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Friday, November 19, 2010


Last week the market regained the 200 week moving average. I suspect after the brief  2 day move back below that level we will see the market now hold above this major support level.

Yesterday's rally was strong enough to form a swing low and should mark the bottom of the daily cycle. I'm still expecting the new daily cycle to move back to new highs before topping in mid to late December and rolling over into a more substantial intermediate degree correction in January.

By the way, my good friend Doc, who most of you are familiar with either from his blog or from the insightful comments he posts in the SMT comments area, has offered a discounted rate for his newsletter to SMT readers. You can go here to take advantage of his offer thru Thanksgiving weekend. He might even buy me a chicken burrito or two if you sign up ;-)



  1. My question is this: most all of the miner's I watch gapped up on the yesterday. I am a B IG believer in gaps getting filled.

    Did Mr. Market create gaps to be filled on the D Wave correction later on, OR, will he pull back one more time to allow his "Friends from the Hampton's" one more opportunity to load the truck?

  2. So now do we have a swing high on the dollar?

  3. Yes, swing high on the dollar hit this morning. Let the games begin.

  4. Still need a swing low in Gold.

  5. Gold seems to have some dificulty to make that swing low.....

  6. Hi Gary,

    USd made the swing high and since then silver and gold have just been moving down. Is there a possibility the swing on USD will be negated and it moves above 80?


  7. Anything is possible. Just follow the plan.

  8. The old turkey plan? I have to tell you I can't wait to slice, dice and smoke old turkey.

  9. we're still waiting for a big move in gold. Lets hope it comes later today so all our swings will be in place

  10. Take a look at a 5 or 15 min chart of the dollar futures (/DX). There's a H&S forming with at neckline at roughly the 79.75 level. The dollar dropped sharply below that level and is back now, retesting that level.

    If we have set a swing high in the dollar here, we ought to see it drop soon from there, continuing down. It looks like it's starting as I write this, but we'll see.

    Also, silver is just retesting prior resistance at about 26.50, and gold the critical 1345-50 area that was keeping it down for a couple of days.

    Always hard to tell, and there may be a bearish interpretation of that basic TA, but that's one view of it.

  11. I'd be cautious about those dollar expectations. Not all swing highs are meaningful. Consider that left-translated dollar cycles do not typically surge 4+ index points out of a low. L-T cycles that form during vicious down legs also tend to top very quickly, often within only one or two days. The facts that the current cycle was so strong off the low and has thus far set a Day 8 peak is out of character for a L-T cycle, so it would be prudent to at least be on guard for something different.

  12. Yes, indeed, it appears that the dollar isn't finished just yet. The short term key will be whether it can reconquer that 78.75ish level and keep it. If so then the thesis may be in jeopardy.

    We watch and wait with bated breath. LOL

  13. Make no mistake a swing isn't a guarantee of a top. It's just the first sign that one is possible.

    Just follow the plan.

  14. Some markets are not rrading well, Ftse selling off pretty heavily...careful

  15. My goodness why all the anxiety people? Long positions in the market have a stop below 1173. We still have the mental stop below $1315 on gold. Risk is very small at this point. This is the point where one should be the most aggressive not the most timid.

    So far the market hasn't even moved back below the 200 week moving average.

  16. The drop of gold back closer to the lows of the week (so far) continues to confirm, in my view, that gold/silver hit intermediate top last week. (And that the recent continuing strength in silver *might* be nothing more than an emotional after-effect bounce. Although I'm not as confident in that statement.)

    My work needed to see a surge up in gold to erase most of the week's losses by the close of today. It's still possible, but not looking likely.

    Without that surge and with another down week in a row, it simply appears the top is in for now. That's my bet anyway by having only a core position.

    I would actually prefer the top to be in because I'd like to reset lower at the next intermediate low a few weeks from now AND because I think it means an even larger ending C rally in spring.

  17. TZ,
    If you used that criteria out of the July bottom you would've missed the move. If you used it out of the Oct. bottom you would have missed the move.

  18. And I think you and I both know that during the panic conditions of an intermediate cycle low you aren't going to be able to take a huge leveraged position. And even if you do you will immediately get knocked out of it by the intraday volatility.

    I really need to find some way to convince you to abandon this destructive leverage mentality.

  19. I'm not wild about this action and it could portend lower prices, but with Burrito Boy holding our hands, I just know everything is OK. :)

  20. I hope you're not reading anxiety into my comments Gary. I was just providing some commentary on the short term picture as I see it. Just for kicks. I'm still adhering to the strategy here.

    And even though it's obvious that I'm peering at the intraday charts here, my main focus is on the bigger picture.

    And I realize that looking at short term charts can be hazardous, as it can cause one to panic as they take things out of the proper context. That's probably one of the biggest mistake that novices make, IMO.

    It's fun sometimes to look at 1 min charts when price is going up. But when it's going down (and you're long) you should definitely pull out to the daily in order to not lose the proper focus and context.

  21. I never should have revealed my taste for Mexican. G-train was bad enough but Burrito boy?

  22. LOL! If you don't like it we'll let it go, but "G-Train" is pretty slick.

    All aboard!

  23. SB, you missed the price action in silver last night, what happened to you? or was it sleep time for you? it was just beautiful to watch how it ran through 27

  24. Gary,

    My comments just now are regarding the "is the intermediate top in or not" debate. That's all. You sure went off on a tangent with your reply:

    I dont know how you get either:

    A) leverage from that discussion. It isn't a topic or mentioned at all.

    -or -

    B) that my criteria for buying anything is based on seeing a surge. It isn't.

    I'm discussing the continuing back and forth of whether the int top is in and whether a person should hold with the $1315 stop (as you are) or be out and watching (as doc is). You aren't jumping on DOC's comments. Why are you doing it to mine?

  25. Yeah, I missed it. I'm not worried on the least.

    I had orders to add this morning, way below opening prices again, but didn't get any fills. Looks like another day of sitting on the hands, unless we see a sharp selloff which is looking very unlikely.

  26. bounced hard off the 4hr mid bollinger band in silver
    silver 4hr

  27. My order on SVM was at $11.39 to add, missed it by .02

    I can't say I'm displeased to see this rip the last few minutes though. :)

  28. Shalom....you want il all wery cheap...... :-)

    Good trends....

  29. Would you prefer Enchilada Man? Or maybe Guacamole Gary? Trader Taco? Gary "Salsa" Savage?

    I'll call you anything you want. Just keep doing what you're doing.

  30. Well that drop away from /DXY 78.75 sure lit a fuse on gold/silver. Interesting, for sure.

    This may have been the key moment in the Gary vs. Doc battle of short term strategies. ;-)

    Now it has to get solidly under 78.60. LOL

  31. True, Carlos. I like to get 'em cheap into short term contra-moves if possible. It's just the easiest trade for me and has served me well.

    These fills make it much more comfortable to hold as well. To me, it's much more difficult to hold a position if I'm down 5% not long after entry, even if I'm confident it will eventually work. Same with pressing winning positions if I'm already up nicely, much easier to let it do it's thing instead of jumping out early.

  32. I suppose the best way to put it is that it's all about getting strong hand status, and the stronger the hand, the easier it is to push for more.

  33. TZ,
    I watch you go back and forth as every little intraday swing casues you to flip back and forth.

    I doubt you would be anywhere near this emotional if you would just jettison the leverage. You would be able to hold positions and in the long run you will make a lot more money and eliminate the risk of severely damaging your account.

    The key isn't how much one makes. That will take care of itself. The key is not losing big. With massive leverage it's virtually impossible to avoid as sooner or later one of those curveballs will catch you.

  34. It would be a shame if childish comments cause Gary to curtail his humor or to not reveal personal aspects about himself. Not only is he a great coach but he has a great sense of humor. The burrito jokes crack me up! :)

  35. GARY,

    I appreciate the suggestions and I intend to modify to a cycles approach on the next intermediate low.

    I was new to cycles and didn't trust your calls as a recent subscriber in July.

    I actually DID buy the july low, almost exactly using my own methodology. (With about 2x leverage. And with a small stop.) I exited that position about a day later, no loss, because I re-calced my work and expected one more leg down. I was wrong. I guess I'm the first person to not have a perfect system. Don't shoot me.

    The subsequent problem re-entering as everything went straight up (with few pullbacks) is clearly documented and voiced by a LOT of people. I wasn't alone in the difficulty there. Yes, you were saying "just get in". No I didn't trust you cause few other people I follow get stuff right any more than I do.

    Suffice to say I would do things different now. And also suffice to say I have an understanding and respect for your calls that I didn't have back then.

    Since we are at or near an intermediate top here and since there is some disagreement on that, I have simply decided (so far) to be out (still have a large core) and watching instead of long but with a mental $1315 stop. Personal preference.

    My earlier posts this morn described my own views in addition to yours and docs as to whether the top is in or not. That's all.

    Hope that clarifies things and I do agree with your comments on how to approach trading with cycles in mind. I've been exposed to cycles for about three months now out of over ten years trading. It has taken some time to incorporate, but it is sinking in.

  36. Re: Tudor: Gary "Salsa" Salvage...Lol..

  37. I think I will send my assistant out for a Breakfast Burrito. Not that I need it, but that picture is making me HUNGRY!! (Stop it)

  38. Chevy's (mostly west coast) used to have a chicken burrito with mashed potatoes, cabbage, and BBQ sauce in it. Wild but very good.

  39. I was a recent subscriber in July, but i trusted his calls because once you have axcess to the subsc. page, you can look at archived calls. Pick a cycle high or low and read what he saw/reported the wk of that period.

    I was a tech-trader with volume analysis at swing points and chart patterns along w/ certain indicators,etc...and never believed in cycles, because I only heard 'Ackerman' discuss 10 yr and 3 yr cycles--Kress cycles,and it wasnt helping my trading.

    but Gary has added a lot of confidence to 'timing' a trade and holding a position for gains sake due to cycles and sentiment.

    good stuff :)

  40. I had a Chevy's burrito after my tournament a couple of weeks ago. I'm sorry to say I'm not the man I used to be...I couldn't finish it.

  41. Gary--
    Glad to know I am not the only one suffering from that ailment!!

  42. Marc Faber video for those that are interested:


  43. Have you ever tried Moe's Southwest Grill?? there a few of them in Florida, i am not sure about other states. They have this burrito they call the Homewrecker and they make it in this huge tortilla which sometimes i have a hard time finishing the whole thing. It is by far my favorite place for burritos

  44. Nov 9 smackdown I decided to cut some positions if it bounced the following day

    sold AXU @ $6.60 on Nov.11

    it tanked to $5,78 and NOW ( ONLY 6 trading days later) is @ $7.00 and climbing

    good case of why the "old turket' method would have been fine!!

  45. gary , compare slw & hl, any reason SLW outperform hl last 2 years???

  46. Sure it's a much better company.

  47. Forgot to add to my last post that I missed re-entry to AXU..got left behind

    so thats why old turkey method would have been better

  48. I haven't been to Moe's in Fl, but the best Mexican I had there was a place called Cantina Laredo. Fresh made guacamole right at your table and best margaritas I've had in my life.

    However, my wife makes fajitas that'll blow your doors in! She slow cooks a flank steak in the seasoning for 5 hours or so, then has me throw them on the grill for a few minutes to char the outside.

    While I'm on the grill she sautes (I guess that's what you call it) the onions, red and green peppers on very high heat in a thin layer of peanut oil, with more seasoning.

    One of my favorites!

  49. Very very good news,


    Screw Hawaii, right? lol.

    Very happy to have a nice AXU position for today.

    Definitely does not feel at all like the silver/gold markets are weak or toppy here, but actually the opposite.

  50. But Gold still haven´t broke 1364.50......

  51. G-Man, considering you live in Vegas, I think down the road you should host an SMT member poker tournament or we could rent out a Vegas card room temporarily (probably a better idea). 2.5-10K buy-in, your choice. I'd start with 75% of the chips of the rest of you b/c I've played more ;)

  52. SLW is certainly the cream of the crop for the year performance. (excluding select juniors). Up 128% YTD.

    However, HL, EXK, AXU, SVM and even SSRI and PAAS are starting the play catch up the past three months. Notice how they have all out performed SIL and GDXJ. GDX is only up 14% the past three months!

    Link to three months performance

  53. Have you guys heard about the new phenomena, 'Silver Money Bombs'? Max Keiser and others are starting to select days where all of their followers go out and buy physical silver. Their goal is to crash JPM. lol. Their belief is founded upon that JPM has a short position in silver equivalent to 3.3 billion ounces.

    Next to get everyone to get on this 'Silver Money Bomb' bandwagon they promote the claim that silver is going to $500. They are also having their followers constantly Google "$500 Silver". They claim that news reports are written upon volumes of specific Google searches. If you were to Google "$500 silver" you can see it has already been progressing.

    They claim $500 silver is $10000/gold divided by 20.

  54. Someone asked Max, a previous professional options trader, "who were the founders of these idea to crash JPM."

    Max replied, (quote is my summary) "Institutions. Institutions got together and realized how vulnerable some commercial banks were with their excessively large silver short positions."

    Someone asked Max, "who personally can be accredited for attempting to move against JPM's silver short?"

    Max replied, (quote is my summary), "Eric Sprott. (He also mentioned a Candian, if any of you truly care I can go back and find his name- he also added another name or two but reverberated "Eric Sprott").

    Just an FYI.

  55. I think I'll just stick with my miners and the tight spreads rather than pay large premiums and take delivery on physical.

    Physical is good for people who can't control their emotions but not so good if you want to maximize returns or need to get in and out quickly. At some point soon we will be exiting partial positions in order to avoid an intermediate decline.

  56. G-Burrito-Man,

    If you're responding to my most recent post, I'm not in any way shape or form advocating going to the physical side of the silver market.

    I am simply bringing the message here to what others are currently doing in the silver world (this may be a very small minority, but I think it is still respectable information).

    I am in shares because historically they have outperformed, no one can steal them, and I can get out without having to take steroids to lift them all when the time comes to sell them.

  57. $500 Silver? Well, Gary did say it could blow past a nice, round number. :)

  58. Bob Chapman has around 20-30% in physical I believe. You never know what kind of crap may go down in the coming years so having some physical protection may be prudent. Even owing something like Sprott's PSLV or having a Goldmoney account could be worth doing.

  59. Yep silver is heavy stuff. $100000 of silver weighs 231 lbs. Pretty close to my max clean & jerk :)

  60. Hypothetically, in a dream-world, if shares at their peak were to have advanced 40x the advance of physical silver, which would be going up 18.31X current price, shares would go up 732X from current levels.

    SLW would hypothetically be trading at $25275/share.

    To become a billionaire you'd have to have 1.36 million in silver shares today.

    Sounds like a semi-fairy-tale, but I will stand back and watch :)

    TZ what's $35-$40 slw now when it's going to $25000/share? Just get in. LOL!

  61. woo
    silver close to day high while gold remain at 135x

  62. I think this is a good place to take profits on silver for the day..we should be fading into the close

  63. And where will you be if silver gaps up .50 in the morning?

    Do you need to read Old Turkey again?

  64. Razvan,

    You sleep well at night having no silver position while we're in the beginning (odds are high) of a new daily cycle for silver?

    You could easily find yourself chasing in the morning, and then have it reverse hard tomorrow afternoon after you've chased. How'd you feel then?

    What are you seeking 1.5% reward for what could turn around easily into a 5% missed-profit-opportunity?

    Not only that you are setting yourself up for the habit of trading silver in the future- a habit in which you'll miss big silver moves in the future that you would have profited handsomely from.

  65. I think that is going to happen. Since tonight is friday, shake out from weakhands and recovered, there will be no chance to get on board in monday.

  66. As long as one follows the plan they will catch most if not all the rally while still being protected from riding an intermediate cycle correction down.

    developing a habit of trying to lock in small profits will cause you to miss large chunks of the C-wave.

  67. Given the video with cartoons on QE, here is another one on Gold:


    Also, there is another video on Youtube with cartoons arguing why QE is good for the economy.

  68. going up to 4 months back i have never seen metals gap up from Friday to Sunday evening.
    Have you ever seen the movie Pointbreak with Keanu Reeves and Patrick Swayze?? At the end of the movie Swayze, who plays this die hard surfer, is standing on the beach during a once in a lifetime storm which creating the biggest waves he had ever seen. He has his surf board in hand getting ready to jump in the water when the cop comes and puts handcuffs on him "You're gonna go down, its going to be that way!!" The surfer then tells him this is a once in a lifetime opportunity and ends up persuading the cop to let him ride "at least one wave".
    This is the big one Gary...let us ride !!! :)


  69. Robert wrote:

    Hypothetically, in a dream-world, if shares at their peak were to have advanced 40x the advance of physical silver, which would be going up 18.31X current price, shares would go up 732X from current levels.

    SLW would hypothetically be trading at $25275/share.

    Alex says, this may be true, but the company would most likely do several stock splits on the way up

  70. Razvan -

    Do you have a core/physical position or are you just trading futures?

  71. This comment has been removed by the author.

  72. looks like silver is close to breaking out. IHS on SPX projecting to 1240.


  73. I think Razvan trades with a lot of leverage and most of his trades are short-term. Those who can do it, it is very profitable and also allows you to sleep well at night. But it is not for everyone; certainly not for Gary's Old Turkey style.

  74. Razvan was getting margin calls on days silver was gapping up :-) Say no more.

  75. Once again: Gold red and Silver green....

  76. Gary (or anyone), Why do people believe that JPM would short a massive amount of unhedged silver and risk going broke? Just hubris to prove they are bigger than a bull market? They may be short silver and long somewhere else or hedged in some other way. Why would they ride a short position into bankruptcy?

  77. when i have a good run i cash some of it and buy physical so i do have a core in hand. I am not a day trader but if i see an easy trade then i will do it mostly obvious fades or momentum moves. Going back to july the stats are 90% of my trades are on the long side. I only short when it is a down trend. I shorted silver from 25.86 to 25.26 because it was riding the bollinger band on the 4hr.Then i bought back at 25.05 and held on since then. However i do not keep out of position for more than a few hours just in case we get an upside surprise. I was on gold from 1180 to 1410 without missing any of the upside. It has worked for me so far, the only time i get screwed is when the price keeps moving up and i keep building up the leverage and get tangled in a spike reversal. I am trying to get that under control but it is psychologically hard to control the impulse.

  78. Raz probably doesn't want to pay the carry charge for holding silver right? Come on, its only $6.5 per 500 ounces!

  79. Poly
    that is not true. The margin call was post QE2 announcement when we had the spike from 1347 to ~1324.
    its not about the fee. But what i noticed is that the prices peak around 2pm and then fade slowly into close. Obviously today was not the case! :)

  80. DG,

    MK: JP Morgan also holds the largest derivatives positions of any banks, at $69 Trillion (not 1.5 trillion that I mention in my conversation with Alex), according to the US OCC. Thus, it is likely that JP Morgan also holds the largest short position in silver derivatives, too, as a matter of course, since they dominate derivatives trading in general. So, to them, a $100 billion short position in silver would be “chump change” compared to their other derivatives positions, and may, in actual fact, be a part of a larger overall strategy to maintain the value of their other derivatives, (including the US dollar) to keep interest rates low."

    www.maxkeiser.com (previous entries)

  81. Gary as a new Sub what is old turkey? And what is "the plan"? Thanks

  82. I've got some burritos to put to work in the market G-man. I've been waiting and don't want to add more here until we get some kind of confirmation. Especially with your boy Doc saying your wrong and all...he thinks even if we pop it will be short lived but by that point the pop could take silver to 35 and SLW to the 40 range!

    Anyways--What would you recommend for those wanting to add here? Wait for the swing low on gold? That sucker is not cooperating!

  83. Got a tattoo this morning, it reads:

    "Surprises Come To The Upside"

    It'd be cool if that translated well in Latin :)

  84. The market seems very quiet. Maybe everyone went home.

  85. no offense...but that tattoo sounds ponographic :)

  86. Yeah, girl do tell me that once my pants drop ;)

  87. You're going to get me kicked out of SMT, Alex, save it for the Vegas 2014 party ;)

  88. axu and kgn = having a good day

    I own neither :(

  89. yeah...we'll chip in our profits and build our own casino to party it up in

  90. I swear SSRI is turning into a HL, under-performance or lagging is it's middle name.

    You have to hold the thing forever until it just explodes. And don't comment on this one Alex ;)

  91. good one :)

    however really HL just about doubled from aug to nov highs...it just exploded recently...so maybe now it'll move out better when things pick up again.

  92. Yeah, everyone talks about the 45 million share short position, and it does ring true; when silver is really taking off the thing pushes higher, faster, than any other silver stock pretty much. The same holds true on the downside.

    I know guys all-in, completely on HL. That's crazy all-in on the most volatile stock in the most volatile sector.

    HL is a traders dream though. Close to 5% swings daily. You could probably retire just off HL trading alone.

  93. boy...days like this are sleepy

    unless you re in coal

    PCX ICO even JRCC

  94. Well,
    Next week will bring some clarification. If we all imagine the sensation we'll feel with silver at 35 bucks then it shall be so. Who's in?

  95. gary,

    From previous swing in October, do you think GLD have to re-test 129 before move up???

  96. I've been in :)

    but right now this days pretty much over...so I'm going OUT for a run

    peace out traders

  97. DG,
    I've never bought into the whole conspiracy nonsense.

  98. 92000,
    Not if this is a final upleg in this intermediate cycle.

  99. Dumamae,

    Old Turkey

    Go over the last two weeks of nightly reports and you will understand the "plan".

  100. Gary,

    I don't buy into conspiracies either. I was just posting what these theorists argue to answer DG's question.

    I do wonder though, if you were the Federal Reserve (I believe about 18 of the worlds largest banks, JPM included), and your product is the US Dollar wouldn't it be in your interest to stifle your currency competitors? Wouldn't it be in your interest to keep as many people as possible faithful in your product and not revert to other currencies like gold and silver which you can't print?

    MK was saying, I don't totally agree or disagree with him, that in the 1980s the initial price hikes were so high b/c this is where the bankers got totally blown out of their gold/silver shorts, just as we're witnessing now.

    Either way the causes, arguably, are irrelevant, that is why it's stupid to focus on them, as long as we just continue to pay attention to dollar liquidity.

  101. "Veni in insidiis concitant"

    Surprises come to the upside.

  102. When was the last time you or anyone you know bought anything with a gold or silver coin?

    As much as the gold bugs would like us to believe it, neither gold nor silver have any monetary function any more. And I seriously doubt they ever will again.

    Gold and silver are just a store of value. No different than oil, copper, wheat or cotton.

    Although the fundamentals are different for gold and silver than any other commodities. But that doesn't mean our or any government is trying to suppress the price of gold. What a waste of time that would be. Most people on the street couldn't even tell you what an oz. of gold costs within $500.

    Everyone can tell you how much a barrel of oil is though. If there was anything that the government needs to take down to cover up the lie of the CPI it's oil not gold.

  103. That's good Tutor, thanks. I was more aspiring for a famous phrase that equates well with "Suprises Come To The Upside."

    Maybe I'll have to settle for:

    dulce bellum inexpertis

    "War is sweet to those who have never fought."

    Translation: Don't fight/trade bull markets- you'll learn quick. lol

  104. Gary,

    Your arguments are very good and I do side with you. One counterargument though is that the Euro is 5% gold backed. Of course if all currencies were gold backed then it would be senseless to try and suppress gold.

    So would you say that Max Keiser's campaign to bring down JPM by buying physical silver, acting against their shorts (if silver is taken out of the market enough, they wouldn't be able to cover their shorts with the subsequent price increase) is fundamentally faulty? Are you saying that a substantial JPM silver short does not exist?

  105. Ok. I get it.

    "Stricta pendet equitando bovis." - Hang on tight when riding the bull.

    "Nunquam dimicant taurus foro." - Never fight a bull market.

    "Magna comederis et avis pennis consummans cenam dives." - Eat your turkey and you will finish dinner a rich man.

  106. Gary,

    In Vietnam, which is outpacing China for growth, buying real estate is settled in bars of gold. The price is listed in USD but the buyer has to pay in equivalent bars of 24K gold. Food for thought. :)

  107. Gary, the only reason gold and silver do not serve as everyday money any longer is because of legal tender laws. If PM's (privately minted, PM-backed money) were allowed to compete directly with government fiat, there would be little doubt the dollar would have imploded decades ago.

  108. I suggest you read Murray Rothbard's "What Has Government Done to Our Money?".

  109. Tutor, you have a fundamental misconception; "government fiat". The government also has no right anymore to issue currency- in 1913 that was handed over to the Federal Reserve. We are at the the whims of the private corporation, the Federal Reserve Bank.

  110. I don't buy that one for one second. You telling me tha in order to buy property in South Korea I would first need to convert my dollars to gold bars? And just how would one go about dividing those gold bars so they could arrive at the correct price.

    Sorry gold and silver haven't been used as money for a long time. Even in the thrities the money was just backed by gold but we still used paper money.

    There just isn't any logical reason for the government to supress gold which BTW isn't working anyway if the last 6 C-waves are any indication.

  111. zstock,
    The last time the VIX was in the 17's, the DOW, steadily declined for a few days, and then tanked 175...I expect the VIX to stay in its 17's to 23 -24 channel for at least a week more.

  112. Tesla Motors is a very tempting stock if one were to enter the stock market. I guess if one were to enter the stock market they'd go to agriculture prior to Telsa, but it is a decent play for dollar devaluation/oil spikes.

    I drove their latest model when they were in town a few months ago, 0-60 in like 4 seconds. The torque is intense. Anyone else like these?


  113. It seems almost everyone is trying to determine future stock prices by one technical method or other when in fact we probably just have to watch the dollar. If it still has one more leg down into the yearly cycle low then it's unlikely we see a significant decline in risk assets.

  114. GOLD still showing weakness, probably headed to 1260 or even 1160, it's 200 day....
    NEM back in the 56's, is where I'll go long NEM. It's showing weakness, and usually follows gold.

  115. Weren't you saying the same thing in Oct. right before the move to $1420?

    In order for gold to correct we would need to see the dollar rally. I seriously doubt we will see the dollar regain the 200 week moving average now that the 3 year cycle decline has its hooks in it.

  116. My VIX 23-24 target has 15 signals backing the retest....I don't just use one signal, to determine market trend. Market Trend is still to the downside. The way things are going, it's going to be a late start for the x-mas rally, maybe starts DEC 1.

  117. I thought today's action overall was positive and we at held all of the gains, managing to reverse a decline that could of gotten away. I think it sets up well for some more positive news out of Europe which will serve as the catalyst for the next cycle up.

  118. In Sept/OCT, I was saying gold going to $1400, and $1600 in 2011....
    I'm just hoping the 1260 level holds...every now and then, Gold completely retraces it's $300 price channel, for no apparent good reason.

  119. LOL the 200 DMA is rising.

    The 50 DMA is rising.

    The 20 DMA is rising.

    Each MA is above the longer duration average and the market is holding above all three.

    As of the close the market is down 2.2% form all time highs.

    How in the world do you figure the market is in a downtrend? Could it be that you are just taking a wild stab at trying to call a top?

    It didn't work so good with Gold in Oct.

  120. My dad-who I've been telling about Gold for the past 3 years, emailed me today and said he's buying some on Monday.

    Sorry guys, D-wave is coming starting Monday. :(


  121. I beg to differ in Oct. you were calling a top in gold.

    Z you really need to learn cycles analysis so you can spot true turning points. So far there is no indication that either gold or stocks have reversed the intermediate trend.

    We don't even have a pattern of lower highs and lower lows yet.

    It really does no good to make repeated attempts to call a top. Eventually you will be right but in the meantime you will go broke, especially if you are shorting.

  122. GARY,

    Any comment on Doc's argument that a daily dollar cycle that would be continuing lower (and continuing *towards* an int low; i.e. your argument) does *not* scream up (over 4 points) for 8 or so days like we are seeing on the charts? Thus lending to his conclusion (at least partially) that an int bottom has already occurred and the sharpness and duration of the dollar rebound shows it was an int low?

  123. TZ,
    It kind of irrelevant at the moment don't you think?

    Either the dollar breaks back through the 200 WMA and resistance at 80 or it collapses into a true yearly cycle low.

    Trying to guess the outcome before it happens is a waste of effort and trying to trade something that hasn't happend an even bigger waste of effort and capital.

    Just follow the plan.

  124. Gary,

    What "the plan" you talk about?

  125. TZ,

    Just from a spectators point of view, the argument being that the dollar hit an intermediate low because of its reaction out of that low "screaming up" is probably one of the most ridiculous things I've ever heard in the markets.

  126. It's clearly spelled out in the nightly reports.

  127. :-)

    Good calling Gary, have a good weekend all.

  128. AXU finally announced production at Bellekeno. Check their brand new machinery and warehouse pictures out, these guys are impressive:


    They are in the top 3% in the world for highest grade silver being mined.

  129. Poly

    Add a subscription. You wont regret.

    I am a new subscriber (less than a month) and i´ve already learn a lot, starting to control a little more my anxiety.

    Have a try.

  130. http://snalaska.net/cot/current/charts/SI.png

    WOW. COT commercials are RAPIDLY backing away from being short in this market.

  131. "It's clearly spelled out in the nightly reports."

    Yes of course sarcastically. You're a gentleman churning out these comments.

  132. Carlos, signed up 3 months ago :)

  133. It's pretty amazing, sticking with the "Plan". I purchased in September, thought I was getting in late; in October, thought I was getting in late; and November 1st right before election day I bought AGQ. Every purchase is positive, even when we had the correction a few days ago my shares were still up at the bottom. A couple of times I was pretty worried but I'm sticking with the "plan".

  134. i like how strong silver closed going into the weekend. We should have more upside to come as soon as Sunday night! I wish they kept the market open 7 days a week.

  135. Gary

    > There just isn't any logical reason for
    > the government to supress gold

    That statement is at the very least debatable.

    Of course you may personally find such reason(s) unconvincing but that's another matter.

    For one, former Fed Chairman Paul Volcker himself begs to differ on this issue. In his memoirs he wrote:
    "Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake."
    [quoted here: http://gata.org/node/6800]

    So Volcker did see such a logical reason, whatever it was (and even regardless of it being a viable reason).

    Also, Congessman Ron Paul remembers a meeting with Volcker:
    "I was in Congress when Volcker was chairman, and I had a breakfast meeting with him. I had gotten there early, and when Volcker came in, he didn't say good morning, he went right to his staffer and said, "What is the price of gold?" "
    [quoted in: http://reason.com/archives/2006/11/02/can-we-bank-on-the-federal-res]

    (I hasten to add that Paul's quote in and of itself doesn't imply a reason to suppress gold. But it does show the goldprice was clearly pretty important to even the Fed Chairman - and therefore part of broad US interests - which the US govt would and will of course defend when it sees fit.)

    > [...] supress gold which BTW isn't working anyway
    > if the last 6 C-waves are any indication

    First, that something apparently isn't working like it was meant to work, doesn't mean it hasn't been TRIED very hard to make it work, nor that even though it failed, such trying didn't have significant impact.

    Personally I believe it has been and still is tried, and its failure did and still does have significant influence on the goldprice. I could of course be wrong.

    Secondly, those 6 C-waves can equally well be considered as indication the suppression IS working.

    In that case the argument would be that without the suppression the goldprice would have risen much more gradually and/or would have been much higher than the [imo ridiculously low] price today.
    So the bull would have happened anyway, but it's characteristics would have been very different.

  136. Walter,
    When the dollar was backed by gold then yes the government had a reason to care about the price of gold. Volkers comments were regarding a time when the dollar was still backed by gold.

    It's meaningless to take a comment from the early 70's as proof the government still tries to manipulate gold. In the 70's anyone could go to the bank and trade their dollars in for gold. The government no longer has to worry about the public emptying Fort Knox during a currency crisis.

    So my statement still stands. There's no logical reason why the government gives a damn what the price of gold is.

    And manipulation doesn't slow a trend it accelerates it. If the governement has been trying to suppress gold then the current price is much higher now than it would have been if allowed to rise naturally not the other way around.

    Artifically low price causes shortages which results in much more aggressive moves once price overwhelms the manipulation.

    Gata's stand that manipulation has restrained normal price discovery is pure baloney. If true, then gold is much higher than it would have been without the manipulation.

    As a matter of fact it would be great for us if the governement would manipulate the hell out of gold. We will just get that much richer, that much faster.

  137. Gary, thanks for a great week - unless gold has a trick up its sleeve, we seem to have turned the corner and timed it perfectly. And it's been fun reading the banter this week. Have a great weekend!

  138. Gary,

    Volcker's comments presumably date to his tenure as Fed chairman -- probably around 1979-1980, when the dollar was not backed by gold. (We went off the gold standard in 1971, as you know.) In fact, he would never have bothered asking the question of his staffer if the dollar were backed by gold, because he would have known the answer -- $35.

    I suspect he was asking his staffer that question because it was during the height of the inflation crisis, when the price of gold was seen to be an indicator.

    We are not at that point now, but I definitely think there will be a time in the future when the price of gold will assume that kind of importance.

    At some point, the price of gold will be seen to be an indictment of the Fed and the dollar. Keep in mind that in all of our speculative bubbles to date (stocks, housing) the government had an incentive not to try to knock them down. The monetary authorities probably will come to view gold as a problem -- but I don't think we're there yet.

  139. Let me ask a question. Does anyone think that the government will fool anyone that there is no inflation by knocking down the price of gold?

    Sure there may be a few hapless souls that are that dumb but the vast majority will still undstand that a loaf of bread cost's $10 or a gallon of gas is $8 or a cotton T-shirt is $50.

    The government isn't going to fool anyone by taking down gold anymore than they fool anyone with their phony CPI numbers. So what's the point? It doesn't cost anything to massage the CPI. It costs a huge amount to manipulate gold.

    Hell if they wanted to they could just pass a law fixing the price of gold. They tried that in the 70's though and it just caused shortages.

  140. TZ:

    Thanks for posting that COT chart. Apart from the commercials going less short, what is also interesting is the steep drop in open interest. The only thing going up is the long interest of small speculators.

    COT Report

    Gary, could you please comment on that, especially the falling open interest.

  141. You're wasting your time trying to gleen any useful info from the COT's in the middle of a C-wave.

    The only thing the COT's are really good for is spotting D-wave bottoms.

  142. Gary,

    I said Vietnam, not S. Korea. I'm Vietnamese and I go back every year. You pay for property in gold bars! Rounded to the nearest gram I guess. The prices are listed as USD because of how inflated the Vietnamese dong is (largest note now is $500,000...worth about $30USD) Why would I lie about this stuff?!

  143. I couldn't find anything with a google search about real estate sales settled in gold. I'm not saying that the odd deal isn't settled in gold but I would think a story like that would make all kinds of headlines.

    I'd be willing to bet a burrito I could take my dollars over to Vietnam and buy a house without having to first convert them to gold.

  144. You got a bet! I'll find proof on the net or get some proof next time I am back. You do acknowledge that countries like Vietnam use gold to settle transactions as common practice. The government controls the inflated currency which is quasi pegged to the USD but is not worth anything because of the screwed up way they run the country so individuals use currency to pay for day to day stuff but for big purchases, settling in USD or gold equivalent is the norm.

    Example. Since the government is communist there, the land doesn't really belong to the owners. One of my relatives had to move out of their place because the gov't was developing the land for a business building and the gov't gave them 200 ounces of gold as the "fair" value of the house on the land.

  145. People in Vietnam don't like to hold "trillions" of Vietnamese dongs after they sell their place because they know how weak the currency is so it's gold or USD over there. Hell, you get interest for depositing your gold in the banks there!!

  146. You just said the people use US dollars. I think I already won the bet :)

  147. http://vietnambusiness.asia/acb-cuts-gold-deposit-interest-rates-to-0-25-p-a/

    Get paid to hold gold! In Vietnam anyways...

  148. I said they price their houses in USD and settle in either. It's easier to carry 200K in gold than 200K in USD since most people have been hoarding gold since way before.

  149. dont get the wrong impression about Vietnam. Lot more super rich people living there than here in Canada.


    Using USD or gold to hold their wealth is just smart thinking. But I think they will be dumping the USD soon since rich people can smell the "fire" starting in the US

  150. Gary,

    You owe me a burrito!


    The sentence you want to focus on in the article is "those who took out gold loans to buy houses"

    translation: People have to borrow gold to buy their houses thus gold used to settle house purchase!

    I would like the burrito with all the dressings, expressed shipped to me because I don't want it to go bad.

  151. Volker did indeed supress gold and inflation with a ~20% federal funds rate. He was certainly talking to RP ca. 1980 and he was using gold as a barometer, not manipulating. If Bernanke did that today then the whole Ponzi scheme would collapse pronto. In fact, about 5% would melt down the system....

    With the Japanese example, their debt servicing would hit 50% government revenues if bond rates increased to about 2%. That also amounts to sovereign default.

  152. N1tro - in case Gary tries to talk his way out of your bet. Maybe he was searching for South Korea instead of Vietnam :-)


    "The Vietnam Dong has been rapidly evaporating and losing their purchasing power. Many contracts, such as real estate sales, are being made using gold. Gold is money and is reasserting itself as currency in Vietnam."

  153. The bet was

    "I'd be willing to bet a burrito I could take my dollars over to Vietnam and buy a house without having to first convert them to gold."

    You haven't shown me anything yet that suggests I couldn't take my US dollar over to Vietnam and buy a piece of real estate.

    I also suspect it's probably the odd contract that is paid in gold in Vietnam as I doubt there is enough gold available to make it a common practice for the masses.

    That is the problem with using gold and silver as money. Supply is limited. It's one of the reasons paper money was created in the first place.

    And contrary to popular belief a gold standard or gold and silver coins has never stopped governments from debasing the currency. In Rome the coins were clipped.

    So even if we went back to gold and silver money we would still find a waqy to debase the currency. It's just what empires do over time. They all manage to destory their currency.

  154. Gary,

    when will you issue weekend report?

  155. Have you checked the website lately?

  156. Given all these bets for Burritos flying around the blog, I'm thinking being a Burrito seller is going to be pretty profitable on SMT over the next year or so.

  157. It looks like the clearinghouse to settle these burrito bets should become the following:


    Minimum settlement is 12 burritos, and 12 delicious burritos from them is $200 + shipping.

    Gary you might have to force your debters to go in together to add up to the 12.

    Anyone wanting to present Gary with a nice x-mas present, this might be the one.

  158. Gary,

    Re: Core

    You said: "One’s minimum core position should be a position small enough that you are comfortable riding out an intermediate correction with it without freaking out and selling at the bottom, but large enough that you won’t be pulling your hair out if the bull throws us a curveball and just keeps charging higher."

    I don't make a core/non-core distinction. I'm holding my entire position "Old Turkey." (even when it sometimes feels like cold turkey instead of old turkey)

    I prefer to just sit tight through intermediate corrections. It's my understanding, however, that you would recommend going to cash even for my core during a D-wave. Is that correct?

  159. Gary,

    Technically you couldn't take your cash and buy a place in Vietnam because you are a foreigner and foreigners aren't allowed to own property. But my point was a counter to your earlier post of

    "When was the last time you or anyone you know bought anything with a gold or silver coin?

    As much as the gold bugs would like us to believe it, neither gold nor silver have any monetary function any more. And I seriously doubt they ever will again."

  160. The TSI Trader
    Saturday, November 20, 2010
    How HIGH Could Silver Go in December?


  161. Gary..what's your take on the COT report for silver?? Looks like everyone is getting overly bullish.

  162. Actually..looks like large specs getting less bullish..commercial more bullish..Anyone?? Anyone??

  163. Bede,
    Yes you don't want to ride any position down into a D-wave.

  164. Jeff,
    The blees rating for silver this week is 62. Almost dead neutral.

  165. Jeff: Commercials are smart money; large spec is dumb money. COT is not especially helpful in spotting tops, and the reading now are "bearish" (in quote because of the caveat i just mentioned) but not outrageously so. Gold is more important to watch, rather than silver, as it is gold movement that calls the tune..

  166. Found this while searching Gary's previous posting's accuracies this year (pretty good, very good in regards to Gold, which is most important):

    'America Ticking Time Bomb'


  167. 1776 - 2009 = 7.5 Trillion $ Debt

    2009 - 2015 = 6.5 Trillion $ Debt

    2015, 30% of revenue to go towards paying off interest on the debt.

    Sounds like a country headed for disaster. But there won't be too much disaster solely because of our favorite, American Idol.

  168. For sure mini-crisis in the dollar come Spring. Interesting times. 230 years of good prosperity in this country, and now I turn 23 at America's C-wave top. The D-wave will probably last until I'm in a nursing home.

  169. Luckily we're shorting this SOB ;)

    (indirectly of course, playing the decline in the dollhair).

    It otay though. I have no problem moving to the caribbeaan. Jah Man!

    Bernanke = BumbaClot

  170. FWIW: After the recent pullback in the miners I wanted to know:

    Which stocks decrease less after a top: The lowperformer or the outperformer of the previous bull?

    My portfolio of about 20 miners gave me the definitive answer: Relative strength rules. Strong stocks stay strong.

    So I definitely will sell my low performers when I want to realize partial gains. Somehow counterintuitive for me :-)

    Just another version of "let your winners run" backed by hard numbers.

  171. Hiptwist-

    Which were your top performers and which ones stunk up the joint.

    Big money may flow into the larger boys next year, so these may finally play catch up. I'm looking at you, AUY!


    Bond Market Implosion. Gold Tactics

    “I cannot overemphasize the critical importance of factoring the bond market into any analysis of the crisis now.” That was the sentence I started yesterday’s update with, and it’s probably the sentence I should start every update with, for the next six months!"

    "In practical terms, meaning flows of liquidity by institutions, what the institutional awakening means is a mass panic out of bonds and into…?"

    "The history of institutional money flows in a currency and bond panic is a massive flow of liquidity into the stock market. Having said that, what do you think happens to the Gold Price Thermometer of global financial health what that occurs, or is thought to be about to occur? I don’t think most in the gold community really understand what just happened to the bond market, and what this event means for gold."

    "Markets anticipate price and factor in what has already happened. The gold market is on the verge of anticipating the Institutional Awakening, meaning the gold price is on the verge of surging higher, not lower, while most are wasting current buy prices, standing there with no buy fills, thinking the game is to be the one to guess how LOW gold goes. Wrong tactics. Wrong tactics, bigtime. "

  172. Robert-

    That 14T in debt is nothing. Let's talk "unfunded liabilities".


    Our Debt Is More Than All the Money in the World

    There’s more, of course. Much more. Besides those monthly pension checks, the states are on the hook for retirees’ health care and other benefits, to the tune of another $1 trillion. And, depending on how you account for it, another half a trillion or so (conservatively estimated) in liabilities related to the government’s guarantee of Fannie Mae, Freddie Mac, and securities supported under the bailouts. Now, these aren’t perfect numbers, but that’s the rough picture: Call it $130 trillion or so, or just under ten times the official national debt.

  173. Two recent articles about the foreclosures and revisions to the economy. Both are very disconcerting.



  174. More pain coming this week for the dip buyers for last week. If we thought that the dollar put in a high and is going straight down - hmm are going to be disappointed IMO. Gold may very well take out its 1330 low and so would silver. Things about to get interesting :-)

    Dollar may not put in a higher high though I expect gold and silver to put in a lower low.

  175. I'll take the other side of that bet.

  176. BTW the only pain has been for the dip sellers :)

  177. Gary,

    How many more A-B-C-D cycles do you think we have in store during this secular bull market?

    My assumption has always been that there would be one more complete cycle after the current one.

    That would mean that the blow-off top of the secular bull would come in 2013-ish.

    But at times you seem to imply that we can look forward to two more complete waves, which would take us into 2015 or 2016.

  178. Gold will have another 8 year cycle low in 2016. That major decline similar to what happened in 08 should separate the 2nd phase of the gold bull from the bubble phase.

    Bubble phases usually last about a year to a year and a half. So if I had to guess I would say the gold bull tops in 2017/18.

  179. That would mean two more "C" waves, followed by a final blowoff top that will presumably be even more powerful than the C-wave we're experiencing now.

    Of course, that would imply an 18-year bull market, which is very long for a gold bull market. The last gold bull was only 10-ish years long.

    Up until now, my presumption has always been that the secular bull in gold, along with the secular bear in stocks, would roughly follow the roadmap set by the 1970s -- i.e. 12 years or so.

    What leads you to believe that this gold bull/stock bear will be so prolonged? Presumably the last gold bull did not have two eight-year cycles, so why should this one?

    (Not that I mind, by the way. If you're right, we're all going to make a fortune. I'm just curious as to your reasoning.)

  180. The commodity bull of the 70's was an anomally in that it was farily short. most commodity bulls last 20-25 years.

    Unless we get another Volker in the Fed who is willing to send the country down into the depths of a terrible depression to cleanse debt from the system then I don't see any way we avoid following the same path Japan has followed.

    They are now starting their 3rd decade of the secular bear market.

  181. During the blow off top in 1980 gold rose 300% in a year.

    Kind of make our current C-wave look pitiful doesn't it?

  182. During the blow-off top silver rose %780 in a year.

    Pitiful indeed.

  183. Maybe Gary should be bubble boy, not burrito boy. And maybe we should keep him protected in a hermetically sealed bubble to ensure he's around to guide us through the next 8+ years. ;-)

  184. If I were to try to make an argument for an 18-year bull market in gold, it would be based upon the excesses of the stock bubble in 2000, when valuations reached unprecedented levels (35x for S&P).

    The law of reversion to the mean implies that we need to get to unprecedented low valuations (4-5x, perhaps) before we can hope to see stocks bottom.

    We're not even close to that yet -- if anything, stock valuations are still far above the historical mean. They only got close during the meltdown. We're not going to correct that in any less than 8 years.

    If a gold bull is indeed a mirror image of the stock bull that preceded it, then this gold bull is going to have to be that much more powerful than the 1970's, because the stock bull of the 1990's was far more overvalued than the stock bull of the 1960's.

    So that gives credence to your theory.

  185. Gary,

    You have also said that you believe this C-wave will be the most profitable of the secular bull market for PM stock investors.

    This implies that you think this wave will be more profitable than the final blow-off for PM stock investors.

    Is this because of the level of undervaluation coming out of the 2008 meltdown that still has to be corrected in the PM stocks?

    Or did I just misread you?

  186. David, Me thinks he meant so far, or the strongest to date.

  187. 2018 sounds just about right, that's where the next big crash will be.

    Meanwhile, everything goes higher from here.

    See you fine folks at Siegel's Dow 36,000.

  188. wake up old turkeys!! market has opened and we have a gap up in both gold and silver

    Wake up call

  189. Check this:


  190. wow, for a second i thought the chart was the stock market futures but then i saw USD. This is bad news for the dollar but good news for us.
    Shiney metals to the moon !


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