We have moved!


Please visit our new blog at: http://blog.smartmoneytrackerpremium.com to read the latest posts and to comment.

Saturday, December 18, 2010


I've temporarily unlocked this weekend's update. I'm also going to run the special 15 month subscription until Christmas.

Click here to read the weekend report.

If you want to take advantage of the Christmas special (a perfect Christmas present for that hard to buy for investor) follow this link and click on the yearly subscription. I will add three free months to the normal 12 month subscription.

Sorry this offer is only for new subscribers and or current subscribers converting a monthly subscription.


  1. To Nikeboy:Nope---no vacation here. We are still building a top. I have made some short forays and lost very small. I will post when I start shorting in earnest for the coming drop. I have pretty high confidence that the NDX (Q's) will get hammered in January. The great thing about trading is you can wait and wait for a good setup, and I just haven't seen one yet. I hope they wait for January before tanking.

  2. Hi Gary,

    Regarding 25% GDXJ,aren t you worried the juniors will get slaughtered here?

  3. So what? I'm not planning on selling and locking in a loss.

    I will sell at the top of the C-wave when they are many percentage points higher than they are now.

    This is just my core position in case I'm wrong or the bull surprises on the upside. It's my insurance against the bull running away from me.

  4. Could see TZ's low volume, holiday when no one is looking, smack down to get gold and silver under some key technical levels (Break 1300 & 25 if possible)

  5. Pretty fascinating stuff on silver. Be sure to watch the vid inside the article. http://is.gd/iYUzK

  6. why would we want to subscribe when you have been wrong recently.

  7. why would we want to subscribe when you have been wrong repeatedly recently?

  8. Jim: I have been trading for 35 years, and have read a zillion analysts/newsletter writers from time to time. Gary is in the middle of an incredible run of calls. Whatever you are expecting, if it has not been met by what Gary has been doing this past year, you are asking for the impossible.

  9. Jim,

    You must be new here.

    Gary has nailed it all year. And not perma-bullish, stopped-clock, vague stuff. He has made highly specific calls and every one has been correct.

    Let's go over his year, shall we?

    Last year around this time he called for an intermediate correction. It unfolded exactly as he predicted, although he got back in a little soon. And by "a little" I mean days. Based on his call, I waited to buy PM stocks until the correction had run its course and got a much better entry than otherwise.

    Then, most importantly, this August he started pounding the table for PM stocks, particularly silver. I was personally getting weary of the underperformance in PM stocks, which had not kept pace with the gains in the metal for years. Gary insisted that we were on the verge of a monster C-wave rally, and that silver and PM stocks were going to outperform huge this fall. He was right.

    This fall, as the rally went further than anyone expected, he urged people NOT to take gains. I probably would have, but I stayed all-in and made a fortune.

    Finally, this winter, he told us to take leverage off and go back to a core position. I thought he was a little early (he was -- he got spooked by the North Korea business) but this is a minor quibble.

    Anyone who has followed Gary this year should be up 100% for the year. I am. If Gary never gets another call right, I won't care.

  10. Maria,
    You are giving a very specific example of a directional trade in the middle of one of the worst stock market crashes in history.

    Hell I just bought some puts on drillers during that time and made the same or better returns and I didn't have to go through all the complicated rigama role you went through.

    Instead of giving us one instance that worked out why don't you tell us about all the lost capital for the many many times where the market just continued higher and your "insurance" just cost you money and crippled your long positions.

    Folks I can assure you if it sounds to good to be true it is. You can dream about risk free trades all you want but unfortunately the real world just doesn't work that way.

  11. I can say for sure I lost my butt on options until I learned some cycle, and bull market knowledge from Gary. I am still very cautious, but the best piece of advice is small doses, and only in bull market instruments at intermediate bottoms. I could see buying some puts if the market turned into a bear, but not on individual stocks. Perhaps some SPY puts 6 months out after a 50/200 cross and a confirmed Dow Theory. Even then, just a maybe. Maria may do well, but most will lose their clothing, food, housing.........

  12. Gary, what are the differences between this setup and the 2006/7 runaway move?

  13. I'm assuming you are talking about the stock market.

    In order for a runaway move to get traction we would need to see the dollar collapse. The dollar is rallying out of a yearly cycle low and as I pointed out in the weekend report it looks like it has just put in a cycle bottom on the last Fed meeting.

    Dollar rallies haven't been kind to stocks for the most part. At best stocks might trade sideways during a dollar rally but we certainly aren't going to see a runaway move in stocks at the same time as a dollar rally.

  14. JIM is probably Zstock in drag......

  15. Gary, what are your thoughts about a second bubble forming in the same sector within 10 years?

    what I mean is another tech bubble with Facebook valued at 40 bill, Groupon at 6 bill, Yoku IPO's doubling ect ect

    Is it different this time because of 4g? is this time for real? could tech be the catalyst you are looking for to start the new bull?

    your thoughts are appreciated

  16. jim,

    if gary is wrong then just do the opposite of his calls and you will make a fortune!

  17. The Nasdaq is still half what it was in 2000. How can that be a bubble?

    The tech bubble burst 10 years ago. It's not coming back anytime soon. Just like the housing market isn't coming back any time soon.

    The bond bubble is in the process of deflating right now.

    The only bubble I see at the moment is in government debt.

  18. Gary is a money machine. As far as i am concerned he should be kept in a glass bottle locked away in a vault. If you cant make money with him then you should give up investing and do something else.

  19. Most folks who make comments like Jim are lashing out for their own inadequacies as traders. You'd think he'd at least be smart enough to pick a target who didn't have a record as solid as Gary's.

  20. I also would like to chime in on Gary's track record. While his calls are not perfect (his crystal ball broke a long time ago...) His cycles work has been consistently profitable.

  21. Indeed, JIM's comment is laughable, and absurd.

  22. How do we get follow-up comments to a new post without leaving a comment?

  23. onlooker i completely agree with you ;-)

  24. For you folks interested in playing the coming drop, heres' an interesting chart of FXI (China). With the SPX making new highs China is already weak. Looks like it built a huge top over the past year, then made a weak push to new highs that failed. Breaking this trendline ought top yield a juicy drop. FXP is the double inverse ETF.


  25. Planned Economy Or Planned Destruction?

    Satire published in the Chicago Times in 1934. Speaks more fluently about today's times than most anything I've read in a while. Sign.

    Trotsky's quote was also fitting to this image, "You may not be interested in strategy, but strategy is interested in you."

  26. It will be interesting to see the outcome of South Korea's artillery drill that is scheduled to occur any moment now (12:00 PM - 1 PM Korean time).

    I think Korea has for a long time been an objective of the Western powers to eventually disband. They currently stand firm with 1 million+ in their military with another 8 million on standby though. They actually have the 4th largest military in the world! I honestly think that in the next few years there will be full blown war between the Korea's, it is more a question of who else gets involved?

    It will also be very interesting to see what gold does during this conflict. Maybe the dollar strengthening is too much for gold to avoid an intermediate decline even amongst Korean conflict?

    War games are of the most interesting when you're not involved.

  27. Gary,

    If you are expecting an intermediate decline in PMs would you take a small position in something like ZSL?

  28. If you look deeper you'll find that North Korea's current military/industrail levels have been reached through indirect Western financing.

    The same of course holds true for the previous USSR.

    It seems to be that what the final objective here is a unified Korea, with the further goal being a more unified Asia, with China being the supreme powerhouse.

    If you are naive about the US funding the USSR's military advancements I suggest you read, 'None Dare Call It Treason', by John Stormer.

  29. In all likelihood, North Korea will simply collapse, just as the Soviet Union did.

    This is actually South Korea's greatest fear. (They know war is not in Kim's interest. Even with his standing army, he would be routed very quickly by American air power, and he knows it.)

    If North Korea collapses, there will be a flood of refugees into the South and a massive humanitarian crisis. South Korea's economy will have a hard time absorbing a huge pool of utterly uneducated, brainwashed, starving people. They will literally be overrun by zombies.

    At the moment, Kim's regime is what's keeping that eventuality bottled up, and he knows it. His periodic tantrums are intended to extract money from the west to keep the game going. But at some point he will die, his idiot son will take over, and there will be some sort of coup d'etat. At that point, anything can happen.

  30. Elaine,

    I don't like answering for Gary, but repeatedly, over and over again, he emphasizes NEVER to short a bull market! Silver is the little brother of gold and so they are both part of an ongoing bull.

    Surprises in bull markets come to the upside, and even if this Korean incident blows out of proportion gold and silver could quickly rise catching most off guard. That is why it is smart, almost essential, to hold a core position in this bull market.

    It is still best right now though to wait for an intermediate low to get back into gold and silver if you're currently not holding a position. There should be some very good buys come January/February.

  31. Elaine,
    Not in a million years. In bull markets the surprises come on the upside.

    You may get lucky every once in a while but over the long run all you will accomplish by trying to short bull markets is to whittle away at the gains you made during the rallies.

    First off you will almost never time the entry right. So you will lose some there. Next the intraday rallies will usually be volatile enough to kick you out for losses. More whittling.

    Then there is almost always one powerful counter trend move even during an intermediate decline. That will get you for a few more percentage points.

    So by the time the correction is over you will probably have managed to whittle away 2-5% of the gains you made on the upside even though you were positioned correctly.

    In hindsight it seems like a good idea. But in real time its just a great way to throw away money.

  32. Gotta love Bloomberg, always:

    "Gold’s rise resembles moves reached before the three big crashes of the last decade: the Nasdaq tech-stock bubble of 2000, the U.S. housing market bubble of 2005-2006, and the crude oil- price spike of 2008, according to data compiled by Bloomberg."


    "History shows that when the price of an asset takes a parabolic climb like gold’s has, it’s eventually bound to crash, according to Mark Williams, an executive-in-residence and master lecturer at Boston University’s finance and economics department. And when it does it’s almost always the smaller, individual investors that get out too late, he said."


  33. These are probably the same people who couldn't see the housing or tech bubble coming. Now they think gold is a bubble when there isn't even anyone buying gold yet.

    Gold hasn't even made an inflation adjusted all time high yet. How can you have a bubble when the asset isn't even at new highs.

    When we see lines out front of the local coin dealer then it will be a bubble.

    When the Dow:gold ratio is at 1:1 or lower then it will be a bubble.

    Classic Moe Ronn!

  34. Yeah I have a lot of friends with wealthy families, my friends are all getting into finance, and none even know about gold/silver. What they'd just think if you brought it up to them would be "expensive, of no use."

    Ironically one of the wealthiest families I know is into gold/silver and have been since around 2000 right when it started! Next thing I know this guy just bought a farm a few weeks ago. He obviously thinks agriculture is going to take off. And for all you people who think it is paranoid to prepare for certain types of events, this guy just built a monster house 20-25 minutes from downtown (kind of remotely located), with HUGE water reserve tanks built under the house. His son told me his dad said there is a 10% chance of food shortages in the US in the future. His dad also had private arraignments with a private jetliner to pick his son, my good friend, up from college in case of emergency. This is of course just common sense but these elite do cover their asses in all situations!

    He also did say that HAARP is a mind-control affiliated project. He also has flown all his gold out of the country to South America. I'm not trying to scare any of you but this is all true, everything.

    10% is good news, eh? :)

  35. Also his dad recently had him buy into a few miners/etfs that Gary is already into. We are well positioned :)

  36. His dad would never conceal any of this to anyone. His son has of course told me all of this. His son only tells me this stuff of all our friends because he realizes I'm the only one that can comprehend any of it, or more or less, is interested. His son is not fearful whatsoever, the exact opposite, very comfortable always- he knows their family is of the highest preparedness. We almost never talk about these things, but over the course of the last 2 years, those are the facts that have popped out of him that I have noted. I wouldn't scare into getting rid of all stocks and into physical, the stock market will be around for as long as humans are around. It might close for a day or two (when it opened gold would explode, right :) ?).

    Just wanted to share with you guys some facts that have alarmed me. Cheers.

  37. You had me right up until the part about mind control.

    Rich people can be as crazy as anyone else, if not crazier. See under: Howard Hughes.

    By the way, why would you fly your gold to South America? South American countries have a history of corruption and expropriation. It's less safe there than somewhere like Switzerland or Luxembourg. And presumably when the sh-t hits the fan, you're going to want your gold near you, where you can actually exchange it for food, etc.

  38. He has a fully staffed, militia-backed, compound there.

    I shouldn't have brought HAARP up to be honest. I'm not saying right or wrong on the mind control. I haven't used the HAARP facilities, none of us have (expect maybe TZ, :),), and so I guess no one of can with 100% certainty answer on that.

    It would be interesting to study the natural state brain/nervous system frequencies. Also study what changes occur if these frequencies are altered. That last thing I doubt though is the ability, technologically, to create some type or propagator that would do this. Most likley though as many speculate its primary purpose is weather engineering, and its secondary purpose would be mood altering. I highly doubt it is currently used for anything other than experiments. I guess what I said before suggested that it is being used. I don't think that is true on a large scale. But that does not leave out of the question that it is planned in the future to do so.

    Listen to everyone, read everything, believe nothing unless
    you can prove it in your own research.

    Remember I'm not trying to bring up crazy "conspiracy" theories. I got into HAARP as I was reciting what my most elite-related friend has brought up to me over the years that has alarmed me. The reason I brought him up in this first place was due to his dad's interest in gold and silver which this blog is dedicated to. I probably will all add investments to agriculture in the future, as of now I haven't decided which exact means.

  39. His dad is nothing like obsessive-compulsive Howard Hughes. This guy taught graduate school finance, and has major institutional buildings named after him. I obviously don't know where he's "plugged" in, but I do know that he is.

    And it's not Hulk Hogan.

  40. IT decline catalyst: Korea artillery drill? Gary did hypothesis that weeks ago. Every news site I visit now basically mentions this as or near their main headline. MarketWatch is also providing this reasoning for the dollar rise. Still though we could go nowhere to January. It would be something if for the first time in a while though we got hit with a major decline prior to xmas eve. In both gold and the markets people would be confused.

  41. Not knocking the guy. I don't know him. I was using Howard Hughes as an example of the fact that the rich can be eccentric.

    A lot of people have end-of-the-world fantasies. Rich people can indulge them to an extent the rest of us can't.

  42. Gary Your blog limits the number of words but here is some info. I do between 50 to 60 trades a year. This year I have been in Cisco, CECO, MSFT, KFT, XOM, KFT, ABX, RIMM, Visa. The lack of understanding on how options are applied is indicative of why so many traders get hurt in any market - bull or bear. Options are actually very good in a bull market particularly for sellers of options. Those of us who understand options do not just buy an option and wait. I started in the 1970's, when options was a small market with limited number of optionable stocks. When you learn how to use options you learn how to buy the option and how to then cover that cost. Here is another example, from this year and again let me use VISA as it has been stellar. At the end of Jan 2010 with the stock at $87 I bought 30 put contracts Jan 2011 80 for 4.40. You can see that I always buy the leap put, bcause this affords me time to cover my cost of purchase and for the stock to have wide moves. Time is on my side with leaps. Again to defray the cost I then sold 30 contracts Mar 80 put for 1.58. At the end of Feb I bought back the March 80 put for .25 cents and sold 3 April 85 for $1.75. It expired worthless. The first week of May I sold the May 75 for .68. I had made 3.76 against the cost of my puts of 4.40. On May 20 one day before Friday options expiry, the stock opened at 72, rose to 75.42 and closed at 72.82. I bought back my May 75 puts for 3.35. - Now my cost was 4.40 for the original Jan 80 put, less 3.76 I had made, plus 3.35 to close early - so my loss was 3.99 - The same day, May 20 I sold my Jan 80 puts for 9.35 - My gain was $5.36 on 30 contracts. My cost 3.99 X 30 - $11.970.00 - My gain $28,050.00 for a net credit of 16,080.00 or 74%. Gary I am in my late 60's and I have been doing this for a very long time. You learn through paper trading how to buy options, cover those costs and reduce your risk. The same with stocks and putting in place a collar, which is a common method for options. In my last posts I mentioned a variety of books that are well worth reading. Those who believe options are for losing money do not know how to use them. I would also recommend the forum I belong to. Post questions as there are hundreds of users and they are more than happy to share ideas. The moderator is a woman who has been trading a long time. Her website is fullyinformed.com and while she does not do my style of options, she belives in options and stocks and is consistently successful and quite conservative. She posts all her trades and unlike many sites she does not charge. I stumbled on her site last year. She appears very interested in trading ideas. I subscribe to her site. As a sidenote you might want to check out the one lone gold stock - YRI that the moderator holds and trades. She is up 22% this year on it and was up 14% last year on a very conservative option strategy. Just my opinion and I hope it helps some people. I also enjoy your site very much.

  43. As far as agriculture, I'll never be a commercial size farmer but we've been raising our own animals for 2 years and growing enough food for a few families (for practice, although we give much of it away for now).

    Since I'm not a die-hard farmer, I have been buying up property with 50+ yr old timber on it, just for something tangible. Good thing about these "farms" is that they are low maintenance.

    I still have majority of assets focused on gold/silver although I'm looking for a window to re-enter those.

  44. And it helps to buy timber in areas that will also be good for farming, should something happen to the timber investment before it's harvested.

  45. regarding 'JIM' s comment (late to the blog party, i know :)

    I am imagining that Jim must have started reading this blog late Oct - early Nov, and heard that Gary was calling for the IT top and stripped down his position.

    Maybe Jim got out of gold, and has since seen SOME P.M. / MINING STOCKS still go up % wise since mid-Nov?? ( see ticker NAK =$9-$14 / PZG =doubled in price-- even AXU went from $6 to $9 in Nov 17 to Dec 3)

    So Jim , in your defense, maybe you missed the 'meat' of Garys call to load up early July, lighten up November..and are now seeing further possible gains...feeling he was wrong..

    BUT , in Garys defense, he has a solid track record for solid gains/low risk...and KEEPING GAINS.

    trading NOW is HIGH RISK...I do it with a small side fund & my own methods...(dont risk more than you re willing to lose)

    You can trade as you wish,have at it...

    but Garys report calling for a major decline will materialize...please write us here in end of Jan...and let us know how you're doing :)

  46. Alex,

    A month or so ago you posted a list of PMs and miners that you trade. I have searched through the archive but can't find the original post. Would you consider posting it again?

    One of my resolutions for the new year is to keep a trading journal.

    Thank you.

  47. Hi Gary and everybody,
    you all, with the exception of Gary, put down this Jim guy who posted here, not quite for the right reasons. Gary, in fact, has not been as right as everybody is suggesting here. I do think that it is virtually impossible to be right all the time, and it is healthy for a blog if some one points that out. Perhaps he did it in a way that was not entirely polite, but he wasn't outright rude. What I always like about Gary's responses, he is fair, polite, and never aggressive. I think that is good for a blog.
    To be fair, the last time I have written on this blog was when Gary's forecast was wrong. If I remember correctly, in March Gary was not trusting a market that was melting up from the February lows while I got invested against his advice on this site. In late April then the market started to act very erratic. Gary suggested that the melt up would continue and suggested to invest here, while I sold my positions and suggested on this blog that the market seems to be building a top. What happened then was a steep correction. This is my recollection. If anyone remembers differently, please feel free to educate me; but to change the history of the past twelve months by saying he was always right makes no sense. For as long as I follow this blog, Gary has been a good investment advisor with a gentleman style with some very good calls and some not so good calls.
    Btw, I am not that convinced that the market will be correcting now. What I see in all markets (and I know chart patterns are some times questionable, and I know that some data suggests a correction) is a cup with handle pattern that suggests further upside. I participated in the uptrend since summer with AGQ, SIL, some Uranium stocks and DAG. I sold recently and I am out of positions now. I am only holding physical silver at this point; you could call that my core position. I am out even though I wouldn't be surprised to see the market continue to go higher into January; the reason is simply that there was a good run and I rather miss out on another (smaller) leg up, than risking to dramatically decrease my profits. So I am actually with Gary on this one, while I am not sure that the call is right this time. In fact, even though I am out, I got the feeling there is still some money to be made here if you're in the market.

  48. Elaine

    I post with caution that these are mostly juniors (explorers and producers) so some fundamentally better than others. Can be volatile on any bad news, so be careful.

    good solid ones fundamentally are SLW NG EXK AXU PAAS HL UXG

    I have invested in PZG NAK EGI ANO MGN PAL GBG and a few others, but I use a chart analysis that is trade specific, and I have been able to catch some great % pops (like PZG, EGI ,NAK , etc) ...but please be cautious. I do not advice many to do what I do in this area...maybe after the it bottom arrives, these smaller ones will form nice uptrends

    but you gotta love AGQ and SLW at that point too

    please be careful this late in the cycle...these may be a nice watch list??

  49. Basil,
    Actually I had been warning early last year to expect a 10-15% correction in the stock market off the second leg up in the cyclical bull. The Feb. correction came in a little lite at about 8%.

    I was a little early getting back into gold and knew that possibility existed because the stock market hadn't corrected yet. But I wasn't willing to let gold get away from me just in case it ignored the stock market correction so I re-entered anyway figuring the greater risk was in missing the run than in worring about a correction that the bull would "fix" anyway.

    Starting in late March and early April I began warning that the potential was there for some kind of mini crash similar to February 07 because protective hedging had completely dried up.

    We all know what happened in May.

    We are in a similar situation right now in that speculation in call options is off the chart and no one is buying puts. The market has lost it's safety net so to speak.

    This should lead to a severe correction by the end of January.

    When it will start is anyone's guess. But it's way too late to press the long side, unless you have a hair trigger on the sell button.

    I will say this. I almost always sell to soon. So investors would probably do better if they wait a week after I sell.

    I can usually get pretty close at bottoms because cycles are pretty good at timing bottoms but mostly worthless at timing tops. Hence my habit of getting out early. I dopn't want to get "caught" at a top.

    When one has the kind of gains we've made over the last several months it just doesn't make any sense to risk getting caught in the down draft just to catch the last couple of percentage points.

  50. Basil-

    Gary also told us to go all in last January and we got swept into the yearly decline in the miners (stock market floated up through Dec & Jan and refused to put in it's intermediate correction and by the time it did, lights out for the miners). He was also very reluctant to get out during that correction and finally made the call to get out and sell the SLW calls which would have had time to bounce with the June exp.

    Other than that, he had a very good year overall. Not complaining, just showing he was not perfect as nobody is. At least we are not following Tim Knight's calls.

  51. Alex,

    Yes, definitely only on a watch list. I have stuck with Gary's 4 main recommendations and done very well.

    Thank you.

  52. CB:
    Of course, there is a reason for me to follow this blog. I am just getting cautious when the tone on a blog turns into guru-admiration as that would usually be a first warning that it might be better to not consider this blog for further advice. That is the reason why I put up the previous post. I wouldn't care reading Gary's posts if I wouldn't care for his opinion.

  53. Elaine

    good, now that I know you re not jumping in...check out a 6 month chart of AUMN and GORO juniors

    maybe at the bottom of the coming correction , we'll catch one of these :)

    J/K.....play it safe

  54. Blogger only SEEMS to limit the size of posts here. I have found it doesn't really (at least with firefox and potentially other browsers.)

    -Create a comment, as long as you want.
    -Push submit.
    -You get "Comment..." or "URI.." "too long" error.
    -IGNORE. Hit F5 refresh one or two times. (You will get same error).
    -Then push the BACK button on your browser. The browser will ask "OK to resend..." (yes/no) (or something like that). Say Yes.
    -You'll be back to the original comment page and your long comment WILL be there.

    (NOTE: if you want to write something longish, it is always smart to copy it first to another program on your computer just in case this process doesn't work and you lose it.)

    Let the long diatriabes commence.

  55. Paragraphs are always nice when writing a long comment.

    Just a hint :)

  56. OH...and stuff like this long comment solution. And the earlier (AGAIN) reply by gary about why he doesn't short, are the types of things that should be in a FAQ, I suggest.

  57. Gary

    never noticed the rock climbing pic by your name (the pics dont seem to show up on my explorer , but on laptop i use firfox and just saw it)

    I know its your hobby, but is that you in the pic?

  58. and to think I thought you were low risk!!

    Its clear enough to see chalk on your fingers, but I dont see the safety harness :)

  59. Trust me there is a harness and a rope.

    I may be an adrenline junkie but I'm not suicidal :)

  60. gary, i feel better now.... :-)

  61. http://www.321gold.com/editorials/hoye/hoye121910.html

    Hoye in the dollar bullish camp. Projecting to 84.

  62. thats good...

    dont ant to give anyone legitimate reason to cancel their 1 yr subs lol

  63. This is what I like to do for fun.

    Shows you how smart I am.

  64. Hey! The OEXers are buying a lot more puts than calls finally. It is too early in the day to count for much as the numbers are still small and will therefore be volatile, but if it holds up till the end of the day I may put out a short or two. I am getting nervous about waiting until January as they may just break before since everyone "knows" they can't go down in late December.

  65. >This is what I like to do for fun.

    The market appears to be like climbing rocks. The uptrend is a slow grind over time. The downtrend comes unexpectedly, is much much faster with significant fear.

  66. Gary

    nice link...THAT actually looks like a great time ( and yes, I saw the harness that time...especially the last 10 seconds)...

    Markets are slow 2day/this wk ...good time to work on those skills . I may take an early leave here shortly.

  67. PS: Let me ask a technical question. If a person is climbing and has that safety rope, the rope is always anchored as you go UP....so it's always anchored at OR BELOW where you are, right?

    So when you slip, you freefall down the rock face, slamming into any outcropping, possibly spinning around. Then you get jerked as the line holds and you slam into the face at that point?

    How often do people slip?
    Is that the process when they do?
    What is the damage level from a drop down until the rope holds?
    How many times does the FIRST hold point NOT hold and you pop lower to another one?

  68. OH..didn't watch the video fully. You slip at the end. Not too bad.

  69. Your belayer holds the other end of the rope. When you fall, if he's a good belayer, he will try to jump right as the rope tightens so the fall is cushioned and you don't slam into the rock.

  70. Elaine, What I have noticed is that towards the end of an uptrend in the miners, some of the least attractive get noticed as laggards and they get bid up. Now PZG had a major discovery, so it may continue, but the other late bloomers Alex mentions seem to always be in this last to the party group. You could include KBX and BAA into his list of late bloomers.

    The operative thing here is that they show up at the end of the uptrend, and always give back most of their gains.

  71. Brian

    I tend to agree (however we arent at the very end of this c-wave, so after the pullback , these can still become rockets...CAUTION NEEDED THO).

    and the theory...and old saying(s) with regard to your observation is that when the bull mkts run, the big caps lead and then as it catches on, the junior producers and explorers can catch the bid...the sayings are

    "When the wind blows hard enough, even turkeys fly."


    "Rising tides carry all ships"

  72. Alex, I probably should have clarified "end of an uptrend" to say the "end of an intermediate cycle" to put it in SMT parlance!

    My main point is these are the most dangerous, as they have no fundamental reason for catching a bid other than the rising tide theory. I play them too, but you have to be a careful chart watcher.

  73. Here's a link to Eric Sprott's fund and it's mining holdings. I noticed he just added a stock that was recommended to me by a guy who runs a pm hedge fund. (BRD).


    He also increased ABX, AXU, CGC, JAG, KGC, MFN.

    I have AXU, BRD & MFN on my watch list.

  74. thx Jayhawk

    Brd is new to me , and I love that volume on a 1 yr weekly. Strong buying and the news showed it to be a recently profitable producer...on a pullback I will be watching this one.

    again...new to me , thanks

  75. Never mind. I see that the SoS numbers aren't updating this morning. I was looking at Friday's closing numbers.

  76. Alex-

    Glad to help, I appreciate the sharing of different ideas in regards to juniors. I want to hold a bunch for a longer term play--but also catch some good ones that could be ripe to move next year.

    Longer term speculative ones I'm checking out-Impact Silver, Arian Silver, Sandstorm Resources and a few others.

    I like many of the ones you posted as well.

    Article on BRD-


  77. Last year BRD was named Apollo Gold symbol AGT. They declared bankruptcy and changed their name. It has been getting good press lately.

  78. Intermediate correction will be sideways, i.e. consolidation...

  79. This dollar rally seems to be falling on deaf ears...

  80. In the last twenty years no intermediate corrections have been sideways consolidations. You can't work off sentiment extremes by going sideways.

    Markets just take a while to top. That way emotional retail traders get suckered into the top of the rally while the smart money gets out of the way of the correction.

    We've already had several large SoS days. Big money is already out the door. Now you just have to decide if you are going to let yourself be suckered or not.

  81. Brian

    I remember Apollo Gold...I was wondering what happened to it...I lost track in one of the corrections.

    I was in it at .35ish?? it shot up to .70+ ish ..and dropped again...and I spit it out around .55ish if I remember correctly.
    Rough ride :)

  82. Today's wonder stock is XPL. Somebody knows a secret because there is no news that I could find that would cause a 46% rise this month......

  83. SoS -31M on gold..this is highest SoS number I've seen in a few weeks for gold

  84. Virtually no premium on near month S&P puts here.........

  85. Diamonds are forever. MDM steps to the next level. Good story behind this one for the investigative types.

  86. In this article just posted , and looking at this writers chart-


    He is basically calling for an immediate rally in gold ( no room for an IT bottom), so whomever he sucks into this market at this point will be selling you there stock in Feb...

    kinda sad, but thats what makes a mkt a mkt.

  87. Hey DG...follow up on your OEX post

    If i'm reading this correctly, EOD data: calls 7,821; puts 19,689

    put to call ratio of 2.5...which I believe is quiet high..the number of puts really increased in the last hour..wonder if we tank tomorrow?

  88. Nike: Been out and just got back...Yes,you are reading it correctly and yes, that is very, very high. I am going to short some SPY in the aftermarket based on it. These guys are not always right but have been virtually perfect for the last month or so, and I believe in going with the indicator(s) that are working. Good catch. Let's see what happens tomorrow.

  89. DG

    Where exactly are you looking? Because I don't see those numbers on this page:

    CBOE Intra-day volume

    What am I missing?


  90. Onlooker: Your looking at the intra-day stats. The final stats are posted a while after the close and can be found here:

  91. DG,

    When I look at the volumes for December expiry (12/22), I see almost 12000 puts traded today and the open interest is now down to less than 3000.


    Look at strikes 510, 520 and 525.
    It sounds like most of these were puts that were bought back and not puts sold.


  92. rkp: I usually look at the raw data for the OEX traders, but your point is a good one close to an expiry...but I thought options expired this past Friday? I am not an options trader (obviously) and just look at several stats for sentiment. Why are these options expiring 12/22?

  93. Hi DG and RKP,

    I think that Yahoo meant to say Jan 22nd 2011 and instead said Dec 22nd..
    I'm pretty sure that the Dec OpEx is over

  94. The OEX options traders are usually the smart money, but I certainly don't see their latest bout of put buying reflected as profits for them in the major averages.

    Their last bout of put buying commenced on 11/17 (2.12 p/c), and got exceptionally heavy on 11/22 and 11/24 (3.15, 3.29), and ended on 11/26 (1.62).

    While they certainly may have profited on individual names, those profits were not reflected in the averages.

    I think they actually got it wrong in November.

  95. DG,

    OEX has weekly options. December week4 options actually expire on 12/23 which is Thursday (24th is probably a market holiday).

    The other problem with Put/Call ratio is you don't know if someone is buying or selling Puts/Calls. Lot of people sell Puts for the premiums if they think market is going up (or if they hold longer term options, then they could be selling short term options).

    Not sure how you gain an edge by looking at the number without knowing the ratio of buys and sells inside that number.


  96. Wes: I look at them primarily for next day action because they flop back and forth so much. I am more enthused now because I think we are going to tank for many reasons. On the dates you showed heavy OEX put buying:

    11/22--Dow was down 142 the next day
    11/24--Dow was down 95 the next day
    11/26--Dow was down 46 the next day
    11/17--they blew this one

    As I only use them as evidence for the next day, 3 out of 4 is pretty good for a bull market that refuses to break. I use the 10 or 21 day MA for longer term bets. I am more bothered by what rkp said.

  97. I actually use the sentimentrader.com site where Jason boils all those stats down, using things like ROBO (Retail Only Open to Buy) if I want to get more into it, but many more people buy options than write them, so the raw data generally works. Here's a partial analysis from Jason's options sentiment page:


  98. @ basil Kudos for your post. Crowds form everywhere, it is good to keep in check the impulse for those in which it is too irrepressible ;) Do you have a webpage where one could read out your views? Thank you.

    Equally, kudos to Garry for his reply. Not giving in to sycophancy is proof of character.

    @ TZ (7006): Thanks for the tip re. long postings :) It would have been useful on occasion in the past, the occasion will certainly arise again in the future.

  99. DG,

    Nice try in making them look good. They purchased more puts than calls every day from 11/17 through 11/26.

  100. What you call "sycophancy" can also simply be called "appreciation" from people that Gary has helped.

    You will generally find that Gary is challenged and questioned much more than he is lauded around here.

    Jim's post elicited the responses it did not because it questioned Gary as a guru, but because it made an assertion that was plainly false -- that no one should subscribe because Gary's been "wrong repeatedly recently". The record is easy to check. If you'd followed Gary's calls, you wouldn't have hit every turn perfectly, as some seem to demand, but you'd have done exceptionally well overall.

  101. Ditto that David. It was the typical hit and run, unsubstantiated, and provocative nature of JIM's comment that irked me. I have no problem with a reasoned and thoughtful challenge, backed up with some evidence, etc.

  102. I just looked at the numbers and dates you posted which you said were the big ones. More puts than calls is not relevant unless it's approximately 1.4 or more to 1 (it changes based on where the BB are). Did you post random dates or the extreme dates? They couldn't have been higher than 1.4 to one from 11/17 thru 11/26.
    And even if they were (very doubtful) it is a mistake to rely on only one indicator. GIven all the other background conditions I am interested in a very heavy number. I didn't realize that the have an expiry every week, though, and for that I'm grateful to Ravi. I'll have to check that from now on.

  103. Silver symmetrical triangle. Gold in down wedge (and intraday reverse H&S pattern). Both look ready to break higher.

    Doc suspects any break higher (if so) won't last long. (DOC: if i'm giving too much away from your comments let me know).

    I'm not so sure how fast we might roll over. A break higher could see a tradable move I think and I'm pondering it. Not only might it be tradable, but it might get back in to a continuing uptrend.

    Yes, I know the risk and I only consider this with VERY tight stops.

  104. Went long in here with gold futures around 1386 with a very tight stop.

  105. Money never sleeps, but it looks like everybody else here does.

    I'm risking 0.3% of net worth on the long gold trade. High leverage. Looking very good at this moment for a break higher.

  106. Still awake here...Good luck, TZ!

  107. Good interview on KWN. Robin Griffiths talks the miners in the last 5 minutes or so. Was long gold bullion etfs, now switching to the miners. Thinks HUI 800 is the target. Tired of trying to time the short term stuff and thinks just take your positions and ride it till the bitter end.


  108. Going to bed. Stops near the low of a few hours ago for small loss if hit. Not looking as good now, but you never know.

  109. TZ,
    Just my opinion but I think you are just setting yourself up to take losses with these trades. Tight stops in a sector as volatile as metals is just asking to get knocked out for a loss.

  110. Gary,

    have you ever considered that intermediate could have ended (and started again) on 26th November?


  111. The weekly dollar futures look like they are topping and in the early stages of rolling over...a process that could take 4-5 weeks, although maybe not. Shorter time frames(daily, 4 hours)are a bit more positive but still a bit toppy. The weekly looks like it is supporting a long term dollar decline/risk asset rise beginning sometime between now and late Jan. Right now, it doesn't look like a short term dollar spike.

  112. I cant figure why one would go long gold at 1386 when 1388-1390 has proven to be a HUGE resistance. Have you seen how stock market has gone up, but gold has been held hostage under 1390 area.

    I suspect market will get big whack before Christmas and will get gold down to 1350-1360 region, where it is a better buy than right now.

  113. SPDR GLD had 32.87 S.O.S. on Monday

  114. Gary,

    Why do you use cycle analysis on the Dollar Index, when it is a very thin market? The volume on the Dollar futures is ridiculously small when compared to EURUSD, for example, or any other major dollar cross. I believe that the sentiment and cycle of the Dollar Index is mostly dependent on the sentiment and cylce of the major crosses, specially USDJPY and EURUSD. So why not analyse these 2 crosses instead of analysing the Dollar Index, which very few people trade?


  115. contulmmiv

    you were giving kudos to everyone else, but I wanted to give kudos to you for using the word sycophancy in the blog :) I've used cacophony , but had to look sycophancy up :)

    while I'm at it..kudos to Gary ,WES & DG and Jayhawks etc for staying on top of their research game ( usually to our benefit)
    Kudos to Gary for this blog and his time & energy!

    yes, just had my second cup of coffee ...WIRED ;)

  116. GG,
    If you read the latest weekend report you would see that every intermediate cycle in the last 20 years has dipped back down to test the 200 DMA and many drop below the 200. Obviously we weren't even vaguely close to anything like that in Nov.

    An intermediate cycle decline has to be strong enough to completely correct overbullish sentiment. Right now sentiment is at multi decade highs. That will be corrected at some point.

    Positive seasonality may hold the market up till next year but it will just mean the correction when it comes will be all that more severe.

    The Flash crash in May was a diret result of the Fed's efforts to artifically inflate asset prices. The market rose too far for too long and everyone lost all fear of a correction. When it came no one was prepared for it and everyone tried to get out the door at the same time.

    The Fed is now manufacturing the same risk again.

  117. David,
    I mostly use cycles analysis on the dollar because I have decades worth of history to draw from and historically it has followed these timing bands.

    I would add that the dollar is the worlds reserve currency. There are more dollars circulating around the world than anything. It is probably the largest market in the world.

    I'm not concerned with just the size of the futures market anymore than I'm concerned with the size of the futures market in the S&P or gold. All I care about is what the actual asset does. And the dollar has very clear cycles that it moves through.

  118. CRAP MAN!! TZ was in at 1386 with a very tight stop...gold went to 1384ish and bolted to 1392. I was hoping he'd get a little extra cash from a tri angle break :(

  119. TL,
    What about the dollar "looks" toppy. What does toppy look like BTW? Seems like without a crystal ball toppy looking is kind of a meaningless term.

    None of the momentum indicators are diverging and MACD is on the verge of crossing back over. We don't even have a swing high, not that it would have any significance this early in a daily cycle.

  120. Gary

    just wondering what you did for work in your 20's and 30's etc..or your educational background.

    I ask only because it doesnt matter what question is asked or what angle it's coming from...you have a well thought out , fact based answer that even if one were to dis agree, they would have to admit that it is reasonable. It never sounds like bull or smoke and mirrors.

    But I almost feel that you didnt get a business degree, or they may have clouded your thinking into 'seeing' things differently (like cnbc). (NO Offense to those with a business degree that CAN see through the smoke and mirrors)!!!

  121. Dear Gary,

    Poor you! I don't undertsnd those guys who ask you for advice and then keep telling you that you might be wrong!, you must feel like the captain of a ship in the middle of the storm!! As you said before, let't all have a trading break and re- assess when the crash comes....

  122. Alex,
    Purely self taught. I learned the hard way by making mistakes and learning from them.

    Luckily I usually only have to make a mistake once or at most twice before the lesson sinks in :)

  123. Gary

    Thats my background too.Many hours reading and many more learning from my mistakes...
    I ve often said that doctors pay quite a bit for their education,Lawyers for theirs , so anything worthwhile will cost you time and money. Its about not giving up or discouraged from losses to me...its an education.

    We have paid our tuition to this market for our education. Well worth it, and I'm happy to witness another example of success from that 'self taught' arena in you.

    thanks for sharing.

  124. Weird bounce in gold/silver. Anyone know what that was?

  125. So much for that gold/silver breakout, for now at least. This action is just another reminder to people of just how volatile (and randomly weird in the short term) these markets can be. Don't try to rationalize these kinds of spasms.

    The rally from the July bottom has generally lulled many into a sense of complacency. But when you look at their history you can clearly see that much more volatility is the norm.

  126. Hey Gary-

    On Weekly March dollar Futures, I've got the StochRSI %K high and starting to flatten, the MACD speed line still in uptrend but starting to flatten, and a directional indicator with a downward bias at present (although flat for this week). Plus, the price is nudging admittedly weak resistance...all of which I take as the dollar feeling to be in the beginning the topping orocess ...although obviously anything could happen and the rolling over process could take time.

  127. Don't lose sight of QE2 primary function, which is to buy treasury notes and bonds, $600B worth to be exact. But in light of this action, look at how far bonds have dropped in the past 4 weeks.

    If bonds can collapse under this level of direct buying support, there is absolutely no credence to the argument that QE2 can or will forever support a rising equities market.

  128. Checking the 3 days before and 3 days after Christmas in the stock market when the trailing quarter, month and week have been positive, there have been 126 such days since 1950.

    Exactly one has been a 1% or greater down day.

  129. Poly,

    That's a good point, but I would say that QE2 has not offset a rise in interest rates due to improving business conditions.

    I'm not as sure what the corresponding statement would be about the stock market.

  130. We've had "improving business conditions" for 18 months and recent news was no better. Plus the drop in bonds was sudden and severe.

    I guess the lesson is don't be blinded in thinking the fed will "always" raise all ships.

  131. Seems to me that QE is creating lots of money. That would naturally depress bond prices as inflation and credit risks are involved. Oftentimes, though, "to much money" means higher stock prices as the money needs to go somewhere, and it may fuel further market gains (after a big correction) until/unless people get really scared about things coming unglued. Makes sense to me for bonds to drop and stock to rally, until rates get high enough to choke of growth.

  132. That's a great stat about Christmas, Wes 12/22, 12/23, and 12/31 are the three strongest year-end dates for this year, so if we are not down today, it's probably game over for a much dip until January.

  133. I've been saying all along the bond bull expired in Dec. 08.

    Secular turning points in bonds tend to be very long drawn out affairs but I think the bond makret has recognized that the US is now on an unsustainable debt binge.

    If anyone happened to read Vic Sperandeo's article in this weeks Barrons you know how these things end. Either the government admits defeat and defaults on it's debt or they eventually hyperinflate the currency.

    The bond market is starting to price in political stupidity.

  134. I would point out that stock markets rarely stay ahead of inflation. If they did the 70's would have been a great time to buy stocks.

    When a government goes on a debasing binge the only safe place is in commodities.

    Liquidity will continue to leak out of stocks and into the commodity markets until inflation rises high enough to destroy the economy.

    We saw this very thing happen in 08. It didn't matter how much money the Fed printed it all just flowed into the energy markets and stocks continued to fall.

  135. I'm always confused about how to interpret the OEX options data on a day like yesterday.

    The p/c ratio of options traded was 2.52, clearly bearish (for people usually right), but yesterday's open interest p/c was only 0.66, well below the long term average and clearly bullish.

    If the open interest is what they take home at the end of the day, are the rest day trades with limited predictive value ?

    I admit confusion here.

  136. This market is truly ridiculous...I guess when they say dont fight the Fed, they are right. SnP shorts is bleeding!

  137. Gary,
    thanks for the answer. What i am concerned about is that EUR is starting (if not already done so) a new intermediate.

    Here's my oscillator (cycles are blue, the indicator to look is the cycle speed (the black line) when it cross zero):


    It is hard to imagine a sellof with dollar dropping.

    There's another possibility: a failed intermediate cycle on EUR. But that would mean HUGE drop for about 6 weeks both on equities and preciouses.

    The point to look at is 1.2963. A new 16days cycle is about to start on EUR. If it drops under that point, we can short the whole farm on it^^

  138. GG,
    I'm not sure what that chart is but I can tell you the dollar cycle runs 20-28 days most of the time. The Euro will run opposite the dollar.

    The dollar just bottomed 4 days ago and there is no sign of a left translated cycle at this point.

    Sentiment on stocks is at multi decade highs. I realize that our emotions will fool us into thinking this is going up forever but I can assure you it won't.

    When sentiment is this extreme we are at risk of running out of buyers at any time. Eventually we will and when that happens the market will drop like a rock. Then you will be wondering how in the world you could have ever thought the market would never go down.

    And before it's over you will be convinced the bear has returned. Then of course that's when we will run out of sellers and the process will reverse.

    The Fed is exacerbating the moves with it's free money. So the rallies go higher and last longer than they normally would. Then when the correction comes it ends up being more severe than it would have been...which causes the Fed to freak out and print more.


  139. The S&P is currently stretched 9.7% above the 200 DMA. That's about as far as it ever stretches barring the intial rise off a bear market bottom.

    The market is in very dangerous waters here.

  140. This comment has been removed by the author.

  141. Anyone got SoS numbers today? Site seems to be down, the Market Data at WSJ.

  142. Robert

    Nope, it's not updating for me either; stuck on Monday EOD data.

  143. I had to giggle at this one, but thought I'd put it up here,

    "‘We’re smack in the middle of a ‘Puetz window’. Researcher Stephen Puetz studied eight epic market meltdowns dating back to Holland’s 1636-37 Tulip Mania. He found every one of them took place within a few days of a lunar eclipse… and each time, that lunar eclipse took place within six weeks of a solar eclipse. Heh… The next solar eclipse is Jan. 4.’"

  144. Bonds may be rolling over again with a failed daily cycle manifesting. I got out of my TLT long with about a 1% gain. Should have gotten out sooner of course, but we know how that goes. I thought there might be a bit more in it. And there may yet be.

    But it's looking ugly as we are holding perilously at yesterday's low. Maybe a renewed plunge in bonds will help break stocks down. If anything ever can again! LOL

  145. The NDX is stretched 13.7% above the mean and only 7 points from the 07 high. I doubt it will be able to get through that resistance level on it's first try.

    If the Q's can tag $55 speculators might consider trying a short.

  146. Gary,

    Gold vending machine right in your backyard:


    Here is another one in FL from this past week:


    On a separate note, on your long term view, how about the low in 2012 / 2013 holding above the March 09 low and the stock market forming a right translated 4 year cycle instead of a left translated?

  147. Here is the company making these Gold ATM's:


    They are planning to install at least 30 of them country wide next year.

  148. Nick,
    The key is the coming three year cycle low in the dollar. The rally out of that low should intiate the next leg down in the secular bear market just like it did when the dollar rallied out of the 08 three year cycle low (the stock market actually discounted it by several months and started heading down in Oct. 07 instead of March 08.

  149. Watching TZA on daily, monthly,weekly...even 10 day hrly and 5 day /15 minute and it looks like a bottom on a decending wedge pattern.

    Could be due for a bounce or maybe more, but when the markets finally let go...this should be a great ride up.

  150. posted a buy of NG last Friday @ 13.50...out at $14.50.

    posted a buy of ANO @ 1.22 last Friday ( still holding on , since volume looks o.k. , but hairs are up on the back of my neck :)

  151. This market is still very undervalued. Maybe fairly valued at SPX 1500. Maybe.

    For anecdotal evidence how the economy is improving dramatically, look no further than frequent visits to Starbucks and Apple stores. Breathtaking!

    Vegas is also coming back. MGM great buy.

    Housing? Getting better. USG, a Buffett stock, looks great.

    Keep buying.

    Precious metals look like they're headed down to sideways most of 2011.

  152. Volatility is a traders market and not long term. I woulkdn t recommend buying here--unless its an amt you can lose.

    (although I did by intraday break out of REE on the pullback @ 9.70. this will be a quick trade and possibly my last for the year).

    these markets are drifting up lightly like most Christmas rallies.( See WES post on the history) Can run through new years - OR NOT -and will break down.

    oh, will by TZA soon :)

  153. alex,
    "oh, will by TZA soon :)"

    why you think the mkt going to stop?
    what technical indicator make you think so?

  154. Anyway, this looks a lot like accumulation...


  155. GG,
    Still too early for the three year cycle low. I went over the series of events that should drive the dollar down into that low next year in the weekend report.

    Namely a severe intermediate correction early next year that causes Ben to freak out and print like crazy. That should tank the dollar into the three year cycle low and in the process spike inflation to the point where it collapses the global economy again.

    You are probably wasting your time trying to chart your way through this mess. Tops are never going to look like tops and bottoms are never going to look like bottoms on a chart.

    In order to catch the turning points you need to learn cycles and follow sentiment. Then to top it off watch the money flows so you know what the smart money is doing.

    Right now the charts are saying up forever but all three of the reliable tools are saying extreme caution is warranted.

  156. oa92000

    Exact tops are impossible for me to call really. I see them coming , but stay in later than most I think...anyways

    Yeah, like Gary said...extreme sentiment levels (giddiness), but also the SPY and Nasdaq and DJIA are continueing up on less & less volume ( like Gary said...buyers running out) - Higher highs without MACD confirming...distribution...etc and when Mkts get that extended , they waterfall sell-off when the time comes. I am long a couple stocks, so TZA can act as a hedge until I can close positions if need be.

    Also though, on the TZA there s a descending wedge forming , so a break of that downtrend line is a good entry. I may go sooner to hedge my REE in case of a sell-off

  157. Well folks, I think that's it for the year. The silly season is upon us and dart board stock picking seems like a great idea, for now!

  158. GARY,

    >Just my opinion but I think you are just setting yourself up to take losses with these trades. Tight stops in a sector as volatile as metals is just asking to get knocked out for a loss.

    This trading is my technique, not yours. I know. Stopped out for 0.2% loss last night. However I made the same trade on the wed and thurs morning bounces and am well ahead considering all three.

    I will continue to buy bounces in the decline to INT low. At the one or two bounces which I believe to be *THE* low, I will hold instead of trade out of them for smallish profits.

  159. MLMT,

    >I cant figure why one would go long gold at 1386...

    May I suggest that trades which are met by most people as being crazy or completely boneheaded are often the ones that work out. It's like buying on panic selloffs - it's VERY difficult to do, but it usually is profitable because it's so hard and because so many people are doing the opposite thing that you get good prices.

    Still...I did lose on last night's trade. But I'm well ahead overall with my strategy.

  160. I didn't post the wed/thurs trades and I don't really want to get into "it's the internet and you are making things up" situation. You either trust me or not. History shows that posting small side trades isn't really the meat of this blog so I didn't.

    I commented last night cause it was a slow night. If people would like to hear about my buying bounces on the way down (one of my strategies; like DG has his own too) then I can post a bit more on them in real time.

  161. TZ,
    My point wasn't so much as to whether or not the trade had good or bad odds of being directionally right.

    I was suggesting that a very tight stop almost guarantees a loss even if you got the direction right. Case in point you did get the direction right and you would have a profit this afternoon but your tight stop didn't allow the trade to work.

    The metals are volatile. A tight stop almost guarantees you will lose even if you are right.

  162. TZ

    that sounded like a 'general'post so I'll add my 2 cents.

    I like this blog, I read what everyone says . I trust what you've said in the past (its fairly anonymous anyways, no one knows us personally , so why would you lie). And I like your posts as well as others. (Some are overly critical, but I just read them and say to myself..

    "what? You never lost $$ in the market??" we have ALL lost enough to not be OVERLY critical.This isnt an EXACT science, its human nature.

    I say keep posting as you like...I enjoy reading every ones thoughts, I learn from their winning trades and ideas , and I learn from ones that dont work and the ideas behind them.

    also when Gary gets a rude post..he must use it as a sentiment reading, because he barely bats an eye -good patience lol

  163. Alex-

    Can you post a chart on what you see on TZA? I don't see it--looks like a death channel at this point!

    I got burned last year shorting around this time frame when every kept calling tops but the market drifted higher for ever it seemed.

  164. TZ

    when I said I like your posts as well as others (some are overly critical)...

    I meant some OTHERS posts..not yours :)

  165. So much for PM's caring about what the dollar does.

  166. Jayhawks

    I'll try in a minute. TZA isnt quite ready yet , but I was thinking of using it as a hedge ( a waste of money) :) - in case the sell off was to gap down tomorrow.

    I used the TZA in different time frames but 3 months has one a POSSIBLE formation ...(maybe its a stretch, haha)...but i took lows of oct , low of Nov , Low of Dec for bottom and high of 11/16 , 11/23 , 11/29 , and 12 /16 as a contraction of that channel.

    It looks like $15 would pay off well if the markets start failing.

  167. Mom,
    What do you mean? The dollar has rallied for 6 weeks and in that time gold is down about $40.

    But more to the point I expect gold will drop into an intermediate low no matter what happens to the dollar.

    It corrected into an intermediate low this summer even though the dollar was weak.

    These intermediate corrections are like clock work in the gold market. I doubt the clock has broken.

  168. I have come to see over time that Gary is also a trader, he just uses different words. Anyone who goes from 130% long to 50% long in the middle of a bull market is a trader. Buffett held his items for decades. Cycles and sentiment are timing tools and would be of no use if one didn't trade off them.

    So it come down to the trade's holding period. Gary calls "short-term traders" traders. He calls guys looking out a month or three...whatever he calls himself, because that's what he does.

    As for myself, I do both, depending on what my macro view is and what the sentiment is on the item. I bought the Q''s and the bottom in 2003 and held for two years. Shorted the euro and China earlier this year and held each for months. He's right that I make more money that way, but the market has to let me hold that long (the ETF acts right, sentiment doesn't get wild, I don't get in the hole much) I do it this way because I can never get badly hurt and damage my financial health. I made a nice chunk in the PM's and was never in the hole. Taking quick profits simply because they are there is a waste. If I get into the black I set a break-even stop and otherwise hang in there (if I bought for more than a bounce, until it gets overdone on the upside vis-a-vis oscillators or sentiment.

    Anyway, a little trading philosophy while the slow markets play out the crazy time of year.

  169. FOr those of you who like Christmas, you can watch Paul Tudor Jones´ Christmas light show. That´s one of the benefits of being one of the greatest trader in the world :)


  170. I'm showing a break out of that channel/wedge around 15.60 would be a positive sign for TZA. I'm in a bit, but will cut it loose soon. I know others are in. Who was the dude who got 5-6K shares last week?

  171. DG,
    You are right. When I say trading I'm talking about these quick little trades that we often see posted on the blog.

    Short term and day traders must use strict position sizing and risk control or you run the risk of losing more than you can recover from.

    So when I say a trader can't even come close to an investor that is what I'm talking about. Some one with a limited position size trying to make hundreds or thousands of trades a year.

    Unless you have a mechanical system and have the discipline to follow it just trading off gut feel with the restictions of proper risk control you will be lucky to win 55-60% of the time.

    It is going to be virtually impossible to keep up with an Old Turkey investor with that kind of handicap.

    Obviously I do trade the intermediate scale to some extent. When I think an intermediate cycle has bottomed I step on the gas. When it's late in the cycle I coast.

    And when I think it's time for a C-wave to top I'm going to exit everything.

  172. Jay,
    Instead of guaranteeing a loss if you don't time the trade perfectly. Why don't you take timing out of the equation.

    We know an intermediate correction is coming. We know all markets are stretched too far above the mean.

    We know all markets regress to the mean, with no exceptions.

    If you take a small enough position you will be able to hold the trade until it works.

    If you demand that you time the trade perfectly you will almost certainly incur a loss even though you probably have a winning trade.

  173. Man if I could win on 55-60% of my trades I'd be incredibly rich by now! My gains are far larger than my losses so 35-40% is great average of winners to losers for me. My favorite trading style is yours (months or so), but I make money and love the game of doing the short-term stuff as well. Believe me, if we catch the bottom on the PM's I expect to make a pile and will not be "trading" in and out of them (except maybe to go from super-heavy back to heavy). I will have about 50% of my net worth in them when the time comes if the tape, sentiment, and cycles (not the charts) all look right. I also plan to buy some ag, and perhaps a little uranium.

  174. Jayhawks

    and if you do a 6month chart , go from the Bottom of july (July 27) across all the same bottoms , then use 8/25 and11/03 and 12/16. the stochastics looks done to the downside soon too ( but the fed is pumping things up, so its a tough call).

    Also, this seems to be clearer on a Non-log scale.

    I also found out this only works on

  175. Big dollar rally and gold is still up today, was my point.

  176. DG

    I agree , I think we have similar trading preferences, and I too love the long trade with cycle timing 3 to 6 months of riding it.

    But at other times...like now... I think for me , I just see other small opportunities and 'cant sit still' until it's definitley over :)

  177. DG,

    I've won 42% of my trades this year and "if I only" held onto these 42% a little longer :-)

    Still be a great year.

    Jawhawk, I had the 5k + TZA last week.

  178. Gary-

    You are right, patience on this small position. (It's around 7%)

    Poly-you still in?

  179. Longer trades are the most successful and that's how I handle most of my money. But those trades make for lousy conversation.

    There has not been a single day in 2010 that I have not been in the market.

    I mark to market every Friday, and my account peaked on 12/3. Since then I am down 1.5%.

  180. Wes, that's remarkable because I am also down almost exactly 1.5% since about that date as well! Weird.

  181. Well the long bond reversed right off that support/resistance level I was eying (the low of yesterday). Of course I got shaken out in classic fashion, but with a profit.

    I should have waited to be sure it wasn't going to hold there, I suppose - jumped the gun a bit - but I had a tight stop on it as I don't have conviction longer term.

  182. if tomorrow GDP number is good, what that will do to TZA?

  183. No, I got in at $16.16 but got stopped out fairly quickly. Itching to get back it in, but had three stops on it already.

    Yes Gary we know :)

  184. There's a chapter in Market Wizards about a trader (name escapes me) who said, "The WSJ always has these reports that I caught the exact low on this item or that item. What they don't report is that while I did enter right near the bottom, I had six false starts first!" For me, I don't care how many times I get stopped out so long as when the big move comes I am there in size for 80% of it. I add on counter moves once it's working, and stay until there's a reason to get out (there's always a clue). I have had three or four false starts already on the coming dip, but expect to make that back with interest in January/February (I hope!...and if i do it right.)

  185. TZA has gone (through Dec) down to a trendline , then more sideways , then down to meet that trendline again , then sideways , then down again. I am thinking it could go to $15 , but Its a guess more than anything.

    I think it will be a GREAT opportunity when the selling picks up...I mean it looks like it could bounce 30% ($15-$20) easily. (just my opinion)

  186. rkp: Can you explain to me how they show a total of 4234 OEX puts traded at the 2:30 posting, but the Yahoo site you shared shows 6633 of just the 510,520,and 525,'s alone? It's not yesterday's data on Yahoo as it is now different than what the 12/20 close showed.


  187. The market can drop now, picked up some Jan puts on SPY and QQQQ. :)

  188. Jan. is probably way too short. Time decay will eat you alive and if this turns out to be a stretched cycle you will just flat lose.

    I would try the March or April just to be safe and so you will still have plenty of time value when you wnat to sell.

  189. Liked the volume on the few longs I still hold ,

    so stayed long on ANO , REE , and yes(I think it was DG..if you remember our conversation last week) ...I am STILL long GMO (ha ha)...my stop was 10% and it went near there , but I am almost break even now , thank you uncle Fed :)

  190. I think a number of us are in general agreement that when the drop does come, it will need to be somewhat substantial to erase the current excessive bullishness.

    Seems to me that a put lottery ticket might pay off under these circumstances.

    I don't have anything specific in mind right now, but someone might want to bring up a candidate.

  191. AND..if this was near a bottom of an IT low, I would see that ANO chart and be screaming from my rooftop to buy it , that is a sweet chart.

    But ( due to cycle timing) it is not really a buy here and now in time...I got in earlier.

    Almost Dinner time on the East coast...G-nite guys!

  192. Wes, by lottery I infer you're soliciting an out of the money option we could speculate on?


Please see the link below to comment on the new blog.

Note: Only a member of this blog may post a comment.