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Monday, September 13, 2010

DOLLAR IN JEOPARDY

The dollar is going to be the key to virtually all markets. If it continues down it's going to act to support asset prices. Well at least initially. At some point we are going to see the decline become unruly and the Fed's efforts to prop up asset prices will have serious unintended consequences. Namely, surging inflation. Which is already starting to show up in China, India and many emerging markets.

On a cyclical basis if the dollar drops below 81.88 it will mark a failed daily cycle.


When that happens it's going to be a big warning sign to bears. A failed daily cycle is the first sign that an intermediate cycle is about to roll over. If the dollar's intermediate cycle has already topped then we are looking at a potential extremely left translated intermediate cycle.

A move below 81.88 would be a big warning sign for bears to cover shorts. A move below the August intermediate low (80) would be confirmation that the intermediate cycle has failed and the dollar is in the initial grip of an impending currency crisis.



It will also mean shorts on anything will quickly become toxic and must be jettisoned immediately.

I've been trying to warn the bears for months now to wait for proper confirmation before piling in on the short side. Already this morning the dollar is very weak and threatening to break below 82. As soon as the market becomes convinced the dollar is headed lower smart money will flood into asset markets causing stock markets to surge out of the trading range they have been in for the last couple of months.

Update: The dollar did break below 81.88 today. Unless 83 is recovered almost immediately we have to assume the dollar is in trouble and it's only a matter of time before the intermediate cycle also fails (moves below 80). At that point we will see inflation start to surge higher. Investors and the common man alike will need to protect their purchasing power by buying real stuff. The easiest and probably the most profitable real asset to buy is gold (or silver if you want to make bigger percentage gains)

118 comments:

  1. Markets up big this morning.

    G-train 5
    Troll babies and perma-bears 0

    Hey Gary UK how are those puts doing?

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  2. Shorts are getting slaughtered again after last week. Ouch!

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  3. I wonder what "price action" is telling Justin these days?

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  4. Justin should have listened to the G-train. Ooops

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  5. with the weakness in the USD, i am thinking about adding to my dips as opposed to taking profits as suggested. G, what your thought process on that? Would this be an appropriate time to add to my positions, or do you think a Daily cycle low in Gold is right around the corner?
    Peter

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  6. I'm of the opinion that gold will probably tag $1230 then a runaway move will begin.

    I won't be taking profits myself as I'm confident gold will break out soon. But if someone is heavily leveraged they could bring that down and wait for the breakout before putting it back on.

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  7. Gary--

    Can we assume that if we are working our way into a daily cycle low that this cycle is actually a failed one and extremely left translated? Or an extremely long one and very right translated?

    Thanks

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  8. There is no chance of a long right translated cycle at this point because the top came back at the beginning of June.

    We would need to see a move below 81.88 before we can say with any confidence that the daily cycle has already topped. If that happens in the next couple of days then we would be looking at a failed daily cycle and this is a serious warning sign that the intermediate cycle has also rolled over.

    And that is most likely the early signs of a currency crisis brewing.

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  9. G - tag 1230$ .. looking at the charts, I assume you believe that would happen this week. Would you say this was an extended daily cycle in gold ?

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  10. I doubt it. I think it's more likely that gold is about to enter a runaway move.

    If that happens we can probably just throw away all of our cycle studies. A runaway move is one of the most powerful conditions in the market and it will tend to roll right over everything and that includes cycles and sentiment.

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  11. Interesting how we had a right translated cycle in 1995 that bottomed in the dollar launching into a new bull market. Also interesting that the dollar is above that 1995 level at 80.14! So much for all that currency destruction Bernanke has caused us.

    Gary you seem to have jumped to an extreme lately, all it takes is a measly break of 80 and you're panicking out of dollars and moving to Canada. I remember how extreme the bearishness got towards the dollar in 2008 and all it resulted in was the launch of a new dollar bull.

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  12. It looks like silver might not even pull back with gold (if gold does).

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  13. Justin,
    80 is a key level not just because it is 80 but because a break of 80 would represent a failed intermediate cycle.

    This early it would also signal an extremely left translated intermediate cycle. Those kind of cycles produce the worst losses because they have a long time for the asset to drop before putting in the intermediate bottom and a bounce.

    An extreme left translated cycle is the hallmark of bear markets.

    And as I've been saying for a long time there is virtually no chance that the dollar began a new secular bull market in 08. A cyclical bull yes, but if the dollar breaks below 80 that cyclical bull will be dead and the secular trend will be resuming.

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  14. Hey trolls, 950 is the other way. LOL!

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  15. Price action is telling me the dollar is headed much lower.

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  16. And there's a death cross in the very near future!

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  17. A move to roughly 20.10 would be a breakout of the bull flag in silver. Silver has been the strong sister. Where it leads the rest of the PM should follow.

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  18. Justin can talk a good game about following price action...he just can't follow his own advise LOL

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  19. Gary--
    Regarding the failed cycle question, I was talking about gold... See below

    Gary--

    Can we assume that if we are working our way into a daily cycle low that this cycle is actually a failed one and extremely left translated? Or an extremely long one and very right translated?

    Thanks

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  20. Gold rallied 10 days. That puts it right in the middle. To be left translated it would have had to top in less than 10 days. To be a failed cycle it will have to move below $1210.

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  21. Gary,
    I do have some holdings in foreign moneys, like Loony, Francs, Singapore dollar and Nor. Krone.
    Is this a good time to add to these just before the US dollar gets in trouble???

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  22. I would rather add to gold or silver has they will rise against all currencies.

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  23. Gary,

    I'm a subscriber that now has 75% of my portfolio in gold, silver, GDXJ, and SIL.

    The remaining 25% I want to put in silver, but do you think I should wait for the expected small pullback in gold before buying the silver, or just get it now?

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  24. P.S. I took 25% out of gold in order to put it in silver, which I also think will outperform on a relative basis.

    I don't use margin too often, so I'm almost fully invested.

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  25. Hi Gary,

    Silver ltp is 20.12, can we add more silver as bull flag broken upside.

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  26. You could get in as soon as silver breaks out of the bull flag or you could cross your fingers and hope gold manages to tag the $1230 level. I have no idea if it will or not. That's why I'm not selling any of my own positions at this time.

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  27. Well I guess I should have looked. Silver already broke out.

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  28. Anybody seen any news about IAG lately that might explain the relative weakness of the last week or so? I can't find anything.

    NGD is also taking a big hit today.

    I'm thinking about adding to IAG on this weakness.

    It could just be the normal inexplicable volatility that can be seen in these names, but I'm looking around.

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  29. so how do i play this gary? owning tara bought at 0.52

    Tara Minerals Corp. (OTCBB: TARM) (BERLIN: 6T3) and Tara Gold Resources Corp. (PINKSHEETS: TRGD) (FRANKFURT: T8N) have entered into a tentative agreement for Tara Minerals to acquire all of the common shares of Tara Gold in a transaction valued at approximately US $83 million (the "Transaction"). Pursuant to the definitive agreement, two (2) Tara Gold shares will be exchanged for one (1) Tara Minerals share. The Transaction implies a purchase price of US $0.805 per Tara Gold share,

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  30. Do you want to own Tara minerals. If so then just sit still and you will acquire shares of TARM. If not then sell and find something else to put your money in.

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  31. Silver is on fire...20.20
    Even if Gold wanted to tag 1230, I think it now cant do so, just because silver is dragging it up higher
    Aaron.

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  32. Hi Gary,
    I sold my GDX today. Holding GDXJ, SLV, AGQ. I want to put a buy stop on a breakout of the GDX. Can you tell me your recommendations? I was thinking 54.70. I appreciate any help you can give me.
    Todd

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  33. I would use the HUI as my indicator. About 498 would be a breakout of the triangle consolidation.

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  34. The Yen appears to have rallied strongly since 2007 following left translated cycles so I'm not sure why the dollar couldn't follow the same pattern.

    I think you're calling the cyclical dollar bull dead a little too early on a break of 80. On more deterioration after that maybe, but not on simply a break of 80.

    I never said the dollar was in a secular bull either, right now it's just a cyclical bull.

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  35. I'm basing my call on cycle theory. If the intermediate cycle low at 80 is broken it is going to be very bad news for the dollar.

    I'll remind you we have a yearly and 3 year cycle low coming due.

    Ignore that at your peril.

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  36. Gold languishing today.

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  37. If we have a demonstratable example of the Yen rallying in a cyclical bull on left translated cycles then why do we need to be so worried about left translated cycles?

    I'm pretty sure bad news doesn't happen for the dollar until it resumes a downtrend. Until then it's just fear mongering.

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  38. What do you call the collaspe from the June top to the recent intermediate low?

    That certainly looks like a downtrend to me.

    How long are you going to stay on the wrong side of the trends? You claim to let price tell you what to do. How much louder must it yell before you pay attention?

    You've already sat and watched as the market rallied over 8% against you. At what point do the losses become great enough to where you admit you are wrong and change tactics?

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  39. Justin: I'm just not sure why you are fighting so hard? Investing/treading is about performance not theory. Gary's calls have been remarkable. Precise, actionable, and correct. Your questions never seem to be about your wanting to learn something and improve your trading, but instead seem argumentative and aggressive. Why is that? I am not at all opposed to differing opinions (that's how we learn), but why do you have such a fixed attitude towards what you already think you know? How do you ever grow as a trader? Lighten up, show a little humility, and learn. It'd also make the blog a lot less tedious to read. I am not in the slightest trying to put you down here. I am hoping you'll just take a step back and look at what you are spending so much time doing.

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  40. not sure if any of you read the link submitted by RA yesterday ( or saturday, cant recall ) but if Government Sachs is getting ready for QE2 and Dollar debasing, then odds are in favor of continued dollar weakness. I resubmit for your perusal ...

    Peter

    http://ftalphaville.ft.com/blog/2010/09/09/338446/goldman-anticipates-qe2-dollar-weakness/

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  41. Gary can you explain why we should be worried about left translated cycles in the dollar if the Yen rallied in the same manner during it's cyclical bull? Or are you going to keep dodging that question?

    Right so the dollar "collapsed" since June. Nevermind that it has been in an uptrend since 2008, and all your theories about Bernanke destroying it have failed to take place.

    I'm not going to be swayed by some fear mongering, instead I'll just focus on what the real price action is.

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  42. What does the Yen have to do with the dollar? Two completely different currencies. Backed by two completely different cultures.

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  43. housing was in an uptrend from early 2000 up until 2006, I dont think that really worked out as an indication of future value ...

    On the weekly, dollar is in a bear flag, and, on day 1 of this week, its already broken to a new lower low. I am no expert, but it looks like a continuation flag to me.

    either way, if Justin wants to believe in the strength of the u$d ... not sure why we need to talk him out of it.

    By the way, life is pretty good up here in Canada ...

    cheers
    peter

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  44. Looks like $ already tagged 81.88 this morning. We may not have to wait past today to get that break.

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  45. "I'm not going to be swayed by some fear mongering, instead I'll just focus on what the real price action is."

    Otherwise know as; I'm going to keep fighting the market until I go broke because it's more important to be right than make money. LOL

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  46. Onlooker, 7:27

    I've been trying to figure out what's up with IAG too. It's been weak for a while now. It's acting like some large holder has been steadily selling. NGD was just downgraded, so that may be the cause of its weakness today.

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  47. Hmmm, silver and silver miners outperforming gold and gold miners...

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  48. USD at 81.86 -- there goes the farm!

    Do we need a close below 81.88 or just a break to confirm the failed daily cycle?

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  49. I suspect Gary will say a break is all that is needed.

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  50. Ouch! USD now 81.79. Just too painful to watch.
    I'll have to soothe myself by looking at my AGQ and SIL holdings.

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  51. I'm showing 82.02 as the day's low on Thinkorswim.

    Not saying it's right, but...

    John - I agree re: IAG. Sure seems like someone big must be getting out here. It concerns me a bit, but maybe it's just an opportunity. Similar weakness seen in GG on the acquisition rumor/news of late (Andean Resources).

    Maybe there's similar news coming with IAG, although they're not one of the big boys. Who knows, but I'm not gonna scare out here just yet.

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  52. RA, I'm looking at /DX[Z0] in TOS and it's showing $82.07. A TOS CSR just told me the quotes are realtime. Am I looking at the wrong thing?

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  53. I look at USD on

    http://www.goldseek.com/quotes/charts/usdollar/usdollarindex24hour.php

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  54. IAG and SLW both unusually weak today. Since they were the stars of the upleg, it may be that they are foretelling a pullback. Or they may just be part of the same big player's portfolio, and they've decided to take profits.

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  55. And I must confess I am not sure if goldseek is more accurate or not on the USD...

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  56. Gary are you not capable of applying your cycles analysis to the Yen? If so how useful can it be if you can only apply it to certain markets?

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  57. Silver miners as a whole (SIL) outperforming SP500. Gold miners as a whole (GDX and GDXJ) underperforming...

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  58. Hi Justin,

    From your comments, I am not sure if you are a subscriber.

    Cycle theory should be applicable to any security. But for Gary to apply it to the yen, he will have to look at the charts of the past few decades to work out the cycles, their lows and average lengths.

    Every security has its unique cycle.
    Bonds have their cycles too but Gary has indicated that he has not worked those out and will probably have not interest to do so.

    Someone also asksed about agriculture and got the same reply.

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  59. Taken as a whole from the fall 2008 bottom the dichotomy in the performance between different mining stocks is pretty exceptional in my opinion. It will be interesting to see how that unfolds. Especially the last thrust in the leaders ANV and SLW, just straight up without a down week for 6 weeks.

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  60. Dollar Index ($DXY)

    DXY --
    81.79 -0.90 (-1.09%)
    Stock Price Quote as of Monday, Sep 13th, 2010 12:08P EST (INDEX)
    High 82.47 Low 81.76
    52Wk High 88.70 52Wk Low 74.17
    Open 82.62 Prev Close 82.69
    Weighted Alpha +5.44 Standard Dev -2.01
    View Detailed Quote

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  61. RA,

    I made a comment that the Yen looked to be rising in a left translated cycle, and wondered why the dollar couldn't rally in the same manner, but got no response from Gary so that's why I was confused about why we couldn't dissect the Yen into cycles like the dollar.

    In terms of cycle analysis I have a hard time understanding how that work would allow you to identify a trend change, since it seems like the translation of a cycle only becomes apparent after the trend is in force, and not before it.

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  62. For instance if the dollar makes a new high the 3 year cycle in the dollar becomes right translated. So if you follow cycles analysis you wouldn't get bullish on the dollar until after that new high?

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  63. USD: http://www.marketwatch.com/investing/index/DXY

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  64. Justin,

    I am a novice to cycle analysis myself but I think breaking below the previous cycle low indicates a trend change. Same thing for the highs. So not much difference here from regular TA.

    But I think the value add is in the cycle lengths. If we are deep into the cycle withot breaking the past low, then it will likely not happen. Same thing for the highs too.

    Then there are cycles at different levels. The broader cycles influence the smaller cycles.

    Of course Gary talks about ABCD waves for gold which may not apply to other securities. But this is not part of cycle analysis.

    And Gary analyses USD in relation to gold. So he may not do the Yen in isolation.

    This may not help you understand more of cycle theory but maybe it helps you to undertand Gary's appraoch.
    Hope I did him justice :-)

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  65. Justin,

    I missed your last post. If you looked at Garys post Deflation Never Had a Chance and his 3 yr cycle on the usd, no new high was made. The previous 3 yr cycle high has not been exceeded.

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  66. Best shorting opp for bears is today and tomorrow.

    still stuck in the trading range spy 113 to 104

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  67. Best shorting opp for bears is today and tomorrow.

    still stuck in the trading range spy 113 to 104

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  68. Justin is down big on every position the last several weeks, yet somehow maintains an air of superiority.

    Joker.

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  69. Bears don't change tactics. They have an emotional attachment to their egos. They think they're the brightest bunch on the planet. But, of course, they're not or else they wouldn't be bears! Market history just isn't on their side for the last 200 years.

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  70. Those who see the Dollar Index at 82.02 as a low are indicating it for the Dec. Contract.

    Aaron.

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  71. Gary: To help clear up price quote differences...

    Does the site below work for you? Where do you get your real-time dollar index quote without a futures account?

    http://www.marketwatch.com/investing/index/DXY

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  72. The dollar has not been able to better the last three year cycle high. That is a big check mark in the secular bear market continuation camp. So far the top of this 3 year cycle came very early in the cycle (left translated cycle). More often than not that leads to the next 3 yeaar cycle low breaking below the prior one. We now have a failed daily cycle in play. This early in the intermediate cycle that will more than likely signal the top of the intermediate cycle also.

    If that is the case the dolalr is in big trouble.

    I'll say it again. No way the market just let's Bernanke get away with printing several trillion dollars. No way no how. Maybe in never, never land but that's not how its works in the real world.

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  73. http://www.goldseek.com/quotes/charts/usdollar/usdollarindex24hour.php

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  74. Aaron (or somebody familiar with TOS), what should I be looking at in TOS? I plucked the /DX[Z0] off the list of futures.

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  75. RA,

    Thanks for the feedback. I guess according to cycles analysis we need a break of that 3 year cycle high in the dollar to get the cycle aligned in the bullish manner.

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  76. Ombi, my futures broker doesnt give me live quotes on the dollar (as far as I know), Gary's link and many others offer you that for free.
    I dont use the index to trade per se, so I never really considered asking my broker.

    Aaron.

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  77. Justin,
    In order to change the secular trend we need the 3 year cycles to form a pattern of higher highs and higher lows. So far that has not happened. The dollar could potentially make a higher low if it can hold above 71 at the appraoching 3 year cycle low.

    But I doubt it will based on the extreme left translation of the current three year cycle.

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  78. For those fretting over IAG action, I suggest either buying a basket of miners and not watching them individually or just by GDX. It's hard enough to stay focused on the big picture without getting distracted by the day-to-day movements of individual miners. I've made that mistake and can assure you you're life will be much more pleasant buying the sector and just watching the gold cycles for trade signals.

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  79. I strongly agree with theDoc. I never put big money into an individual stock. I remember years ago when I was a trader in Philly. A guy in the office had a big position in a stock. The morning's paper showed a small airplane sticking out of a building wherein many of the top executives had just been killed. Let's just say the stock didn't do all that well after it finally opened. GDXJ and SIL let you sleep at night and you can pile in without worrying about a fraud, catastrophe, etc. There's nothing more annoying than being right on a move and picking the wrong vehicle to trade it so you make little or nothing because your one stock cratered. And if you are going to buy a basket of stocks, might as well buy the etf.

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  80. Please don't misinterpret my query about IAG as "fretting" or whatever. It's an appropriately small allocation of my total (less than 2%) and I'm more inclined to add here than sell. Just wondering if anybody had heard something as the action has been uncharacteristically weak of late.

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  81. I have some tiny positions like that as well, from time to time. They are irresistible :) But if it is just 2% and doubles, so what? If you put serious money into it it's too dangerous, and if it's a tiny position, it doesn't really matter. The real money (without too much gambling) will be made in the etf's I think. Anyway, that's how it works for me.

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  82. That would be my recommendation also. Either build a basket of miners or buy the ETF but don't go all in on one or two stocks.

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  83. Gdxj and SIL also give you access to stocks that are not traded domestically -- mostly Canadian juniors and the biggest silver stocks like fresnillo and hochschild.

    When these co's get US listings, a lot of capital will flow into them.

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  84. Wow this is the best blog I've encountered. keep it up!

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  85. Gary: I know you are long AGQ. I have seen often that these juiced etf's do not track the underlying very well over time, though they are good for a day or two. Does this not happen for AGQ? Since you are holding it for a long time, I guess you think not...? Don't they lose ground when they roll over the futures or whatever it is that gives them the leverage?

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  86. Tim Knight says to short retail. LOL. I guess we gap up again in the morning after retail sales numbers.

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  87. AGQ will underperform also but I don't intend to hold it for a long time. While silver is rising it may even outperform.

    I plan on exiting when I think the current intermediate cycle has run it's course (10-15 weeks).

    And I definitely won't be holding through a D-wave.

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  88. At some point we are going to see the decline become unruly and the Fed's efforts to prop up asset prices will have serious unintended consequences. Namely, surging inflation. Which is already starting to show up in China, India and many emerging markets.

    I honestly have no idea how Gary connects Fed monetary policy to inflation in China and India and "many emerging markets."
    India, as a solid example, pursues very independent monetary policy that has very little to do with the Fed or how the Fed affects the rest of the world.
    China's monetary policy is largely useless because of the underground shadow credit system with its accompanying Ponzi schemes.
    If he's linking Fed money to the surge in agri and other commodity related speculation then he's just plain wrong.
    Commodities have exhibited large speculative moves for ages. Nowadays the world is playing so the moves and swings are wilder. Gary acts as though these assets now somehow have a floor beneath them now because of the Fed and an imminent Dollar collapse.
    Very Wrong.
    I still fail to perceive how the Fed is the all-powerful (in terms of market influence) entity Gary makes them out to be.
    In Mid 2008 everybody was under the grip of inflationphobia. Yes prices went up big time and peaked that year in many things, pork in China, bread in Indonesia, steel in so many countries, energy etc...
    But the rising crescendo of the inflation trade (which is the traditional bias of the financial sector since... forever, at least the 60's, along with imminent Federal government insolvency) led to most investors to lose even more money.
    Frankly this blog should steer clear of FX analysis.
    Gary wants to link US DX to broader asset markets yet amazingly he chooses to ignore the Yen.
    What was it he wrote?
    Two completely different currencies. Backed by two completely different cultures.
    Amazing stuff. I'm not coming back here anymore especially when I keep seeing Gary "calmly" but contemptuously dodge and ignore many important and critical questions addressed to him by the likes of Justin and many many others in the past, I have been here over 3 years now.
    There was one discussion I remember where Gary tried to show people gold and silver were "thin" and relatively small markets. His numbers were off the mark BIG TIME.
    I'm a staunch physical gold bull. I'm also a very strong-hand holder of PM explorers and producers but I'm not so sure how these will play out but I know should the shit hit the fan real bad for this sector I'll probably stop out at a net profit on everything.
    But I want to be exposed to reasonable, sensible and well-researched analysis of the fundamental situation.
    Sadly, Gary has decided to stick to widely held (definitely not contrarian, btw) mantras based on decades-old fears fed to retail investors and to institutions by the financial community, the inflation trade.
    I was a sub for three years. He's an excellent market operator, a great coach, but sorry, I have to say he has a fundamental misunderstanding of the situation, especially currencies. And he's such a sureshot about the Dollar, he can short it Futures or via long-dated options and make big bucks. Yet he always wonders why people play currencies because the percentage moves are smaller...
    James Turk or was it Sinclair have incorporated inflation and antidollar rhetoric into their marketing since forever. They have been right about Gold since the bull market began but they are clueless fundamentally. I realize most people don't care if they are making money but I can't keep reading someone who has the basic fundamentals wrong and is not interested in revisiting his assumptions.

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  89. TommyD:
    Stick to USD, CHF, and possibly NOK (should oil hold up above 50-55 dollars a barrel).
    I advise against Sing Dollar (which will tank once China's problems become inescapable.)
    I advise against Loonie (which will tank against USD mainly once Canada's banks are exposed for their ineptitude and own problems vis a vis Canadian real estate and their commodity trade financing once China begins to decline.)
    These are longer term reco's from my end. The Dollar going below 80 means squat to me.
    Gary's cycles are not the be all and end all of market analysis, I can tell you that 1000%.

    Advising people looking to diversify cash hold holdings to just buy gold and silver instead is plain ridiculous.
    I used to tell people that as well, but as a serious investor you have to realize that's a serious market position.
    People have currency needs and I don't care what anyone says, gold and silver are not currencies even though I am a big gold bull. Silver? Not so much. It's too speculative, too wild, and I think there's just too much of it out there, unlike what most PM-heads think...

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  90. Khalid,
    In case you haven't noticed the G-train continues to be right time after time and he continues to make money. Maybe instead of coming up with ridiculous rants against his so called faulty analysis you might catch a clue and realize this faulty analysis is making him and his subs rich.

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  91. K,
    You can claim that my fundamental analysis is wrong but I claim it's right on the money and I have pretty good company as Rogers, Soros, Schiff, Faber, Pento, Paulson, and the rest of the Austrian school tends to think like I do.

    So all in all I think I'll just stay the course :)

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  92. BTW one can leverage up in gold or silver to the same extent as currencies and make more money. Trying to claim trading currencies will outperform is just nonsense. Levrage is leverage no matter what asset you use it on. Your gain or loss is determined by the percentage move in the underlying asset.

    A 1% move leveraged at 10 to 1 in the dollar is still the same gain as a 1% move in gold leveraged 10 to 1.

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  93. Sounds like Khalids biggest mistake was losing his subscription to the SMT and trying to think for himself. ;)

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  94. Seems like many of the deflationist are angry that they short the market, went long the dollar, went long the 30, and hate the fact that life isn't working from a king dollar perspective. Being forced to rethink a wrong position is very humbling.

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  95. I sure would like to say "Thank You" to Gary. I have been out of the stock market since March, but my husband had a long position in AMZN in his portfolio. If you've been paying attention it hit the high of $151 and then reversed to $104. My husband wanted to sell this summer in disgust, but I told him to hang on based upon Gary's analysis of the market. He is out as of today with a pretty nice profit too boot.

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  96. Khalid must be getting popped! :)

    It gets harder to think of yourself as intelligent, and your analysis correct as the losses pile up. And his mention of Justin's thoughts is the icing on the cake. LMAO!!

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  97. Khalid says,

    "I honestly have no idea how Gary connects Fed monetary policy to inflation in China and India and "many emerging markets."

    Liquidity is global.

    Money doesn't have to stay within its own borders.

    See under: "carry trade".

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  98. Gary,

    It looks today like the runaway market will be the stock market.

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  99. i would be curious to hear Khalid's evaluation of the canadian real estate market and canadian banks. Canadian banks were rated as the safest banks in '09. Our real estate values, which really havent crashed, have now stabilized and yes, in some areas have pulled back slightly. Of course, the Canadian Govt recently raised interest rates precisely to contain the real estate. Nonetheless, the laws in Canada differ from the US. We cant just walk away from a mortgage here without recourse. How the Foreclosure works in Canada?
    Well, for starters, it’s helpful to recognize that, unlike in the U.S., you don’t have the option of mailing in your keys and walking away. In Canada, the mortgage debt is the homeowner’s – not the lender’s – and the lender can do whatever it takes to get that money from you, including garnish your wages. As a full-time Canadian real estate investor, you should be aware of the downsides to a loan or mortgage.So, i dont think the banks are too concerned about a crashing real-estate market.

    As for silver, you should do some research about silver production and usage over the past 2 decades.

    Peter

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  100. Wow Gary, you nailed--$USD is in the hurt locker. Whether or not you pegged the daily cycle low correctly at 81.88, today's chart (or "price action" if you will) looks plain awful.

    I try not to put too much stock into head and shoulders patterns, but a nice, clean one is playing out for $USD. After today's close we may be testing 80 rather quickly.

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  101. AGQ holds silver primarily through forward contracts (about 97% of its exposure) rather than futures contracts (about 3%), thereby carrying unwanted counterparty risk along with an additional tax burden. Futures contracts are guaranteed by the exchange on which they trade (NYSELIFFE for silver) and also carry the tax benefit of 1256 contracts... 60% long-term cap gains and 40% short-term.

    Forward contracts are privately-traded, negotiated contracts. Holders of AGQ have no idea what the terms of those contracts are (whereas futures contracts are standardized) and they carry full counter-party risk such that AGQ holders have no recourse if the party taking the other side (a party that is short silver, mind you) goes belly up.

    No, thank you. I'll stick with futures.

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  102. Anybody watching the REE's (rare earths). Holy Cow!!Whats goin on there? GWG.V, UCU.V, RUU.V,etc....

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  103. G,
    Don't you know tha Khalid is smarter than all the greatest investors in the world?

    LMAO

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  104. Justin and Khalid really belong at Wrong-Way TK's site. Good thing it's free because they aren't gonna have much $ left. :)

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  105. Thanks to Gary, I've paid off my house, cars and all credit cards, etc, and even started buying rural land. Zero debt, and loving life in the middle of the Greatest Depression.

    Thanks G-Train!

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  106. SLW not confirming this recent surge in silver. Silver seems to reverse it's move at the end. Many of the other silvers turned tail at the end of the day. I think these could be ready to correct this week.

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  107. Gary-UK here.

    Everyone ok here?

    Nice to see an Anon enquiring to my wellbeing.

    I'm enjoying this topping process. Not just in equities, but (sadly) in Gold & silver too.

    Give it 2 or 3 days, and we'll be headed down again very sharply, this is the top of the range for this little bounce.

    We're headed down to 850ish by end of November.
    Gold to around $1000, silver back to $15 or so. A big liquidation event just about to start.

    I'm loaded to the hilt with shorts and long-term puts.

    Deflation will rule the world for the next few months boys, don't panic, gold & silver will be back, but prepare for some stress & pain.

    I'm going to enjoy commenting as this unfolds!!

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  108. Does anyone else think Gary UK is in denial?

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  109. Fish n' chips UK peeking in again as expected!

    You were loaded to the gills the last 6-8 weeks, so don't visit us pretending it's an entirely new bet.

    You got smoked, and even if you get it right this time, you account is already decimated.

    I thought you were already dead, so good to see you. LOL!

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  110. Gary UK: I have been on this blog for a good while now and haven't ever seen you be right for more than a short time. This "topping process"" has been going on for longer than you can possibly have remained solvent if you are acting on what you are saying. Some day a market (gold or stocks) will go down and you'll crow how right you've been. (I swear I do not get in what way people like you get off on posting on blogs like this. Human emotional needs are absolutely fascinating!) Is there any possible event where you would finally say you were wrong? How about if gold goes to $1500? Will that be part of the topping process too? How about SPX at 1160? I am not predicting these things, but want to know if you ever can be wrong or if you're always "just a little early in the topping process."

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  111. Gary UK got smashed immediately after his last "all in" call.

    Rarely is anybody that wrong just out of the gate. What a horrendous showing. No wonder he's been gone the last 2 months.

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  112. I don't think that's actually Gary UK. He usually posts under "Gary" and not "Anonymous" no? See his profile attached to comments here: http://smartmoneytracker.blogspot.com/2010/07/beginning-of-end.html

    'Tis entertaining nonetheless.

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  113. Gary UK's puts got vap-o-rized!

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  114. Yeah and Justin's shorts and long dollar are getting hammered. Meanwhile the G-train just keeps on rollin.

    Choo Choo :)

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  115. Ol' Yeller is getting a little frisky after hours:

    http://www.finviz.com/futures_charts.ashx?t=GC&p=m5

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  116. JOHN/ONLOOKER,

    Guys, no offense, but I'm gonna be a bit rough here. Sorta a tough love.

    This isn't high school and you aren't children I assume. If you can't do a *simple* news search on IAG and READ about what just happened, then you shouldn't be in the stock market in individual stocks. You are way over your head and bumping around asking people on message boards is no way to go through life.

    A simple news search on the 8th (or after) when the stock started diving results in MULTIPLE announcements that they JUST APPOINTED A NEW CEO. !!

    I assume you guys realize that's a pretty big position for a company. No?

    Well...if you then look at his resume, you will see he is from the OIL and ENERGY sector and has no apparent Mining or Precious metals experience. I assume you realize this could be viewed as important news as well and reason people might not be happy holding anymore.

    Like I said. A bit rough of a post, but whenever I see people randomly wondering about 'what's up' and can't even determine that the company announced a NEW CEO from looking at the news, I want to lay out a bit of a talk and say 'get it together'. If you were kids asking about why the sun is yellow, you'd get some leeway.

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  117. wow is slw stretched tight.
    what a game

    --TZ

    ReplyDelete

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