We have moved!

Commenting

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

Thursday, February 17, 2011

DOLLAR ON THE EDGE OF THE ABYSS

The dollar is now poised on the edge of the abyss. 

The current intermediate cycle has rolled over and is making lower lows and lower highs. The current daily cycle has formed a swing high and is in jeopardy of rolling over into a left translated cycle. If the dollar breaks below the November intermediate bottom of 75.63 it will be an incredibly bearish sign as not only will the current intermediate cycle have topped in only 4 weeks but the larger yearly cycle will also have topped in only 4 weeks. 

If that happens there is little chance the dollar will be able to hold above the March 08 lows as the crash down into the three year cycle low begins in earnest.



This will not only drive the final leg up in gold's huge C-wave it will also drive a huge spike in inflation in all other commodities. Food riots world wide will intensify. The rest of the world will be in an uproar over the collapsing dollar. Spiking commodity prices will collapse discretionary spending just like it did in 08 and 09. 

The phony economy driven by Ben's printing press will roll over when he's forced to turn off the presses to halt the dollar collapse. (Just like it started to do last summer when QE ended and the stock market started to collapse.) 

The dollar's rally out of the three year cycle low should correspond with stocks beginning the next leg down in the secular bear market and the next brief deflationary period just like the bounce out of the 08 three year cycle low drove the second leg down in the secular bear market.

The rally out of a three year cycle low usually lasts about a year to a year and a half. The next 4 year cycle low in the stock market is due in 2012. I expect that year long rally out of the coming three year cycle bottom to drive stocks down into the next major 4 year cycle trough and drive the CRB into it's next major cycle bottom.




A lot is riding on the next 2/3 weeks. If the swing high in the dollar yesterday does signal the top of the dollar's daily cycle then the November low will almost surely be broken and the chain of events I laid out will be set in motion.

781 comments:

  1. So what will happen to gold as the dollar rallys out of the three year cycle low and commodities and stocks take a beating?

    Will the D wave in gold last as long as the dollar rally?

    ReplyDelete
  2. D-waves usually last 5-8 weeks and are followed by an A-wave that should test the highs.

    All in all the result in gold should be a year to year and a half consolidation below the coming C-wave high.

    ReplyDelete
  3. So the A wave will test the highs even as the dollar is rallying; while stocks and other commodities are declining?

    ReplyDelete
  4. Gary, normally what is extension of the D WAVE correction ?

    Thks.

    ReplyDelete
  5. The dollar rally won't go straight up. There will still be corrections down into intermediate cycle lows. But even so gold should rally in an A-wave advance no matter what the dollar does.

    ReplyDelete
  6. D-waves usually correct about 50% of the prior C-wave advance. This C-wave began in April 09 at $860.

    ReplyDelete
  7. Great post. Very clear big picture although I know for sure that there will be daily/hourly/60min/30min/15min/5min price wiggles and jiggles to get people's emotion work up and stir up doubts and uncertainties. Thank you. You are the only adviser who has given me a road map that I have confidence to bank on.

    ReplyDelete
  8. Gary,

    If the C wave started at 860 and if it hits 1600 at the top say - a 50% retracement means we get back to 1230!

    Wow! No wonder you want to get out of D waves!

    ReplyDelete
  9. BASIL

    I will say it... 9.00 a.m. &
    I think I was wrong when I sold my AVL yesterday :)

    But I did purchase AXU with it, so I am already happy about that.

    ReplyDelete
  10. Speaking of the April 09...I remember trading those days, it was scary to say the least.

    ReplyDelete
  11. hi Gary,

    I understand your point. Gold/Silver going up if Dollar down or dollar up...My only concern is PM stocks: if there is more problem in the Middle East, the dollar will rally, stocks will go down and PM will follow to a certain extent...So, isn't it better to just buy Gold or Silver?

    ReplyDelete
  12. Hi Gary,

    It would be helpful if you could move those charts in your new post to the left so we can get the full picture of what you're discussing. No big deal if you can't. Thanks.

    ReplyDelete
  13. Driver

    Try zooming out, that works for me.

    ReplyDelete
  14. Gary,

    Two questions.

    The 4 year cycle low was Match 2009, why wouldn't we expect the next low to be in 2013?

    Being this cycle is almost right translated (and very positive), could we expect this 4 year cycle to be extremely right translated and therefore see further upside well into early 2012?

    I certainly agree we're headed down into deep bear market lows at some point, I'm just wondering if we should consider alternative scenarios. A QE3 could be a possible extension and another severe correction like April-Aug 2010 could server as a catalyst (coupled with a QE3) for another even more massive runaway.

    ReplyDelete
  15. Problems in the middle east dont always cause a rally in the dollar. Yesterday was a great example with the Iranian ships/Israel...the dollar actually fell.

    ReplyDelete
  16. Perfect timing on this article Gary

    I was just reading this article this wkend ( He uses cycles and is calling for a bullish dollar surging higher on Euro debt fears and his cycle work.

    http://www.safehaven.com/article/19978/us-dollar-currency-short-term-bullish-long-term-bearish-not-so-sure

    Personally, I think yours' matches what we're seeing and this past summer , as a sub , I saw you repeatedly called for this dollar dive in the spring and c-wave in gold.

    DRIVER:

    You can click on those charts for full view

    ReplyDelete
  17. I agree with Rebecca. An excellent post and a valuable road map to what lies ahead.

    But I have a question about the timing, Gary (maybe I misunderstood something in reading your remarks). Are you saying gold will be down for a year to a year and a half? The last major decline was from $1034 in March '08 to $681 in Oct. '08, or 7 months. Do you think it will last much longer this time? Is it due to the projected stock market cycle bottom in 2012? Just curious.

    Thanks in advance.

    ReplyDelete
  18. I'm only going on what I've read about bull markets, but we should not forget that this gold bull is now certainly past it's half way point, meaning the swings get wilder, the corrections fast and steep and the snap-backs and C-Waves get ridiculous.

    Attempting to predict future action on what happened in say 2006 or 2008 could be costly.

    ReplyDelete
  19. This would be fantastic if it all works out this way

    We ride the last part of this C wave and then we will probably get a D wave correction at the same time the dollar rallies and the market starts to shit itself, which we can short on the way down. Then after that hop back on the gold and silver bull for the A wave.

    Sounds good

    ReplyDelete
  20. This is a great quote from Marc Fabers latest newsletter.

    "All investors I know always ask around who the best advisors,
    strategists, brokers and fund managers are. However, I have never met anyone
    who asks whether he himself is a good client. If a broker calls a client with an
    idea, the good client will listen to the reasoning of the broker who presents the
    idea and either pass or agree to follow the idea with some money. The bad client
    will question everything the broker explained just for the sake of arguing.
    Consequently, he will waste the broker’s time. The bad client does not realize
    that since he wanted the “best broker” to service him, it’s obvious the best
    broker would be successful and extremely busy due to a very large customer
    base. Therefore, the next time the broker has a good idea who do you think he
    will call? The good client or the bad client! The same goes for clients who
    invest money with successful fund managers. The bad client will continuously
    question the successful managers about every investment decision he takes not
    realizing that the successful fund manager is successful because he devotes his
    time and energy on identifying good investment themes and not by wasting his
    time with irritating clients. It would never occur to the bad client that if every
    client called the successful fund manager every week, he would never ever have
    enough time for managing his fund."

    ReplyDelete
  21. POLY,

    I was thinking a similar thing, about trying to gauge a parabolic move up in Gold...and was trying to look at the oil spike and what preceded it, and the nasdaq 1995 to 2001.

    The only thing I was adding to it, is that Gold and P.M. stocks are small and demand could be HUGE. 1970's to early '80's showed that.

    ReplyDelete
  22. Personally I think the NASDAQ fits the mold as the perfect euphoric Gold fever type bubble. Overlaying the gold chart to date fit's nicely.

    ReplyDelete
  23. Sophia,
    Miners will follow gold.

    The only exception is at the very end of a selling climax the stock market will drag them down. They always rebound violently once the selling pressure is released though to get back in line with gold.

    ReplyDelete
  24. Poly,
    Because stretched cycles are almost always followed by shortened cycles.

    The 02-07 cycle was the most stretched cycle in history. It would be unusual to see another cycle of even normal length follow that.

    On top of that the next bear market will be driven by the deflationary forces of a powerful dollar rally.

    That will occur as the dollar rallies out of a 3 year cycle low.

    Unless the dollar cycle is going to stretch really long then stocks have to drop as the dollar rallies.

    ReplyDelete
  25. QE3 is not going to be politically possible with the rest of the world screaming about a collapsing dollar and inflation pressures spiking...no matter how much the government massages the data to make it disappear.

    ReplyDelete
  26. Mam,
    Gold will drop down into a D-wave which usually lasts about 2 months. Then it will go through an extended AB and initial stage C-wave consolidation pattern below the all time highs.

    I don't expect the next C-wave breakout till at least the fall of 2012 or more likely the fall of 2013.

    ReplyDelete
  27. Gary,

    Do you think there's any chance stocks will get spooked by a seriously falling dollar and as a result top out and begin to head south BEFORE the dollar makes its 3 year cycle low?

    If this were to happen, we'd have stocks and the dollar moving down concurrently and then when the dollar bottomed and headed higher, stocks just might accelerate their move to the downside, no?

    ReplyDelete
  28. Dollar jusy cracked 78!...lets see some follow through!

    ReplyDelete
  29. I actually do expect stocks to top slightly before the dollar bottoms as inflation begins to surge out of control.

    We saw that very thing happen when the stock market topped in 07 ahead of the dollar bottom in 08.

    Surging inflation had already poisoned the economy and it was rolling over fully 5 months before the dollar bottomed. Ben's printing strategy had already failed.

    I think this time they will top a little closer, maybe 1 or 2 months before the dollar bottoms.

    ReplyDelete
  30. GARY

    "I don't expect the next C-wave breakout till at least the fall of 2012 or more likely the fall of 2013."

    Is it ( I thought so) more likely that as gold goes on in time, the climb gets steeper and the pullbacks quicker, thus speeding up the cycles? I thought I saw that in oil.

    POLY

    Any chance you can get a chart with Nasdaq overlayed over Gold as you mentioned,and post it here??? Or did you see that somewhere else. I dont know how to do that. Thanks

    ReplyDelete
  31. Redwine/ALEX, thanks for that chart suggestion. I didn't realize that could be done.

    ReplyDelete
  32. Pima/Nike: I'm out of UNG. After perfect looking start I am disappointed it died. But that's how my trades work. Took a tiny 1.5% loss and had a possible 10-15% gain, so a 5-to1 or better risk/reward ratio. If I had had a longer term opinion on gas I'd have played it differently but this was just a trade, so small loss and out it goes. If it rallies, good for whoever bought it from me. Alex: That'll teach me to go long! (j/k--I am long as often as short for this kind of trade.)

    ReplyDelete
  33. Gary,
    I went grocery shopping last evening.
    Price of meat got me to checking the ticker COW.

    What you think? Is it cheap? It's still in the group of commodities that's why I thought I would bring it up.

    Tom

    ReplyDelete
  34. Just wanted to repost my questions from the last post:

    Thanks Gary and Alex, I'm definitely trying to learn. Today, I added more to my SLW position thinking if it does go down again to close the gap, I'll put in more but I am already quite overweight with SLW compared to my other holdings. I'm trying to rebalance it more in lines with Gary's portfolio. I do have a question regarding AGQ. I've been burnt really bad playing with HNU.to (2X natural gas futures). But from my understanding, AGQ follows 2X SLV and not the futures? So there's no contango effect with AGQ just the daily rebalancing effect just like every other 2X etf?

    ReplyDelete
  35. Alex,

    I had seen it somewhere, don't recall where now. Stockcharts wont let me pick two different time periods.

    But you can eyeball the Nasdaq from the first 10 years of that bull and see a similar 400-600% increase.
    It's amazing how tame that first 10 year increase looks when viewing the entire NASDAQ bull market. It's like the gold chart today looks steep, but this portion of the chart will look rather flat when looked back at the end of this run.

    ReplyDelete
  36. Alex,
    As this 2nd stage of the bull progresses we should see the swings become more volatile and larger. I don't really expect the ABCD wave pattern to break down till the bubble phase though.

    ReplyDelete
  37. Tom,
    It's a possibility although I doubt it will outperform silver.

    ReplyDelete
  38. TommyD,

    Did you shop at the Giant, or Wegmans?

    Reminds me of my college days in upstate NY. Good times, indeed!

    ReplyDelete
  39. That vuvvy guy has a model that should help us exit the top. Also, we could scale out and per Gary's comments yesterday exit miners first, the let the pure silver plays ride a bit longer.


    .05 away from 31 silver. A close above there for a few days would be nice.

    ReplyDelete
  40. Ryann,
    Yes just the rebalancing effect. One only wants to hold AGQ during rallies.

    It's not a long term investment vehicle.

    ReplyDelete
  41. Shalom

    My brother lives in buffalo and I was shocked at how nice wegmans was. They had the nicest bathrooms and changing stations for babies with free diapers. I am from nyc and the animals here would destroy a place like in a new york minute

    ReplyDelete
  42. thank you DG...got out at 5.27 as well

    ReplyDelete
  43. Haggerty,

    You got that right. I lived in NYC for awhile as well, and couldn't wait to leave. To each his own, I suppose.

    NYC was fun, but far too expensive for what I was getting in return. I like land and wide open spaces these days. :)

    ReplyDelete
  44. Yeah, and now it's tanking. I have always loved the line "'Hope' is not an investment strategy." I heartily endorse Gary's always having a Plan. Without it you are too scared to buy at bottoms, and let losses get out of hand.

    ReplyDelete
  45. Miners being held down...OPEX Friday so I'm not banking on any fireworks this week. Most likely these miners being naked shorted too by the desperate EE.

    ReplyDelete
  46. Hi Gary,

    they way I understand your prediction is as follows:

    Commodity inflation (or speculation) surging between now and late spring or early summer 2011. That surge in commodity related prices (particularly oil) breaks the neck of the 'recovering' economy, hence it comes to a more or less screeching halt with collapsing corporate profits and therefore collapsing share prices and overall speculation.
    In addition, inflated commodity prices also set the stage for more worldwide political turmoil in the coming months and will force the US government to act swiftly by pulling the plug on Bernanke's printing press, possibly in the face of an economy, which at this point, shows only early signs of a repeat decline. The decline in share prices and speculation will accelerate once there is no QE 3 (June), and the air will deflate out of ALL markets including commodities as the end of QE will start a new round of liquidation among investors as a flight into the dollar starts in synchronicity.
    As for the timing, indices will begin to roll over any time after, say late April (my guess would be June) and start a decline that will bottom out between summer and fall 2011 (my guess would be October2012).

    Is my understanding of your view correct?
    If yes, I agree, because I can see all of it happen like this. However, I wonder about QE and whether there could really be anything at all that would stop the printing press (including international political pressure). And of course, it's just an educated guess, and some things could change unexpectedly.

    ReplyDelete
  47. HUI +4.36% for the week.
    SIL +3.35%
    GDXJ 5.47%

    Seems like they are doing pretty good to me.

    ReplyDelete
  48. Basil,
    Correct on all accounts. Surging inflation in 08 demanded Ben quit printing and the same thing will happen this time to.

    It just won't be politically feasible to keep running the presses during a dollar crisis.

    ReplyDelete
  49. Charge!!!!!!!

    Watch out 30yr high's.

    ReplyDelete
  50. Alex,

    you made a reasonable decision based on price.
    My view is that the fundamentals for rare earths have been good anyway, but have much further improved by the Chinese export restrictions. This is a long term fundamental driver, which only stops once the Chinese change their rare earth policy, which I don't see coming any time soon. I also look at the long term chart of the Canadian shares of AVL, which shows that their high in the late 1980s was $45, and that is not adjusted for inflation. With the new driving forces behind the prices for rare earths I would not be at all surprised if these old highs will be taken out during some manic, speculative phase in the course of this commodity bull. So I am very positive on this stock, but expect a very volatile and scary ride with lots of setbacks.

    ReplyDelete
  51. Gary....Thoughts on why SIL is lagging SLV so bad?

    ReplyDelete
  52. Here is an option trade that is low risk and still gives you a 5.5 leverage. It fits with Gary's admonition of a delta of 80%. The market is giving us a gift, we should explore it.

    My my blog

    http://arum-geld-gold.blogspot.com/2011/02/slw-low-risk-option-trade.html

    ReplyDelete
  53. Silver stocks seriously underperforming the metal.

    Ominous.

    ReplyDelete
  54. Same with gold stocks and gold, David.

    Why is that ominous?

    ReplyDelete
  55. DAVID,

    >Silver stocks seriously underperforming the metal.
    Ominous.

    No. Normal and expected.

    I said this days ago.

    In the final surge of a C wave silver outperforms EVERYTHING.

    Somebody immediately contradicted me based on some uninformed snap reaction and everybody else stumbled over the truth and continued blissfully on their way.

    I wonder if anybody actually checked the facts. I guess not.

    ReplyDelete
  56. David,

    my guess is that the actual metal is the beneficiary of the commodity price inflation while the stocks suffer from that price inflation. I would expect the miners to lag with oil that high and expected to go much higher.
    I am not invested in PM stocks. SLW for one is at a PE of about 50. That's as high as it should be and stay, in my opinion.

    ReplyDelete
  57. Can anyone tell me the exact date of the D wave bottom so I can note it in my diary?

    ReplyDelete
  58. David PS: As with any corporate profit, the miner's profit is suffering from higher costs of getting the metal out of the ground. And the projection is that their profits will suffer more. So it's a number's game between rising PM prices and rising oil prices, which might nullify each other to some extent.

    ReplyDelete
  59. mama,

    hehe. When I look at the long term charts, the D waves decline sharply and quickly. The steepest bottom should occur early. I remember that I bought my metals after a major decline took place in I believe May 2006. Within a very short period of time the price of silver fell from 15$ to around 9$. That's when I bought. It never ever again dropped below my entry point. The climb up was boringly slow, of course. In 2008 it was very similar. A crash down that hit the bottom quickly.

    ReplyDelete
  60. Silver is going balistic!
    Bye bye JPM shorts!

    ReplyDelete
  61. At some point, this will refect in the JPM stock...should be fun.

    ReplyDelete
  62. Resistance is futile.

    30 Yr Broken, new high's.

    " Nothing but blue sky" Song from the roaring 20's

    ReplyDelete
  63. Basil,

    No offense, but enough with the D Wave :) Can we savor this C-Wave please.

    ReplyDelete
  64. Basil,

    Very good point on PEs for PM stocks? What are investing in to capture the current C-wave?

    ReplyDelete
  65. http://www.youtube.com/watch?v=8yFFyW4Ad8k

    :-)

    ReplyDelete
  66. Gary: I think you were the "somebody" that contradicted TZ. This statement was" In the final surge of a C wave silver outperforms EVERYTHING." If I remember your point wads that that happens at the end of the final C wave, not at the start. Which is correct? (TZ: You make interesting points sometimes but why be sarcastic? It's a nice friendly blog but you seem so annoyed sometimes that no one is as smart as you.)

    ReplyDelete
  67. Gary said that if silver breaks above its high on this cycle, that means that we will see something impressive in the silver market. So $50 here we go. Wow silver broke its high and we have about 2 weeks before we look for a top. Any guesses on how far it goes before this daily cycle tops?

    All this euphoria goes away if this is a double top.

    ReplyDelete
  68. Thanks Gary , I guess we'll just cross that volatility bridge when we get there

    Thanks Poly ( I couldnt find a way to overlay nasdaq 1990's and gold now either)

    Jayhawk?? Can you? :)

    ReplyDelete
  69. DG

    haha, I know you're long P.M.'s for sure....ahhh, if not though, Get To It! :)

    ReplyDelete
  70. Basil,

    I guess diversification is not such of a concern at this point. Ok. Make sense.

    ReplyDelete
  71. Basil,

    Actually, silver got as low as $8.40 in Oct. 2008 but that was short-lived and pretty unique as everything crashed then.

    There's always a danger of a counter-trend move up after a big decline, followed by a lower low afterwards, but that seems rare in the silver chart, so maybe a huge drop 4-6 weeks after a major top could be a good buy point for those brave enough.

    ReplyDelete
  72. Rebecca,

    I am holding several Uranium stocks and one Rare Earth stock (there are no sophisticated vehicles to invest in the commodity itself in these cases). I am also holding Japanese financial stocks. And finally some DAG (double long agricultural commodities). I am also holding physical silver. Overall silver is 50% of my portfolio.
    That's plenty of diversification for me, but it's of course a speculative portfolio.

    ReplyDelete
  73. One thing that's different between this bull and the 1970/1980 bull is the existence of ETF's. Rather than money flowing into miners, as in the old bull, the money is flowing into GLD and SLV. I think this may be a reason the physicals are outperforming the equities. Also the existence of rip off artists running the mining companies. Any thoughts?

    ReplyDelete
  74. Basil,

    Thanks for the additional information. I guess I was looking for your confirmation or justification that within the PM complex, one needs not to worry about diversification in stocks and metals. Your thoughts please?

    ReplyDelete
  75. Basil

    Yes, I was saying yesterday that I was wanting more volume on AVL , it had less than 1 million at lunchtime-

    boom, today it has 4.5 million at lunchtime. Where was it when I needed it-- haha

    ReplyDelete
  76. DG,

    >you seem so annoyed sometimes that no one is as smart as you.

    You are confusing some sort of 'smartness' with a trait commonly known as HARD WORK.

    Someone putting in hard work to produce a result would not exactly being joyous in having those results dismissed by casual response of factless and effortless origin.

    Is this not fair? Please tell me if you disagree.

    What if the years and years of WORK you put in to create your trading system was dismissed by somebody who said "well..you were just LUCKY and had some extra vitamins when you were a kid."

    I have no idea if it was gary who commented or not. Doesn't matter.

    If anybody wants to disagree, fine, but please produce some evidence making your point to the contrary. The charts are pretty clear on my side unless I'm missing something. As ALWAYS, I WELCOME someone showing me a mistake cause I can use it to avoid losses and increase returns. Again, I think we all agree on this point.

    (And I define the "last part" or "last wave" of C as being the last almost continuous surge up WITHOUT any sort of major correction. An example of a "major correction" was what we just went through last month or two. Thus, in cycle terms, that means the final intermediate wave of the C.)

    ReplyDelete
  77. Alex; Yeah, I am long a solid amount with AGQ the largest holding. I like to add as I get in the black and am willing to sacrifice some gains to not get too far in the red on a drawdown. As Gary has said, though, if silver goes to $50, a couple of percent here and there won't matter much, and it ain't getting to $50 without me having a full load. Thanks for the post!

    ReplyDelete
  78. Another great day, but it's looking like I'll be stuck at 67% invested. Pullbacks to add just don't look like they'll occur.

    Patience is all we need at this point and let them work. :)

    ReplyDelete
  79. If I'm really out of line with something I said, then I apologize.

    I think for the most part I'm about as helpful and adjusted as anybody else on the board.

    My most recent posts were helping RA on how to avoid getting blown out of stop loss trades. Yes, I wanted him to do much of the work, but I hardly think I'm here insulting people.

    ReplyDelete
  80. Rebecca,
    I don't worry about diversification in silver. AGQ and physical is all I care for. AGQ as a trading vehicle (weeks and months), physical as a buy and hold (years).
    At this time, I prefer to be invested in the price of silver rather than the miners for the reasons given.

    ReplyDelete
  81. Shalom Bernanke,

    Maybe you would be more than 67% invested if you had taken the "embedded" note a bit more seriously. Who knows what the future brings but this was a data point at least worth considering.
    No arguments here; just your response was arrogant and rude.

    L'Chaim!

    Steven

    ReplyDelete
  82. Shalom,

    You were on the Sep-Dec ride, no such thing as pullbacks, ESPECIALLY in Silver. The daily cycle lows were almost non existent.

    ReplyDelete
  83. TZ: I was not debating your point as I have not done the research (but I bet Gary has, so I hope he will weigh in), and I myself am often calling for evidence for a claim. so no bone to pick there. My final comment was about stuff like:
    "Somebody immediately contradicted me based on some uninformed snap reaction and everybody else stumbled over the truth and continued blissfully on their way." Seems sarcastic and arrogant to me. I know it's hard to believe but even when you are sure of something, you could be wrong (If you don;t think that's true you haven;t lived long enough yet. Don't go Robert on us! I commend your hard work, but not your self-congratulatory attitude about it. Humility, even (or perhaps especially) when you believe you are the smartest guy around, is a lovely quality. Relax. You can always say what you want to say without the obvious irritation as to what fools everyone else is. Look, this is just how it seems to me. If I am off the mark, I will just drop it, but you asked what I meant, so here it is...

    ReplyDelete
  84. Basil,

    Yes and thanks! I hold quite a bit of physical silver as well.

    ReplyDelete
  85. Silver is ripping today. Silver has topped it high of Jan 3. Gold is not too shabby either!

    I have been shifting my portfolio more into leveraged metals (via deep in the money calls on GLD and SLV with deltas > .90) and less in the miners. I still have some GDXJ and SIL and will probably keep what I have. Also SVM. New positions will be deep in the money GLD and SLV calls.

    ReplyDelete
  86. DG,

    Just read your comment about adding.

    I too want to add, but have not decided on a strategy, whether to wait for a daily cycle low (which could be minimal and may not even get close to today's prices) or to just start adding now, a little today, a little tomorrow. (I did add yesterday, but have more adding I want to do.)

    What is your strategy for adding?

    ReplyDelete
  87. QS,
    SIL is up over 4% this week. Nothing wrong with that in my opinion.

    ReplyDelete
  88. TZ and DG

    I may be wrong here, but I find that at times when someone on here speaks, you cant tell if it was written to be read as

    1) the kindly voice of reason

    or 2) Scolding. maybe even in a sarcastic way.

    for ex: read this line both ways ..

    "I would expect that someone as experienced as you would remember how to average into a trade."

    read it kindly in a soft tone..
    and read it harshly in a sarcastic tone.

    Big difference,

    please read ALL of mind kindly , I am never ruffled or angry on here. :)

    ReplyDelete
  89. DG,

    I will try reduce my superiority and smartness going forward
    :-)

    ReplyDelete
  90. Jayhawk,

    I read from your previous posts that your largest holding is SLW. I'm in the same boat right only because I trade with the Canadian dollar and I would have to exchange a lot more USD if I was to rebalance my portfolio to mirror's Gary. I was just wondering why you chose to have SLW as your largest holding vs SLV or AGQ?

    ReplyDelete
  91. Anybody know why AGQ hasn't taken out the previous high in Jan., while /SI and SLV have?

    ReplyDelete
  92. Rodney King - "Can't we all get along"

    Especially on a great day like today :)

    ReplyDelete
  93. Steven,

    You're too sensitive and choose to take things personally. My response was simply "EMBEDDED!", and somehow you twisted that into an insult. Sometimes I also say "BOING!" when metal spike higher, and you should also not take that personally.

    Poly,

    Hope you're right about the lack of pullbacks. t's just how I trade, and I rarely get 100% into any idea, no matter how much I believe in it. You're right I was on last year, and it wasn't just Sep-Dec, but we also caught a good move from Feb-May. Great year overall. :)

    ReplyDelete
  94. Hoping someone who understands volume and price levels can educate me on its validity in PMs. MLMTs prediction of 1390 turning gold down perked my interest. But when I look at GLD and SLV, it looks like the on GLD 131 and 133.50 should have acted as resistance, but only turned it down by 2-3 dollars before giving way. On SLV the 28.50 area should have turned it down, but SLV just gapped through it. Am I missing something here or is volume analsyis just not applicable to PMs?

    SLV
    http://stockcharts.com/h-sc/ui?s=GLD&p=D&b=5&g=0&id=p06187960021

    GLD
    http://stockcharts.com/h-sc/ui?s=SLV&p=D&b=5&g=0&id=p69515779387

    ReplyDelete
  95. Guys, IMO, this train is not going to wait. 14 days out from a new cycle is a long time and if these are the last few cycles for this entire C-Wave, you're not going to get anywhere near this price on the next low.

    ReplyDelete
  96. Ryan,

    http://finance.yahoo.com/q/ta?s=SLW&t=6m&l=on&z=l&q=l&p=&a=&c=agq

    I think this chart speaks volumes in terms of %

    ReplyDelete
  97. When people get scared, they tend to sell stocks, so I think the stock market may roll over sooner than later... probably once the 3-year cycle trend line is cracked or the November low fails. Since the dollar will be the subject of the crisis/panic, it will obviously not be the beneficiary of the usual flight-to-safety trade. That onus will fall on precious metals, and the only way thin markets like gold and silver can absorb panic-scale liquidity is via a massive price adjustment. I don't think the usual TA methods of targets and extensions will work this time around... they will all be blown away.

    By the way, the CRB cycle actually runs about 2.5 years. The last cycle was shortened to 2 years due to the crash, so the current cycle should run long at 3 years. This still puts the cycle low in early 2012.

    ReplyDelete
  98. Otis,
    Now you see why I don't use technical analysis to trade the metals. If a C-wave is ready to run TA is worthless.

    The only way I've found to make consistent money is by watching the cycles, sentiment, COT and a very distant fourth place is TA.

    ReplyDelete
  99. Gary

    5 day.....SLV 4%, SIL 4%.
    1 month...6%, 2%.
    3 month...20%, 10%.

    ReplyDelete
  100. Pima: The question is what your priority is. If it is to maximize gains then the fact that it may not come back to today's prices is significant. if it is to not get into a situation where you feel pressure (by, for example, getting in the hole) then waiting until you have a nice gain cushions you. There is no "right way" but there is a right way to achieve your preferred goal. I don;t like the pressure and am happy to sacrifice a little profit to wait until I get some room. I will surely add a lot at the next cycle low, and probably little bits on the way up. (I bought more AGQ yesterday, for example).

    Alex: Agreed. I always try to read the posts in a positive way, but some are clearly what they are. I have never felt put off by one of yours (except the ones that even hint at questioning anything I ever say, think, or imply).

    ReplyDelete
  101. TZ,

    Please don't reduce your smartness. Smartness is appreciated. :-) We can use all the smartness we can get here, no?

    (I'm not being sarcastic, I come here for knowledge and am fortunate that there are quite a few smart, experienced traders here who are willing to share some of their hard won knowledge.)

    ReplyDelete
  102. Thanks, DG.

    I too don't like getting into a hole, one that feels (emotionally) BIG.

    So adding on the way up sounds like a good plan. And certainly adding at what appears to be the next cycle low. (I say "appears" because you never know it's the cycle low until after the fact.)

    I am also watching channels and may put in close stops on SIL and GDXJ when they approach the top of their channels.

    ReplyDelete
  103. Whitebear,

    the double ETFs often wait for confirmation from the single ETFs at resistance points before they catch up and gallop. I for one always eye the single ETF at resistance points before drawing conclusions about the course of the double. The January high is considered an important resistance point and if silver stays above it you'll see AGQ soon pace ahead.

    ReplyDelete
  104. Redwine,

    Indeed. The silver stocks should have run up ahead of the metal. Instead they're lagging, even on a day when the metal is breaking out.

    ReplyDelete
  105. whitebear PS: eying slv and the spot price that is.

    ReplyDelete
  106. I hope you guys are right and silver just runs from here. For me, I like buying into weakness, which is the strategy that works best 90% of the time. Occasionally we see runaway markets like now, and this is the 10% of the time I find it difficult to add.

    I will say that adding can be done on the smallest of dips if this turns out like it's showing itself to be. And with Silver taking out the 30 yr highs it could add fuel to the fire. Heck, even my most recent purchase (and highest price paid) is still up roughly 30%. I can live with 67% invested at this stage.

    ReplyDelete
  107. Redwine,
    Since the intermediate cycle bottom.
    SLV +17.9%
    SIL +18.2%
    SLW +26.8%

    SIL is underperforming a bit but other than that I don't see anything wrong with any of those numbers and who knows SIL may get in gear and correct the unerperformance at any time.

    ReplyDelete
  108. ryan,

    I am from canada too. why dont you just buy the slw.to instead of changing in the US to buy slw

    ReplyDelete
  109. Most recent sizable purchase, that is up 30%. I've been nibbling here and there with small additions that are up only 8%.

    But my big buys are always into the puke-outs.

    ReplyDelete
  110. Gary,

    this is what I look at:

    http://finance.yahoo.com/q/ta?s=SLW&t=3m&l=on&z=l&q=l&p=&a=&c=slv%2Cagq

    and in case you read my earlier comments how rising energy prices will eat away from the mining profits, the chart explains itself.

    ReplyDelete
  111. Haven't you guys figured out by now that the metals sector tends to move in big spurts followed by periods of lackluster performance.

    Usually the spurts come pre-market or in the first 5 minutes. So if one gets knocked out during the boring period they miss the entire move when the next spurt happens.

    ReplyDelete
  112. Basil,

    Thanks brother, all is good..

    WB

    ReplyDelete
  113. Basil,
    You aren't going to have to worry about energy this time (that was the last bull market). Oil has been, and will continue to underperform during this bull as the metals continue to rocket higher. Profits will continue to soar in the sector.

    ReplyDelete
  114. DG

    THAT was rude and insulting...I QUIT

    :)

    ReplyDelete
  115. Gary,

    I know you always talk about all-time highs (or in this case 30 year highs for silver) but do you have a way of seeing a short-term top other than the cycles. And if it is the cycles then I assume you do not focus on price but time, correct? The real question I'm getting at is where can we expect silver to take a break here?

    ReplyDelete
  116. Pima: My only thought to add is not to rely much at all on channels and such. I believe Gary is right that that sort of stuff won't work when we get a blow-off type C-wave. If you are in the black, be willing to lose some profit for a once-in-a-lifetime opportunity to make a pile and really change your financial situation. It is going to get volatile as we get deeper so tight stops will get triggered and you'll be in cash wishing you weren't. Just go Old Turkey until there are lines outside coin shops. As much of a trader as I am even I'm going to just sit.

    ReplyDelete
  117. Gary,

    One more question. Do you think there needs to be a catalyst for the PMs to launch into the C wave (other than the 3 year low in the dollar)?

    ReplyDelete
  118. Steven,
    The single worst thing you can do right now is "expect" silver to take a break and try to trade it.

    Maybe some of you who ignored my advice about trading during the fall rally can impart to Steven how much money you lost by trying to get cute during that rally.

    ReplyDelete
  119. Gary,

    I'm not trying to trade other than a small position that was in excess of my max leveraged position. And I maxed out a few weeks ago on AGQ but bought a bit more last week for a short-term trade. Not touching my full position (and this is not my core but my max leveraged position I was comfortable with).

    ReplyDelete
  120. Gary,
    I am not saying that the miners won't rise, but compared to the physical, particularly leveraged AGQ, they should underperform. It's simple math. If the overall economy will be affected by rising commodity prices, the miners will too. Energy prices, which I expect to rise much further (even if proportionally not as much as the PMs), will have a huge impact on the miners in diminishing their profit margin. They have rising metal prices as a buffer, but their profit margins are nevertheless impaired, I therefore don't see them outshine the metal itself, particularly a leverage on the metal price, like AGQ.

    As one could argue that SLW is less of a mining company, I add here another chart that compares to SVM, one of the greatest low-cost miners. I believe the picture is everywhere the same, no matter what miner chart you pull up.

    http://finance.yahoo.com/q/ta?s=SVM&t=3m&l=on&z=l&q=l&p=&a=&c=slv%2Cagq

    ReplyDelete
  121. Gary,

    Question about leverage. When you leverage 130%, and the price of silver goes up. The amount you borrowed stays the same, so your leverage percentage drops. Do you then add to your holdings, so the percentage stays the same?

    TIA

    ReplyDelete
  122. Thanks for the chart Basil.

    Trade H, I do trade SLW but I'm overweight on that vs my other holdings. My dilemma is if I want to put more weight on the metal and use AGQ, I would have to change to USD but I'm worried that if the USD tanks, I would lose out changing it back to Canadian dollars. I guess I can always just hold the USD and wait for it to come out of the 3 year low and change it back to Canadian dollars later. Now the real question is should I add to AGQ now after such an explosive day or as some suggest, wait for a daily cycle low and then add?

    ReplyDelete
  123. Gary: Do you have a comment on what TZ posted? The question seems to be whether the miners underperform at the end of the final C-wave, or during the entire final C-wave.

    TZ: do you have an old chart showing the under-performance for an entire final C-wave?

    ReplyDelete
  124. PS Gary:

    and to say that I won't have to worry about rising energy prices... I recommend to think that over ;)

    ReplyDelete
  125. Alex: I wanted to send you an email. Can you drop Gary a line with your full name and he can send it to me?

    ReplyDelete
  126. PimaCanyon,

    I hadn't thought of buying SLV calls until I read your post, so I just did so. It's an excellent idea and I was surprised to find there's not much premium if you go reasonably deep in the money.

    There's actually more price potential with these than AGQ as you could double your money on a 20% move in silver (whereas in AGQ you would expect to get a return of 40%). I own some AGQ, too, as well as plenty of miners, but so nice to get a good return on a pure play on silver the metal on a day when the miners lag, and you don't have to worry about company specific problems, of course.

    I sold my Jan. 2012 EGO calls to pay for it (EGO has done nothing in months).

    If you don't mind my asking how far out do you go on the SLV calls? I bought the April 2011's.

    Thanks for the heads up!

    ReplyDelete
  127. Basil,
    I've already shown you where the miners are outperforming the metal. Now of course they won't outperform an ultra fund and that's why I have a large position in AGQ.

    But I don't think you will have to worry about oil during this C-wave. When emotions really start to heat up the price of energy is going to be the last thing PM speculators think about as they bid the miners up to the moon.

    DG,
    No miners don't tend to lag until the very end of a C-wave (and even that isn't 100%).

    At final C-wave tops smart money starts to sniff out an approaching top and sometimes miners will start to lag. But like I said it doesn't always happen. Sometimes emotional retail traders continue to take the miners right up into a top even though smart money is long gone.

    ReplyDelete
  128. Looked at Gary's terminology charts--A-D wave that started in June of 2006 and ended in 2008,

    SLV did out perform the big, lumbering HUI index towards the end, but only briefly and not by much.

    SLV vs HUI

    Didn't hold up next to SLW, PAAS, SSRI...No AGQ or SIL back then to compare. I think AGQ is the best bet, but I kinda like "owning" a company vs. have a derivative based instrument be what I own. I do have a core in the metal that is my longer term old turkey position.

    SLV vs SLW

    SLV vs SSRI

    SLV vs PAAS

    I bet certain juniors will keep up with AGQ

    ReplyDelete
  129. DG

    I can do that if Gary doesnt mind.

    Time is valuable, so he can just pass it on when he gets time, right?

    ReplyDelete
  130. Gary,

    well, I politely let you have the last word on that subject. For now that is... :)

    ReplyDelete
  131. silver is kicking the shorts so hard youd think its got a black belt

    ReplyDelete
  132. Weren't we supposed to have a blood bath in silver not long ago??

    This is why I don't use pure technicals to trade C-waves.

    ReplyDelete
  133. MLMT: You also posted that there would be a $30 gap at around the $1390 level and that it could be up or down, but you thought it'd be down. Still think that, and what odds are there it'd be up through $1390 in your opinion?

    ReplyDelete
  134. Hi Gary,

    You have a good point on the miners as well. I guess the counter argument toward Basil's point that rising energy price will hurt miners is that the rising energy usually accompanies with rising metal prices, which will help miners. So 50/50 here? But you and Basil both seem to agree on that AGQ is going to outperform miners. So why not put 100% into AGQ? Your thoughts please?

    ReplyDelete
  135. The grim reaper is back with another startling revelation!

    ReplyDelete
  136. Rebecca,
    For all practical purposes I do have 100% in silver as I have 50% in AGQ. (It's the same as being 100% in silver.)

    But if one wanted to simplify and didn't mind the volatility they could just go 100% AGQ and then maybe a little leverage in SLW or SIL.

    That way one would only have to manage one or two positions.

    ReplyDelete
  137. Gary, if I wanted to add to my AGQ position, should I add today or wait for some kind of a pullback first?

    ReplyDelete
  138. mam,

    I have GLD 124 April Calls and SLV 23 April calls. So both are April exp. I figure that I can also roll them forward in early April if it looks like the C is going to continue on into May and June. I liked April better than months further out because the premium was lass (and delta higher).

    As I add more (and as gold and silver go up--we hope!), I will likely go with higher strike prices (but still deep in the money, so premium is low and delta is high).

    Yeah, if you run the numbers, for the same dollar amount these deep in the money calls should outperform even AGQ.

    Using this method I can get as deeply invested as I'm comfortable without using all of the cash in my account.

    The only downside I can see is the bid/ask is wider than with the etf's. But I'm not planning to trade these, buy and hold till the C wave looks like it's close to topping.

    I also like having both gold and silver, even though it's likely silver will be the clear winner.

    ReplyDelete
  139. Ryan,
    You got a pullback yesterday. If you wanted to add why didn't you do it yesterday?

    If it's because the pullback made you nervous then it's reasonable to assume that the next pullback will also make you nervous.

    If that's the case then you are better off adding into strength and just weathering any drawdown. At least that way you will get in.

    ReplyDelete
  140. Gary: you may have answered this before elsewhere, but wanted to ask:

    Why not the end of this particular C wave mark the end of the secular bull? With gold @ 1600-1800, Silver between 43-50?

    Why go on till 2016 odd? Especially since given inflation later this year or next, the Fed will stop the presses and the fundamental driver of the Gold Bull will dry up.

    Thanks!

    ReplyDelete
  141. I am interested in the discussion of the possible gap at the 1390 area? What is the thinking behind this? I see the gap in GLD 136-138 that pulls prices to be filled-

    ReplyDelete
  142. Thanks, DG, for the feedback re channels and trying to get tricky and trade this beast. I agree with you.

    My use of channels on my SIL and GDXJ positions is partly due to the possibility that we get a serious curve ball and the market goes back down to tag the recent IT low or even lower. Those ETF's seem tank the quickest when PM's head south. And they are only a small part of my overall position.

    ReplyDelete
  143. Gary,

    I saw the drop in AGQ yesterday but by the time I wanted to put in an entry, it already came back up and I just waited. I did take the opportunity to add to my SLW position. I may just add into strength and just hold on as you suggest. Thanks.

    ReplyDelete
  144. Nice trading, G! Now's the time to step away and let it work. I plan on sitting tight for the next couple months, so no need to watch every tick.

    ReplyDelete
  145. Nice move in NLY for those who bought on the secondary announcement. It pays to buy those if the stock is in bull mode during a steep yield curve. 14% yielder.

    ReplyDelete
  146. NJ,
    Secular bull markets don't end until valuations reach absolutely ridiculous levels. In the past that has been a Dow:gold ratio of 1:1.

    They don't end until the public piles into the sector. Have you seen any lines outside the local coin dealer yet?

    This still has a long way to go. We are just starting to get the public sniffing at the sector. They are going to get burned during the next D-wave. Then a few more will catch on during the next C-wave and so on until finally everyone becomes convinced gold is a sure thing. Then the last buyer will buy and the bull will be over.

    ReplyDelete
  147. Nice comparison charts, Jayhawk.

    Thanks for posting!

    ReplyDelete
  148. gary, "Silver between 43-50"

    How you come to that ?
    I am looking at SLV 5 yrs weekly chart..
    19 - 8 = 11
    11 + 14 = 25 (obvious not right?)

    ReplyDelete
  149. The possible T1 pattern projects to about $43. But I think once silver gets over $40 the 1980 high of $50 will act like a magnet pulling it higher.

    ReplyDelete
  150. Jeff,
    Pretty unlikely at this point in my opinion. The current daily cycle in gold has now become right translated and the dollar should have 2 or more weeks of declining price ahead. That should drive gold higher for the next couple of weeks before any short term top.

    ReplyDelete
  151. I will address the 'silver beats everything' in more detail to assist in allowing people to decide.

    I have already defined 'the last part of the C' as being the last almost continuous move up (lasting many weeks, often 2 months) which does NOT have a significant correction like we have just experienced. A "significant correction" is one clearly visible on a WEEKLY chart. Not a dip of 2 or 3 days.

    I will not be vague. I will provide three EXACT date segments to denote "last part of C" historically:

    1/4/04(2/8/04; fuzzy start) - 4/4/04
    3/26/06 - 5/14/06
    12/23/07 - 3/16/08

    Each of those segments is the LAST part of a C wave with no "significant corrections" before the ultimate top.

    Silver beat everything in those segments.

    (Remember that I exclude penny stocks for reasons I already outlined. If you would NOT put your ENTIRE net worth in the SINGLE security, then you cannot use it for a counter example.)

    The theory is that we are in such a "final C wave" segment now because the theory is that this is the last intermediate move up for this C.

    And to address gary's reply giving some gain amounts for slw/slv/sil in the last few weeks:

    1) Those gains are very short term gains from the immediate bounce out of the most recent correction. Stocks will tend to BRIEFLY outperform on such a bounce back (we are talking one or two weeks). That outperformance has already ended days ago though and will fall further behind as we continue.
    2) The sum total of the gains, even using gary's measurement, at the END of this C will still show silver leading as per my note in #1.

    I have given the exact parameters if my statement and I believe everything is correct. Comments welcome.

    ReplyDelete
  152. 3) and of course gary's reply showing some gains from the bounce for last 2-3 weeks doesn't address those three time segments historically I have mentioned.

    ReplyDelete
  153. Can't you just be happy you're riding silver higher, TZ?

    ReplyDelete
  154. Shalom,

    I am happy.

    Is there a problem in resolving a fairly important point on how to make money in the upcoming rally?

    When honest, thoughtful people disagree it is usually just because they are using different data or different definitions.

    I hope the last posts give enough info for people to decide and for flaws to be highlighted if I am wrong.

    ReplyDelete
  155. Anti government protests spread from Egypt into Lybia:

    http://www.heraldonline.com/2011/02/16/2842296/gadhafi-next-anti-government-protests.html

    ReplyDelete
  156. Thanks for your comments, Pima, I was thinking the same thing: of rolling over into later months at some point. One could try to get cute and take profits in the upper $30's if silver gets there, then re-enter on a pullback, but there's the risk of not getting back in (and there might not be more than a 2 or 3 day pullback on the march into the $40's).

    Personally, I hate margin and when I've gone into margin in the past I usually end up selling something I shouldn't. Some can handle it (like Gary) but I can't. I get very nervous.

    What I like about deep in the money options is that you have a great profit potential and are not margined (of course, if wrong you can lose most of the capital). But I think options are great for moves like the one we're in. I seem to recall that Gary once discussed options and stressed they should always be fairly deep in the money.

    ReplyDelete
  157. TZ,
    You need to factor in that miners are still historically way too cheap compared to the price of gold. This should revert to the mean during this last leg up.

    So I want to have some money in SIL, SLW and GDXJ along with a much bigger position in AGQ. I'm confident these positions will continue to outperform silver but probably underperform AGQ.

    ReplyDelete
  158. NOTE: the date segments I gave in my post are based on a weekly chart. They might be off by 1,2 or 3 days from the exact points.

    It will be easy enough for someone to adjust looking at a daily chart if they are so inclined.

    ReplyDelete
  159. Ryan, I am Canadian as well and use HZU as my AGQ equivalent:

    http://jovian.transmissionmedia.ca/fundprofile_betapro.aspx?f=HZU&lang=en

    I'm not buying now but I did add this morning.

    ReplyDelete
  160. Also, loving AXU - thanks Alex.

    Alexco Resource is AXR on the TSX Ryan.

    ReplyDelete
  161. GARY,

    That miners are 'undervalued' I have no idea. Value is whatever people will pay for it. And they have been willing, as a whole, to pay less and less compared to straight metal since 2008 (as seen on comparisons to CEF at 50/50 gold/silver).

    I *do* believe that will change as we get closer to the end of the ENTIRE BULL as the masses come in and invest in what they know and like - stocks. But for now we aren't there.

    I respectfully stand by my statements - At the end of this C wave silver gains (starting from the lows a few weeks ago) will beat slw, gdx, gdxj, sil.

    They might not beat other specific stocks like svm or great panther or whatever, but anybody with history in this game would not be willing to stake most of their wealth on such specific picks due to concentration and mining risk, whereas that is possible with silver, slw or the ETFs.

    ReplyDelete
  162. And of course clearly AGQ will beat silver by 2x+ since it *IS* silver leveraged.

    ReplyDelete
  163. GDX (underperform) maybe - probably. But as I've pointed out SIL, GDXJ and SLW are all beating silver. GDXJ and SLW are outperforming handily.

    ReplyDelete
  164. Gary is right, as usual. I bought AGQ on Monday at $155. Then on Tuesday it did a little reversal, so I just repeated my Gary mantra "I'm not worried about the little wiggles" and today, WOW!

    That's all I have to say, except as always... Thank you, Gary.

    ReplyDelete
  165. Well,
    Silver didn't seem too bothered by the 31.00 mark. Pressure. I wonder what strategies large shorts are using to combat this rise.

    ReplyDelete
  166. AG and SLW seem to be stuck in second gear for a few days now...hmmm

    ReplyDelete
  167. Gary are you purchasing options on any of the etf's you hold? I'm guessing you don't since I haven't seen mention of it and so I'm wondering why not, if that's the case. If you're convinced of silver's rise (as am I) why not purchase calls 6 months out? Thanks.

    ReplyDelete
  168. Blammo

    I just looked at AXU when you said that...nice volume today and I'm loving it too!

    You're welcome,

    And thank you --to the canadian miner Great Panther SILVER(GPL here)...that 3 month wkly chart is gorgeous!

    ReplyDelete
  169. TZ. Thanks. I will look at the dates you supplied over the weekend. I am interested in this question. I have been trading/investing longer than probably anyone on this blog. I have thoughts and ideas that I have relied on for many years. Sometimes things change and things that used to be true or work no longer do, but that is generally the exception (as Gary says, "Human nature doesn't change.") If in fact silver generally outperforms during the final C-wave. it goes into the tapestry of my experience as a simple one-sentence point to keep in kind. I like those and appreciate your posting what you have put up here. AGQ ho!

    Gary does make a good point thought that the miners may need to play catch up. Sometimes under-performance continues and sometimes it is temporary and later corrected. Makes sense to me that the miners would lag at the very end of the wave, but not at this stage. Have you looked at gold bulls other than the current one? Probably no easy way to get the data.

    ReplyDelete
  170. correction...6month wkly GPL with Green/Red volume

    ReplyDelete
  171. I stand by my theory that OPEX on Friday will mess with these miner's performance the next day. Next week, it should be interesting to see what they can do.

    Remember this inverse H&S chart from a few weeks back on gold?

    IHS

    ReplyDelete
  172. Blammo,

    Thanks for the ticker HZU. I've been burned pretty bad with HNU (Natural gas) so I'm a bet hesistant with those funds. Now I'm a bit confused I think HZU follows silver future contracts but AGQ follows silver spot price, is that the case? Also, I find that the volume is quite low on AGQ and if I want to buy or sell I have to usually put in about 10 cents lower or higher to get my order filled. I'm guessing the liquidity is even worst with HZU?

    ReplyDelete
  173. SVM looking great, wish I had more AXU. EXK & AG pretty lame recently.

    ReplyDelete
  174. Mission,
    I have all the leverage I want at this point.

    Haven't I talked enough about the evils of leverage?

    ReplyDelete
  175. Ryan, you've been burned by HNU because natural gas is in a massive downtrend and you've been caught trying to catch knives. That has nothing to do with the underlying instrument.

    As far as I know the silver futures follow the spot so the net effect (2x) is virtually the same as AGQ (without the currency friction).

    The volume *is* lower on HZU but I haven't personally had any problem getting decent fills (or sales).

    ReplyDelete
  176. Its interesting how weak GDXJ is on a day like today. Not that I mind daily wiggles so much, but their is clearly less demand for the juniors today. Assett allocation of the hedgies? Realancing toward large caps after the recent 20% move in the juniors?

    ReplyDelete
  177. Speaking of beautiful charts, you might want to look at Sabina Gold & Silver (SBB.TO). They are located in the Nunavit region in northern Canada. Every drilling result seems to be better than the last. I met the then President Abraham Drost when he made a presentation at the London Silver Summit in 2006. They used to be 95% silver with zinc and other base metals, then started dicovering gold. I bought in 2006 and 2008 at average prices of about $1.50 (it's now over $6.00). I have an account at Penntrade where you can buy Canadian miners. Drost is now Pres. of Sandspring Resources (SSP.TO). They mine in Guyana. I am not recommending Sabina but do think it has more to run. I am holding until 2015.

    I also learned about Great Panther and First Majestic at that conference and met their CEO's. Both very capable, Keith Neumeyer particularly. FR.TO is one of my biggest gainers. Funny, but when I chatted with him, he saw me admire the 1 oz. round they produce. He gave it to me and I fished into my pocket for a £10 pound note (silver was about $10 then I think), but he refused to accept it, said it was a gift. I thought that was so nice of him I bought 500 shares the next day, and still have them. Another hold until 2015.

    I had an 80% loss at one point in GPR.TO but just held on, now have doubled my money, so something to be said for being a long-term "Old Turkey" with some of these juniors.

    Just some reminiscenses from a dyed-in-the-wool silver bug. But do have a look at SBB.TO, it's a lovely chart.

    ReplyDelete
  178. train has left the station for all gold and silver miners and metals you are either on or you get on but it left.

    ReplyDelete
  179. TZ, the time frames you mentioned include an intermediate correction. GDXJ and SIl are volatile instruments and corrected more than Gold and Silver. Is that not obvious. Thus, there climbs back from the correction put them at lesser returns over time frames that include the correction.
    Gary's frame of looking at their repsonse to an int bottom is more relevant.

    ReplyDelete
  180. I'm seeing SPY -77.17 on the SOS list from WSJ. Is that something we should be concerned about?

    Thanks Blammo, I just may use HZU when I want to add more to my AGQ position.

    ReplyDelete
  181. I've been using HZU also for the last 18 months or so. I always buy/sell at market and my fills are always perfect ... I rarely buy/sell more then 500/order so never seems to be a problem. I'll use a limit price if I want to buy a lot ... but even then I usually split my orders up.

    ReplyDelete
  182. Unrelated.
    I dumped the last (20%) of my April S&P Puts this morning, when the market was down 3points. Deep losses on them, you all know the story.

    But I wanted to point out just how liberating it feels to have dumped them, losses and all. This was a great and expensive lesson. (Of course you know that was the top)

    ReplyDelete
  183. Poly: If I may...You are so right. One of the great things about dumping a loser is the mental energy it frees up. I think people don't appreciate how much is tied up with a position that goes against you day after day. Death by a thousand paper cuts. Selling it to clear your head and then buying it back if you want to even works (though once it's gone you'll see it's wrong to buy it back). It's part of my love for small losses. Bring the tiny ones on! I convince myself of this every day so I never damage my account, or more importantly,my psyche with a big fat ugly one. A cheap tuition.

    ReplyDelete
  184. Poly,

    Congrats on your new found freedom.

    Have you considered using SDS or QID (double short SPY and QQQQ) instead of put options when shorting? Or maybe you had deep in the money puts, so premium was small? Don't know whether that would have kept your losses more manageable or whether the losses were mainly due to holding on so long.

    ReplyDelete

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

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