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Tuesday, January 4, 2011

INTRADAY POST

An alternate stop.

214 comments:

  1. Gary --

    I placed my stops at GLD ≤ 132.45. Same concept.

    Bud

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  2. Why the new tight stop? Seems like this could easily be triggered while still safely within your current cycle hypothesis.

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  3. One thing is certain.
    This bull market in Gold is never easy. Today's curveball is the weakness in USD.

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  4. Poly,
    For those who can't stomach drawdowns.

    Much higher chance of getting whipsawed though.

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  5. Gap fill and the rising 50dsma for GDX are in the same neighborhood and would be the next area of interest, imo.

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  6. Thanks.

    Let's hope it's a July 27th type move down that marked the start of that run.

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  7. This comment has been removed by the author.

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  8. We will continue to see moves like this as long as the big bullion banks maintain their short positions.

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  9. Gary,

    Are you expecting an intermediate low (IT low), followed by continuation of the current C wave to its top, followed by the D wave?

    --OR-- Are you expecting the D wave to already be underway when gold drops to the IT low, such that the IT low is just the first wave down of this new D wave (to be followed by lower highs and lower lows until D wave bottoms)?

    The reason I ask has to do with stops. If we get a rally out of the IT low to higher highs (that is, C wave is still underway), then why would we want to stop ourselves out and have to get back in later, possibly at higher prices?

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  10. Looks like a good old-fashioned beating is in store. I'm still with core position, but not looking to add yet.

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  11. flat/weak dollar and gold getting hammered - looking a lot like last Jan's intermediate correction..gotta be really careful here

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  12. Bud,
    Yes, we have no bananas
    we have no bananas today.

    Substitute with word with

    Sorry my voice is a little rusty

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  13. Geez, this is one strange market. Maybe the market is starting to really buy this recovery crap again and is selling PMs on that basis. Who the F knows but it's weird action. And a bit painful at this point, to be sure.

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  14. Interesting to note that oil has the same kind of action going. Big reaction to this little tiny uptick off the bottom by the dollar. Just goes to show you that the intraday wiggles are a true mystery.

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  15. PC,
    There is nothing that looks like a final C-wave top yet. So this would just be an intermediate correction before the final run.

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  16. gold need to re-test $1360 before move higher

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  17. it's weird how gold easily goes down 2% in one day, but very rarely goes up more than 2% in one day...

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  18. I warned ya'all yesterday. And as I had pointed out, I was made fun of.

    Target for Gold is 1160 by mid-Feb

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  19. MLMT, okay I'll bite... so what you're "secret", what analysis convinced you that gold was headed lower? And what analysis has you convinced it's headed for 1160?

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  20. MLMT: You were not made fun of. TZ and I both asked for your reasoning which you still refuse to provide. In my book, until you do, you made a lucky guess. Did you have reasons for you "prediction" or were you just guessing? Millions of people guess all the time and some of them are right several times in a row. Most people who are sincere share their thought process, however. Is asking for reasoning making "fun of you?"

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  21. MLMT,
    Here's the thing. One can't invest or trade based on a guess. I can assure you that if you exit everytime something doesn't look right you will never be able to ride the bull. There has to be a reason to exit.

    A good reason would be a pattern of lower lows and lower highs. That hasn't happened yet. It may, and if it does then one can stop out in preparation for a larger decline. But until something happens that has real meaning just exiting because you told us to is a perfect way to miss a bull market.

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  22. Perhaps people are booking profits they wanted to take last year, now that they won't be taxed until Jan 2012?

    I don't enter/exit on those considerations, but it's a possibility. For me, Gary's made it easy for me to ride lower days like this by having reasonable positions based on my risk tolerance. Instead of pain, I can look forward to the opportunity it might present over the next couple weeks.

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  23. Nike,
    That's how bull markets work. Up the stairs, down the elevator.

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  24. An alternate strategy: Buy more here with a stop at $HUI 550. If this is not the start of an IT decline you will make a tidy pile, if it is, you lose pennies with the stop less than 1% below here. This is just what I look for and I am buying more GDXJ with the tight stop.

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  25. Regardless of whether gold goes down some more here, even maybe significantly, 1160 by mid-Feb is an ABSURD prediction. That is a crash of epic proportion. Much more severe than the '08 event. Puh-lease...

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  26. DG, you're right, it's a good time to get a little aggressive. The HUI 50 dma has provided support for the entire move since Aug-2010. The 50-DMA is at 550

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  27. Jay made a great point on the previous post for SLW...People were freaking out about their favorite stock falling from 17 to 15, to have it close to 35-40 now. I can only imagine where this stock is going to be once silver breaks 100. The more I keep looking to the mountain peak, the more I see how high it actually is.

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  28. I think the key is the 50 dma.
    Gold already bounced off of it 3 times over the past 1.5 months.

    Not sure what a 4th trip down would look like.

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  29. Poly: for me it's all about stops. If I have a good sensible stop point that is within 1% of an item I'll buy almost anything. There's a story in one of the Market Wizards books by a guy who said you can throw darts at the Wall Street Journal AND tell him to buy or short whatever stock is hit, and he'd still make money through letting the profits run and cutting the losses. Buying right near a stop is a one-sided but. I just bought more JDXJ at 38.5 and I'll be out if HUI breaks 550, so probably at 38.30 or so.

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  30. Gary: Thoughts on the fact that the dollar is up today? Sure is acting like it isn't going to drop, let alone bottom this week. Just very right translated?

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  31. HUI 550 will certainly be taken out, even if not today.

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  32. It's always possible the daily cycle contracted down to only 13 days.

    But I never like to bet on an abnormal cycle because most of the time I will be wrong.

    No matter what we still have a failed daily cycle in play.

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  33. Hmmmm.


    I think I've seen enough. I may be out shortly.

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  34. Jay,
    You can put your trade trigger .10 lower on the GDX if you want.

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  35. Bonds have cracked for past 2 months, gold is starting to crack, and the SPX still holds up --- Amazing!

    Gary,

    Maybe Gold and Markets bottom together? Whether that is 1200 on SPX or lower and 1300 on Gold time will tell. It is high time the market had some correction (daily vs. INT) and that could also drag Gold down more.

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  36. I'm not talking any patterns (don't use them) like H&S, and at this stage it's impossible to know where the miners will find stability. It might be just below 550, or much lower.

    I defer to Gary on my LT miners and metals, but my short term trading is all me, as it has been for almost 20 years. All my short term indicators are telling me there is more to come on the downside. I'm not selling any core, but I'm not buying yet, either.

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  37. And I very rarely sell into weakness in bull markets, unless stopped out, which is rare as I use very wide stops.

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  38. Gold has filled the gap and is at the 50 day MA, which as been support for a few months

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  39. Thought -
    Big fiat war here. Europe sees inflation hitting, China does not want our currency to depreciate, Ben printing more,,, It's all a race to devalue among the countries in crisis.
    Who will win?

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  40. WOW...WTF. Humbling today for sure.

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  41. If we close below 550, it really does imply lower prices coming. An oversold market that can't rally off the oversold is a pretty reliable sign of a trend change. Since the lower BB is here we ought to bounce off it if new highs are in the near future. I'll be out if we fail here as i will not hesitate to buy at the next thing that looks like a bottom, nor hesitate to buy at higher prices if it looks right.

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  42. The move to lower lows on the HUI probably does mean an intermediate correction has begun. But that isn't a bad thing.

    It means we can cut losses short now and get in at much lower porices for a much larger run later. These small little losses will be swamped by the gigantic gains to come.

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  43. Does that mean you are selling here at the HUI stop gary, or waiting to hit your original gold stop?

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  44. Gary, does that imply you are back to core ... removing leverage or still holding?

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  45. Gary, you´re saying the intermediate correction has begun, since $Hui broke sightly 550 ?

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  46. I agree Gary, we will make it up. I just hate losing but know you can't win em all, Ahhh...such is life.

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  47. I don't attach any significance to a close below 550.

    When a bounce comes, it will tell us how much more potential downside we have on the next move lower. Either way, we need to be patient b/c the upside is capped temporarily at best, and at worst we'll see lower prices.

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  48. Gary's post said close below HUI 550...

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  49. Mr. Mom ... indeed it did! ... Thanks for that clarification.

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  50. Does anyone see any kind of intraday bounce brewing? Not me at the time.

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  51. MLMT,

    >I warned ya'all yesterday. And as I had pointed out, I was made fun of.

    You were made fun of for the exactly right reasons. Note that you didn't come back to respond, put your 'prediction' on the line, or say you were betting money on it UNTIL we dropped this morning.

    You conveniently left your statements hanging in the air until you saw that the market was moving in your direction. That's easy for anybody to do. They just have to throw stuff out and see what sticks.

    It was pretty darn apparent that gold and silver were gonna move HARD in one direction or the other this week. MANY of us have said as much including me. You simply picked one direction but never locked yourself in and never gave a reason.

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  52. MLMT,

    A correction. I didn't make 'fun' of you. Bad word choice as a follow up to your use of it.

    I challenged your statements professionally and allowed you a response to gain credibility BEFORE the market moved one way or the other.

    You have only shown up now after a direction has occurred. That doesn't count to me.

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  53. Jay,
    Did somebody say fomc announcement today? Raise rates???maybe?

    What is Euro and dollar telling us?

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  54. I will honor my orginal stop. Gold movng below $1361. But others who can't stomach drawdowns could trim if the HUI closes below 550.

    The risk of a whipsaw is greater though.

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  55. "Jayhawk91 said...
    Does anyone see any kind of intraday bounce brewing? Not me at the time."

    all depends on $USD.

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  56. TommyD,

    It was FOMC minutes today at 2pm.

    I personally ignore these numbers for my trading, unless I'm ready to place a trade right in front of a news item, in which case I place orders a bit further from the current prices.

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  57. Shalom,
    Thanks. I was grasping for an external reason as to the clime of the dollar. But, wall street plays games even with no news.

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  58. Bought back gold futures. Maybe for trade or hold. Haven't decided yet.

    We should have bottomed for at least a trade though at this point.

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  59. Gary,

    How come you rarely include volume in your analysis? Perhaps you use it in your thinking, but just don't write about it much? Or is isn't it very helpful in PM sector?

    Just curious. . .

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  60. Josh,
    The volume in GDX was pitiful coming out of the July bottom. If I cared about volume I would have missed the move.

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  61. 50 DMA on HUI should be drawn with a fat crayon. There's nothing magical the exact number.

    Take a look at what happened in mid-October: 50 DMA was penetrated 5 times and two of those times HUI closed below the 50.

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  62. I'm certainly no dollar expert, but a similar move in a major stock market index would signify a successful test of the December 2 low.

    The dollar index ran stops below the 12/2 low, and reversed hard.

    This is a textbook reversal.

    If this was a stock index, it would imply higher future prices.

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  63. There are huge foces at work in the currency markets. Who knows what could happen.

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  64. It's the Factory report...

    Recession is over. Move along now; donate your stored-up food; get your kids PlayStation 7.2; tell the bank you would like a home equity loan so you can plan that swimming pool.

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  65. VIX not really buying this move down......

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  66. OUT gold futures. Small loss. Much more weakness than expected.

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  67. Not sure I follow you on $VIX, Poly.

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  68. Back to even on my Q's short (done at the old high of NDX 2239). The NDX gets trashed at some point almost every January. Looking to add and will post when I do. I hear tell one can't make money shorting an IT decline in an ongoing bull market...we'll see. I will almost surely be out of PM's by day's end.

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  69. slw should reach 36 or gap at 35.4

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  70. Actually my quote or thought if you will is that if one would simply avoid shorting in bull markets one could probably improve their lifetime percentage 10-15%.

    over a 30 year career that would add up to millions.

    Thats not to say one can't get a call right just that the odds are much better if one doesn't try to fight the trend.

    That being said I think one will make money shorting here because the coil pattern gives you a 70-30 edge.

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  71. DG, when you say "out of PM's" are you talking completely out? You won't even hold a core position?

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  72. Nasty and not fun. What are people with new positions doing here?

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  73. Gold and silver are down from selling vs dollar index 5:1. It ain't the buck.

    Tuesdays are favorite bullion bank manipulation days; it's the cutoff date for PM COT reports. Ed Steer @ Casey Research rants about this All. The. Time.

    I was waiting for this move to leg in some more, considering "da boyz" didn't do a takedown last week.

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  74. I would also say this about takedowns on Tuesdays: it doesn't seem to matter what the news is, good or bad, it just happens.

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  75. Let me say that gold still has 9-15 days before the current daily cycle is due to bottom. It topped right in the middle so it could end up being a left translated cycle.

    One doesn't want to buy in the middle of a cycle. You buy at a cycle bottom.

    Right now one should just be letting stops work not trying to buy.

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  76. gary,
    would you add here for slw?

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  77. BoW on GLD: 12 million. probably not significant. 60 million or 80 or 100, that would be significant.

    OEX call/put ratio is 1.25 calls to every put, so the OEX options traders are not buying this drop in stocks. Yet.

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  78. I had to sell my AGQ. It was giving me a heart attack.

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  79. 92000,
    read my comment right above yours.

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  80. Demark analysis:
    SPX 1266 Daily exhaustion point hit yesterday
    SPX 1287.5 Weekly and monthly exhaustion remains to be hit
    DJIA Monthly 12008 remains to be hit
    Russell,NDX have hit their monthly exhaustion levels, so getting close to an intermediate top
    Prof Depew sees a move up to SPX 1436.50 unless we get a low below 1131.87 in the upcoming correction-could be close if we hit 200 DMA
    Gold and silver?? They both recorded a Monthly Demark Sell Setup in December, which implies a 1-4 month reaction which would mean high volatility through April for you. Also, don't forget Gold posted a Yearly sell - 12 years of bad luck. Silver looking at a 1-4 year selloff starting in 2012.

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  81. No, I don't hold core if the odds are high that we are going down from here, but that's just my style. If you are SURE that you won't be afraid to buy at the bottom (waiting for one more little drop, or worried that the bull is over) and are SURE that you will be willing to buy back in at higher prices (thus admitting you would have been better off not selling), then, to me, there is no reason to hold a core. Very, very few people can do that, so you wind up selling when you are scared, and buying back when it "looks safe." That is a recipe for losing even in a screaming bull market. Gary is right that the vast majority are better off buying and closing their eyes until the bull ends with buying frenzy. But geez I've been training myself to buy into panics my whole life, so I better be able to in gold. (I bought debt crap ETF's into the panic in 3/09. My wife almost shot me until I sold them al 75% higher in six months).

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  82. Gary,

    I would like to sell to core position. Is it a good idea to sell here or sell on a bounce.

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  83. There's the HUI trend line off the summer rally point and we are on it now. TL's are made to be broken, but there it is.

    http://www.screencast.com/users/Jayhawk1991/folders/Jing/media/a9d287db-fe96-4356-b52f-5f6e26244376

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  84. Wow--
    this Gold Bull is Bucking pretty hard!! 1361 --- will be interesting to see if we get there?

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  85. Looks like I will making a trip to the bullion store soon.

    I will buy stocks anywhere in the cycle based on individual charts for that miner but I only buy physical during intermediate or better corrections.

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  86. Folks,

    Gold and NDX bottomed for the day.

    Look at FCX --> that is GDX + copper. That is a good leading indicator of whats coming quite often (unless there is copper or FCX specific news).

    Gold hit major support 1375 area. Stocks will sport a nice bounce over next couple of days IMO and gold should bounce to 1388 or so IMO.

    GDX seems to have put in an island top. And very likely it will not see higher than today's opening level for several months.

    What do I do to get these levels? Volume analysis aka Volume profile. Plot the volume traded at different prices over time and you will know why a certain price level will/will not be breached. For Gold and GLD these levels are much more cleanly defined than GDX.

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  87. MLMT: Hey! You gave reasons! Great! Yeah, volume analysis is one of the things that works pretty well most of the time... most of the time. If you hang your hat on any one technical indicator eventually you lose your head. No doubt that it nailed it this time though. If it were that easy everyone would use it and it'd stop working. I've got lots of things like that that work most of the time. I really appreciate your sharing more than "We're gonna tank" though. Lots of people on this blog use different stuff. maybe you can be our guy who does volume analysis. That'd be quite useful.

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  88. MLMT,

    What is the time frame on your composite? Where are the CHVN's and the CLVN's??

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  89. Oh boy, if so many here are panicking and selling, many of who are "coached and subscribe", then maybe this is a bull fakeout. Plausible in light of no major equities selling or dollar rally.

    We're up well over 50% on PM's and IMO, this is a time to be brave, not to run and cover. The $1,361 stop is there to protect, anything above "is still in play".

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  90. I agree Poly--
    Time will tell which scenario plays out! (Good to sell early as continued weakness is coming or bull fakeout and we continue up)

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  91. Interesting. If the Dow closes up today I will get a sell signal on the SPX. They buy signals are worth banking on (80%+ accurate), but the sells are not nearly as good. Given everything else, however, I will probably add to my Q's short if we get it.

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  92. well lets hope it is not deja vous all over again. Actually, maybe I do want deja vous all over again. Same shit as last January and it allowed a great entry when intermediate cycle bottomed.

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  93. Poly, its easy to sit and hold when you got in early on this train, but I got in in November and bought a bunch of AGQ on Friday. I basically gave back 2 months of gains in 2 hours this morning.

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  94. MLMT,

    Thanks for the info re volume profile. Good call on this move down.

    Do you use volume profile on only daily charts, or do you also use them on hourly and smaller time frames?

    And what is it in the volume profile that has you calling 1160 as a likely bottom? I see a lot of volume at 1235 - 1245 and also around 1200. Seems like those two price ranges would be likely stopping points for this decline (if it gets that far).

    And finally, are you using GLD or gold futures for your volume profile analysis? (The numbers I gave were from gold futures)

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  95. DG,

    IMO this is where most traders go wrong.. They use a variety of indicators and rarely would all line up in one direction. So, often there is a conflict and mish-mash and eventually it is the internal bias that resolves the conflicting indicators.

    IMO have one or two tools and learn them well. And know when they work and when they don't.

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  96. Nat,
    Now you've hit the nail on the head. Most people look at this and see a loss. What they should see is an oppurtunity in the future for huge gains. Much bigger than if gold just kept going higher here.

    If this does turn out to be an intermediate correction I expect I will recover all of today's losses in 2-3 days as gold comes out of the intermediate low. On positions I re-enter that is. My core will jsut ride it out.

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  97. IF we go down from here and continue down for a while--like weeks or longer--then we have a triple top on GLD and gold futures. Triple tops are rare--rare because they usually get resolved to the upside (so the "triple" top disappears).

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  98. As much as today hurts, one has to be looking at the bigger picture... where will we be by year end. That's what's keeping me from freaking out here today.

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  99. Pima,

    The 1160 call by MLMT would be a CLVN because it will reject the price based on unfair value.

    However, volume profiles do not forecast large moves or direction. They provides areas to do business and "accepted prce" and "unaccepted price.

    High volume ares equate to HVN and price usually trades around those numbers.

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  100. MLMT was correct. This is the second time within 2 or 3 weeks.

    Moreover, he has been correct last time to the dollar.

    This time, his timing is correct. He now states 1150 in Feb.

    It is no larger a drop than the 950-650 drop in terms of concept. It will terminate the fever. That will make this market healthy again.

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  101. MLMT: If it were easy to find one or two indicators and you could tell ahead of time when they would work and when they wouldn't everyone would be rich! Lots of people have cruised through here with something that works for a while, and then you never hear from them again after they blow out. Keep posting calls here. Time will tell. A "weight of the evidence" approach takes into account that no indicators work all the time. I'd love nothing better than to be shown I am wrong. NOne of this is meant with any disrespect---just skepticism until shown otherwise.

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  102. There's the trend line off the summer and also the triangle break out/back test on the HUI on the bull side of the story. I'm still holding, waiting to see what these levels do here.

    4 hour chart-

    http://www.screencast.com/users/Jayhawk1991/folders/Jing/media/dc8e1f3b-1c02-4e03-824f-c15faa473a1f

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  103. Let's get serious, MLMT made one and only one comment yesterday.

    "The action in PMs today should make those who are long the shiny metal worried IMO."

    Hardly calls for predicting today's action or to be construed as any meaningful, actionable information!

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  104. Gary

    Just a day ago or two ago, didn't you get into leverage? In fact you mentioned that you took positions last Friday and yesterday at prices much higher than todays. So wouldn't today be an even better day to buy keeping in mind the hard stop of $1361, especially since you were so confident about the dollar starting to plummet into it's 3 year low?

    or is it you have changed your outlook on the dollar based on today's gold price action?

    not

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  105. May this is a double fake out? Pull the rug out and make everyone think month long correction so they dump and then blast off?

    SIL sitting on channel support here.

    http://www.screencast.com/users/Jayhawk1991/folders/Jing/media/127ebd7c-7e5c-411d-8635-33fa39590d2b

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  106. I don't want to add if the market isn't doing what it's supposed to be doing. And the HUI definitely shouldn't be making lower lows.

    Maybe this will end up being a really long cycle driven by the Fed's meddling. Similar to last year.

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  107. Sorry Rosabarba just noticed your question. I was stating earlier when the S&P was down almost 1% that the VIX wasn't reflecting the sudden decline, it was up only 2% or so at the time. It's not actually turned negative!

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  108. BOW

    SPDR GldTr (GLD) 17.09 Million

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  109. Great article, just got done reading it

    http://www.robertsinn.com/2011/01/04/the-single-most-important-thing-that-you-could-ever-understand-about-markets/

    thought the SMT blog would like to read it as well

    J

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  110. Personally, I would be relievred to see a significant correction here. With my current exposure of 45% it ight cost me 9 to 12% of my account, but it will certainly clear sentiment, knock riders off the bulls back, and set us up for a beautiful run into renewed dollar weakness later in the winter/early spring.

    Remember folks...the fundamentals are intact as the FED and other central banks are not likely to cease or slow the creation of paper money to manage their debts amidst economic weakness that lacks true productivity. Also, the public card has not even been close to being played, and if anything is likely it is that the public will enter into the gold and silver markets in a big way before this is all over.

    The only position I will jetison at a break of 1361 is my 5% AGQ. Otherwise, I'm gonna ride as the risk of being whipsawed is greater to me than the risk of taking a 10% hit to my account. After all, I had a 48% gain last year.

    Good luck. Stay clear.

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  111. here's something interesting: 19 million on BoW list for GLD. However, if you look at the Block Trades column, you see a NEGATIVE 5 million. Looks to me like smart money was unloading GLD today (hence the negative 5 mill in block trades).

    This goes along with Gary's comments that this cycle is not due to bottom for at least a 9 more days. Smart money knows this and is dumping shares.

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  112. Pima, $3.3Billion in GLD stock was traded today, little reality check please.

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  113. @Bluebox...do you watch lease rates?

    I do and when I see big spikes it usually means the big bullion banks and their buddies the central banks are about to do something. Forward rates are set by the 6 or 8 players on the LBMA. Of course its all paper shuffling for the most part in the paper gold market.

    Something else to remember, especially for new subscribers, is that gold will swing 50 - 100 dollars a day as this bull progresses. Gary made this point 3 years ago, many, many times, when people were freaking over 10-20 dollar price swings. He warned if you can't handle these swings, 10-20 dollars, you will be freaking when we see the 50-100 a day swings.

    I smell a good buying opportunity coming.

    No, I don't have a clue as to what the price will be or what day it will come. I will just follow Gary's cycle analysis and use my own risk tolerance to add back in. Served me quite well over the last few years.

    For me personally, the larger thesis, that FIAT currencies are finished hasn't changed and won't be changing anytime soon. IMHO, we are going through a large paradigm shift. Something none of us has ever seen in our lifetimes. The warning signs have been around for a long time, but as usual, human nature being what it is, most people will not see this until its far too late.

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  114. fubsy/Mitch....I second your comment

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  115. Poly,

    What's your point? That the BoW number is too small in comparison to the total dollar amount traded? What would that ratio need to be before you'd give it any importance?

    Seems to me the Block Trade amount would be the important number anyway and that number for today is negative.

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  116. Above 550 HUI close? Should be. Also, 50 MA on the HUI looks like it might hold.

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  117. Yes that's my point, that number is simply to small and irrelevant for that pool.

    Jay, interesting how all of the metal complex crawled there way back just over the 50dma. Next couple of days will obviously be telling, but even a confirming decline in the next few days should at some point revert back to the 50dma giving us a chance to dump at the 50.

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  118. What's interesting is how the 78.82 proved to be a weak exit point. With so many making plans on that number, I actually adjusted mine a little lower to 78.5 (pretty random number) which never activated. This made me avoid adding the 80%. It looks like the 78.82 just got faded.

    Now if we go lower again and the dollar proceeds to be breaking down into it's 3 year cycle low, and gold and stocks are entering their int. declines, I'll still obviously not add being that gold/silver would most likely be making lower lows.

    MLMT has been making some nice predictions now! BUT I would be willing to wager him big time on gold not hitting 116x's.

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  119. I also posted a post earlier on gap filling that never posted for some reason.

    Gary,

    What is your thesis on gap filling. How often do they occur/not occur? From the ones I've looked at, them seem to more often than not fill. You're last SLW gap filled. You think SPY is going to fill it's 1200 gap?

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  120. *correction, 78.82 entry point, not exit (although it was exit for some).

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  121. Hi Gary,

    You made a comment that becuase the coil pattern gives you a 70/30 edge. Did you actually short?

    Thanks,

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  122. Robert,
    Yes i do think it will fill as that is where the first level of SoS came in.

    No I did not short. I don't short bull markets.

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  123. M,
    Weren't you telling us gold would not be able to penetrate 1388 several weeks ago...right before it rallied to $1420.

    No one has a crystal ball folks. Don't let one call make you think they do.

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  124. I will restate what I said:

    All intermediate tops have a certain way they play out. They start with a big gap down (that comes from a lower high, like we had one here in case of gold).

    After that the most recent ST support is broken.

    Then a rally to the regular hour highs of the day (on which the big gap down happened) to shake out those who shorted the big gap down.

    Then another big gap down....

    This is what I am trying to apply to this situation - hence 1361 will likely be breached in coming days and then a rally to today's highs to mark a VST or ST top and then the decline will resume with another big gap down.

    The up-down nature can be explained by supply demand. The exact levels can be pin-pointed by HOD, LOD, open, close and Volume Profile levels.

    No one has a crystal ball. I dont think I have one. The fact that 1388 got breached *proves* that I dont have one :-)

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  125. Gary you are a great trader. Hands down.

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  126. I'm not arguing about an intermediate correction. I think one is probably coming...actually I'm hoping it is so I can get in at much lower prices and make much larger gains than if the bull just kept running.

    A correction should allow me to make 50-100% this year too. Corrections are neccessary. They are to be taken advantage of and that's what we will do if one does in fact develop.

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  127. I am not arguing with anyone. Just presenting my market read here. Thats all.

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  128. This comment has been removed by the author.

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  129. If we see a intermediate correction. Will the stock market also fall? For me its hard to see that stock, dollar and gold fall at the same time?!?!

    Is it possible for the dollar to reach the three year cycle low and gold to have a intermediate correction at the same time?

    Gary wrote som nice stuff 2-3 weeks ago. He wrote that the dollar will rally and the stock market and gold was going down..Waterfall decline in the stockmarket and intermediate correction in gold..

    To soon to say something about that right now maybe?

    But if the dollar starts do rally from here then the stock market and gold would go down hard I think..Focus on the dollar then?

    For me its hard to see a dollar rally from here..

    /Patrik

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  130. So Gary is human after all?

    He has no clue for a while now

    or is it just a bull market makes a genius of everyone?

    I've seen this blog go from bullish to bearish, back to bullish now back to bearish in less than 2 weeks

    You guys remind me of an old turkey with its head cut off flip flopping all over

    LOOK AT THAT TRIPLE TOP WITH HEAVY SELLING ON EACH. scary huh?

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  131. Gary, looks like it's time to dust off the troll meter! We'll need it to fine tune that bottom call... :)

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  132. When the market changes one has to change with it. To do any different is to argue with the market and no one ever wins that battle.

    On Tuesday gold rallied when it should have dropped and today it dropped when it should of rallied. If someone knows how to predict the unexpected without a crystal ball then I'm all ears.:)

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  133. Rick obviously confuses short term observations with the overall prognostication on metals. Gary's been very clear. while Rick seeks immediate gratification.

    Gary was up huge in 2010 along with many here, and Rick chooses to whine and try to pick fights. :)

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

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  135. Yes, Gary, let's get the troll meter back! I am happy to read all the anony-mouses for a while so we can see when to get back in.

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  136. DG,

    You'd risk the civility of this site for another stupid sentiment indicator ? Like they've been working like clockwork, anyway.

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  137. My thoughts on today,

    After sharp selloffs like this, metals rarely stop at the end of the FIRST day down.

    Yes, I can agree we might get a $10 or $15 bounce or so, but we are likely to continue rather sharply either tomorrow or thurs at the latest.

    It isn't a guarantee and I'm not betting on it (by way of a short, for example...although I am at core holdings only), but that is how it plays out more often than not.

    Metals aren't kind to people who are long once a real correction sets in. By time it's done you usually wish you had never invested in the sector at all.

    (Yes...there is the chance this is just another fakeout or whipsaw and the zoom up resumes momentarily. I'm believing that is less likely now.)

    Obviously I'm changing my opinions rapidly along with others as new info comes in, but that's my view for now.

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  138. Don't worry.

    There will be Trolls.

    In about 5 weeks the place will be infested with them.

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  139. Just for 3-6 weeks, Wes, though I must admit the site really has been delightful since they've been banished. But c'mon, you'd take one for the team no?

    By the way, Pima, huge OEX put buying at the bell today. I added to my Q shorts at the close. I'm short about 100k but would like to double it if I see a pathetic bounce after it breaks a bit more. Gotta make back what I lost in the PM's today, right?

    And Gary, you're infecting me...I'm really looking forward to nailing the next PM bottom (I hope.)

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  140. Gary, I was mulling over the idea of using the dollar as our guide over the last few days. I realize the dollar is driving the long term trend, even the intermediate trend in PMs. BUT, does it not seem likely that when markets (stock, PMs) get severely stretched the dollar's influence becomes SECONDARY to sentiment? I'm sure we both agree that this will be true at the final gold top, no? The mania will have taken over any mechanics between gold and the dollar.

    So what about our recent peak? If sentiment gets out of hand, which it has, it seems like we should NOT base our decisions on the dollar chart as it will likely be overruled. In other words, at tops it is sentiment-based SELLING that drives the dollar upward as people flee stocks and NOT the other way around. You have been looking for an external event to drive up the dollar (Korea, Europe) but we already have a good one: an exhausted rally which people will try to flee ... to the dollar!

    If this is true, we might be able to avoid head fakes like today and like a year ago. There were no Fed surpise annoucements, no flash devaluations, etc. Only what has already been announced long ago. So it's highly unlikely that the dollar will move dramatically downward to overrule a correction that has been long in the making. It is more likely fake. We also don't need Europe or Korea to send this downward - those are also fakes.

    In summary:

    Bear signals:

    1. Markets severaly overbought
    2. Large momentum divergences
    3. Large money flows out of stocks
    4. Cycles calling for corrections
    5. Lack of any large stimulus
    6. No new high in gold
    7. Gold at short term resistance
    8. Gold rally ended at nice round number.

    Bull signals:

    1. Dollar daily cycle failure
    2. Short term gold strength

    Notice that if we ignore Bull signal No.1, then Bull signal No.2 becomes suspect since they are linked. If both are tossed out, what do we have left?

    You thoughts are always appreciated.

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  141. Low,
    If you think you are going to avoid headfakes and curveballs in real time I have some ocean front property I'd like to sell you here in Vegas.

    They can only be avoided in hindsight...which is what makes Elliot wave such a great predictor of the past. :)

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  142. Gary, "avoid" is too strong a word. Try minimize. But what about the logic of the argument? Does the dollar not take a back seat at the end of large rallies?

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  143. Jayhawk91, nice TL's on GDX and SIL - I usually don't draw/trust TL's, but these look good - thanks much.

    Gary, glad to see your flexability. The 60 min chart of HUI showed neg div, so this coupled w/Jayhawk91's TL may mean we're bottoming here. Have to wait and see.

    If the $HUI trickles along sideways here, not going lower for a day or 2, I'm a buyer w/a floor.

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  144. We will only know after the fact.

    Sentiment has been sky high for over a month now. If it was going to override the dollar why didn't it already?

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  145. Because as you've noted, rallies can go on for far longer than anyone can expect - tops are hard to call. But that's not important to my argument - the important part is that we take the dollar off the table at large tops. Not completely of course, but send it down the list a bit. Give the other signals a bit more weight and then ... WAIT. There's no reason to rush back in aside for "surprises come to the up-side." But if this correction picks up steam, we will have had two big reasons why it might not always be wise to think such.

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  146. Uh, fyi for clarification purposes, I meant there was neg divergence on the Friday GLD/SLV/GDX 60 min charts, indicating a minor correction Mon/Tues this week, which happened. $GOLD, $SILVER and $HUI are still above their 50d EMAs (w/$SILVER still above it's 20d EMA), with higher lows & highs, so in my book we're still trending up.

    This matched w/Jayhawk91's TL make me think like Poly that today's correction is a fake shakedown, w/higher prices ahead. Depends on tomorrow - I'll watch the $HUI and Jay's TL.

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  147. And if it was as easy as that to do then you would have done it :)

    I've been doing this a long time and I can assure you that at any point in the market you can find countless reasons for why it should go up or why it should go down or why one should ease back or step on the gas.

    In hindsight you will be even better. You will certainly see all the things that were "clearly" warning of a correction...and more importantly because you will now know the outcome you will minimize all the things that told you at the time that the market was going higher.

    The best anyone can do is play the odds and then if the market throws you a curve ball cut your losses as quick as you can. That's what the stop at $1361 is for.

    It will prevent us from riding an intermediate correction all the way down. It will allow us to get to the bottom with some dry powder and our emotions intact so we can take another swing.

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  148. Gary,

    I got out of AGQ a little while ago when it dropped from over 150. I think I sold in the mid 140ies after holding it since 70$. I thought it might correct much lower, but when it didn't and just recently jumped back over 150 I got back in only to see it drop again by 100$. Wondering now whether I should get out again to not suffer a price meltdown or whether I should just hold to not get whipsawed in and out. If there is a correction how much lower might it take AGQ? I have 1/6th in physical, 2/6th in AGQ and SIL, 2/6th in Uranium stocks, DAG, and now UNG, and 1/6th in cash. Any piece of advice?
    Thx
    Basil

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  149. Gary,

    I got out of AGQ a little while ago when it dropped from over 150. I think I sold in the mid 140ies after holding it since 70$. I thought it might correct much lower, but when it didn't and just recently jumped back over 150 I got back in only to see it drop again by 100$. Wondering now whether I should get out again to not suffer a price meltdown or whether I should just hold to not get whipsawed in and out. If there is a correction how much lower might it take AGQ? I have 1/6th in physical, 2/6th in AGQ and SIL, 2/6th in Uranium stocks, DAG, and now UNG, and 1/6th in cash. Any piece of advice?
    Thx
    Basil

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  150. >And if it was as easy as that to do then you would have done it :)

    Sadly, I only just now thought of it... and I'm not a trader like most of the guys on this site - I'm a long time hack who specializes in going nowhere in his accounts :)

    I don't disagree with any of what you say - which is why I listen to you! But none of that actually addresses my point, nor does it invalidate it:

    1. You used the dollar to make a recent call.

    2. The dollar may not be as useful to us at tops.

    I'm trying to get your thoughts on the logic of this. Is the logic sound? If not, exactly why not?

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  151. P.S.: I meant today's and yesterday's drop of approx. 10$, not 100$, of course.

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  152. Basil,
    You should honor the stop. That will keep you from getting caught in an intermediate correction.

    Low,
    You seem to be assuming the dollar has topped. What if the dollar also throws us a curve and rallies to higher highs even though we clearly have a failed daily cycle in play?

    There are no guarantees in this business only probabilities.

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  153. Hi Gary,
    What percentage of your portfolio are you planning to sell if the stop is triggered? The stop is a hard stop right?

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  154. Low Tax,

    All the shares of every stock are owned by someone all the time. How can money flow "out of stocks" ?

    It seems to me that if the buyer and seller are in the same country, the dollar index would not be affected.

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  155. Gary, I'm not assuming that at all, if anything, the reverse. But no, I'm not assuming anything. I'm simply saying that we should give the dollar less weight at the tops of big rallies.

    So in our present circumstance, when you saw the dollar fail its current daily cycle and gold rise on Friday, you would have said "Ok, we might be looking at a continuation of this rally based on cycles but I'm NOT going to act on it until gold makes new highs and proves itself because THE ODDS STILL POINT TO THE DOWN SIDE."

    The odds DO point to the down-side IF one gives less weight to the dollar at big tops.

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  156. Wes, see previous discussions on Selling-on-Strength and Chaikin Money Flows. You were part of those so I assume you know the answers :)

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  157. Wes, sorry, I didn't read your comment carefully enough. Let me answer you graphically. I don't know how to post a pic to a blog entry but you can plot the S&P alongside the dollar for the last 3 years and you will see a perfect inverse relationship.

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  158. Todd,
    The stop is a hard stop. I think I will go down to 33% this time.

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  159. Low, I don't buy new highs. That's a fools game as most breakouts to new highs get reversed. Buying a new high is an almost fool proof way to incur a drawdown.

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  160. Low,
    I know what you are doing. I did it myself many times during the beginning of my career. You are trying to find some foolproof way to avoid drawdowns. Some indicator that will "warn" us that trouble is brewing.

    I eventually figured out that there isn't one. You just have to play the odds limit risk (stop at $1361) and when you get caught you cut your loss and move on to the next setup.

    For us that will be at the next intermediate cycle low. And I can tell you now there is a good possibility that we won't time it perfectly so we will almost certainly have some kind of drawdown at that entry.

    If that is going to cause you to freak out because you suffer two drawdowns in a row then just stay unleveraged remove the stop and go Old Turkey.

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  161. Gary should our stop be at 132.85 on GLD?

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  162. I was using that as an example. Would it make you happier if I had said "a breakout from the triangle in Jan 1's report"? If not that, then is there anything else that could have given us a stronger buy signal?

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  163. Maybe 132.50-132.75 should be fine.

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  164. The strong buy signal comes at intermediate bottoms when its almost immpossible to pull the trigger.

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  165. Gary,

    I'm not a cycles guy, but I'm interested because I think it's possible they do exist. I listen to Tim Wood every weekend, and find your blog fascinating.

    To me, the thing that keeps me from being a cycles guy is that from the little bit I've read/seen, the periods aren't regular. Cycles in nature are pretty regular - the seasons, the moon, the tides, the half life of Uranium, and so on. I really have a hard time when I read about cycles (of whatever - gold, dollar, S&P, ...) being stretched or left/right translated - to my novice ears it sounds a lot like rationalization - akin to how EW'ers re-count their waves whenevever something odd comes about, like cycles, which from my knot-hole seems is often - too often for me to trust/trade off of.

    But you're doing well I see, so I'm hoping I'm wrong/uneducated.

    I'd truly like to follow cycles if in fact they are fairly stable and predictable - are they? Or is it a guideline type thing?

    Thanks much.

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  166. Will,
    Cycles aren't a perfect timing tool anymore than anything else and they are virtually worthless for timing tops.

    All cycles are really good for is to let you know when to step on the gas and when to ease up and even then we can get a curveball like today that can throw everything into chaos.

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  167. Bears should probably take the next 4-7 years off trading the market.

    There's good reason to believe that the Dow and SPX are headed to lifetime highs. The Nasdaq may even retest 5000.

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  168. What are those good reasons, Beanie?

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  169. William,

    The inconsistency you describe is exactly what makes cycles so valuable in market analysis. If they were easily predictable, anyone could use them... and then they wouldn't work anymore!

    It is important to understand the concept of timing bands and also the congruent characteristics of cycle lows. With those concepts in hand, you will be buying while the rest of the world is in a state of panic... quite often an extremely profitable endeavor.

    By definition, you will have to be fighting extreme emotions to get cycles to work in your favor, but as any weathered trader will tell you, fading extreme emotion is the most profitable way to trade.

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  170. William-
    Glad you liked the trend line. They get broken all the time but maybe this one holds!

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  171. Hi Gary,

    Would like clarificatin on your response to Todd re your portfolio allocation when the stop is hit. You are saying that you will reduce your holdings TO 33% right? And not reduce it BY 33%?

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  172. Yes down to 33%.

    I'm more confident of an intermediate correction if $1361 gets broken as we will have a failed cycle. We didn't have that condition a couple of weeks ago.

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  173. This comment has been removed by the author.

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  174. Mostly by how confident I am that I will be able to re-enter at lower prices.

    That is the only reason to sell in a bull market is if you can get in lower.

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  175. Hello Gary,

    Thank you for all your help! It is indeed a very difficult market to read and your comments and analysis help a lot!
    Congrats on the website btw...
    And don't worry about the people like Rick...it is so easy to become nasty, some people should behave like traders and hold their cool....

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  176. "potential" bull pennant forming on the GLD

    we would need to see at least a reversal tomorrow or the next day for a possible breakout

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  177. The ADP employment numbers will be out tomorrow. I expect the numbers to beat the estimates based on the seasonal spending.

    May put a wet rag on this rally and we'll have a failed pennant.

    So we'll see. I'm open for anything tomorrow.

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  178. Hi gary,

    does this meet our criteria for people buying frenzy...

    http://www.zerohedge.com/article/scotiamocatta-sells-out-silver-bars

    V

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  179. Golddealer.com has supply. I think it is probably just a case of one company not having enough inventory not a market supply shortage.

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  180. Overnight action tells me that I am wrong about 1261 unless we are down to near yesterday's lows by 9:30am.

    That being said, I still expect gold to trade around 1395-1400 or so pretty soon in NY hours (as mentioned in my earlier comment).

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  181. Looks like after-all gold will likely be below yesterday's lows when NY markets open

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  182. Gary, a technical issue. Are you doing any handling of the comments which are posted on the blog? During the exchange we had two days ago, my last comment appeared at the bottom of the editing page, but not on the blog page. I tried to repost it several times, but it still would not show up. At one point, I got completely locked out of the entirety of my Google account. The process of reporting/restoring access to a Google account is anything but simple or conforting.

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  183. No sometimes blogger decides for whatever reason that something is spam and it deletes it. If it happen post a note that a comment got scrubbed and I will retrieve it out of spam.

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  184. I will make it a point to check the spam folder from time to time to see if anything got caught.

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  185. Gary: I noticed in last night's report that there was no mention of the dollar. I assume that's because its action has you stumped for the time being (you're entitled.) Is that it or are you feeling that it's action is just not the point now?

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  186. Gary,

    Will you sell as soon as 1361 is broken or will you wait for a bounce to sell into.

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  187. DG,
    The dollar didn't do anything yesterday. Until it either finishes going down into a daily cycle low or bounces hard enough to make a higher high we're just in no mans land...although still technically in a failed cycle.

    I think we are going to get a test soon to see whether the falling market can reverse the failed cycle in the dollar or whether the falling dollar cushions or prevents the market from dropping.

    Sandy,
    I will sell as soon as the stop is hit because there is no guarantee there will be a bounce. And I don't want to ride an intermediate correction all the way down, especially with leverage.

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  188. Gary

    Is there a reason you sometimes don't include expected position and distribution info in your nightly or intraday reports? As of now I still don't see any information on which ETF's you plan to hold and at what percentage each after the possible trimming at $1361. The 33% plan was revealed on this blog rather than in a report.

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  189. Gary,

    In cycle theory is an IT low always ALSO a daily cycle low?

    Or can you have an IT in between two daily cycle lows?

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  190. Interesting stat at sentimentrader.com: Since 1975, when gold has a 2% drop while within 1% of a 52-week high. it is extremely likely to be down over the next 1-2 week. (72% of the 25 instances these criteria were met has gold down. After that the action is random.

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