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Friday, October 22, 2010

BOTTOM IN SIGHT

Trying to pick a bottom in the gold correction at this point is probably a low probability strategy. The simple fact is that until gold forms a swing low there is no possibility of a bottom. So someone trying to jump in front of the correction might as well wait at least until a swing forms.

Ultimately though we need the value investors to step in to the gold market. Of course its tough to guess ahead of time at exactly what level we are going to get enough value money come into the sector to halt the correction.

I do have a couple of ideas of where that's likely to happen, being somewhat of a value investor myself.

The first level that should start to bring in big money is the psychological $1300 level. That level may or may not bring in enough money to halt the decline. We will only know after the fact of course. But if one wanted to try and pick a bottom that would be the first level to make an initial purchase.

A much safer bet in my opinion would be if gold can correct  enough to test the $1265 breakout level. I expect enough value money will enter the gold market at that level that it's unlikely gold will decline significantly below that point.


We have a bit of a dilemma right now. Similar to what happened back in January. Gold has begun to correct but the stock market is still resisting. As soon as the stock market rolls over into it's daily or intermediate cycle decline it's going to put added pressure on the gold correction. So trying to prematurely jump into the gold market here is risky (in so much as one will probably experience a drawdown. Of course being a bull market any timing error will eventually be corrected).

In a perfect world the dollar rally will strengthen and test 80 and in the process force the stock market to correct and gold to drop down to test the $1265 breakout. That's the point where I would advise investors to step back into the market heavily. I expect you will have a lot of company at that point and your chances of a significant drawdown will be drastically reduced.

154 comments:

  1. My cyclical indicators says that we haven't already hit the top on USD.

    http://img838.imageshack.us/img838/6509/eurok.jpg

    There's still a cycle to close. It is a left translated one, and have lower top than the last one. So almost sure a lower bottom, i suppose around 1.3650-1.36.

    Timing band for low is 40 to 60 market hours (forex) from now.

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  2. GGuy,

    Interesting cyclical indicators.

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  3. These are not my indicators. It is just a drawing to make it look easy :)

    Notice how, as we approach to the top of the higher cycle (the daily cycle) and then decline, smallest ones tend to transform from left to right translated. The current cycle is "leftier" than the last one, if it does not go over the max from now on, so "probably" (that mean there are NO FREE MEAL) it will go under 1.37 on close

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  4. From right to left, NOT from left to right

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  5. Some additional thoughts to my note from last night:

    Since we are only 6 odd trading days away from Elections / Fed meeting, I expect the SPX to form one of Gary's coils next week, with a false breakdown post election / Fed meeting and a sharp rally to end the year.

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  6. This ANV is down over 12% this week. Tough not to go bargain hunting on price alone, but will wait for gold to bottom before buying size even if I have to pay a higher price.

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  7. How much of a movement in gold would there be to form a swing low, using the current price action as an example? Would it have to rally 20,30,40 points? Missing part of a rally is better than "catching a falling knife" :*)

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  8. Gold would need to move above $1349 to form a swing today.

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  9. I take that back. Gold made a lower low today so a move above $1349 would form an outside day.

    It's impossible to form a swing today.

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  10. maybe today form a star formation and a swing low tomorrow

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  11. From past exerience I would be nervous to jump in before the stock market corrects.

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  12. The one thing that would convince me to jump in before stocks correct would be for the dollar to drop back below 76.14.

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  13. Tempting to buy GDXJ here for a bounce. It hasn't moved below Tuesday's low of 33.11, even though gold has been lower.

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  14. Public Service Announcement from the FED:

    As your unelected, unaudited leader, I assure you that everything is OK. Please do your part to spread the word.

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  15. SIL hasn't traded 1 share in 12 minutes so far.

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  16. Gold to Hit $2000...

    http://www.cnbc.com/id/39795316

    More reports like this will end this sell off sooner rather than later.

    My very weak wave counting has gold hitting 1295 - 1300 fairly soon (a week or 2).

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  17. Dollar going up but gold isn't going down today. Forming support perhaps?

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  18. Right here reminds me of the setup before the intermediate decline in Jan/Feb. When the S&P rolled over from a right translated cycle the miners came under severe selling pressure for an extended period. That resulted in the worst troll infestation I've seen around here, as well as plenty of Gary-bashing. It also provided the best buy point of the year.

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  19. Im in the camp that we wont see 1265. Even 1300 is iffy, there is way too much buying pressure. The OI hasnt dropped as significantly as people thought.

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  20. If the stock market corrects buying pressure will dry up in a heart beat. If the dollar can rally to 80 I expect that to happen.

    Don't know if it will but investors need to be mentally prepared for it just in case.

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  21. Gary, isn't a swing low forming today in the $?

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  22. Maybe it could be called a short-term swing low, since a larger one formed earlier.

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  23. Yes we are. However swings are only significant when we are in the timing band for a trend change.

    Since the dollar has already begun a counter trend rally the next significant swing will be a swing high as the cycle tops.

    Unfortunately cycles are mostly worthless for spotting tops so it's pretty tough to determine in real time which swing high will actually mark the top.

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  24. MUST SEE VIDEOS!!!

    http://www.youtube.com/watch?v=9kPCYcBm-C8
    http://www.youtube.com/watch?v=KRreoB63Dq0

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  25. Any opinion's on the Tocqueville Gold Fund making up a good part of a core position?

    It's been around for 12 years, outperformed bullion, GDX, GDXJ, has no load/tran fees and more importantly being a mutual fund the temptation to keep trading is reduced.

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  26. I don't see anything wrong with it.

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  27. Poly-
    they do not seem to have much silver (at least in their top 10 holdings) Although that obviously has not hurt their performance. I have only heard pretty good things about the fund.

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  28. Gold is flat. Dollar is flat. SPX is flat. HUI is up 0.8%, GDXJ up 1% SLW up 1.5%.

    Interesting development......

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  29. bonocelli,

    I especially liked the 2nd video, as it was news to me. Somehow, I'm not surprised!

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  30. I hold a good chunk in TGLDX (Tocqueville) and I think it's an excellent choice. Clearly its performance throughout the bull mkt has been exceptional, and even more so since the '08 bottom. A lot of good junior exposure, as demonstrated by the outsized outperformance.

    And I really like the fund manager, John Hathaway. Lots of proven experience in the field, and long time with the fund. And he's no doubt going to be able to pick juniors better than I could, and has demonstrated his ability to add alpha.

    I also hold some USAGX, USAA Precious Metals, which has a similar record.

    The expense ratio isn't bad for either, considering their performance record. And I agree that it reduces the temptation to trade, especially with TGLDX with the 120 day redemption fee.

    As for silver holdings, I think that's what your going to see no matter where you look in the fund arena. It's just harder to get pure silver miner plays. So I also hold some SLW and SIL to get a bit more silver punch (hopefully, that is).

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  31. There's a bit of a H&S formation on the $ 30 min or less chart. It seems like if it breaks above about 78 that it's likely to continue higher, and if not then it's going lower and we've seen the daily cycle high.

    Seems like a decisive level (in that area at least) to watch at this point.

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  32. Gary - when I get ready to pull the trigger on SIL do you recommend a market order or limit order. Volume is not as heavy as other PM ETF's?

    Also, does anyone know of desktop stock ticker with price and volume displayed by transaction (just like they scroll across the screen on CNBC)?

    Thanks

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  33. I usually start with a limit order and if it doesn't fill and the stock starts to get away from me I just change it to market. It's not like we are trying to time a perfect day trade where a couple of pennies makes a difference. We shold be holding the position for at least a couple of months.

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  34. The premium on CEF is down a fair bit recently. It's at 4.2% now ( Central Fund ) and was at about 8% not too long ago, which is close to its 5 yr avg of about 8.5% ( CEFA )

    Something to watch, as buying a low premium and selling it at high premium (which generally comes at intermediate highs) is an interesting strategy.

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  35. Personally I always use a limit order, especially for something relatively thinly traded like SIL. It'll keep you from getting surprised or taken advantage of (especially in this HFT mkt).

    If the market's moving up/down fast and you really want to buy/sell, you can always just set a limit well away from the current price and you should get the best execution, just as you would normally with a market order.

    But you won't get some crazy fill way above/below the market. It's not likely to happen, but it could. We've seen enough of these anomalies of late that it's worth the insurance. That's my take on it.

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  36. I don't think we are done going down yet on gold. Low next week around 1300ish.

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  37. Gary: maybe you should open the website up again so we can see what the trolls think? On a related point, I'd love to see at least one headline proclaiming the bull market in gold is over. Maybe at $1300...?

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  38. Looks like gold is setting itself up nicely for a potential swing low on Monday, and being on Day 30 of the daily cycle... which typically runs 18-28 days and rarely exceeds 32 days... one could reasonably guess at a rally out of here.

    Personally, I'm already fairly heavily exposed, so I'm willing to give up the first part of the rally to get further confirmation. I'll probably top off my book once the dollar cycle fails.

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  39. It was too easy to buy on wed and there is still too much weak hand money available on the table.

    Lotta late chasing longs from the last few weeks are holding their breath after tues and "hoping".

    Lotta people who rushed in on wed are holding their breaths and "hoping".

    Hoping doesn't usually work in the market. In fact, "hoping" usually indicates you are on the weak side of a market and the guys in NY will know it (they can SEE their own customer's accounts) and gun for it.

    Furthermore, I would argue that the current state of the metal market will cause bottoms to be short and explosive. In other words, when we hit 'the' bottom in gold (and the guys in NY will know it) we will jump out of it HARD. The fact that gold and the stocks are just sorta grinding around for 2-3 days shows we aren't there yet.

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  40. These are the times that make riding the bull so fascinating. I am becoming more aware as this bull goes on of the forces that reside within my mind that make it so difficult to make wise investment decisions. I firmly believe that understanding these forces and not succumbing to them are the edge one needs to perform well in the markets.

    Greed and fear both lead to impatience. How hard is it to wait for confirmation of a bottom? The current correction is part of the natural rhythm after the rally, but I notice how those commenting on various blogs are wanting to pull the trigger and buy with each minimal drop. Why? Impatience....A gamblers addiction to playing. As Gary points out, it is clear that no sign of a bottom has occurred yet. Waiting is the hardest action to take, but a critical skill in making good entries and exits.

    Fear leads to indecision, and consequently, and a lack of action. How hard is it to buy when the confirmation comes? Say, a swing low. I've had the voice pop up "Oh, I'll wait for a new high." The high comes, and its "Shit I should have bought the low. Now what if I buy and we correct again?"

    I'd like to thank Gary for being a guide in helping me act differently than I did before. I am buying swing reversals near bottoms in the face of fear. I just buy amounts that don't freak me out if I'm wrong. Over the past 18 months or so, these fractional buys have lead to an 80%position in PMs and stong hand status. This correction has not tempted me in the least to pull a sell trigger. I'm riding a bull. I am however anxiously awaiting a chance to add to my positions.

    Waiting sucks. But man its been worth it!

    -Waiting out consolidations (not losing my hand).
    -Waiting out corrections (adding to positions when they signal bottoms through cycle lengths, sentiment, and swing reversals).
    -Waiting out rallies (holding on to core positions and riding to higher highs and not letting go to book profits too early).

    The best to come of this is the recognition that most people in this market are run by their fear and greed, and don't recognize the role of those drivers in their action and inaction, and I am seeing how that gives me an edge.

    Here's to the first secular bull I have had the pleasure and pain to ride.

    Mitch

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  41. DG has a good point, the trolls were a fine indicator. It's difficult to meausure the emotional level without them.

    Maybe just for 1 hour/day or something..call it Troll Hour. :)

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  42. At least let GaryUK and Justin back in....they were the best and easiest fades of my entire career!

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  43. As far as guessing at a low, I'm in the 1250 to 1265 camp. That would create fear. I think too many people are expecting a correction to 1300, and it wouldn't create much fear.

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  44. It appears the G-20 meeting this week will swing the dollar one way or the other. We should know by Sunday night if the dollar is going to break lower or extend the rally.

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  45. If everybody gets together to celebrate one day after getting rich it's gonna be over.... burritos and beans?

    No, please. Don't make me spend $11.99 for a meal!

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  46. Will that include a Corona, or is that extra?

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  47. With a Corona it'll be more like $21.99. :)

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  48. The FT has been pushing against gold with two recent Opinion pieces.

    One by a prominent insider who suggested selling all of the gold in Fort Knox now at the Peak. This guy: http://www.iie.com/staff/author_bio.cfm?author_id=122

    And then a really weak piece by a tinpot BU professor why gold is going down. The FT put this article on the banner of the front page of the paper.

    (Yes, I subscribe to the FT to see how the enemy is thinking.)

    These two articles were extremely poor from an objective position. It shows some desperation among the power elite Keynesians.

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  49. UIn case anyone is interested, I started a blog to record my musings on gold miners, hard assets, etc.

    I am looking to educate and to post trades and ideas I have.

    It should be fun.

    I have a very large gold/miner/hard asset portfolio for a very long time.

    I beleive the age of financial assets have run its course, and hard assets will become dominant.

    Stop by, I'll post frequently.

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  50. My site is www.arum-geld-gold.blogspot.com

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  51. I'm throwning in the towel for good . aftertaking Gmans advice on FAZ i've had enough and i m not blaming gary AT ALL thats not my intent . though i use to slam him in '06 quite a bit . my beef isnt not with gary at all he even posted hes was getting out of FAZ . its just the stock market in general , imo there is just no ryme or reason to any of it , no volume etc . commodities is the place to and again this is in , in no way a shot at G man . More a shot at myself ... Jake

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  52. What i still have in my portfolio that makes sense to me anyway , DBO , GLD,UNG (I give that one lots of time) , UND . Ones that make no sense , CHK , why dont ask me ,and TWM , TZA ,TBT , and TMV . for one thing I think I've about had it with the majority of ETF's ! I'm really thinking of blowing out all the losers like TWM and TZA , but some are worth so little now that I really dont have much down side left . and no I'm not blaming anyone but myself for any of it !
    Jake , ps sorry for the rant but I dont post often on here anymore .

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  53. Phil,

    Agreed. The stock market has been a ridiculous lace to make money lately. Too much indecision. But, the PMs are rocking over time. Have you been in them? Why not just get on the bull with a small position at the next swing low and ride for a a few years....or until the C-Wave shows signs of being near its end? Buy major dips and ride the rips. Its been rewarding.

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  54. It appears that almost any kind of an up day for gold & silver will create those turning points on Monday.

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  55. The market is a heat seeking missile that finds your emotional flaws and then blasts you in that weak spot. It might be fear, greed, inability to take a loss and admit error, ego in other forms, indecision, poor analytical skills, whatever. It is a glorious game that keeps you on your toes---positive and flexible; cautious and bold; patient and aggressive. It is, therefore, most definitely not for everybody. This is a somewhat unusual market to be sure, but every market is unusual in some way or everyone would be rich! If you are losing it ain't the market as risk management and discipline ought to protect you regardless. A mediocre year makes sense. A bunch of losing trades doesn't. Most people guess "Hey it's a top" short, then hang on and get killed. That's not the market doing anything weird. Sometimes indicators work and sometimes they don't. how you deal with it when they don;t will tell you whether you are made for this game or not.

    Gary's way is a lot easier, though the big drawdowns are tough. Once you get a nice profit in gold, though, stop looking at where it was at the high. It's not relevant. It's going from $500 to $1500 and will jiggle all along the way. So?

    Anyway, forgive the rant, but after 35 years of trading I feel like I may have learned something (or I'd be broke by now, I guess) and wanted to discourage the non-traders from trying it---you know who you are!---and endorse Gary's (and Livermore's) Old Turkey approach for almost everyone. Have a great weekend everybody!

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  56. If you give UNG lots of time then it will take you to zero quickly because the fund needs to constantly roll over the future contracts it holds. It's a bad instrument unless you are short.

    If you want to bet on natgas (I wouldn't) for the long term then go after a proxy like CHK.

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  57. Jake,

    I don't understand your issue with FAZ? The day Gary said he was going to purchase it was about $12.35, he got out when it was about $12.18. Gary can confirm his trades, but today it closed at $12.31. Really that's much less of a move than AGQ over the last few days.

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  58. Jake,
    Did you take a huge position in FAZ even though I warned everyone to only take a very small one?

    The only place one can safely take a huge position is in precious metals.

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  59. http://finviz.com/futures_charts.ashx?t=DX&p=m5

    Is this accurate? (Or a bad print)

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  60. I'm hanging on to my small position in FAZ and SH for now. Both seem to be sitting on firm support at least for the time being. I guess if we break higher next week I will dump.

    Gary-

    Why are you being cautious about adding (if the market corrects it will put down the miners like in Feb)? I thought the miners got caught in the yearly cycle low then, this time we are deep enough into the cycle that any brief dollar rally to 79-80 will only cause a miner break down in gold/miners if any. I really like the fact that 500 on the HUI is hold and they are firming up at that level. Maybe one quick freak out day next week and a reversal is going to be this cycle's end game? Also, I'll never forget how the miners barely batted an eye during the flash crash day, many were green in the middle of that insane day.

    TZ from the other post-thanks for the feedback regarding picking juniors and just going with GDXJ. I've been trying to pick some diamonds in the rough for a longer term buy and hold...I think this total % of my port will only be around 5%.

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  61. Daniel, if that's Eastern Time, that was an hour ago. My INO chart doesn't show that.

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  62. The conspiracy guys call that a "fake print" when the TPTB signal where they are taking a market. We had a 3400 fake print on gold a few weeks back.

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  63. Jay,
    I'm not being cautious, I'm invested 105% :)

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  64. Driver-
    Yes that was EST-- Why I thought it was a bad print? Just kind of wierd?

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  65. @ Phil

    I must second Frank's warning re: UNG. All of those futures-based ETFs have built-in headwinds that make them exceptionally poor holds.

    If you don't like CHK, I suggest shopping for another producer (you might prefer ANR to CHK if you want to stick with the big boys) or one of the gas trusts, which usually pay a fat dividend and are particularly worth considering for tax-sheltered IRA accounts.

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  66. That dollar print seems to be a data error with the active (DEC) contract. Check EUR/USD or March futures and you won't see that weird quasi-flash crash.

    Either that, or the Illuminati are tanking the buck on Sunday and drinking all of our milkshakes. ;-)

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  67. Interesting article that will be of interest here, I'm sure:

    Gold Sentiment Turns Slightly Bearish

    Take it for what it's worth, and beware of confirmation bias.

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  68. Actually the public opinion poll confirms Swenlin as it dropped considerably this week.

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  69. I noticed that both Jimmy Rogers and this dimwit prof from BU who wrote an anti-gold op-ed in the FT cited 95% bullishness in gold.

    What the hell are they citing? Is it some Prechterite BS sentiment indicator?

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  70. Here's an indicator (or opinion) that gold sentiment is restrained.

    http://www.goldalert.com/2010/10/amazing-contrast/

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  71. Gary: Jason shows silver sentiment the highest since near the top in 2008 at 81%+ , while gold is much more restrained. Is this significant to you, and/or might it mean that silver will underperform going forward until this moderates?

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  72. You know I've never even bothered to look at silver sentiment. Silver will track and magnify the moves in gold. As a C-wave approaches the top silver will go nuts, usually driving the gold:silver ratio down into the mid 40's. As of today the ratio is at 57. There's still a lot of room for silver to outperform before we need to get worried.

    Since I expect this to be the largest C-wave of the entire bull market I wouldn't be surprised if we see a new low in the gold:silver ratio, maybe even to 40 or the upper 30's.

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  73. Thanks, Gary. The gold sentiment is at 69% so nice and neutral.

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  74. Although I'm leaning toward a correcton to the 1250 range, it would make sense and be in the nature of the bull's current mood to just turn back up, haul ass higher, and leave everyone who's holding out for a deeper correction to get left in the dust again. Hmmm...

    Yep, next swing low is gonna get some of my attention.

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  75. This comment has been removed by the author.

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  76. I think it was a bad print. I don't see it on any of my other sources.

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  77. Flash crash in dollar.

    http://www.barchart.com/chart.php?sym=DXZ10&t=BAR&size=M&v=2&g=1&pct=&p=I:5&qb=1&style=technical

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  78. Gary and everyone ,
    thank you for the responses and help. Gary yes it was a small position and only took a small loss (600) ... and and again I'm not blaming i understand most trades are not right and its money management . I enjoy reading your post and newsletter daily when i can . and by the way I'll take everyones advise about etf's and ung specially . I was beginning to see that for my self .. perhaps I'll just blow them out and move on sooner than later ... thanks again . Jake

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  79. GARY,

    When you send multiple daily emails (like the weekend report) can you indicate what is different in them for our benefit?

    I'm staring at two weekend reports that are different in size and flipping back and forth in a frustrating game of trying to determine which one has whatever correction or change.

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  80. Oh...due to the nature of internet email, it is NOT possible to use the time received as an indication of which is the 'correct' one. They might arrive is reverse order. Email is not guaranteed delivery (or guaranteed order either).

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  81. "Oct. 23 weekend report"
    ->
    "Oct. 23 weekend report (v2)"
    ->
    "Oct. 23 weekend report (v3)"

    ???

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  82. oops, I deleted one. I thought they were the same?

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  83. I only sent out one weekend report. I don't know why you got multiples. You can always go to the website if you need confirmation or miss a report.

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  84. Anybody seen any worthwhile news or updates from the G20 meeting?

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  85. Everyone pledges not to devalue their currency which we all know will be reneged on. Now we just have to wait and see whether the market temporarily believes the BS or whether it sees through the noise immediately. we should know Sunday night or Monday morning by the latest.

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  86. Timmy also said to be prepare for volatility in the currency markets. He must be referring to the upcoming destruction of the dollar

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  87. This comment has been removed by the author.

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  88. Is the ETF DBO ,(long term), just as bad as a hold as UNG long term ?
    thank you very much for any input . I have a lot of that along with some GLD ( 1k shares which that I am holding on to like Turkey )... I'm finally taking my head out of the sand and into the shameful reality of how bad I've been doing with my investment portfolio ..
    thank you , for any input .... Jake

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  89. Jake,
    First off let's be clear. There is only one secular bull market left and that is in precious metals. In the PM sector you have a safety net under you.

    There's no other asset that you have that luxury, with the possible exception of agriculture, although ag is also effected by weather, pests, plague, etc. so its still more risky than PM.

    If you are going to deviate from an Old Turkey investor approach in PM then you add in a timing factor to your investing. As we all know timing is tough to get right on a consistent basis. I think I can say unequivically that it can't be done consistently over a long period of time. Since that is the case the only way to make money by trading is to control risk.

    That is the single most important aspect that every trader has to learn in order to be profitable. If they are unable to learn that rule they are never going to be profitable.

    That complete dependance on risk control strictly limits how much one can make as a trader. You simply can't ever swing for the fences if you are going to be a trader.

    If you want to make the big bucks then you have to give up the trading strategies and become an investor and you have to ride a bull market. This is how virtually all billionaires are made.

    BTW almost all ETF's have some kind of decay. GLD and SLV are mostly due to the small management fee so they tend to track pretty close. Ultra funds track really well as long as the underlying is moving in the right direction but they are not suitable for multi year holding periods.

    I know that in the past you had a very pervasive bearish bias. You absolutely must eliminate that in order to make money unless you are willing to spend hours and hours researching companies to dig up the sick ones.

    You are never going to get an edge on the short side by only looking at charts. That is a fools game and one that your broker loves for you to get tangled up in.

    Mathmatically it's almost impossible to get rich by shorting. However it's incredibly easy to make a fortune riding a bull market and for all intents and purposes all you have to do is buy and then go on vacation for several years. I have a Roth account that I made purchases back in 04 and have rarely even looked at in 6 years. Most of those positions are up over 1000%.

    It didn't require me to do a damn thing to make a small fortune. That's how one gets rich, not by trying to time every wiggle.

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  90. BTW there is still plenty of time in this bull market for one to make gigantic gains before this is over but if what you have been doing hasn't worked then I think I can safely say that it's not going to all of a sudden start working.

    If it's not working then try some thing different.

    Einstein said the definition of insanity is doing the same thing over and over expecting to get a different result.

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  91. Lest I forget DBO is an oil fund. Oil was the leader of the last bull market. It's not going to do much during this one, the fundamentals are impaired.

    I wouldn't touch energy with a ten foot pole anymore.

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  92. thank you Gary , I just started dumping my dogs for monday and start from scratch with what I have left . Dumping all of my UNG , TZA,and also 500 shares of DBO just so I can close down one account I dont have much left in anyway were my TZA's were sitting . Also dumping 1500 shares of my TWM that I bought a long time ago in the 70's and 60's . kept 2 k of that for now I picked up 20's and under... thanks again for your time Gary . And in '06, and '07 , it wasn't anything personal against you more against myself and aggravation . Jake

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  93. Gsry, so according to Yahoo News:
    A communique to be issued at the conclusion of G20 finance ministers' and central bank governors' meeting will state: "We're all committed to moving toward market determined exchange rates that reflect underlying fundamentals and refrain from competitive devaluation," said an official, who spoke on condition of anonymity.

    Based on this statement, how do you think the dollar is going to react on Monday? TIA

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  94. Yes that is what the official statement is going to say but here is what is really going to happen.

    Geithner doesn't consider QE as currency manipulation so the Fed is going to continue and then he will blame the market for a weak dollar not the true culprit, the fed and it's printing press.

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  95. After last week's down action in metals, it would be to pattern if we opened lower mon/tue and made a bottom then. I *really* hope last week wasn't it, but gary might be right.

    (Note that this is another example of the benefits of futures over etfs/stocks. You can take a position starting at 6pm tonight instead of waiting till mkt open monday if you are so inclined.)

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  96. One of two things is going to happen. Either the market is going to see through Geithners BS and the dollar starts to tank immediately and is then exacerbated at the next Fed meeting OR the dollar temporarily buys the nonsense that came out of the G-20 summit and continues it's counter trend rally until Nov. 3 when Bernanke spits in the face of the world and initiates QE despite agreeing not to manipulate our currency.

    At which point the dollar collapse resumes with a vengence.

    The sad fact is that there is nothing that can halt the dollar collapse at this point. The damage was done with the first round of QE. In order to halt this Ben would have had to start draining liquidity at least a year ago.

    One can't turn the Titantic on a dime after all.

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  97. How does Geithner speak with a straight face? Oh yeah, he doesn't. His brows twitch and furrow, his neck is cocked ridiculously to the left, his shoulders hitch into his ears, and his lips quiver. Even with the greatest poker face in history, his lies are so blatant it amazes me that anyone gives him credibility. The poster child for what is wrong with the policial system. Integrity is not a priority. Eventually, the public will force a change in this regard.

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  98. The next guy will be no different from Geithner.

    It's amazing how people seem to think that the individual personalities are what matter. All politicians are the same.

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  99. $usd looks like going to 74 or 70

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  100. It certainly will eventually but I don't see that the forex markets are open yet.

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  101. Geithner is doing *exactly* what the people who put him there want. And he is doing it very well. Others who proclaim the 'cluelessnes' of the treasury or fed simply don't understand what their goals are. Note: it isn't what you read on their websites.

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  102. http://finviz.com/forex.ashx

    I believe the forex market opened 15 minutes ago.

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  103. Sydney 4pm central
    Tokyo 6pm
    Frankfurt 1am

    http://forex.timezoneconverter.com/index.cgi

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  104. troll meter says dollar gains this week...

    is the troll meter ever wrong?

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  105. Maybe someone can help me: I have two sources for dollar quotes:
    http://www.marketwatch.com/investing/index/DXY
    and
    http://www.marketwatch.com/investing/index/DXY
    Marketwatch says "spot price" and shows the $ at 77.39 down 8 cents right now. Finviz show the dollar at 77.59 up 84 cents right now. What's the deal? That's a pretty big difference. Which is more "real world" accurate for what's happeningg right now? TZ?

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  106. If it can hold that into the open we should have our swing low.

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  107. Gold is up about $5-7. Would be more helpful to post concretes instead of "gold flying" for people who might not have an easy alternative means of trying to determine what 'flying' means.

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  108. GARY,

    Where, historically, did you come to the belief (or recognition) that a 'swing low/high' was such a significant demarkation of a change? Are there statistics on it? Did you use to use other means?

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  109. In other words, why does exceeding the high of a day when a security also made a low make it significant?

    And if something trades 24hrs a day,then what "high" do you use when you get a "low"? The entire 24hr window? With the low in the middle of that window? or on the end?

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  110. "If it can hold that into the open we should have our swing low"

    Sorry which market were you talking about Gary?

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  111. TZ,
    A swing by itself is meaningless. What I am watching is the duration of the current daily cycle. It's now overdue to bottom.

    Since a bottom can't form until we get a swing it's a pretty good tool for spotting the bottom as long as we are late in the timing band for a cycle low.

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  112. I'm certainly not going to get excited b/c gold is up on Sunday evening. Let's see what happens by late Monday morning.

    Fubsy,

    Geithner is my boy. He does what he's told just like myself. Front men is all we are. All hail the "new world order" and it's one government no matter what the people want!

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  113. Most Americans along with other citizens of the world think we got rid of slavery a long time ago, but even slaves had the necessities of food and shelter for all their efforts.

    Not much different these days, except the dupes have "freedom", even though most can barely afford their necessities. But do not worry under any circumstances, everything is OK.

    Keep your nose to the grindstone, don't ask any questions, and I promise it'll be OK.

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  114. Fellas, please excuse me for the rest of the evening. My buddies at Golden Sacks just rang, and I've been called back to the presses.

    http://www.zerohedge.com/article/goldman-fed-needs-print-4-trillion-new-money

    Personally, I think $4 Tril is a not even close to what we'll need, but in any case, it'll be ok.

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  115. GARY:

    As per your "portfolio change"...

    "...if gold is positive at the open i'm gonna..."

    actually the time to wait for before deciding to buy your position is 10am eastern. If gold is gonna drop, it usually does it by then. After 10am you are mostly in the clear. Just my 2 cents. 9:30 to decide on the trade is too early historically, but call it as you see it.

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  116. http://www.gold-eagle.com/editorials_02/speck062802.html

    I'm aware this site goes to 2002, but i've see the same chart applying to recent times (and confirms my own observations).

    Note the danger of the 9:30-10am period. It's only 30min past your 'open' decision point, but historically it means a lot.

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  117. If at the open gold is positive then I'm going to assume it will also hold above $1315. That means we will have a swing low.

    I'm not particularly worried about a drawdown this late in the daily cycle. What I am worried about is a gap and run the gains 3-5% in the first 15 minutes of the market.

    I don't want to miss that run so as long as we have a swing in place I will buy and not worry about any minor drawdown.

    It is a bull market after all and in bull markets timing mistakes get corrected.

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  118. same pattern; this chart goes to 2005

    http://4.bp.blogspot.com/_s6MoaWlpg6A/S7JPYgMBFSI/AAAAAAAAAGQ/FtGRR-Zddfs/s1600/speck120605b.gif

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  119. up to 2006; same
    http://www.caseyresearch.com/images/1251465898-speck102706.gif

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  120. GARY,

    Comment understood; I remember what happened last time you took a bottoming trade and I didn't follow along. I'm staying frosty on this one.

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  121. i hope tomorrow when i wake up in the morning we will be back at $1370

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  122. Gary...

    This same blog is on Toby Connors Gold Scents. Which one of you wrote it?

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  123. I answered your question on the GS site.

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  124. The GS site is a partnership between me and my publisist. We had to have a seperate site so as to track traffic that he drove with his marketing efforts. His commission is calculated of sales from the GS site.

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  125. So you're actually neither Gary Savage nor Toby Connor and these are your pseudonyms?

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  126. Any particular reason for the belligerent attitude?

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  127. What do you find combative about a straightforward question? I'm just trying to decide whether or not I made a bad decision in giving you $225.

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  128. Have I given you bad advise? Is there any thing about the newsletter that makes you think it's not worth the meager $25?

    If you want I will refund your prorated purchase price and take you off the mailing list

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  129. I'll have to think about it. Actually I've been happy with your analysis so far.

    It just seems strange you'd use an alias, or more than one, and be so defensive about it.

    Why not just truthfully answer the question?

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  130. Bailing..

    Just throowing in my unsoicited two cents here. I've been reading Gary's blog and letter daily for appx 18 months now. In that time with his guidance I've caught appx 5 bottoms on PMs, and have held through this C-Wave. My gains are steadliy becoming meaningful. I have learned/am learning tactics that i was not aware of before, and that Gary puts together for consistently actionable analysis of the markets....not just Gold.

    He also has been transparent about the GS site. That's it. I'm an appreciative subscriber.

    Mitch

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  131. I answered your question. Did you not believe me. Here is the answer again just in case you missed it.

    "The GS site is a partnership between me and my publisist. We had to have a seperate site so as to track traffic that he drove with his marketing efforts. His commission is calculated of sales from the GS site."

    Toby Connors is a ghost writer name we chose to author the site under.

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  132. This comment has been removed by the author.

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  133. We also call him "the dude", "his dudeness", or "El Duderino" (if you're not into the whole brevity thing)

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  134. It's just a slight disconcerting to see the same exact comments attributed to two different people. You can understand that, no?

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  135. fubsy cooter

    Thank you for the two scents. I see that Gary/Toby is highly respected here and on GS.

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  136. Gary, I have to say I'm also a little troubled by the discovery of this Gary/Toby dichotomy. Not because of the advice you provide in these websites (I'm a subscriber!) but by your need to create all of these multiple identities. Just curious, is Gary Savage your real name, yes or no?

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  137. Cut the BS and let's stick to the business of making money!

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  138. It is incredibly rare for gold to be up more than 2% in one day, so tomorrow should be interesting!

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  139. some good comments from Zeal:

    http://news.goldseek.com/Zealllc/1287765505.php

    Dollar-Neutral Gold
    **

    The benchmark US Dollar Index, which tracks the value of the US dollar relative to 6 other major currencies, has been decaying rapidly since late August. Topping the day before the flagship S&P 500 stock index (SPX) bottomed, the USDX had sunk 8.0% at worst last week by the same day gold hit its latest interim high. Over this exact 7-week span, gold rallied 11.3%. But the weak dollar was responsible for the great majority of gold’s strength.


    This revelation has all kinds of implications for gold, not the least of which is this metal’s global rally was far more muted than our American dollar-centric perspective suggests. And since gold hasn’t rallied as far and fast as we think here in the States, its odds of being overbought are much lower. And if gold isn’t yet overbought, then there is no need to fear a correction. Today’s upleg has plenty of room to run higher.

    **

    The bottom line is American worries about gold getting overbought are based on a distorted dollar-centric worldview. In dollar-neutral terms as represented by euro gold, this metal has actually been merely consolidating high since spring. And gold has been dead flat since late August once the effects of the rapid dollar devaluation are filtered out. Gold doesn’t get overbought until late in universal rallies. All we’ve seen lately is simply a revaluation to reflect the weaker dollar.

    And this dollar-neutral euro-gold perspective reveals far more than gold’s complete lack of overboughtness and greed today. Euro gold has been forming a beautiful high base just under the psychologically-massive €1000 milestone. Once €1000 breaks decisively, tens of millions of mainstream European investors are going to get a lot more interested in gold. Their buying alone should accelerate a universal upleg.

    Adam Hamilton, CPA

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  140. G-Train,

    That Toby C/ Gary Savage issue comes up with newbies often enough that I'd just dump the marketing efforts under the Toby alias. You're kicking ass and deserve to keep it all, so why create confusion and only take a split when you can just be you?

    Gary don't need no stinkin' partner. You're subscriber base will grow as a function of the success you generate here, IMO.

    Btw, looks like gold is off to the races again. If it holds, I'll be adding today like yourself.

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  141. Gary--
    If we do see the dollar take out 76.14, how left translated and failed would this cycle be? Looks like we are 6-8 days in.

    Thanks

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  142. Nobody else on this blog seems to use their real name - so it doesn't seem odd really that Gary also uses a pseudonym.

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  143. To begin with I really have no desire to do all the marketing that my partner does. I would rather be out climbing.

    Second his efforts have almost doubled the size of the subscriber list. I don't reward that kind of success by firing someone.

    Even if he hadn't been that successful, when I make a deal I stand behind it. There's no way in hell I would ever renege on the deal I made. Period.

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  144. Don't get offended. Only you know how successful his marketing has been for you.

    Do those that subscribe to Toby Connor's package eventually get told it's really the G-Train?

    Eh, don't answer...not important. I found this site without the marketing, and in fact have never really seen it marketed anywhere that I can recall.

    Now, back to PM's!

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  145. This comment has been removed by the author.

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  146. gary, do you have a stratergy to get into UUP if we hit the dollar low in around april next year? how much would you expect the dollar to rally then?

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