, I've copied these posts and filed them for future reference.
Keep the questions and answers coming, Justin and Gary!
Gary,
ReplyDeleteWhat do you think about selling puts in order to accumulate more shares for pm's? Non-leverage. 1 put = 1 share purchase.
Thanks
USO $20s this week. S&P 950 coming soon to a chart near you.
ReplyDeleteQID sitting pretty since the open.
Without price action you can't derive a sentiment or cycle interpretation so saying the either of those are divorced from prices is not correct.
ReplyDeleteIn regards to cycles if the dollar were to break above 88, the current 3 year cycle in the dollar would become right translated making a high at the end of the cycle. So either way the 88 level, is going to determine whether the bull trend in the dollar is going to continue. Sentiment in the dollar obviously is not going to improve until there is more widespread belief the dollar can go up, if the Internet is a judge then the fact that you have to scavenge for dollar bull articles makes me believe we have a while to go.
I think bond-bull (particularly Treasury-bull) coverage makes a decent stand-in for dollar-bull coverage, and of the former there has been quite a flood. It doesn't mean the bond bull is dead, but I don't believe it is a contrarian position at this point.
ReplyDeleteActually the dollar has to break above 90 to become right translated.
ReplyDeleteNo matter how much you want to think it is cycles and sentiment have nothing at all to do with price. They will run their course no matter what price does. Especially cycles. Cycles are simply a standard duration for the cyclical nature of human emotions.
Sentiment is a measure of that emotion.
Anon,
ReplyDeleteIf one is day trading they can certainly scalp some profits on the short side. But if you are taking a position and expecting to hold it all the way into 950 with no draw down I'm afraid you are probably too late in the cycle for that to play out.
That strategy is probably going to cause you to get caught in a short squeeze when the cycle bottoms.
One of the best things about G-train is he's kept me out of suboptimal and losing trades. For example, it's my belief stocks should go down b/c fundamental analysis, and that gold should go up, however I've ignored stocks and focused on gold and that has been the best net return.
ReplyDeleteThe best risk/reward is the focus here.
And that's because stocks are not clearly heading down, while GOLD is in a strong bull.
ReplyDeleteRight and someone looking at a chart formation would then see an ascending triangle breakout on the dollar and interpret that as bullish. So it looks to me like whether you are using cycles analysis or chart formation analysis you're coming up with the same result. That doesn't seem to jive with how you said earlier that cycles analysis was so much more important than "technical analysis", which I still don't see much of a difference between the two. In both cases all you're doing is looking at a chart and coming up with a conclusion, that's what it boils down to.
ReplyDeleteGigantic lid on this market...it can't go up.
ReplyDelete... or down, for the time being.
ReplyDeleteI think Silver tests highs by Friday or early next week.
ReplyDeleteMy two cents.
Well, it doesn't look like ironclad support just yet, but there *is* a daily swing low on SPX unless Friday's low is taken out.
ReplyDeleteI still have a core position but last week I lightened up taking a lot off the table. I bought way back in April so I hope silver and gold do go lower so I can average down. My holdings are still red mostly, and would like to see more green to match my vegetables in the garden.
ReplyDeleteOh, I am back in BHP and RTP after selling at the 86% RSI(5) on 8/9/10 and 13% gain. Looks good for another run-up...
Tom
Dear Market Participants,
ReplyDeleteI'm looking for a catalyst to make me go higher. I have a very disturbing weekly, daily, and monthly technical chart. I'm being propped up by the money printing of the U.S. dollar. I was also propped up for about 6 months from Federal Stimulus. I see unemployment rising at an increasing rate, I see growth slowing, and I'm seeing alot of folks taking money out of me to try and save themselves from bankruptcy.
I really need something to make me go higher. Do any of you market participants have any ideas? I'm losing patience and I think I need to make a major move lower to get your attention.
thank you,
S&P 500
Scary close. Crash time!
ReplyDeleteLOL. Imagine if GDP is negative on Friday! 104 by Friday's close, and 950 by next Tuesday!
ReplyDeleteOil has the worst chart that I have ever seen!
Gary,
ReplyDeleteI don't think AGQ is a gd idea. I have invested or trade leverage ETF and they are not a good investment tool long term.
Gary, is the transport spelling a down market coming?
ReplyDeleteAGQ isn't a long term hold for me. I will take down the AGQ trade when I think the intermediate cycle has peaked and I will certainly sell as soon as I think the C-wave has peaked.
ReplyDeleteGary,
ReplyDeleteGd to know about your position on AGQ, coz I thought Gary always does his research!
Justin,
ReplyDeleteI give up :) You apparently refuse to understand what I'm saying. So I'll just hold my gold positions based on the intermediate cycles and you can leverage up long the dollar. Maybe we will both come out winners.
Transports are a long way from breaking the July lows. Until they do everything else is just meaningless wiggles.
ReplyDeleteThe G-train was right about stocks bottoming in July. He was right about gold bottoming in July. It looks like he's going to be right about the short term top in gold.
ReplyDeleteDo you really want to bet against a bottom in stocks this week? Or the call for a lower dollar soon?
Betting against the G-train has become a very risky strategy lately :)
Old turkey baby. That's all one needs to know!
G is getting quite the fan base lately :)
ReplyDeleteGary-
ReplyDeleteAnything ever throw your cycle theory for a loop-- For example, a cycle lasting twice as long as normal or anything else out of the ordinary?
Sure cycles aren't 100% anymore than anything else. We saw a very long cycle into the April top as an example.
ReplyDeleteUsually long cycles happen on the upside though. Very rarely does a cycle stretch really long on the downside... the emotion of fear is a much stronger emotion than hope and fear tends to exhaust itself quicker.
So I doubt we will see this daily cycle stretch to 50 or more days. The most likley bottom would be on the GDP revision or maybe the day before if the market gets a hint of better than expected numbers. At worst it might stretch to the Sept. jobs report... but I doubt it.
Longer term weekly MA's I'm watching-the 50 & 20 weekly ma's...Go back 25 years and test this one-1% cross would have kept the long term investor types out of every bear and in every bull. 20 curling down and ready to cross through unless we start a nice rally from this point at get some power moving back up. Not saying go short here, it's just that the chart appears to be ready to give the death cross. Back in late 2004 it almost did this too but turned back up. With the typically weak season in stocks coming up, I'm guessing we get the cross.
ReplyDeleteSPX
The 20 dipped below the 50 in 82, 84, 87, 90 & 94 and none of them signalled anything other than a correction in a long term bull market.
ReplyDeletePeople like to look at these moving averages and extrapolate future moves from very small data sections but the reality is more often than not these "death crosses" just end up being whipsaws.
Granted a bear market can't begin without one but most of the time by the time the cross occurs the market is already headed higher.
My suggestion is to just wait and see if we get the Dow theory sell signal. If that happens then the odds are going to increase significantly that we have indeed entered another leg down in the secular bear.
When we do I expect the Fed to fight it tooth and nail. Which just means there are going to be a whole lot of violent bear market rallies. Which extrapolates into a very tough market to make money on the short side.
Could be, but those time periods you reference were the in larger context of a massive bull market run from the early 80's to 99.
ReplyDeleteThe 1% cross would have had you out of the market in early 2008. Not bad! 94 was not enough of a cross to give the sell signal so you stayed invested. I agree with you about the July lows-Dow theory signal, just pointing out a potential longer term signal. This one could be coming in the midst of a nasty bear market so I'm less inclined to trust the future. That all being said, my focus is GOLD baby!
The coming yearly and 3 year cycle low in the dollar would make me very nervous on the short side the next 6-9 months.
ReplyDeleteThe best period to get short would be at the bottom of the 3 year cycle low for the dollar. That's when we can expect a very powerful bounce which should pressure stocks and commodities.
So yes we are in a secular bear market but the dollar cycle isn't lining up for massive weakness in stocks yet.
Gary,
ReplyDeleteI'm still trying to understand the "selling on strength" signals. You got such a signal at the February low.
But, that day was a reversal day, with the market falling all day until 2PM, and then reversing to finish up on the day. How can you know that the selling wasn't actually selling on weakness (panic) during the early part of the day ?
Very confusing.
It's only possible to get a buying on weakness day on a day the market is down and vice versa.
ReplyDeleteBig money buys into corrections and they sell into rallies.
I don't remember the Feb data but if the market turned positive by the end of the day then any BoW data would disappear by the end of day.
I understand that you can only get a "selling on strength" day on a day the market is up. But that does not necessarily mean that the selling actually happened into strength.
ReplyDeleteWhy couldn't the selling have happened during the majority of the day while the market was down ? After all, they are only counting trades made on downtics regardless of when they happened, right ?
true. The BoW day at the July bottom came on a reversal day and I only spotted it because I happend to be at the house that day instead of out climbing. By the end of day the market turned positive and the data disappeared.
ReplyDeleteThat's wrong.
ReplyDeleteIt was a selling on strength day and you didn't call the bottom because you saw a selling on strength day at the low.
I'm trying to tell you how it could have happened without actually being a selling on strength day, but you're having none of it.
I think I'm right on this.
I remember now.. There was a selling on strength day close to the bottom. It just turned out to be a false signal.
ReplyDeleteThat does happen sometimes. There were a few buying on strength days during the market crash in 08 too that only led to brief bounces before rolling over again.
So Wes, it sounds to me like the SoS and BoW days might not be worth putting too much faith in, if you nowatimsayin?
ReplyDeleteThey work best if combined with cycles and sentiment.
ReplyDeleteI still don't see why you reject the idea that the "selling" part of the selling on strength couldn't have happened during the weak (majority of time) part of the day.
ReplyDeleteBecause of this, I would have great difficulty trusting any BoW or SoS day on which a price reversal occurred.
August 23, 2010
ReplyDeleteHey Gary did you see the
news at 3:30pm
As long as the market was down there would be no selling data.
ReplyDeleteOn a down day obviously the market is hitting bids. The selling data would have only showed up as soon as the market turned positive.
But if you are trying to decide whether or not to use the money flow data as a tool, my suggestion is to understand that its not a perfect timing tool and if it doesn't occur in conjunction with a cycle bottom or potential top you might want to take it with a grain of salt.
I haven't been watching the news this afternoon. I do scan thru marketwatch and yahoo but didn't see anything unusual.
ReplyDeleteDid something special happen that wasn't picked up by the media?
For those that think the retail trader isn't buying bonds.
ReplyDeleteThis may or may not be a long term top but it certainly looks like buying has become extreme enough to worry about an intermediate term top.
You keep talking about a cycle low forever. Why aren't we there yet?
ReplyDeleteDid you read the weekend report?
ReplyDeleteBloomberg Reported
ReplyDelete"Federal Reserve Loses Bid for
Disclosure Ruling" an appeals
court refused to reconsider a
decision compelling the FRB to
release documents identifying
banks that might have failed
without U.S Government bailout".
The sharper this shift is into bonds, the more it worries me. Those that have a mortgage may consider locking in the longest freaking term you can get, assuming you haven't done so already. This punch bowl is drying up quickly. Either in the next couple years yields rise dramatically in this economy or something more vicious will happen. Low yields and rates are only a disaster waiting to happen.
ReplyDeleteWe are dealing with a fear run. Even the smart traders don’t know how bonds work and are treating them like stocks. Maybe I am wrong, but I sure as sh*t am not standing on those train tracks. Good luck to you traders as I keep buying gold.
This doesn't entirely remove those risks, of course, particularly if we begin to observe a spike in credit spreads (which would be associated with default concerns and a likely drop in monetary velocity), but it clearly changes the environment. Gold stocks and the XAU have essentially gone nowhere since May. Last week, in response to a favorable shift in the Market Climate for precious metals and currencies (largely resulting from the shift in Fed policy and interest rates), we increased our exposure to precious metals in the Strategic Total Return Fund toward 10% of assets, and raised our exposure to foreign currencies to about 5% of assets. This is still not an aggressive stance, and we would prefer the opportunity to accumulate a larger exposure on substantial price weakness, if it occurs. But as this week's comment makes clear, the Federal Reserve has begun to play with fire, the effects of which I doubt Bernanke fully appreciates.
ReplyDeleteGary, John Hussman is increasing his exposure to gold.
Are we translated to the left?
ReplyDeleteThere are currently no left translated cycles anywhere on the board.
ReplyDeleteWhy hyper-inflation won't happen:
ReplyDeletehttp://seekingalpha.com/instablog/475264-tim-ayles/89328-can-the-dollar-crash-why-hyper-inflation-is-a-low-probability-event
Unfortunately our buddy Tim has no earthly idea what he's talking about.
ReplyDeleteAll currencies are being devalued together. That's why the price of gold, oil, sugar, coffee, etc. is rising in all currencies.
The dollar may not collapse against the Euro but it could still end up costing 400 dollars for a gallon of milk while it costs 300 Euros for that same gallon of milk.
Maybe you should read the whole article.
ReplyDeleteThat is mentioned......
Basically talk of hyperinflation as a US $ event is absurd. If it happens and that is a big if, it would be a world wide phenomena that happens to the world, not a US centered event
ReplyDeleteGranted we aren't going to see hyperinflation amytime in the near future but we are on the path that leads to it. I suspect as the dollar works it's way into the three year cycle low it will resume its 10 year underperformance compared to the other currencies of the world.
ReplyDeleteThat would depend on if the US continues to debase while the rest of the world tries to delever.
ReplyDeleteThat is what is happening right now and it is the reason the dollar has collapsed so violently the last two months.
If the dollar reverses soon and breaks 80 I think we can shut the book on the almighty US dollar.
Hmmmm - not sure I see the ole EUR/USD as really strong. Looks to me like the last two months was a breather in the downtrend that is now 10 months to 2 years old depending on how far back you want to go.
ReplyDeleteI will give you that a break of 80 could be bad, but I'd also be worried of a stop rinse down there because it is so obvious.
Gary-UK here again.
ReplyDeleteSo, the dollar is rising, equities falling, gold is down, silver even more.
Deflation is taking hold you gold bugs, expect everything to get taken down in a big way over the next few months. Maybe gold will escape the worst of it?
When the SPX is at 780 our host might admit the bear market is back (though I wouldn't bet on that).
Don't rely on Gary to be right about the future, do your own research.
I won't need to wait till 700. I've been saying for weeks now , and you know very well that I have, a Dow theory sell signal will meet the final requirement to call the return of the bear.
ReplyDeleteI doubt that will happen just yet though. I expect this daily cycle to bottom above 1010 and I'm currently expecting the short squeeze that follows to send the S&P above 1130. At that point it's anyone guess as to whether dtocks can make new highs or whether it rolls over before that.
Gary in case you haven't noticed you are an almost perfect contrary indicator. Whenever you show up the market is always within days of a bottom. Then you disappear for weeks until we near the next bottom.
ReplyDeleteAnyone pressing the short side should now be on high alert :)
Yeah, do our own research so we can lose as much as GaryUK did in the last 2 months.
ReplyDeleteKeep calling for the same thing and you're bound to be right for a little while anyway. Chucklehead!
Gary_UK seems to have decided that you're a raging stock bull, Gary, and so you serve when he needs to express relief that the puts he bought near the July low are working. Not the classiest act, or that close of a reader. I doubt he will read any of the responses to his posts, though I'm sure you'll hear from him again on the next leg down, if there is one.
ReplyDeleteThe MARGIN MONSTER will visit gold...
ReplyDeleteAnd when the hell did G-man say buy last month....
You are rear view mirror selling subscriptions again...only fools pay for crap like this...hahahahahahahahahaha
Stupid Amerikanz...
Here
ReplyDeleteOuch! The G-train just slapped you down Monster boy. Sounds like you need a subscription more than most. LMAO
ReplyDeleteSince monster troll already lost 50-60% of his portfolio just last quarter, he has nothing left to do but whine on various blogs.
ReplyDeletePoor little fella, I wonder if his food stamps were approved? :)
I'm welcoming this dip in gold so I can load up. Only a few times a year does one get discounted ticket fares on the G-train!
ReplyDeleteLots of travel this next month so fewer posts coming up. I will try to post if I can see the next market or gold bottom. I'll be covering Friday's GDX short this week, hopefully in time for the daily cycle low. It was such a high-odds set up I couldn't resist it despite the gold bull. The tight stop made it low risk (unless gold gapped up $30 or so, which seemed highly unlikely given its rocket-ride the past month).
ReplyDeleteGary_Uk again.
ReplyDeleteReally Gary, you're expecting 1130 again?
No way Jose. We just had our best effort at a bounce, and 1131 was tested and repelled the bounce. We might bounce to 1100, though I doubt it.
I see 1010 being taken out in the next few weeks. All the technicals are screaming 'down' now, all moving averages are resistance, and all are pointing down.
And Gold is down and Silver too. And still you offer your publications for free, I am guessing business is drying up as gold bugs await the big correction as paper golds deleverage.
It's so easy to see it bugs, down first, maybe to 1000 on gold, then back up again.
Ride it all down, over the next few months, then ride it back up.
See you at 850 in 2 months time bugs.
GaryUK,
ReplyDeleteHaven't noticed yet that the technicals always look bad at bottoms?
Until you learn that lesson you are going to continue to sell bottoms and get caught in short squeezes.
You sold the July bottom and now you are underwater on all your puts and you've had to watch as 2 months of time value have evaporated out of your positions.
Which is exactly what I warned you would happen BTW.
Gary UK: Is that your evidence for further decline? That everything is pointing down? This is just the wrong-headed stuff Gary has written about. Charts always point down at bottoms. Were they not pointing down in March of 2009? Were you short then? If not, why not? If you gave analysis rather than just "We're going lower!" it might be more compelling rather than picking random numbers. If sentiment doesn't matter (only where the charts are pointed matters) , why were you not short at the 2009 bottom? And if you were why should anyone listen to you now?
ReplyDeleteThe resilency of silver is simply amazing here. I really think silver is setting up for a truly amazing move soon.
ReplyDeleteGary_UK better hurry with the next taunt while gold and silver are still down ... whoops, too late for silver.
ReplyDeleteYep...glad I bought AGQ yesterday. Market down big and silver is up.
ReplyDeletethanks Gary...gold and silver are the places to be.
It appears they cannot keep gold down. I'm still planning to add if we get lower prices.
ReplyDeleteSweet Jesus, gold is UP?
ReplyDeleteGold bounced violently off the 50 DMA. That could be it for the daily cycle correction.
ReplyDeleteSerious bid for PMs early. I'm starting to think Gary_UK might not know what he's talking about.
ReplyDeleteGary-
ReplyDeleteEnough of a correction to place excess cash to work?
Wait till the end of day. If gold and silver are still near the highs then the odds are going to be good we will get a swing low tomorrow and the move back down to the 50 DMA is going to be all there is to this correction
ReplyDeleteGary I'm right about USO heading fast to the $20s and I'm right about the S&P heading to 950. Other than shorting these, I wish I were long silver and gold too.
ReplyDeletePerhaps we will both be right.
George.
George,
ReplyDeleteIt's just too late in the daily cycle to short stocks unless you have a very very tight stop on your position.
If the Fed even hints at QE at Jackson hole the market could gap up several hundred points.
If they get caught enough times at these cycle bottoms eventually the bears will learn their lesson.
Daniel,
ReplyDeleteWhy not just wait for the HUI to get below the 200 ema? It has bottomed down there, without exception, before every rally in this bull market. With volatility picking up, and European stock markets starting to really tip over (Ireland), I wouldn't be too antsy to start committing capital to this market in hopes of making a bunch of money.
The other thing you have to consider is if profits really start evaporating in other sectors, do you think people are going to let their profits evaporate in the metals too? Probably not, which is why they are also vulnerable if the correction continues.
Since you're just going to stand aside forever, Justin, perhaps you might clam up as well?
ReplyDeleteIf by aside you mean short the market, and long the dollar and yen then yes I'll keep standing aside.
ReplyDeleteLooking at GDXJ, a 38.2% correction may be all we see.
ReplyDeleteIt's like someone BIG cannot wait to buy gold. I best check what the wife's doing..lol
Justin-
ReplyDeleteNot a bad thought, but if the daily cycle has bottomed we may never get to that level?
How sick would that be if silver broke out today!!!??
ReplyDeletecha ching!
$HUI touched the 200dema last month, Justin. If PMs are in a bull and leading, that might be good enough.
ReplyDeleteBTW, it's possible the housing numbers were a buy-the-news event, if you're trading short-term.
I put my 10% back to work...I just couldn't wait any longer. Now old turkey. Time to enjoy the sunshine. Good luck in the day.
ReplyDeleteDaniel,
ReplyDeleteThis just doesn't feel like a gold bottom to me. I've seen a lot of bottoms too. I could be wrong, but that's just the way it goes. All I know is if the market continues to breakdown I wouldn't want to be holding a bunch of stuff on the long side.
Justin;
ReplyDeleteI've seen more bottoms than you. I get more ass than a toilet seat.
This second surge does appear that the test of the 50 was all we are going to get. This does look like the kind of explosive move we get off a cycle bottom. The stock market is also trying to reverse which could set up a swing low tomorrow.
ReplyDeleteI think the markets are starting to smell QE II fellas.
Bull flag on Silver, I doubled up on my AGQ at the SPY reversal. Looks strong.
ReplyDeleteI closed my SPY puts, as well.
Gary have you conveniently forgotten what happened in 2008 when the government tried gimmick after gimmick and the market just kept going down? The market is just as likely to laugh at QE2 if the trend is down.
ReplyDeleteThe dollar tagged the declining 50 DMA and collasped.
ReplyDeleteJustin,
ReplyDeleteI can assure you the market will not laugh at QE2. The dollar will collapse into the yearly cycle low and all assets will explode higher.
Gary,
ReplyDeleteAll assets higher? Does that include bonds?
Only if investors continue to irrationally buy bonds in an inflationary environment. At some point the market will recognize the king has no clothes.
ReplyDeleteJustina is gonna spend the rest of his life betting that 2008 will happen exactly the same again, while watching gold hit $10,000.
ReplyDeleteJustina needs to buy an SMT subscription just as bad as George and Gary-uk. :)
ReplyDeleteAre they going to explode higher and yet fail to make new highs like last time? What about the dollar will it "collapse" yet fail to make new lows?
ReplyDeleteJustin, the market is sitting on some pretty strong support, high volume reversal at a major fib line, the bottom of the long term trend channel, and the news is out on GDP.
ReplyDeleteI am not sure how how high it bounces, but the risk reward favors long at this point.
While Justina is betting which turd might float, he shoulda hopped the G-train. They only come around every few months, and next time he won't be able to afford the fare.
ReplyDeleteThis is just not looking good for the bears and if you are dumb enough to be a gold bear you just got squashed by the G-train.
ReplyDeleteThe funny thing is the answer is staring them right in the face. Buy a subscription, jump in the G-wagon, and enjoy the ride to prosperity.
ReplyDeleteIt's true, you can give some people the answer key and they'll still flunk.
If I was confused enough to be long the dollar, I'd get the hell out even into this weakness. Looks like it's ready to rollover on the daily charts.
ReplyDeleteNot to mention the death cross about to kick in as well! :)
ReplyDeleteLOL Gary-uk was the perfect contrary indicator. You hit the nail on the head G.
ReplyDeleteI'm not in gold and I certainly wish everyone well that holds it.
ReplyDeleteSomething that puzzles me is the constant advertising encouraging people to invest in gold. I've been in markets for a long time and this is significantly more advertising for gold than I've ever seen before.
This advertising dwarfs that back when gold went to $800 and that advertising started when you should have been leaving.
Today in my newspaper (Atlanta, Ga) there is an insert urging you to buy a gold ETF.
I can't help but wonder what the chances are that when a record amount of money is being spent trying to get you to do something, that something is exactly the right thing to do.
ole Wrong-Way TK is getting post-happy again.
ReplyDeleteWe're close to the bottom, and G's Friday timeframe is looking good if not sooner.
Gary,
ReplyDeleteI think there's a data error with GLD today on StockCharts. Stockcharts says the low of the day was 118.31, but every other website (Yahoo, Google Finance, my brokerage, Wall St. Journal, etc) says low of day was 118.71, which is 0.35 above the 50 DMA.
Gary, with BHP raising $40billion for POT. I wonder when the M&A will start for junior miners by the big miners. With so much cash building up and low interest rate, ceos have to do something to increase shareholders's value. Also, the chinese govt has approved its miners to acquire overseas miners. I believe the action is going to begin shortly.
ReplyDeleteO,
ReplyDeleteI'm looking at the spot price. It tagged the 50 DMA this morning.
Crashing again. Damn I'm good.
ReplyDeleteYou have "crashing" on the brain LOL
ReplyDeleteI'm not sure a 1.1% move counts as crashing.
Anon 9:53a.m.
ReplyDeletewhat's crashing? You from all of those drugs?
The key is the dollar. If the intermediate cycle rolls over shorts will be in serious trouble.
ReplyDeleteGary,
ReplyDeleteWould you add some AGQ right here or wait a bit? I assume, also, that this is the single security you would add during this low, correct? I took off margin last week and looking to add back but I didn't have AGQ and thinking about adding it here.
Thanks!
Steven
Anyone know when is the Fed meeting at Jackson Hole and how long does it last?
ReplyDeleteI think I probably would. It looks like the daily cycle bottomed on the 50 DMA and silver is already testing the $18.50 resistance level again.
ReplyDeleteShalom Bernanke takes the stage on Friday at Jackson Hole.
ReplyDeleteMy timing on BHP and RTP is looking premature. I still think that when they take off it will be a winner, long-term...
ReplyDeleteI like IVN today as well as HMY.