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Tuesday, January 18, 2011

INTRADAY POST

An intraday post has been made to the website.

234 comments:

  1. http://www.safehaven.com/article/19671/bull-bear-market-relationships-and-the-existing-rally

    Gary, I believe you said you learned cycle theory from Tim Wood. You say that the bear market started after topping out in 2000. Tim is saying it started in 2007 because new highs were made in 2007. Does the high in 2007 count?

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  2. Interesting. I show that the dollar will very likely give a buy signal on a sharp drop today, which appears likely. This is a short term signal but fits with Gary's idea of a daily cycle low. I will buy EUO (euro double short etf) if I get that buy signal this morning and try to post (I'm on a flight this morning). This signal has not been back-tested like my system signal, but is worth taking.

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  3. A lot of shorts closed positions on the friday low over a week ago (the one I keep saying has the chance of being the low for this move).

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

    And as of the friday just a few days ago, we only retested that point and have not broken below it so far.

    I'm still cautiously open to a resumption high (but not putting money on it).

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  4. The miners are not acting like the low occurred last Friday.

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  5. Gary

    Was wondering if you'd read this Tim Wood article concerning mining shares diminishing leverage to physical gold.

    "A Precious Metals Wish for 2011. Stop the Darn Transactions!"

    http://minefund.com/wordpress/2010/12/21/a-precious-metals-wish-for-2011-stop-the-darn-transactions/

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  6. Well that wasn't a Tim Woods article. Tim is a technician not a fundamental analyst but yes the rising price of oil has the deleterious effect of compressing miners profit margins.

    In the final bubble stage all of that will become meaningless as the public just chases momentum. Actually it becomes somewhat meaningless at virtually all C-wave tops too. At that time it's all about the human emotions of hope and greed.

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  7. Some pretty charts/graphs in that article. So much information which fails to give any solid reason for under-performance of the miners to gold.
    If anything the article simple points out how under-valued the miners are to gold.

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  8. hah! They bought up the ndx real quick! SPX unphased.

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  9. The spx probably has to at least tag 1300 before a correction can begin.

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  10. ddn3f,
    Tim is a pure technician. He counts 2007 as the top because the Dow made a nominal new high. In inflation adjusted terms the market topped in 2000 and has been heading down ever since, not only in inflation adjusted terms but in valuation. P/E ratios have compressed from a high of 42 in 2000 to about 17.

    At the secular bear market bottom that compression will take valuation down into the single digits.

    There is more to the market than just nominal price. Tim only considers nominal price so he considers the 2007 top to be the end of the secular bull market when in fact it really ended 7 years earlier in March of 2000.

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  11. Redwine

    Haven't read that article yet, but to correct, it's not Tim Wood (kinda caught me off guard as that would be way outside his normal territory).

    Looks interesting though, and not surprising. The mining companies (many; most?) have been rather infamous for their poor management of capital, etc. Issuing stock left and right and so on. This might be at the root of the underperformance (to the expectations) of late.

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  12. Oops, sorry Redwine. I see now (once I found the name tucked into the comments) that is *a* Tim Wood, just not the Tim Wood I (and Gary) are familiar with and who authored the article that ddn3f linked to.

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  13. I have no interest in shorting stocks, other than periodic day trades, or 1-2 day hold times at the longest.

    Sure it'll work eventually, but the gains from shorting will not come close to what is made from being long metals. I rarely trade just for the action.

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  14. The performance of the market is pretty impressive...It has not retraced once since Sep except tiny one mid november! Is it going to continue forever? How many people are short?

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  15. Are you folks aware that we're in the beginning stages of a mega bull market coming your way? (That makes dippings as good buys.)

    It's the reason none of bear chartings are working and the bears getting frustrated.

    Hell, even Steve Job's leave of absence couldn't do damage!

    Bernanke flooding the system with money can rally the market for another 5-10 years.

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  16. If that were true then we never would have gone through the second worst bear market in history.

    Despite what Beanie would like to believe jut printing money can't fix the debt problem the world has created.

    Magic just doesn't work in the real world.

    When the bear returns, and he will, Beanie will ride it all the way down just like he did the last one.

    Those of us who understand that the market moves in both directions will avoid the bear.

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  17. Actually, I think i'll be out of the market by 2018-2019, likely the end of the super secular bull market that started in the 80's-90's. Before then, every dip is a great opportunity to make money.

    Yes, printing money will have dire consequences. Eventually. Eventually could mean many years away. Why does it have to be the next 1-2 years? I know money never sleeps, but why the rush to doomsday?

    I thought you don't believe in predictions and that 'nobody can see the future' as you're fond of saying. Why are you predicting a collapse of market within 1-2 years to all time lows?

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  18. Beanie: Just be sure to let us know when you sell if we go down from here!

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  19. A "super" secular bull markets that is down over 11 years! Some bull market that is.

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  20. Beano,

    Have you gotten back to even yet after the bear market of '08-09?

    I wonder why anybody would even bother checking quotes if they were just going to stay long til 2018, other than to cheerlead their positions or perform minor "pump and dump" tactics?

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  21. "Yes, printing money will have dire consequences. Eventually. Eventually could mean many years away. Why does it have to be the next 1-2 years? I know money never sleeps, but why the rush to doomsday?"


    This is precisely where we have a difference of opinion.

    Based on cycle theory and analysis, the great secular Bull market that began in the 80s is over.

    That was driven by tangible innovations like the mainstream penetration of the computer and the Internet later on.

    After those spectacular innovations were digested, the market tanked (Internet bust) and this is where things got interesting.

    The Fed didn't let nature take its course and distorted markets with super low interest rates and free money.

    That led to the nominal high in 2007 with the housing or shall we call it credit bubble.

    This cyclical bull market we are in right now is nothing more than hocus pocus nominal manipulation by the Fed and Treasury.

    While that was the case after the Internet bust, which led to the housing bubble, it will be very very difficult to blow up another bubble because, well let's face it, people were really raked over the coals during the 2008-9 crash.

    They will be very hard to convince to partake in another bubble for fear of what just recently happened. They are very suspicious of everything now. The pain is still etched into their minds. And this is evident in the lack of participation by public investors in this manufactured equity rally since March 2009 (re: record consecutive months of mutual fund outflows).

    That is why we believe it will happen sooner than later. Sooner than we have been conditioned to expect because the Joe Sixpack is scarred and is paranoid now.

    People are starting to wake and see the debt writing on the wall for the Gov't, both local and Federal. It matters more now than ever before because people are suffering from the pains of carrying debt themselves, and then they look at what's going on with the Gov't and now, they actually start to care.

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  22. Bought PZA at 21.40 for a trade. Bought EUO at 21.11, hopefully for a long term hold. (posted both as potentials last week). Got the short term buy signal on UUP this morning when it sold off. It has come back bought nought to do more than just this tiny bounce.

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  23. have a look into this...

    http://www.carlfutia.blogspot.com/

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  24. Gary,

    Why do you think it is important for the S&P to tag 1300 before the decline begins? Is there something magical about that number, do you think big money wants to get to that number to unload more shares, or something else>

    Thanks

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  25. No I just think it's human nature to seek order. A market that has come this close to that big round number will probably keep trying till it gets there. Once it does the effort to reach that level will probably exhaust the buying pressure.

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  26. Beanie,
    Printing money from 2002 to 2008 already had dire consequences. Where were you two years ago? Asleep?

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  27. "Printing money from 2002 to 2008 already had dire consequences."

    It caused housing bubble btw 2002 to 2008, now do you think the housing may come back?

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  28. Bubbles never reflate. Just look at the Nasdaq or Nikkei. After 11 years the Nasdaq is barely half what it was in 2000 and the Nikkei is 1/3 what it was in 1989.

    Housing is never coming back at least for the next 30 years.

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  29. hi Gary,

    If I remember well, between Feb and April, the cycle stretched even more than now...Could we have the same config?

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  30. Since the daily cycle is already on day 42 and no top it's probably safe to assume this cycle will stretch to 55-60 days.

    I did note in the cycle count section that I think the daily cycle has expanded to 45-60 days from the historic norm 35-45.

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  31. "Bubbles never reflate. Just look at the Nasdaq or Nikkei. After 11 years the Nasdaq is barely half what it was in 2000 and the Nikkei is 1/3 what it was in 1989."

    Just out of curiosity, do you consider oil ratcheting up to $140 a bubble? If so, do you think it will get back up there again?

    While I generally agree with you, (look how long it took Gold to get back above $800 again), I'm not so sure with oil.

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  32. The commodity bull is hardly over. Oil wasn't in a bubble in 2008, the dollar was in almost total collapse.

    If the Fed continues to debase the currency they may be able to bring oil back to $150 or even higher despite impaired fundamentals.

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  33. Anybody ?

    When looking at Fibonacci on, say SLW, Do I view from October to December 7, or do I go all the way back to August? TIA

    Tom

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  34. Tom,
    You are probably wasting your time looking at fib levels on SLW. Its probably going to continue to correct until silver bottoms.

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  35. Sophia,

    Carl Futia was bullish on the stock market all through the 2008 decline, and most of his trades during that time were on the long side... So people must be thinking he lost a ton of money in 2008... Nope, he actually won a lot. For me, that is the definition of an excellent trader: You win money even when your directional bias is wrong. Carl Futia is an excellent trader, with great insights with regards to the stock market.

    DG,

    We are on opposite sides on the Euro trade. :) Best of luck to both of us, maybe we´ll both come out of it with a profit.

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  36. David, I know that he is great and now he is saying exactly the same as Gary, ie that a correction is coming...When 2 guys like them say something, I listen...Wanted just to share...

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  37. Is there a way to short munis?

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  38. David K. Oh. I don't especially like being on the opposite side from you. My stuff shows the dollar was seriously oversold this morning and the euro as almost as overbought. I got a good entry point (at least so far), and do believe the euro is going to tank again soon, but I will let the market dictate that. That is, once I get some room, unless I am really sure of a trade, I put in a break-even stop. My PZA is reasonably ahead too now, so maybe I'm getting in tune with this damn thing.

    Done: PZA is a muni fund. I have been unable to short it or the other muni ETF's. I am long now as they have been on the front page of every newspaper and are due for a bounce.

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  39. I put the fibs from the cycle low to it's high on the HUI and select miners. (I think the summer rally started mid July--I don't have my charts open)

    What Gary said though...they will stop going down when they stop going down.


    Except for NAK. WOW, that thing is on FIRE.

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  40. Carl Futia had silver going to 12 for the majority of the year last year...I've heard he's pretty good on the S&P though.

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  41. Sorry, but Carl is very far from saying the same thing as Gary. The only similarity is that Carl is looking for a drop, very soon, back to the 50DMA and then we rocket ahead again. He sees 1,350 in April.

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  42. Beanie seems to enjoy taunting anyone who is, God forbid, bearish on the longer term big picture. I don't see how Beanie could be correct about this bull lasting 5 to 10 more years, but what do I know? Even if he were correct, then inflation during that time period would be enormous. Shorting equities would still hurt like crazy though if that were really the case.

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  43. Gary,
    Thanks. I think I will study my seed catalog and get active there.

    How to grow french-fries is my next deep project.

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  44. $BPGDM has really fallen off a cliff lately. It was in the mid 90's and now is 50. Good! We need it down to 40 or less to allow for any kind of bottom in gold worth its salt. Should be very easy to get with another little leg down. This is unfolding pretty well...makes me nervous. "Just as soon as you think you can read the market like a book they revoke your library card." Good luck to us all!

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  45. As some of you are aware, I've been looking at indicators that haven't triggered yet to try to find something predictive of when the decline will come.

    I stumbled upon something that I couldn't believe at first. The market got overbought on November 4, and corrected enough to get slightly oversold on November 16.

    Since then, this indicator has failed to indicate either an overbought or oversold condition.

    Right now it's hovering about half way between zero and overbought. And, it's going nowhere fast.

    If we have to wait for the market to become overbought, again, we may be waiting for a while.

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  46. Big SoS on Friday, two posts by Beanie today.

    I'd say the top is in.

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  47. Not with those IBM and Apple earnings, WOW.
    Unless this is one of those "sell the news" tops.

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  48. SPY just hit 130.00
    Is that it?

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  49. Wow, after soaring AAPL is now getting hit hard..already down about 7 points from where it started to trade and SPY touched 30 and is now 129.75.

    So Gary, this was one of your scenarios that the market sells of after AAPL earnings, no?

    Do you think the market topped in the after hours or would you only consider market hours?

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  50. It's only a few points so far, but they're selling the news in the futures right now. WTFK

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  51. Hardly selling the news, so far at least, it's up $6! It's after-hours trading after all.

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  52. Another thing that has been noted many times by CapitalObserver.com
    is that the market tends to hold up through OPEX week before a correction/pullback ensues. Look at the last couple of years at least and you can see the tendency for dips to start about the third week of the month.

    This Friday is OPEX.

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  53. Valuation Index and Accumulation Distribution Ranking updated, more heavy distribution today. Europe has been "too quiet"........

    http://pressurepointpivots.blogspot.com/

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  54. Steven,
    I'll tell you in a couple of weeks. :)

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  55. Did you guys see this?

    “The S&P 500 is in line to be up for seven straight weeks,” said Art Cashin, director of NYSE floor operations for UBS Financial Services, in his widely read morning note. “That’s never happened before. Equally unique is the fact that the S&P has not fallen below its 10-day moving average for thirty straight trading days. That, too, has never happened before.”

    from http://www.cnbc.com/id/41076255

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  56. Pima,

    I assume Cashin meant that the SPX has not closed beneath the 10DMA in over 30 days because it had several intraday dips below it recently. Also, I don't know where these guys get their data, but it appears the SPX closed above its 10DMA 42 straight days back in the Feb-Apr run. Of course, we all know how that ended...

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  57. Doc: Jason at sentimentrtader published that 10-day-MA stat last week. It is extremely unlikely he got it wrong.
    He wrote: "The index has now gone 92 days without closing below its 50-day average, which has been matched only 17 other times since 1928. What's even more remarkable is that during this time, it has not even closed below its short-term 10-day average once during the past 30 days.
    **That has never happened before, in 82 years of history."**

    I'll let you guys argue it out.

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  58. DG,
    It is a mistake. The SPX closed above the 10 DMA 42 days in a row in March/April of last year.

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  59. I had the same problem as David. But I just logged in again and I was able to access today's post. So for some reason I was logged off the site for the first time since it's inception, but it's not a problem, just catches you off guard.

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  60. The sentiment indicators are not being used right here. In the beginning of a bull, especially now when so extraordinary many are sitting on the sideline, it acts as a RECRUITMENT factor. Drawing more and more people in. It is only at the end of a rise, like in 2007 when everybody already are in, that they can be used in this way.

    As I mentioned earlier more than 1 month ago when the spx was around 1230 (and "a nasty correction to this overboughtness is imminent" :) the copper strength was indicative of a coming stock market rise, and that has been proven correct (and I've gained a little on copper comex futures..).

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  61. This kind of feels like a dog and pony show for the Chinese President's visit to the US. Wouldn't be good manners to have a crashing stock market while the man is in town.

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  62. Middle of the night and metals really look like they want to go higher. We're gonna start breaking some trendlines soon.

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  63. The dollar is in a very bearish megaphone pattern since 5 of December. It will probably break down from it accompanied by a gap up in the Spx and gold.

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  64. I'm just seeing a move to $1372 this evening. That's not even as high as the intraday move during the day.

    Personally I'm not worried about trying to guess at a bottom before a true intermediate low. That is the recipe for getting caught in a big down draft like last year.

    It's worth missing some of the start to decrease the odds of getting caught. A move from $1420 to $1650 is still a huge move. So what if one misses the first $50?

    If by waiting you avoid getting caught like last year one will be richly rewarded. I think the risks far outweigh reward at this point.

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  65. I don't know Gary...The stock market is pretty resilient and it really feels like everybody is short.. Gold and Treasuries have probably corrected enough and since stocks could run higher, we may be in for some rocket move

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  66. trust me the shorts have been decimated. The put call ratio is over the top weighted towards calls.

    This is always the sentiment at major tops. Everyone starts expecting a gigantic move even though the stock market is so liquid that it almost never experiences a meltup. Even runaway moves are many small steps. Never big moves higher.

    Besides we don't care about stocks. we're waiting for the4 PM sector to finish correcting.

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  67. I can't find many that are short-most of the sane & focused trading blogs I frequent are very bullish.

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  68. Jay, that is strange as every blog has been talking of an imminent stock market correction since mid dec....I agree that the banks analysts have been pretty bullish since November, but not the bloggers....I am really wondering if we are going to see any kind of selloff before March/April

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  69. http://tickersense.typepad.com/

    The three weeks prior to this one were massively skewed towards the bullish side.

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  70. I have a 10% short position and I'm really regretting taking it. Man, just bring on the bottom on these metals already!

    I had a nice trade in JASO today, but cut my winner short. Solars and Uraniums had a really nice day.

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  71. Jay...you need to become a professional thumb twiddler. I have been twiddling my thumbs since early December, I figure I have reached professional status. I am not getting paid yet, I am hoping all my "training" will pay off in a few months. (cross your fingers)

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  72. Gary and Doc: Jason clarified the stat he posted. It has been misquoted/misunderstood elsewhere as well. Not that the study itself is a big deal, but I couldn't believe he made such an obvious error. Here's what it stated:

    The study was 30 days above the 10-day average AT THE SAME TIME as being above the 50-day average for at least 90 days. Short-term and intermediate-term momentum.

    First time ever...

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  73. IMO, gold is at 1370.6 and is setting up in this hour to either decline to 1335-1350 or rise to 1400-1420, if we can stay in the range it is now trading, 1370.5+ - 1373.

    I don't know what's happening, but gold is about to do something extreme over the next 3-8 hours.

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  74. A cup and handle in $gold 30 minutes chart ?

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  75. $usd is just getting smoked.

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  76. Splendid, just what the criminal Fed wants. Let the value out of the dollar just slow enough that the population doesn't start to demand cost-of-living raises every month before they will work. Let the masses adjust to the lower dollar (higher prices. If the Fed goes too fast, and people demand higher wages to compensate for the theft, then we don't get to keep as much from our scam.

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  77. Gary--
    We have a weekly swing high in the dollar. This cycle is getting tricky as we are so late in the SPX intermediate cycle. How do you account for this mess? Are we in the grips of the move into the 3-year cycle low? How will the tug of war between dollar and SPX play out?

    Thanks

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  78. "U.S. stocks are within a week of “a significant market top” that is likely to precede a drop of at least 11 percent in the Standard & Poor’s 500 Index, said Tom DeMark, creator of a set of market-timing indicators. "

    http://www.bloomberg.com/news/2011-01-18/stocks-in-u-s-are-within-a-week-of-significant-market-top-demark-says.html

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  79. That is a tough one. If the S&P had corrected then I would expect that the dollar is on it's way down into the 3 year cycle low. But we don't have a correction. What we do have is extremely stretched conditions both sentiment wise, cycle and above the mean, and we've got signs that smart money is selling into the rally.

    Gold and especially miners are not acting like they should if the dollar was ready to collapse.

    So for now I'm just going to stick with the plan.

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  80. Dollar making lower lows. However, it still has not retraced 50 percent of the move up from the late October low (but it's getting close). It could drop down to the 50 percent retracement area, or even 62 percent, before heading up again.

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  81. For my own personal trading, I reviewed charts this wkend...

    The dollar has broken below its 20sma and 50sma ,GDX could get a small bounce here?? And I would 'guess' that the dollar may go back up to retest that 50sma ( the kiss goodbye) -then head down.

    And on that Dollar bounce you 'could' have GDX drop down and touch that strong support line that acted as resistance.

    http://www.screencast.com/t/ujaPdaLFx9t1

    I was looking to buy miners there if conditions are right

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  82. DG

    you there? I was away yesterday , but bought DNN and just bought Jaso.

    Also, I do not think the downside for GDX is very much from here (see my link above),I MAY BE WRONG!!! so keeping an eye on miners for a bounce, and HOPEFULLY a light volume retracemnt later to support as a low.

    ( However , no recommendation to readers, I recommend following Garys plan for a safe entry...wait for your swing low or higher highs)

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  83. Any IVN share holders here? I've received an official company notice regarding something about purchasing common shares at $13.88 by the end of this month. Cannot make any sense of this. Can anyone explain please.

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  84. Alex: I'm doing almost nothing until the buying of every dip ends. And I'm shocked...shocked Iisay...to see you post that you may be wrong. I think you should stop posting until that unsightly condition clears up. I was wrong once in 1994 and didn't like it. I recommend against it.

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  85. If today is any indication, perhaps metals and miners will experience a flight to quality in a general market beatdown?

    Glad we kept our core position.

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  86. We do have a swing high on the SPX. Barring a recovery to new highs by the end of the day.

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  87. The few earnings to date have been mediocre, except for tech earnings.

    But interestingly it's the Nasdaq leading the issues down today. Big Bull moves end on strong news, not negative.

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  88. This is worth a look.

    http://jsmineset.com/2011/01/18/a-note-from-alf-fields/

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  89. For those looking to make some money on the short side (I am not), it seems like the best play would be to add to metals/miners while shorting a stock index. Hedged if everything moves together, but possible to make money on both sides if this action continues.

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  90. And if the sector can break the pattern of lower lows and lower highs I will believe him. Until that happens I will wait for the stock market correction and something that looks like a real intermediate cycle low in gold.

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  91. Shalom,

    I am not a big fan of paired trades unless there is a chance both sides could work in your favor, but no chance both could work against you. So, I think your long miners / short S&P trade is a nice one... and I've used it before ;-)

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  92. DG

    I dont blame anyone for sitting on their hands here...patience will prevail.

    You DID crack me up ,whether you meant to or not, when I stated I could be wrong , and you said wait until 'until that condition clears up' :)

    I always post that "I may be wrong' or "things could change"...becaused they can!! Always could. Even Livermore was wrong ...its just my disclaimer :)

    But as for DNN, for example, its breaking above consolidation with HUGE volume (avg daily volume is 3.8 million) It has almost 2 million in the first hour. I MAY NOT BE WRONG- hows that? LOL take care

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  93. One of the downfalls that many retail traders have is that they make an emotional decision based on the open. I suggest waiting till the close before placing any trades.

    At that time you will know what the institutional money thinks as that is when they place their bets.

    Case in point, almost without fail the blog is giddy in the morning when gold is up, looking for the bottom. But in down trends markets tend to open high and move down into the close.

    I would take each up open with a grain of salt. Smart money will be selling into those higher opens until the down trend has run it's course.

    If something truly has changed then it will show up by the sector reversing the pattern of lower lows and lower highs.

    OR we will see something that looks like a true washout intermediate bottom.

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  94. Right on, Gary,

    As they say: "Amateurs control the open, professionals control the close"

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  95. Agree-

    And as stated earlier, bought DNN YESTERDAY (when buying volume surged near 3.30 p.m. after consolidating all afternoon, but missed Jaso and therefore purchased it when it opened and immediately went DOWN to $7.55

    Liked the volume on Jaso yesterday, but missed my buy.

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  96. Gary --
    Thanks for the response. Are you going on the premise that the last gold daily cycle bottomed in 15 days on 1/7/11? That would put us on day 7 of a new cycle that may be a failed cycle shortly. OR one long cycle now on day 22?

    Thanks

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  97. Could this be the real deal?

    Did Beanie mark a swing high yesterday?

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  98. Alex: Of course I was kidding. Since 100% of people who post here (or anywhere else for that matter) may be wrong, while I appreciate your disclaimer, it always occurs to me that you might be.

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  99. If anyone bought PZA, remember it's a trade based on sever oversold readings and not a longer term hold.

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  100. Alex-

    I caught JASO yesterday, but got burned today so my nice gain was wiped out.

    Just starting "Trade Like an O'Neil Disciple" and it should be good. Lot's of great quotes right out of the gate by Livermore, O'Neil, Darvas. I've got a lot to learn.

    I see a lot of Gary's style in what they preach in this book, FYI.

    I agree that the GDX & HUI chart look actually pretty close to where they should logically find support and make the next move. However, in yearly/intermediate cycles all those charts, MA's, sentiment, etc will be completely trashed and we may not want to go long.

    Good quote from O'Neil-

    "Your objective is never to buy a the cheapest price or near the low but to begin buying at exactly the right time. The means you have to learn to wait for the stock to move up and trade at your buy point before making an initial commitment"

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  101. Jayhawks

    Yes, I have 3 O neil books. He actually only buys 'new highs' breaking out of various consolidating patterns. He believes there are virtually no sellers up there , trying to get out to break even (makes sense -like aapl, goog, etc)

    I learned A LOT from His books, as well as Market wizards , and another good read by John Boik, "How Legendary Traders Made Millions". Its about Bernard Baruch, Darvos, Livermore,WYCKOFF, Loeb, etc etc

    BUT MOST IMPRESSIVE IS a man known as Mark Minervini (in market wizards). AMAZING returns...220%+ /yr for five years!!

    DG

    I hoped you'd say that :)

    ReplyDelete
  102. Oh, and I think he ( Minervini) even bought a stock or two in the morning!!! Darn rookie ;) LOL

    ReplyDelete
  103. The thing about Mark Minervini and most of the other traders that were interviewed for the book Stock Market Wizards, is that most of them made a lot of money while trading during one of the greatest bull markets in history. During that time, even if you bought a rock it would go up. I remember that Schwager did follow up interviews with the same traders after the bubble burst (2001) and most of them were doing really bad, including Minervini.

    If I remember correctly, the only traders from that book that have really established a reputation as great traders are David Shaw and Steve Cohen.

    Anyway, Minervini has a public blog, if any of you are interested, here it is:

    http://markminerviniblog.blogspot.com/

    ReplyDelete
  104. Maybe so-maybe not...

    I actually have read otherwise about Minervini's continued success...to this day it still rolls on. Also called the top the Friday before the Black monday 1998 crash on cnn.

    But regardless , we are NOW in one of the greatest bull markets ...The Gold Bull.

    I could only hope to get 220% + yrly :)

    thx 4 the link.

    ReplyDelete
  105. Jreality,

    We're gonna get a corrective move, probably starting today, but then off to the races again for the bulls.

    ReplyDelete
  106. The other day somebody (I think Jay) posted about the fibonacci retracements and where to put them. Given the thinking is this will be a yearly cycle low (?), I would expect the retracement to be based off the last yearly low. The expected time period is the key to using them.

    ReplyDelete
  107. Alex,

    When it comes to books out there, 99% really suck. And I read many of them. Many are impractical or just outright nonsense. But they have reputable authors with great marketing skills.

    ReplyDelete
  108. Beanie

    Right, be selective and only retain what WORKS FOR YOU...dismiss the rest.

    Same could be said many things and advice offered, I imagine.

    ReplyDelete
  109. Beanie, I'm only looking for a correction too at this point. Not looking for a bear yet. However, I'm not looking for the Bull to last 5 to 10 years into the future either.

    ReplyDelete
  110. /TF selling off might hard...Glad for once to still be in my TZA.


    Brian-I know Gary uses Fibs some some rough ideas on where corrections may take us, but he's not married to those levels. That being said, I like to measure off the intermediate cycle start to finish. (I'm showing late July to Dec time frame). During the more extreme intermediate cycle lows (like last Feb) gold retraced 50% of the move so that should put us around 1300. I like the 144 DMA there too. With the miners, they seem to get beat up pretty hard so we will see.

    ReplyDelete
  111. Triple Beanie witching week, watch out below!

    If the S&P can just tag it's 50dma, my truck full of Put's should show some 100% gains.......

    ReplyDelete
  112. Thinking of March 55 QQQQ Puts?
    (Around .95 to 1.00)
    Anyone??

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  113. Dan,
    Just remember what I said. This is just a fun trade. Don't risk any real money on it. The real money will be made buying at the bottom of the intermediate cycle low.

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  114. Alex-

    Amazing how the HUI bounced almost on the penny on the back test of this red line. The 144 & rising trend line look to be nice support sitting under here--but notice how the 144 caves pretty hard during the more intense intermediate bottoms. Even the 252 (which that article last week pointed out for the miners) got violated last Feb for a few days.

    http://www.screencast.com/users/Jayhawk1991/folders/Jing/media/5fa1fb03-6a85-4e5f-9499-6dab76b21220

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  115. Gary, I posted this earlier and you may have missed....

    Thanks for the response. Are you going on the premise that the last gold daily cycle bottomed in 15 days on 1/7/11? That would put us on day 7 of a new cycle that may be a failed cycle shortly. OR one long cycle now on day 22?

    Thanks

    ReplyDelete
  116. My cycle counts are posted nightly in the cycle count section. If something happens to change the phasing I will note it there.

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  117. Jayhawks

    Not sure if I shared this before, but I had done basically the same thing with the HUI.

    Mine is slightly different because my top support line is drawn at a slight downward slope, so as time goes on , the HUI price projection could also drop a bit lower. Similar idea though.

    I expected a small bounce and then one more down

    http://www.screencast.com/t/1aHxUCS8

    see also :

    http://www.screencast.com/t/ujaPdaLFx9t1

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  118. Daniel,

    If you're playing an intermediate top and expecting a move to at least the 50dma and below, then the reality is ALL these Puts are going to return amazingly!

    I would suggest in light of the returns being great, don't get greedy and buy the April Puts and at higher strikes. This way you don't get completely roasted if the market breaks out higher again in late Jan/Feb and it should allow you to away with somewhat limited losses if you quick to spot the market not ready to roll over.

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  119. OK, sold the TZA for a small gain. Everyone seems to think that is a scam vehicle. I'm considering a smallish short, but might join Nana in the thumb twiddling business.

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  120. Alex-

    Could be--let's see how it plays out. I'll follow Gary's call and ease into my position most likely. (I'm down to just my core metals position around 30%)

    ReplyDelete
  121. Jayhawks

    Yes, I pretty much just draw the charts for future reference of 'possible timing' , but I realize that a strong sell-off in P.M. can really take you down!

    They Break below a trend line , cause a panic sell, then boom , back up whipsaw style :)

    You wont lose anything in the long run following the plan Gary has set out.

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  122. I've been shorting little bits during the DJIA rallies. The tape sure looks different all of a sudden today. We'll see if I get another paper cut (I'm trying to avoid the Death By a Thousand Paper Cuts motif.)

    ReplyDelete
  123. A leveraged VIX derivative ETF

    ZH: Presenting The VXV Widowmaker... On Roids

    ZH says it very well: "Ever feel like this market just does not provide enough unique and suicidal ways for you to lose your hard stolen money within nanoseconds of trade execution? Never fear - here comes the TVIX, a levered third derivative bet on volatility"

    Insanity (except for those raking in the fees, etc. on this thing, of course)

    ReplyDelete
  124. DG, IMO we haven't seen this tape at all since the last daily cycle low back in Nov.

    "The tell" for me here is the Nasdaq leading the charge lower after those awesome Apple/IBM earnings, it's what you expect from a top.

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  125. Poly: Yep, that's one tell, and the weakness in the broad mkt vs. the Dow is another. For you fossils out there, Joe Granville used to call this the Dow's "Solo Walk higher" at the end of a big up move. When the Dow was up today everything else looked like we were down 50 already. Bought some EPV (Europe short), shorted some EBAY, SMH, and still long PZA. Will add to each when I get enough room to. Reasonably tight stops again.

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  126. I don´t think that was the top. The most likely scenario, in my opinion, is to bounce at 1275-1280 and test the highs once again. If the top is being formed, I think we will see a few more drops and bounces of 20 points until the floor breaks down.

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  127. David you may well be right. When I say top, today was the behavior or confirmation we were expecting from a top. "Cat's out of the bag IMO"

    One bounce is most likely certain, anything more than that runs the risk of losing it for any decline will take literally days to find the 50dma.

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  128. Yes, David, I think that is entirely possible and maybe likely. But some issue won't come back to test their own highs as the breadth narrows further. As well, for me at least, dropping and coming back costs me nothing. Blasting out to new highs again does, but they seem spent to me. I also noticed yesterday that they were up 65 or so at 3:30, and then faded into the bell. That's new. We'll see what happens.

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  129. And I believe the spx is sitting right on its 10sma...

    I think a few people on here were looking for a break below there and to close under it ,to add confidence to the downside move too?

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  130. A nice pop back up like David has predicted would also set us up for some negative divergence on the daily charts, which though not necessary are often seen prior to intermediate cycle declines. Which is in line with other comments on topping behavior.

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  131. The problem with these extremely stretched cycles is everyone (well at least smart money) starts to get real nervous. As soon as they are convinced the correction has arrived they all head for the door at the same time.

    It's what caused the flash crash in May.

    The Fed has stretched the market terribly far again. It is setup for another mass exodus as soon as the herd becomes convinced the top is in.

    I wouldn't tempt getting caught in that kind of down draft hoping for a normal retest. These are not normal times and this isn't a normal market.

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  132. TZA--Nice day! Glad I dumped it this AM.

    Blood bath on the ferts-IPI. OUCH!

    Alex-
    Getting focused on our strategy for the intermediate bottom. You like to pick individual miners vs. the SIL/GDXJ/AGQ strategy right? What is going to be your approach as far as silver vs gold, which miners are on your watch list etc.

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  133. I agree with Gary that it is not normal conditions...Been around for quite some time, and gosh, what a manipulated market in the last few months...
    Ben should be put in jail as he is doing what Greenspan was doing, ie inflating all assets and letting bubbles inflate... Look at Greece, Ireland...Main street is suffering because they got caught in this fake economy and it deflated in style....This fate will reach the US shores at one point, and it will be harder for the Amrican people because they will come from further up...

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  134. Oh God no Gary, I wouldn't dream of going long here on an assumption that we'll get a bounce as discussed. No friggen way. Talk about picking up nickels in front of the steamroller...

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  135. My stop is at the lows earlier this hour and my expected gain to the upside is approx 7x if the trade works. Should know within 24hrs.

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  136. Jayhawks

    I have a few things I am looking at and it can change as things (correction) progress...

    I am looking for ones (mainly silver) that ran very well July thru Dec , AND will or have held up well during the correction (strength).

    I am liking AGQ ,SLW and PAAS , but also smaller ones... AG , EXK , NG , HL , etc I will post when I get in.

    Some say HL was a 'lagger' , but it went from $4.63 to $11.56. I'll take almost $7 on a $4 stock anytime :)

    EXK went from $3.10 to $7.69..its already near $6 and is fundamentally solid (news release today), I think this will easily double again & beyond $12 I.M.O.

    If things change, I'll let you know as the correction unfolds.

    ReplyDelete
  137. careful TZ, remember what Gary said..." people buy dips until it doesn't work anymore"...

    BTW, I did the same but on FTSE..

    :-)

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  138. At 43 days into the daily cycle I would keep long positions to day trades only.

    Letting one run overnight runs the risk of getting caught in a big gap down.

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  139. got it Gary, will close tomorrow morning for us in Europe...

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  140. Jayhawks

    I didnt mention AXU...its already in my core position. It tripled this last run ( $3 ish to $9 ish). Its already back to $6.50 , with a gap below at $6 ( 50% retracement, but doesnt mean it'll stop there , just hoping it does go there , may add more)

    Held on today to Jaso in at $7.55
    also DNN @ $3.50

    Dinner time on the East coast-Goodnight

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  141. Closed the position break even. I realize I miscalculated my entry. Still legit trade but I didnt get the proper entry so my risk/reward is bad.

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  142. One thing I look for at tops is increased volatility. What usually happens is we get a big drop (like today) but then the market bounces back quickly. This happens a couple of times and eventually the bounce doesn't happen. That's when people get caught and the whoosh happens. Today we saw the intraday bounce fail to materialize unlike past sessions. Gary is absolutely right is that the smart money will take notice and not wait around for the drawdown.

    I'm looking forward to this correction and getting back into PMs soon.

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  143. Sophia,

    I'm not just "buying the dip" as you imply. There might be some years and hard work behind what I'm doing.

    Nevertheless, I flubbed the entry.

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  144. It managed to stay above it's much discussed 10dma, so for now the bulls are still in control, although the sell off today really did sound like near distant thunder.

    Once the now magic 10dma is broken, the aura of the Bernake Put will be quickly questioned.

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  145. http://www.zerohedge.com/article/harbinger-muni-bloodbath-valejo-offers-unsecured-creditors-5-20-cent-recovery

    Bankrupt Vallejo just filed a POR to pay back unsecured creditors between 5 and 20 cents. "The city regrets that it cannot pay a higher percentage,” Vallejo officials said in the court filings. “The city lacks the revenues to do so while maintaining an adequate level of municipal services, such as the provision of fire and police protection and the repairing of the city’s streets."

    ReplyDelete
  146. 10 day MA's don't mean anything, IMO.

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  147. I've put on a very small buy of QLD in the after market weakness. This is in anticipation of the dip buyers, but I'm hoping they don't show up.

    My real pitch to hit with the lottery ticket puts cannot occur without some more downside here.

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  148. Just a quick post

    the whole Nasdaq 'cloud' area is getting smoked after hours

    RVBD -$6 , FFIV (down $34!!) to $107.93

    also FNSR -$2.50 , Ntap -$4 Arun -$3
    etc etc

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  149. and so it should!

    F5 networks has eclipsed it's massive .com bubble days and is up 1000% in less than 2 years. When you're up so far and miss revenue at 90 times earnings, watch out!

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  150. That bear flag has a target around 1315-1320 Gary. From there, we get our chip shot to the 1300 freakout is support broken.

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  151. Gary,

    How do we know this isn't just going to be a regular cycle low, with one more cycle higher within a stretched intermiadate cycle? I guess I'm asking if the daily cycles are stretched some 20% now, couldn't the intermiadate cycle be too?

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  152. ANY one care to give a guess where AGQ or SLW may bottom out?

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  153. I'll be able to tell you exactly if you give me a couple of months to think about it.

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  154. Kevin Depew on Minyanville highlighted where we are in DeMark Analysis using SPX today.
    On a DAILY basis, we have reached exhaustion last week and are looking for a bearish price flip. Signal good through the end of next week.
    On a WEEKLY basis, he is looking at week 7 of 9 of a sell setup. To perfect or reach exhaustion, the high in next week or the one following has to be higher than this week's. So, there is a bit more upside. After that, expect a 1-4 week reaction - the month of February! There is also a WEEKLY sequential sell signal, that needs to achieve 13, but it is only on week 9. However, these bars do not have to be consecutive, so it would be a minimum of 4 weeks before this is achieved, implying higher SPX before exhaustion is reached.
    A couple weeks ago, I mentioned DXY Dollar Index on a 1-4 week sell setup. We are currently on week 2 and the reaction has been pretty good, but not helping the gold bugs very much - sorry!
    I guess Tom DeMark is on record as saying we could see a pretty severe correction starting next week - we shall see!
    I wanted to update Prof Depew's call on Japanese stocks, and I said in the fall I wanted to compare with Gold and some mining indices to see what is outperforming.
    At the end of September when a monthly buy signal occurred, EWJ the Japan index ETF closed at 9.82 dividend adjusted. Today, it closed at 11.16. 13.6% return. GLD ended September at
    127.91, closed today at 133.72, so 4.5%, not too shabby. GDX, closed September at 55.56 adjusted for dividends, today at 55.47, flat -ugh an underperformer, eh? GDXJ, closed September adjusted for dividends at 31 even, closed today at 35.76, so 15.3%, a bit better than Japanese stocks. SIL is the big winner, closing at September adjusted at 18.64, today at 23.30, so 25%. Prof Depew was very bullish silver until recently. I'll look at this again sometime, as it's interesting to see if all this voodoo works :)

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  155. I'm with you Brian, SLW at 27.

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  156. Gary,

    Is that you disguised as Crammer?

    "Gold is not a bubble, currencies are getting devalued etc."

    http://www.cnbc.com/id/15840232?video=1752642633&play=1

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  157. http://www.telegraph.co.uk/finance/financetopics/davos/8267768/World-needs-100-trillion-more-credit-says-World-Economic-Forum.html

    The world's expected economic growth will have to be supported by an extra $100 trillion (£63 trillion) in credit over the next decade, according to the World Economic Forum.

    Got gold and silver?

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  158. I will be most impressed (depressed?) if SLW gets to 27. It's already taken a 25% decline. I suspect a lot of bad news has already been priced in.

    AGQ to 115 sounds right, though.

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  159. Thew reason SLW is dropping so hard is because it got extremely stretched above the mean.

    It's not even back to the 200 DMA yet.

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  160. I predict around 27 and change for SLW. Worst case if things get really ugly--around 23.

    107 for AGQ

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  161. With most of these miner stocks and ETF's, if you project out their 200 dma and price, they all seem to match up in the middle of Feb..... Doesn't mean much other than they match up, but a coincidence? I think not.

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  162. gold and silver getting creamed this morning...

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  163. That is what happens during intermediate corrections.

    The lower they go the better rice we will be able to re-enter at.

    So I will be cheerleading it lower.

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  164. Gold down $21 and Silver down 3.5% and not a single post!!!!

    Kudos Gary, you got them all out ahead of time.

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  165. Yes indeed, this is shaping up just as planned (after the head fake, of course).

    And as Gary has said, despite the fact that many told themselves they couldn't wait to buy at much lower prices, it turns out much differently when they're looking at those prices take a dive. (I'm not talking about many who post here, just in general).

    Our instinct is to think that something might actually have fundamentally changed and the market "knows it", and therefore it's risky now. I know, because I thought that way at one time, and there's still that little voice in a far part of the brain that comes out when price is diving like it is this morning.

    Muted to no response by the stock market to bullish jobless claims data. And some hatchet jobs in tech land after earnings last night. Interesting

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  166. The dollar is becoming worthless so our currency of choice is "rice" ;*)

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  167. Gary: I understand your comment that "surprises come on the upside" etc., but i really don't bet the idea of holding a core position through an expected decline. The idea of investing is to maximize risk-adjusted expectancy. If you think an item is 85% likely to go down why hold? You said if we void the pattern of lower highs and lower lows you'd get back in at $1390 (or whatever it was), and that if we go to $1600 what's the difference about missing $30? If that's true, why not just get out of the way? You criticize losing little bits trying to find the entry to short now. I understand the risk/reward is much better long gold after the decline!), but I am quite sure that i have lost a lot less than those holding a core in my shorting attempts, and I will make it back once the decline starts in earnest. Why do something with a clear negative expectancy when you have a clear buy-stop point? You're willing to lose $100/oz. on your a core to avoid the unlikely chance that you'd have to spend an extra smaller amount buying back in...?

    ReplyDelete
  168. I added 5% of funds to SVM this morning, bringing my core up to 40%. On this particular stock I'm willing to hold through any further declines (and add sometime in the next 2 weeks or so)

    ReplyDelete
  169. DG,
    Because I don't think like you do. Just because something goes down doesn't mean it's a losing trade. That 35% that I hold as insurance will be a huge winner by the time I sell it. It actually is already a huge winner because those positions were entered in July.

    All I lose is a little time.

    You assume that you can find something better to do with the capital during an expected draw down, like perhaps shorting, I don't short bull markets. So I don't expect to be able to do anything productive with the capital.

    So I just hold it as insurance against the unexpected.

    It's just that we have two different ways of looking at the same business. You as a trader want to always be trying to make money every day.

    Myself when I don't see any opportunities I just hibernate for a while. Then when the opportunity arrives I enter very heavily with the safety net of a secular bull market under me.

    It's how I did more than 100% last year :)

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  170. "Because I don't think like you do."-Gary

    Exactly. Not to mention DG thinks he'll buy back at higher prices if it starts to get away from him, but we've all seen him lose repeatedly on the short side for awhile, and is he back to a full position short now that it's working?

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  171. It has nothing to do with finding something better for the money. Cash is better! I hibernate for long periods of time myself. It doesn't pay to force trades. You didn't have a good year last year because you held positions with a negative expectancy. And you will have had a better year this year, however it turns out, if you had sold when you felt strongly gold was going to go down. You cut back from 50% to 35% but have never explained how those numbers are derived. Why not cut back to 10% or 5% (or zero...?) I understand getting of leverage so you don't get forced to sell, but why not hold 100% until $1600? The line between selling off 65% and 100% seems arbitrary to me. Not wrong, just arbitrary. I guess it's to guard against the emotional distress of gold going to $1600 without you, but even then you have a stop-buy-in point. I don;t want to belabor this, but it still doesn't make sense to me. And "it doesn't mean it's a losing trade" isn't the point. The goal is to maximize risk-adjusted expectancy, not to be able to say "I won on my trade" and your method simply doesn't do that. Please understand i think your work is really outstanding and i have benefitted greatly from it, but you have said you like a good debate :-)

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  172. I've got to agree with the logic DG.
    Gary, just as you get out of the way of a D-Wave correction, I believe you should trust your cycles and experience and get out of the way of all intermediate cycles. You are so confident in their timing and their severity, I believe it warrants getting out of the way.

    It comes down to the question, how often do you call an intermediate decline right over how often you miss a run-away move higher?

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  173. Poly: And not even miss the runaway move; just get in a little late (after the lower high/lower low pattern is broken). No way he's going to sit out an entire run to $1600, but it seems to me you've got to play the odds. I just don't get the whole core idea. Why buy insurance at a healthy premium for a Martian attack? At least wait till you see a spaceship! You may pay a little more premium then, but you are insuring a very low odds proposition to begin with.

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  174. Who is to say gold won't turn around today? It is getting very late in the daily cycle.

    But yes the 35% is an arbitrary number. As I've said each person should have their own core position. Something they can make it through an intermediate correction without freaking out.

    I look at it this way. If I had entered the bull in 2001 and held through any and all corrections I wouldn't have maximized returns but yet I would have blown away any other investing strategy over a 10 year period.

    What's to say that still isn't the best strategy to maximize returns (it probably is) But I'm willing to roll the dice a bit because I think I can somewhat time the intermediate swings (even though I almost always miss at least one curve ball at tops).

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  175. Watching the debate from the sidelines here, and I believe DG does have a point.

    Gary, if you had sold your 35 percent core and then go back to 100 percent when the IT correction is complete, you'd end up with a larger position and a lower cost basis.

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  176. Hindsight is always 20/20. So what I gather from today's insights is that one should be fully invested at all times when it's working, and not a penny involved when it turns against? Further, we should ride all moves to the exact top, but wait to buy until the exact bottom, correct?

    Very good, fellas. :)

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  177. Meanwhile, HUI knocking on 500 as I type.

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  178. SB, DB is talking odds. If the odds are 80 percent that an IT correction is coming and 80 percent that gold will drop to 1320 or lower, and if the current price of gold is 1380, why not go with the odds and dump your gold and PM shares.

    That's what cycle analysis does for us, gives us an edge, stacks the odds in our favor.

    The other thing no one has mentioned yet in this debate is this: If you are 100 percent in cash, it's going to be a lot easier to buy when the IT correction looks done than if you've ridden a core position all the way down and seen thousands of dollars go up in smoke.

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  179. Here's the thing. In hindsight it's easy to look back and say one should do this or do that.

    I have to operate in real time unfortunately. And just the other day when everyone was ready to jump back in because it looked like the cycle was bottoming then that core position was looking real good and if gold had done the unexpected my insurance would have paid off.

    I didn't see anyone complaining about a core position last week. Now with the benefit of hindsight everyone's an expert.

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  180. PC,
    No dollars go up in smoke. This is a bull market. Every one of those positions are huge winners and are going to be even bigger winners before this C-wave is finished.

    You aren't losing money only time. Time I have plenty of.

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  181. SB: Strange comment. Gary predicted what was happening now. No hindsight involved at all. Then you add an irrelevant comment about catching the exact top which has nothing to do with anything we are talking about. If you don;t understand "expectancy" you won;t be able to follow the logic here.

    Gary: My last comment on this: It's not a question of "who's too say gold can;t turn around here, but 1. the odds are against it and 2. You have a buy-back-in plan which is the same as how you'll get your 65% back if we rally from here. You're just holding a35% of your portfolio in a position that will shrink in value. If your odds of being right about the decline are low and your confidence in $1600 is high, it makes more sense to just sit, but you have been good at calling the IT declines, which is what makes your expectancy negative. Also, for those who will be too scared to buy back in at the bottom, they need to hold and wait for $1600, but that's also not you. Lastly, if the curve ball is gold going even lower than $1265, you'll have missed an even greater profit by holding a chunk through the decline. That's it...your blog, so you get the last word!

    ReplyDelete
  182. Check out AG-First Majestic.

    Down 13.8%

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  183. Pima: Yes, I always feel that way. If I am in the hole for the year I am slower to pull the trigger. I hope and expect to be back to even for the year at worst(!) as I will make back the little I lost in PM's on my shorts. If I am even or ahead it'll be a lot easier for me to go heavy into PM's, but maybe that's just me.

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  184. okay, that debate is over, good points on both sides.

    Gary, here's a question more related to the bull market in PM's than about our core position:

    Now that HUI has dropped below 500, does that change your opinion on where we are with regard to the IT correction, the C wave, and the D wave that will follow after the C?

    I'm asking because at one point you thought it was unlikely HUI would drop below 500 again, so wondering whether that the fact that it has done that has risen the possibility that the D wave has started?

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  185. My bet on "the garage" S&P puts are rocking now......and will aim to exit 75% of the position if the S&P tags the 50dma. That should be good for a 100% gain!

    I will let the 25% ride and see if we can get to the 200dma, as these wont expire until April.

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  186. No I still think gold has one more leg up in this C-wave. I thought miners would rise far enough during the last leg to be able to hold above 500 but they only manged to move about 25% above the 200 DMA.

    Just another reason why I don't think that was a C-wave top. At the true C-wave top I expect to see the HUI 40-60% above the mean.

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  187. Hi Gary,

    At this rate, the miners will go to where they were in August in like 2 weeks hehe

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  188. What happened to all those calls for the market is never going down again or my indicator says this could continue higher for a long time yet, or we will see a bounce etc. etc.

    It looks like the cycles and money flows got it right again :)

    ReplyDelete

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