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Friday, January 28, 2011

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273 comments:

  1. What I wouldn't give to see a nice scary downdraft today and Monday down to about $1260.

    Gary's stop got me out yesterday with negligible damage. I was in SLV for all of 90 minutes!

    Make my day, Blythe Masters!

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  2. I doubt gold would drop that fast. But $1260 sometime in the next two weeks would be an all out buy and move to Old Turkey signal.

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  3. Just happened to notice an interesting development on the silver chart.

    I'll elaborate in tonight's report.

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  4. I'd like to see SLV get down to around $24.35 and close that tiny gap. By then the shakeout should be severe enough to start higher again.

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  5. Gary, can you give us a clew about this silver´s chart ?

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  6. Miners showing strength

    Go, Go, Go!

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  7. Since miners usually bottom first, do you think it's possible they have already bottomed?

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  8. Glen, I do believe so.

    If you look at HUI is has bounced off support 500 a couple of times.

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  9. Even if the miners have bottomed, I will not add into strength until the trend is back up. I'll only buy into selloffs until then.

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  10. Shalom,

    I understand. That's probably a better approach in terms of risk management.

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  11. Gary's method is showing excellent constraint.

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  12. thedocument shared a wise observation yesterday (or the day before), when he suggested miners might not get dragged down with weakness in the general market. So far that is the case today.

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  13. I'm still looking (OK hoping)for a sharp +1% and 90% down day today, maybe much more. Don't know if miners get dragged with it.

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  14. This is starting to look like we got whipsawed.

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  15. Right, I believe miners have already bottomed. The metals should bottom sometime late next week. I think we'll see another bear flag forming in the coming days.

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  16. I think I would wait until the dollar rally unfolds before trying to pick another bottom.

    So far this is just a normal reflex bounce to a severe decline yesterday.

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  17. NDX futures doing a cliff dive (5 min chart.)

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  18. RA,

    It does look like it, but I think we'll see by next week the metals hitting a new low.

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  19. 1302 high on the SPX, and stocks finally looking broken. Gary might have nailed it with his call for 1300-05 high.

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  20. James R,

    Hope you are right. Would love to add more on lower prices.

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  21. Watching Silver on the 5 minute chart. (I know most people here don't look at that time frame) It looks like a rocket! Does it go to the moon or bust?

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  22. Watching Silver on the 5 minute chart. (I know most people here don't look at that time frame) It looks like a rocket! Does it go to the moon or bust?

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  23. Gary,
    Historically, how far have you seen gold cycles stretch in the past?

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  24. DG,

    You still in your short stocks and short Euro trades?

    Futia posted this on his site this morning:

    "the AAII survey of investor sentiment shows the most bearish sentiment since the November low."

    If this is true, we're unlikely to get a big move down in stocks, at least anytime soon, no?

    In terms of the short term wave structure in stocks (SPX), looks to me like, on the hourly chart, this morning's high may have completed a 3rd wave up, counting from the low of 1/20 as the beginning of wave 1. If so, we would expect a move down now to around 1295 SPX, then another leg up to around 1314 SPX.

    Your thoughts?

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  25. Silver showing strength. UUP up. Money flowing from stocks to PMs and cash?

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  26. Last year the intermediate gold cycle stretched 30 weeks.

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  27. SB: To be fair, Gary may have "nailed" the top at 1300, but he has suggested several other tops on the way up like the rest of us (I was just looking at old reports).

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  28. dollar and gold rallying together...

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  29. Shalom,

    Based on the history after large price move ups in silver, silver usually retraces at least 50% of the move up. So the retracement of the move from ~$17 - $31, I am expecting silver to at least hit around the $24 level on the downside. That tiny gap at $24.35 fits in perfectly with what I am thinking.

    Also in terms of time, the decline should finish between the beginning of Feb and the 1st of March. Because the declines usually last from a little over 1 month to 1 month and 30 days.

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  30. Pima, the AA survey was from last week, when we got that sharp down day. Prior to that, it was running at high's that eclipsed the April high's of last year!

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  31. David K: You asked yesterday about my target for the dollar. Gary talked about 79 as resistance, and I have been buying EUO for a short sharp move, so that'll work for me. I will go flat there

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  32. Poly

    Those charts you showed yesterday...

    Wow, we're getting a follow through so far. If we go into a nasty decline like May it'll be just friggen crazy how this looks like last year.

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  33. Gold has been following the Usd almost constantly since beginning of November, therefore a rally in $ will drag gold along up this time.

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  34. Gary,I should have said,how long have you seen DAILY cycles stretch.

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  35. I'm significantly long gold futures here with belief the last two days was a bottom.

    1) We got to 1309 which was within my target of $1305 +/- $5

    2) I never thought we would go to the number that others were thinking (i.e 1300 or 1265). This decline would stop before expectations based on the past.

    3) lots of volume blow out on GLD yesterday. The various mining stocks a few days before.

    4) Unfortunately I think Gary got whipsawed and would have nailed this except for the buy in then stop out a day ago. After the stop out, I now see reluctance to get back in and 'waiting' for more conservative entry. I think you will get in, but i think that extra caution might be causing you to miss the low one day later.

    My stop is lower down without too much risk if my long is wrong here. We will see.

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  36. This comment has been removed by the author.

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  37. 5) Today the gold contract goes into delivery at the end of day, but if they couldn't drive it below 1300 before 10am (the normal 'hit' time) then they prob can't now that it has passed. They've probably squeezed out as many contracts as they can or need to.

    6) THe peak rallying time is after all options have expired and the contract has gone to delivery (as you would expect if big players were manipulating the market). We are now in that time (or will be this evening).

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  38. Onlooker, I've been following them for 3 days and the resemblance is f%#^&ing freaky!

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  39. When I say 'significantly long' i mean like 5x. (My stop is a bit over 1% loss if wrong.)

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  40. Already wrote yesterday that Gary told us that the decline will begin when S&P500 touch 1300..

    How far will it go this time..Will it be a 3-5% takedown with a rising dollar..Or will it go further down..

    Nice call Gary...Again..

    Do you think the stockmarket will continue to fall on monday or will it be a weak takedown for a couple of days?

    Its going down fast now..Even in Sweden! Looks like traders want to get out fast!

    Have a nice weekend guys!

    /Patrik

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  41. One can always try again if another swing is formed.

    Missing on or two days in a 12-15 week rally is no big deal.

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  42. trond56,

    Good point. In fact, I've been totally ignoring the USD as a predictor of metals prices since the usual inverse relationship has not help. I don't see an edge in watching the USD, as one still has to guess it's direction correctly, then assume the typical relationship is intact.

    When trading gold, I watch gold. USD is a coincidental indicator, not predictive.

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  43. It appears gold has put in a swing low today and due for a reversal.

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  44. Especially since the USD index is only a measure against other paper currencies, all of which should be closer to zero. :)

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  45. well, so much for my "count". SPX has dropped below what I was counting as the top of a wave 1, so that count is invalidated.

    Let's see where this goes...

    What caused the fast drop?

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  46. actually what would be funny is if the 150 tap last night was the bottom.

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  47. Gary,

    It looks like what happened yesterday was a run on stops in GLD.

    Does that happen as often with the miners?

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  48. gold up, DX up. not your usual inverse relationship...

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  49. http://www.zerohedge.com/article/meet-man-behind-liquidating-hedge-fund-blew-gold-market

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  50. DG,

    Good luck in your dollar trade. I'm still long the Euro. Some kind of pullback is coming, so both of us can come out ahead :)

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  51. GARY,

    >Missing on or two days in a 12-15 week rally is no big deal.

    With the size and stop levels I use it *is* a big deal. I can't enter leveraged unless I pick entries and stops which limit risk. Thus it results in me usually having a number of false starts where I get stopped out before something hooks in.

    I believe I just might have gotten a hook.

    And at 5x leverage with LESS of a stop loss than the previous 1.3x trade had. (No offense, it was a very reasonable call that I came *very* close to joining).

    We will see. The trade could always fail (and I ALWAYS plan on that event.) The rest will take care of itself.

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  52. PC, are you talking about Elliott Wave?

    That thing gives me headaches and for me it is as good as astrology :(

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  53. if we don't close red, we have a swing low on the dollar...which means dollar should ideally top in a week (max 2)

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  54. I will eventually be concentrating on silver (which will outperform gold greatly on this surge up), but the volatility of silver and the necessary stop levels means I could only get a few contracts vs gold if I was doing it this morning.

    So the approach is to start with gold which is much more controllable and then leg into silver a bit higher up with a profit cushion and better entries than almost a $1 straight up move in an hour.

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  55. This comment has been removed by a blog administrator.

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  56. David K, yes EW. I have tried to give it up, Gary's cycle analysis has been one of the most potent antidotes, but it appears my case is very stubborn.

    I did look at the long term gold chart last night though and found an EW count that works well with Gary's cycle analysis that suggests one more push up in this C wave. :-)

    You are right though, EW by itself is pretty much a roll of the dice because there are usually so many alternate counts.

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  57. Poly:

    This will be interesting as I think the Egypt situation will be similar to the Greece situation last Spring. We haven't really had any other geo-political event since then (counting events in all the PIGS countries really.) Will we get a similar reaction or is the printing press to strong?!

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  58. gld showing up in the sos. Is the bounce part of money leaving the stock market and needing a place to go? And when selling gets extreme leaving metals also?

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  59. hi Daniele,

    looks like we are having our little correction.... :-)

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  60. If you look at what Gary said several times, at the first selloff in stocks, Gold is going to push higher until the selling wave will get it as well...so be careful....

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  61. jc,

    GLD SoS is small number so far, but definitely something to keep an eye on. If that number grows substantially during the day, seems like it would raise the odds that we have not yet seen the low.

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  62. Did Beanie finally mark a swing top?

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  63. Wow!

    The way gold is channeling up along with minor corrections to give it added strength, yesterday in fact may have been the bottom.

    If so a lot of investors/traders will be chasing it next week.

    Oh my!

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  64. Both GDX and SLV made a lower low in the 1st 5min after open and MACD is rolling over.

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  65. http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/1/27_All_100_Ounce_Silver_Bars_Will_be_Gone_in_a_Matter_of_Days.html

    Any of you seen this? Eric King has had a lot of insiders that have been incredibly right in the last 8 months.

    I have to say one thing I like about Gary is that he is not a perma bull, he has been right much more than I have been that is for sure!

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  66. You might be right, james r. I was hoping for more downside, but we're getting the preview of what metals might do in spite of rising dollar and falling stocks.

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  67. I do not mind resting on the sidelines as this reminds me of spring 2007 where I was whipsawed and had runs on my stops constantly.
    Having those Deja vo feelings today.

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  68. Hi sophia, yes but tonight he did say that there's no time enough for an intermediate correction.Instead i was waiting for it.I'd like to see sp500 on his 75 week average (1140), but gary now speack about just only 3-5%.So picture is quite confused now, at least for me.Anyway on spx week chart nothing happened, when it will form a swing high will see how deep is this correction.

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  69. Silver and the miners (GDX) both put in swing lows on Tuesday which held, unlike Gold...wonder if Silver (and the miners) are decoupling/turning early vs. Gold. There has been a fair amount of commentary about the Silver market -Harvey Organ has been suggesting potential COMEX failure in February.

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  70. Daniele,

    I read the message of Gary last night...Hey, even 5% is good to grab...Well done Poly, you talked about 1280 in the S&P this morning..

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  71. Thanks.

    (Much needed, I had to date lost the two Porches on my "Garage and two sports cars" Put bet)

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  72. Poly, but if we start to see things get to similar to April, May of 2010, I imagine this would be noticed by many people and then talked about/planned for. Thus, it would not work out. It is nice to get a reset in market for better prices however!

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  73. S&P cash needs to break the 1271 pivot before retracing as much as 10 points or so. If that happens, then the trend has definetely changed.

    Likewise, I think that if gold can take out the 1347 high before retracing as much as 10 points then the odds are pretty high the bottom is in.

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  74. Added some silver futures. This looks legit and very strong.

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  75. Wow. I am recovering the last three shorting attempts today so far. Nice move in the Q's! It partially offsets the annoyance of not being in the PM's. If memory serves Gary said he thought there'd be an impulse move up in the PM's when the decline started, but that they'd get dragged down if the SPX got downside legs. Let's hope.

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  76. Any observations from the G-man? Does this move have anything to do with what you observed this morning about the silver chart?

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  77. In Silver Chart i saw an H&S inverted (30 minutes chart). Any thoughts about that ?

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  78. Significant technical damage in the indexes. A move to the 50dma (coming week) is more than assured, IMO. Beyond that I have no clue, right now.

    $HUI real strong!!

    With this truck of puts a flash crash would be a very nice 6 figure pay day. Slap me please, oh how greed corrupts the mind :)

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  79. Tim Knight!!
    http://slopeofhope.com/2011/01/get-ready-to-short-anything-that-shines.html

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  80. On the 30 min charts, miners are now making higher highs with higher lows.

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  81. Already got swing low in silver just now. I suspect you will get it in gold before day is over.

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  82. HUI's your daddy?

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  83. Gary,

    Can you give us a clue as to the development in the silver chart for those of us still holding meaningful silver positions. Is it good or bad?

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  84. This comment has been removed by the author.

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  85. RA,
    I don't know about miners but it seems like these intermediate cycle lows usually involve at least one fakeout rally and then a move to new lows. We haven't really had a fakeout rally yet.So maybe this is it and then again maybe this is the bottom.

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  86. Bought a nice little position in miners at the open today hoping for a bounce from yesterday. Wish I had bought a bit more. Don't know if I should hold it through the weekend though if we are expecting further downside...

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  87. Wouldn't it be nice if we had a working crystal ball :)

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  88. Right here (1280) could be a buying opportunity in the S&P.

    Target = New highs
    Stop = 1272

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  89. Finally seeing a correction in this market!
    Been holding QID calls for a few weeks now, rocketing today. Bought some EXK yesterday. So far, so good. The Beanie divergence indicator looks like it will play out, give us 5 days please!

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  90. MISTAKE: no swing low on silver or gold possible today cause they made lows last night (which counts as 'today' for chart purposes).

    What we have in silver is an 'outside' day already, and possibly in gold too before close.

    Still strong signs.

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  91. Here is a chart of what I've been talking about recently. http://www.minyanville.com/dailyfeed/this-one-chart-explains-why/ The bounce here is probably temporary. And the bounce could qualify a WEEKLY break of Gold at 1343.7 (Up close next week, followed by a down close the following week, then a down open the next week). If that is qualified, the exhaustion down target is 1256.10. As a reminder, it already qualified a DAILY break of 1350 this week. So we are now looking for a 13 day sequential buy, which yesterday was the first 1 (notice the red 1 under the 9). But these 13 days don't have to be consecutive, so we are looking at a minimum of 2 weeks before that buy records.

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  92. gary,
    do you when is the next dividend date for GDXJ?

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  93. There is an excelent intervirew and charts of gold and silver projections on Howestreet. The LAST thing I wanna do is lose my mining stock positions.

    http://talkdigitalnetwork.com/2011/01/2011-positive-precious-metals/

    http://talkdigitalnetwork.com/files/2011/01/ChartWorks_-HoweStreet_012511.pdf

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  94. If I remember right that was a special distribution not a dividend.

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  95. As I've mentioned before most intermediate declines have at least one major fakeout. We haven't really had one yet.

    I think at this point I want to either see a move down to at least the 50% retracement level or I want to see the pattern of lower lows and lower highs broken before I take another swing.

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  96. It seems after financial systemic crisis in 2009 and European sovereign debt crisis in 2010, a domino effect of political changes in North African and Middle East countries could become the theme in 2011. After Lebanon, Tunisia, now Egypt, who's next? And how can big can this become? Egypt has been a rock solid pillar for the US in the region for generations now. Destabilization in the region could become the next price driver for PMs in 2011.

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  97. If the HUI can trade above 548 that would qualify as a reversal of the pattern.

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  98. why cant things just be easy...hehe

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  99. Silver at downtrend line of last month's decline. Much higher and we have a nice break.

    Still thinking gold can rally more to also put in an 'outside' bar by breaking 1349.

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  100. Gary,

    >As I've mentioned before most intermediate declines have at least one major fakeout. We haven't really had one yet.

    Yeah...i'm sure glad nobody got faked out into buying this week
    :-)

    (In all honesty, I had the same order to buy that you had. I had it live on my screen FOUR times and canceled it FOUR times - ultimately not taking it. So I'm really not sure we haven't already seen the fakeout. Time will tell.)

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  101. FWIW the other fakeouts were multi day rallies that ultimately rolled over into another leg down not a one day rally.

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  102. TZ,

    Where is the downtrend line for silver?

    Thanks in advance.

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  103. True.

    But the market likes to screw with previous patterns. And everything seems to be accellerating in speed.

    The act of a fakeout *regardless* of time is to get people to buy (or sell) then smash them down the other direction so they stop or panic out.

    The last 2-3 days on the metals and the stocks WERE a fakeout by my definition. But, no, they didn't last too long.

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  104. Steven,

    Daily silver chart. Just draw a downtrend on the tops for the last month. Not really a complex observation. Let me know if this is hard to see.

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  105. GARY,

    I have my stops if we go lower and obviously I dont know the future.

    Today just looks good to me and I'm swinging big. It fits with what I was expecting for the last few weeks (and I too almost bought on wed like I said). Luckily I didn't (which gave me a bit more objectivity today - emotional capital) and today turns out to fit my expectation every better than wed.

    So all in all I like it.

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  106. TZ, seems we're in the land of fakeouts. Yes, yesterday's drop could have been a fakeout. But today's rally could be the same. The market might even go up for a few days as Gary has suggested and THEN slam down into the IT low, bottoming below 1300 and maybe down around 1265.

    Breaking above the downsloping TL's from their recent highs on gold and silver would be the first in a series of confirmations that today's rally was the real deal. If this turns out to be an extended correction, PM's could head back to their recent tops and then drop once again. Could turn into whipsaw city that could go on for weeks... Pretty much anything is possible in these markets

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  107. It looks like the HUI did a three day 123 trend reversal to me. I tend to look more at that index for mining stocks instead of the S&P500 or just looking at gold and silver - which I still believe are manipulated :)

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  108. MDW- HUGE volume on this break out. Very nice. Wish I had some.

    http://www.screencast.com/users/Jayhawk1991/folders/Jing/media/b76558b5-0064-4047-85fa-509be9170bce

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  109. Just to put things in perspective: Having lightened up or gotten out around $1400, Gold is still way below there. It is harder to sneak your way back into positions once a rally has started, but I suspect we will all find a way well before $1600, even if this was the bottom and we go up from here. At the least, there will be another daily cycle low some day before the blow off. Or this is a fake out and we tank next week again. Choppy much?

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  110. TZ: How do you deal with overnight gap risk when you're heavy?

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  111. On The other side of the world:

    http://www.arabianmoney.net/gold-silver/2011/01/26/predictable-gold-and-silver-correction-a-half-done-buying-opportunity/

    Good site and good comparisons of apples to apples.

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  112. DG,

    With futures you do not have gap risk. 24 hour trading.

    If you are long stocks, etfs then you can hedge with the futures if you want.

    Futures are great products but you have to respect the leverage

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  113. Swing low today for all miners and PM's

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  114. Silver being repelled by the descending trend line.

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  115. Jerred: Duh. Good point. I am too used to ETf's.

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  116. The market is falling sharply in US. Never thought this in the beginnig of the day. The BNP numbers came out and the market was litle shaky but not much. Then the S&P 500 touch 1300 and people are running out..:-)

    Gary wrote that it was to late for an intermediate cycle decline.

    Why? Everything is stretching in the market now..so there must be any a chance that the market will fall further than MA50? People will be afraid to buy in this market now and will for sure cash in some profit..

    " It’s now getting too late in the daily cycle to have any realistic chance of an intermediate cycle decline developing"

    If you look at the charts in Russel 2000 and in DJIA there are som nasty damage in there..S&P500 have support at 1250..Will it hold? Maybe....But we will for sure try it next week..

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  117. How about down week till Umployment Friday?

    1 year anniversary from last year when Gold and Market bottomed? Dollar simultaneously puts in its top?

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  118. Dang Jayhawk...MDW... 10m shares traded when there is only like 115m out there? I have several Canadian mining stocks and they have really been lagards. I look for them to perform later in the mining boom.

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  119. FWIW,my mechanical system missed hitting a buy today so far by a few bucks, and looking back historically almost every int term correction will have at least a buy,sell,buy before it's over. The one exception is last summer's as it gave it's buy but then it collapsed quickly to new lows but the algo did not flip to a sell and it then recovered very quickly. The candles just don't look like a bottom has been reached either. JMO of course as I will be long when my system triggers.It's a helluva lot smarter than I am:)

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  120. Jerred:
    Can you recommend a good book or website to get started learning about trading futures?

    Thanks!

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  121. speaking of futures, is there enough volume in the mini gold and silver contracts to get good fills, i.e. tight bid/ask?

    And, are the choices just the big gold and silver versus the mini's? any other choices for futures?

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  122. PC,
    good point on the micro futures. I pulled up a chart of MGC on ESignal and it wasn't very heavily traded.

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  123. This is what I'm talking about, some final hour capitulation confirming this move. Who yelled fire?

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  124. There's little doubt the market has rolled over into at least a daily cycle correction. Unless we are going to see a cycle that stretches to 70-80 days then it should only be a daily cycle correction.

    Although I guess if we experienced another crash type event that dropped 10% or more we could consider it an intermediate low.

    The February 07 mini-crash was clearly an intermediate low even though it only lasted two weeks.

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  125. Look at volume in OIL, via USO.

    Zero hedge has an article about
    "Suez closure concerns go viral"

    Gary, U see the buying in OIL?

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  126. Yes. Obviously tied to the riots in Egypt.

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  127. Gary,

    I don't see why it needs to be anywhere near 70-80 days, when you consider the height we are coming from reversing course will be easy to swallow.
    I bet you 130 points could be lost in 3-4 weeks without any type of crash.

    In any event, the trend is still with the bulls and I'm thinking a 5-7% drop and a tag/dip of the 50dma is a safe way to play this.
    Although I said it yesterday the setup and resemblance to April-10 is unreal.

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  128. The people in Egypt take 'yes we can' to the streets; and opposite what is happening here, they can actually do something that brings about real change. Even though you could argue that public unrest in Egypt has causes that differ from what just happened in Tunisia and Lebanon, I think it is no coincidence that this is all happening within a very short period of time. I think Egypt is what might cut the correction short in Gold, if this settles over the weekend or even if it settles in a week, the correction could very well continue.
    I don't think that gold has hit the right marks yet for the correction to be over, but Egypt is the wild card right now.

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  129. PimaCanyon,

    The volume on miniGold is really small. The bid/ask spread is terrible. For me, the only way to go is to trade big gold and big silver.

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  130. 3-4 weeks would extend the current daily cycle to 70-75 days. That's incredibly long even considering that the Fed policy has probably elongated the normal cycle length to 45-60 days.

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  131. Gary, I'm sure you can "make it fit" :)

    No seriously, what about last Thursday as a candidate for a new daily cycle and this would make it a new ELT cycle? That fits no?

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  132. Nothing has happened yet that looks anything like a daily cycle low.

    If I can't pull up a daily chart, stand on the other side of the room, and clearly make out the correction then it isn't a correction.

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  133. I think we go higher on monday. Any positive gap up monday morning is confirmation.

    The much lower probability play is a huge gap down on monday. The bears are positioning themselves for that. I think they'll get disappointed.

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  134. Gary, something has to give between your daily and intermediate cycle right?

    I mean either you really stretch this current daily out and get your intermediate in together or you get this daily done next week (?) and go one more cycle down into the intermediate.

    But to hold the idea that the intermediate won't happen until late March/April simply violates your previous argument (of course in relation to intermediate rules and not daily) "That's incredibly long even considering that the Fed policy has probably elongated the normal cycle length", does it not?

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  135. Sorry Beanie, the blood is on the street and we have at least a drop to the 50dma on the cards, no way out of that.
    We should close higher on Monday after today, it was a brutal day for the market. You have to put this day in context with the past 4 months to appreciate it.

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  136. Poly,

    Perhaps one of us is misreading the charts.

    Where have we seen this movie before?

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  137. Two thoughts: Last time the N Korea attack spiked gold and it looked like a bottom had been put in and it wasn't. This time it's Egypt?

    The other is that SIL sold off on heavy volume yesterday and today bounced on lighter volume and didn't clear even yesterday's high. Both GDX and GDXJ cleared the high for a moment and then fell back below it. Usually after a big correction, the item rallies above the last few days' price range on day one. I am not convinced at all that a bottom is in. This may just be on-the-news buying and there is more selling to come. (I hope). Once the dust settles the dollar's continued rally may yet take its toll.

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  138. Yes one or the other has to stretch. Actually both are already stretched.

    I will say this the dollar is clearly rolling over into the three year cycle low.

    Market participants are protecting themselves against that by buying either stocks or commodities.

    The next dollar cycle should roll over quickly. When it does I have to wonder if the market will all of a sudden decide it doesn't need protection from the three year cycle low.

    If it does then this should only be a daily cycle correction that will bottom when the dollar starts back down.

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  139. DG,
    I was thinking the same thing considering the fairly weak performance by the HUI.

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  140. Beanie,

    I'm hardly calling for anything a Bull like you should be concerned about. A move to the 50dma is another 3% - 33 point (S&P) drop from here. If you're making a case for another rally, then I would think you need to drop some of the sentiment, don't you think?

    http://stockcharts.com/h-sc/ui?s=$BPINDU&p=D&yr=1&mn=0&dy=0&id=p40339912218&a=222575144

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  141. Josh,

    Sorry for the delay, had to step out for a minute.

    The best books I have read are

    Mind over Markets

    Markets in Profile

    Al Brooks - price action

    Brett Steinbarger - The Daily Trading Coach

    Hope you enjoy them as much as I did.

    I would focus on the mental aspect and how the market auctions.

    entries and exits should be your last aspect to study

    You can do a search on Market Profiling as well (Market Delta)

    Investor RT is a great software

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  142. Beanie,

    I think a bounce on Monday would not be the least bit surprising. In fact, I do expect it. However, it also wouldn't be surprising if that bounce turned out to be a nice selling opportunity.

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  143. BTW, Beanie, all I've been looking for is a correction.

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  144. Poly, Beanie doesn't give an inch.

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  145. DG,

    Gold up 1.66% and Silver up 4% and the $HUI, of deeply oversold territory manages a measly 1.17% gain! Not encouraging.

    Either the support/backing for the PM's is not there yet or the drop in equities was a significant drag.

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  146. Possible fears in energy prices affecting miners too?

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  147. DG

    FWIW if you look at an intraday 10 min chart of SIL you'll see that a huge part of that volume yesterday was at the open when it went up a bit. Then the volume was much lower during the sell off. Then today the largest part of the volume was on up candles.

    And there was very large volume today in GDXJ and a lot of the miners. Overall I'd say the picture is maybe mixed but there's been a lot of volume since they bottomed day before yesterday starting with some very big volume on the very bottom on an intraday chart.

    And CEF's premium got pumped up today almost 2 percentage pts, from 5.59% to 7.4% (my calcs as the CEF website is not accurate). Shows some eagerness and buying pressure, especially as it has been falling, having peaked around 9.7% and gotten down to under 5%.

    Time will tell.

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  148. Onlooker: May be so about the volume, but usually the spike out of a deep correction does eclipse the past few days worth of decline---or at least the previous one day's! Smells like a possible "N. Korea" fake out. I wish these damn things didn't happen near possible fulcrum points. Must be a conspiracy by JPM!

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  149. Thanks, Jerred. I've seen some of Dr. Brett's stuff before and like it, and I definitely want to learn more about market profiling.

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  150. You guys keep talking and acting like gold's rise today is caused by the mideast. I completely disagree.

    We have already been selling off for almost 2 MONTHS. We had large capitulation in GLD yesterday and many of the mining stocks earlier in week (using volume and subjective analysis.)

    When gold was driven below the last significant low at 1315 there was LITTLE to no volume that got taken out. Breaking that low was a few K contracts at best.

    Surprising. And indicating that gold was "sold out". Nobody else was stepping up to sell.

    Now, yes, maybe lower to 1300 would have brought up even more sellers, but then you have to consider that:
    A) everybody is looking to buy 1300 or a bit above/below it (all that 150dma talk) so we prob won't get there, and
    B) the COT for gold is **VERY** much reduced. Heck...LOOK:

    http://snalaska.net/cot/current/charts/GC.png

    That's DARN low!

    So gold breaks the last major low, nobody sells, the COT is low, it can't get to 1300 cause people are already buying, and we pass the option/delivery window when you have the most downward pressure.
    (Trust me, *IF* the guys running the show could have driven things below 1300 overnight or in the morning THEY WOULD HAVE. It was too juicy of a target. They didn't or couldn't. That tells you what you need to know.)

    You even had the WSJ story about the gold guy who blew his fund up from too much leverage - scaring the mkt down earlier in the week, but now looking only like some bozo with no risk control. So people who exited on that now want in too.

    Yes, the mideast might have helped some, but I'm saying I see enough reasons that we might have bottomed here that I'm taking a large swing.

    Enjoy the weekend. We will pick it up on sun night (or mon morning for you ETF guys) and resume playing. Regardless, It appears the slow, patient market has now snapped and we are back into the action.

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  151. I'm not trying to cheer anybody into buying or change their plan - whatever that might be.

    I'm just telling you my reasons for jumping in big today (over 5x) and why I think the bottom is in.

    I have stops if wrong and I will lose 1-2% net worth (depending) if things go wrong. (DG: I'm only in gold and silver futures which trade almost 24hrs, so the 'gap' risk is minimal unlike the ETFs).

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  152. FYI: gold and silver futures trade till 5:15pm (another 5min) and then reopen at 6pm sunday night.

    That is the interval where there could be a gap risk, but the gap risk for precious metals is much more skewed to the upside than that downside. Think about it. Almost any other security in the world, if it 'gaps' will gap DOWN on some 'event'. Precious metals gap UP more often than not on those same events.

    Consider what it would take to gap DOWN precious metals. It is hard to come up with something vs the gap UP scenarios. (Exchange controls would do it though).

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  153. This comment has been removed by a blog administrator.

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  154. TZ,

    Maybe I´m misunderstanding your post. But you said you are 5x leveraged and will only lose 1-2% in case your stop is hit?

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  155. I'm just not seeing the type of fear that would drive everyone back to gold. Take a look at the dollar index today. Up .5% for the day only?
    This bounce by gold looks like an oversold bounce.

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  156. DAVID,

    Yes. If I was worth $100,000 then i'm holding $500,000 worth of gold and silver futures.

    Those positions were bought in morning mostly and are all profitable.

    The stops are comfortably below closing prices and if those stops are hit, I would lose the equivalent of $1000-2000 (barring some calamity gap or opening straight down).

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  157. Anyone remember this chart I posted 15 days ago?

    Gold Chart

    What we just witnessed this week was textbook intermediate low. The stops got run on high volume below an important pivot, followed by a vicious reversal. Today's reversal is, in fact, what I term a "lock-out day" in my letter... wannabe longs just got locked out and are now forced to chase.

    I am now loaded up to ride what I believe is a new intermediate cycle which will last as long as it takes for the dollar to find it's 3-year low. Furthermore, money will be fleeing the stock market as it usually does in crisis and looking for a safe haven. The dollar cannot serve that purpose when it is the cause of the crisis. Money will instead flow into PMs. Gold and silver are thin markets. I can't wait to see how high billions of panicked dollars can take them...

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  158. TZ,

    So your stop is only 0.2 to 0.4% below your entry level in silver? For example, if you bought silver at 26.80, your stop would have to be 6-10 cents below for the math to work out. That's a pretty tight stop.

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  159. Doc,
    A weekly swing next week would be the first confirmation. Then if the miners can break the pattern of lower lows and lower highs that would just about do it I think, especially if they can do it against a rising dollar.

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  160. From Beanie's blog comments section:
    _____________________
    Beanie said...
    Next stop at SPX 1600

    January 27, 2011 9:11 AM
    _________________________

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  161. Gary,

    Yes, weekly swing will provide confirmation. There should be tons of upside from that point as the dollar finds itself out of favor...

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  162. I'll follow you if gold makes a swing low on Monday. I'll save the leverage in case we see a move down to $1290 or if the HUI breaks 548.

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  163. I too bought some miners yesterday when it hit the 150 dma. I intended this to be only a quick trade while I waited for the bottom. Since I didn't hold a core position, I think I will make this my core position after reading some comments. Thanks all.

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  164. TZ
    "Now, yes, maybe lower to 1300 would have brought up even more sellers, but then you have to consider that:
    A) everybody is looking to buy 1300 or a bit above/below it (all that 150dma talk) so we prob won't get there, and"

    Gold did bounce of the 150sma last night. It went about 50 cent under the sma. The low was 1308.18 and the sma was at 1308.71. See the attached file.Dark Blue line is the 150 sma

    gold chart 150sma

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  165. With everyone watching the 150 DMA a bounce at that point was surely a self fulfilling prophesy. Whether or not it ends up marking the final low remains to be seen.

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  166. Yes one thing I noticed is that no one looked at the 150 MA before doc mentioned it after the last intermediate cycle... once everyone starts to use something it just might not work the next time

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  167. doc,

    In regards to the dollar, it looks like the dollar formed a swing low and is now beginning a new daily cycle.
    The intermediate cycle for the dollar is at week 12. Do you
    1) anticipate a (very) brief dollar rally?
    2) Subsequent to the daily cycle rally would you expect an extended decline into the intermediate cycle low coinciding with the 3 year cycle low of the dollar?

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  168. I've actually seen quite a few articles on various precious metal sites pointing to the 150 dma as support.

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  169. It's interesting having to work on a day like today and then read the real time thoughts.

    The history I am familiar with is that every time a bottom happened, I didn't believe it for many of the reasons stated here. Candles, vol, etc...Then it rocketed higher....

    And of course there was the fake bottom this time last year. Bottom line is we all have opinions and have to work our own book.....

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  170. TK has a post saying Silver goes down next week. I say NO. Time will tell...I guess some here are hoping he is right..Good luck with that :)

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  171. Ike,

    That's more or less it, yes. Left-translated dollar cycles tend to peak within a week. I suspect this new cycle will perform a quick back-test of the DX 79 pivot and then head sharply lower. If gold has marked an intermediate low, as I suspect, it should mostly ignore this minor bounce in the dollar.

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  172. Gary, a belated congrats to you on your lifting performance. Well done. I wasn't sure you'd do well as you spent so much testosterone on this blog just before your meet. ;-)

    thedocument, nice comments on $GOLD. The 150d EMA certainly is compelling, esp. w/so much precedence, incl. Friday. What bothers me here/now is the tail on Friday's candle. Note that on Wed and Thurs that gold finished at it's highs and lows, resp. But on Friday, price rose up, but then backed off.

    I'm still 100% in cash. A break of gold above Fri's tale at 1350 or so would cause me to go long 10%, and then add to that daily as prices rise.

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  173. Gary, Friday's $SILVER candle did break above the Wed/Thurs high - making a higher low (Thurs MOC) and a higher high (Fri MOC). Maybe this is what you're noticing?

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  174. Mark my word, we havn't reached the bottom in miners before blood is on the streets.. so far I can'r smell any... more like the other way round...

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  175. "Protester back on the streets"

    "About 1,000 Egyptians try to storm interior ministry in Cairo. "

    "Regional ruling party headquarters is torched amid renewed protests, as death toll from unrest crosses 90. "

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  176. Just one comment/reminder here-

    Blogger Golden said...

    Mark my word, we haven't reached the bottom in miners before blood is on the streets..

    Everyone seems to be looking , waiting' for a 'blood in the streets bottom".Remember we are IN A C-WAVE , looking for an IT bottom, NOT a D-WAVE Bloodbath bottom.

    If you want to see the difference, just look at the IT bottom of 2010 July on say the GDX. Compare the volume down with recent volume down...ESP on a WKLY Chart...which looks bloodier to you...July low or NOW??

    http://www.screencast.com/t/rVlgrk1L5

    (click chart to zoom)

    ALSO, notice the POSSIBLE 'bounce - retest" feared at this point is still lower than you will buy later.

    Nice report DOC!

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  177. Exactly Alex--last summers intermediate was extremely mild. This has been pretty severe with the HUI & GDX coming all the way back to the 62% retracement zone.

    Gary's chart from last summer--the massive HUI triangle chart--he said at the time "we may never go bellow 500 for the rest of this bull market" or something to that effect. I'd love to go back and find the original post. So far this pullback has held that level so I think it's wise to start building a position.

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  178. Golden,
    You can't smell blood because you haven't been long...20% feels pretty bloody to me :-)

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  179. 82 million in Egypt the most patient people have had enough. Like the Berlin wall is coming down after 30 years of hard control over them. The curfew is being ignored again. The tanks are being lined up.

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  180. The position I added on Gary's plan Thursday is back to break even, FYI. Did everyone take the stop loss or are others hanging on? This for me was a smaller position and I'm thinking Monday I will be bumping it up a bit.

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  181. Actually there are problems with this bottom. It isn't following the normal intermediate bottoming process. It very much looks like Friday was more about Egypt than an intermediate bottom.

    I'll have the weekend report done in a few minutes.

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  182. The army will not remain loyal to Egypt. 1'000 of people are lined up. Ignoring the curfew.The police are not visible.

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  183. Gary

    I dont disagree , and I feel this bottom MAY get retested and GOLD most definitely could dive below $1300, but for many reasons (technically and fundamentally) I see the GDX as just about done to the downside.

    If I were to sell Monday what I bought last Tuesday...I know I will be buying higher later (Unless this sells like 2008..not likely at all).

    This GDX (gold stocks)is near done if the Gold bull is still in a C-wave.

    (and anytime I post to you..I post with full respect for your work and knowledge)

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  184. There is a REAL silver shortage right now..Listen to king World's Weekly Metals Wrap... http://www.bullionbaron.com/2011/01/goldsilver-entering-3rd-phase-of.html

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  185. Yes the miners are probably just about done. And relative strength in miners is one sign that an intermediate bottom is forming. So we might see another test of 490 but I doubt we will see any significant move below that.

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  186. GAry

    agree , and it will NOT be easy to buy there if Gold is down $40 or so, right? So then you may get the real bottom.

    Also, the "rocket' off of the bottom is usually HUGE , so i can picture the HUI diving down to trip the Oct lows @ 490ish...down $20 ( no one will buy that here) and then it rockets up to end up $20 and it'll be at $529 (higher than now).

    This looks like the buy area , and if one can buy any future smash down , = great potential gains.

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  187. Actually there usually is no rocket off the bottom at a true intermediate bottom.

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  188. Jayhawks

    I had to play catch up with the blog yesterday...was away. Enjoyed your charts , again I think we look at things similarly. thanks

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  189. Looking back..yeah -charts show that to be true

    I guess no one buys that bottom because they are waiting for their own version of confirmation ( that those sell offs are over. It still leads to buying a lot higher than in the middle/bottom of the wash out

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  190. It takes increasing bullishness for a rally to develop. The technical break that usually happens at intermediate bottoms is not easily forgotten. That's why the rally out of an intermediate low is usually very tentative.

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  191. Hmm it was working fine just a minute ago. I've sent an email to the programmer to look into it.

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  192. Gary

    what you just said is SO evident in blogs! The thinking goes from 'so nervous', panicky at the bottom, to crazy 'I'm missing the move up' in just a week or two. Your blog reveals sentiment well.

    I tend to be more contrarian now for that reason. And like you've said...if you dont overdo leverage, you can afford to but above bottoms and later you're still way ahead.

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  193. oops, typo

    obviously, that was 'buy' above a bottom slightly :)

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  194. hi gary from a minute ago, it is impossible toenter on web site.This is the message that appear "PHP has encountered an Access Violation at 024C00AD" if can help.

    thanks

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  195. I bought a lot of miners this last Tuesday when they hit their lows. Currently I'm sitting in them really good. Even in Thursday's sell off they didn't drop much. But even if we were to go lower, and as they drop, what would be wrong with just adding to them instead of dumping them in hopes of getting a lower price?

    Am I missing something here?

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  196. This is kind of a long listen, but if anyone has time I would like to hear your comments. It is a very pessimistic view of Americas economic future. i just hope the rioting in Egypt isn't the start of a world wide reaction.
    http://www.stansberryresearch.com/pro/1011PSIENDVD/PPSILCCN/PR

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  197. Rod ,

    Hey , no one answered you yet (Gary may be fixing his site thats down)so I'll add something here.

    I bought last Tuesday too. I plan on holding most or all at this point (unless my reasons for buying change drastically) .

    I have bought like this in the past , seen a 'shake out' and still, If I sold at that point and got back in at a comfortable moment in time- it was at higher prices. Did you see my chart posted above?

    HOWEVER_ I wouldnt be surprised to hear nxt wk...on a 6 month chart ..
    " Hui is forming a head & shoulders?? , Gold is getting slammed below 1300??", etc etc

    So it may not be easy if we DO retest those lows and even break a bit below to shake people out, then again, we could just keep moving higher. FWIW, I think you re in a good position if things work out as they look like they may to me now-even IF we had a shake-out.

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