Get on the train folks, it's leaving the station.
Gold with a bit of resistance at the 20.I can tell you from last summers move, pullbacks almost never presented themselves and it was so frustrating chasing.Last Feb's low did seem to meander a bit and had a couple of dips...But with the dollar 3 year coming SOON. I don't want to fart around.
Gary: you had talked about adding when $HUI crosses 548. Will you add even more there, or do you have all the confirmation you need to see and that's totally redundant?
GLD still under 50 ema, SLV is above 50 ema.
DG,I'm just adding a little bit. Not enough to cause a margin call if gold decides to turn around.I'll add the rest once 548 is broken.
Gary, don't we have to wait for the week to end to confirm the swing low?
Twitter predicts DJI with an 87% accuracy
Avan,Officially yes. I'm going to assume that gold won't drop $50 tomorrow though.
I posted this under the last comments section before seeing the NEW POST comment, so I'm reposting here:Thanks, Alex! I had forgotten about the large copper component in TGB (which explains why it's been moving up on days when other miners have gone sideways or down!).I have only a small position on this and it's green (up 16% in a few weeks), so I will likely trail a stop, or even dump it and move the funds to another miner.Anyone else own TGB and like it? If so, do you plan to hold it thru the rest of this C wave?
Where's the pullback? Doesn't want to go down. I'm in 80% and want to add the rest.
Funny how once the bull starts to run the previous whipsaws are quickly forgotten :)
Thanks Gary, I wasn't aware that it had to fall below the previous week's low to negate. I thought any close below the previous week high would negate it ... thanks.
NGDipped at 1:30 , and now explosive type buy at 2:30up 78 cents :)The train IS leaving the station!
i'll think i'll wait till tomorrow to add more..
so, there is no concern whatsoever that the dollar is rallying?
I kinda expect that will be the catalyst for gold going higher since everyone expects it to take gold lower. Then when the dollar turns back down the real fireworks should start.
Looks like the BoW numbers last night were predictive. There was a small amount again today which of course will disappear if we end the day positive.
Gary,As you just said, I was looking at past significant bottoms, and gold does seem to start its move up while the dollar moves higher also.
Gary, why wouldn't you want to use options gong into the top of the C wave? I know over leveraging can be a real train wreck, but if you don't lever up hard, go out to say June expiry, wouldn't they work in a blow off move? You mentioned many months ago that A waves are good for options as well. I was wondering why not in C wave tops?
Gary, when and where do you see the USDX topping? 3 days, and maybe 79?
Well for me I can get all the leverage I want with a little margin. If one wants to take a few deep in the money options they could, just give them plenty of time to work in case gold throws us another curve ball.
Aaron,I'm not even convinced it's bottomed yet.
Bought SLW this morning, Sold at a nice profit. Was nervous to hold over night.
lets not forget gold and silver got creamed in the face of a falling dollar last month. Forget about the stinking dollar, gold will move when it wants to move
$store: If I may, that's not the best way to do it. once you get a position that is likely to go higher and you get a head start in it, you need to keep it. Taking "decent" profits from something that may well rally 50-75% is a shame. If you bought it this morning at, say, 32.50 and it's now over 34.00, set a mental stop at 32.50. Worst case you break even; best case you make a tidy pile, so your risk/reward is terrific not even counting the fact that it is very likely to go up. Taking small profits at the beginning of a bull move is a misatke, IMO
This is wild. GDXJ up nearly 6 percent! While gold is up less than 1 1/2 percent.I'm not all-in yet, but close. Saving a little dry powder in case we get a pullback. If no pullback, then I go all in when Gary does!
store,What will you do if this is the start of an intermediate move and SLW gains another 4% tomorrow. Will you chase? Will you sit and watch it get away from you?If an intermediate move is starting usually the worst move one can make is to lose their position.
Jayhawk, I believe you're right. Gold's gonna do what gold's gonna do. We don't need no stinking dollar.
I was never up more than 1.5 pts in my ES short today, and will not stay short overnight. Miners don't look like they're ready to pullback yet but I'll remain patient with what I have. Another great day with them.
Possible inverse H&S on the HUI. I can see it a bit more clearly on the 4H chart. Neckline around 548..If we go there then come down a bit to the 528 area for the rt shoulder. Measure to? 598 exactly. The top number from Dec. Not saying it will stop there or if this is even valid, but fun to think it might be right.
Hi Gary,Assuming you haven't added any leverage yet? If there is no pullback from here into close, you'll wait until open tmw?thanks!
Yes. Usually after a huge move like today there will be a day or two of consolidation. I will add a little into any intraday pullback over the next couple of days.
Gary, You are probably right. I was having the same thoughts. I feel SLW could be bought again in the middle of the month . I could be wrong.
If I'm right about this being the final leg in the C-wave then the last thing anyone wants to do is lose their position. Especially this early in the move.
I don't know if anything can stop this SPX train, but I will get another sell at the close. Clusters like this are slightly more accurate, but not much has been working these days to slow this beast down. I have to admit I have lost interest in stocks as the PM's have started to move. My non-PM positions are tiny by comparison.
The scramble to pick up miners today is amazing. Pack of wild Hyena's.
For some reason SIL sucking wind trying to keep up!
Gary: Nice work. All the tinkering, false starts, and tap-dancing will be forgotten if this is really the start of the final C-wave. The goal is to not lose too much trying to get a big position that you can carry for a big ride. I will mail you a Mexican chef and a live chicken if it turns out you have helped me get there and tooday is the launch.DG
A year's supply of my favorite chicken burritos at Frank & Fina's would be sufficient :)
Notice how Beanie continued to ignore Gary's question regarding the chart comparision of the 66 to 82 bear to the past 10 years.
I'll echo that DG.Gary's composure through this is admirable. The curve ball thrown at the top - no sweat.The error of stopping out deep in the timing band for the interm low - handled with cool and calm. Many others would have become defensive and cautious, afraid of taking another drawdown on an entry, thus missing the opportunity. All because they couldn't admit an error and lost their composure.I've learned much from Gary, and actually give him the credit for my NOT stopping out on the whipsaw at the bottom. I was confident enough in what I had learned from Gary and felt it wasn't the right thing to do. And then I've had to confidence to load up in the last several days. Here's to you Gary.
SHAOLMI Haven't liked NXG for a long time, but I looked at that chart several ways today , and It looks very good all of a sudden. Great volume off the bottom on a daily , AND (CRAZY) on a 5 yr wkly chart , you have a MONSTER reverse Head & Shoulders...projecting $6 minimum (for a $2+ stock).Today was Great...NG was SWEET! Volume & Price. Dinner time on East coast...good nightJayhawks...3 letters for you R-B-Y Looks quite compelling !!
I'll echo what Onlooker and DG have said. It's great to have Gary doing all the research and sharing the results with us! But what's even better is that we're all learning from Gary's work, learning things that I believe are helping us all become better traders, especially when trading a bull market.Have a great evening all!
Hey, Gary. I Bing'd Frank & Fina's address to see what the place looked like, and it's telling me that's actually a Chuck E. Cheeze.Is there somethin' you're not telling us?:)
Now that I think about it there is a Chucky Cheese in the same center. I would never by pass F&F for pizza though :)
I'm go out eat a chicken burrito today. To you Gary, thanks! Sorry I don't live in Vegas.
To add to and elaborate on my previous comment. We're all going to make mistakes. It's how you deal with them and recover from them that makes the difference.
JReality,Comparing the last 10 years to 1966-82 and assuming that the market must traverse the same way in the next 5-10 years is ridiculous and nonsensical. Furthermore, we're not even in the same type of economy we were in then.When you look back at historical charts, you will always find some type of resemblance because there are very few ways charts move; you will see similar dynamics throughout history. For instance, you will always find big spike ups, followed by a crash-like spike down, followed by a dead cat bounce, followed by another selloff, and then sideways action.Do you remember Tim Knight doing an analog chart of the 1929 era and the present time? There were impressive resemblances. He had already scrapped the chart last year.
Gary,in the sub post you mentioned a portfolio change. Assuming we have a minimal core position in GLD what would you advise adding?Same as your previous portfolio outlay and percentages?Thanks.
Beanie,We actually are in exactly the same environment. Both periods correspond to stock market bears and commodity bulls. Both periods are defined by the end of a huge productive phase (plastics and electronics in the 60's & 70's. Computer and internet in the 80' & 90's)Both are periods of massive debt build up to pay for expensive wars. Although the present is many multiples larger than anything the world has ever seen before.Both periods have been characterized by wild swings in stocks with neither being able to significantly penetrate above the nominal old highs. In inflation adjusted terms neither have even come close to their bull market highs. And both were experiencing extreme P/E compression by the 10th year.So I'll ask again, and keep in mind I'm not suggesting the market will trace out a perfect pattern to match the 60/70 period, is there anything that looks different today than the last secular bear market?
I posted my portfolio in the weekend report. Base your portfolio on your risk tolerance.
Beanie, I never heard back from you after you wrote: DG, Jeremy Gratham had been pretty good, but even he was stumped by this bull market. He thought it was done by end of 2009.I responded:Beanie: That's it? "He's pretty good?" He wasn't "stumped" that the mkt went higher in 2010 because he doesn't make short term calls, though he did make a guess in 2009. He missed the rally in 2006-2007 too, but turned out to be pretty right when he said we were dramatically overvalued. Best to have listened to him and gotten out a year early. And that's what he is saying now. Those who ignored him in 2007 regretted it. Those who are bullish now will regret it as well according to him. Yeah, he's "pretty good." Perhaps that's a euphemism for "one of the very best ever?" You're saying you are right and he's wrong now because he was early in 2007 and may be early now?
gold just crossed 1346 and people are looking for a pullback...hilarious
Alex-Got in 1000 RBY at 5.05. It's a part of the Jayhawk Junior Mining fund. JJMF ;) for that fund I've got RBY, MGN,XRA,EXK,BRD,GBG,Bigger positions in SLW, AG, SSRI, SVM, NG, HL, AXU, AGQGood luck all...Hopefully we make some $ now.
silver should run up to at least 29.75 before any pause. Lets see what happens tonight
Today's close on GLD & GDX was a bull-trap. Couple of weeks back, I had noted that GDX will trade back to 56 or so. It has done that and today it closed near the highs.. Tomorrow, IMO, will start a new leg down for GLD & GDX.Worst case, GLD may have an upside of $0.50 or so left.. But I really doubt - the set up is there for GLD & GDX to gap down tomorrow. As always, "we shall see" :-)
It´s going to be funny if MLMT´s prediction turns out to be right. I am actually long some silver futures, so I don´t really want that to happen, but I am not all that excited about today´s move. The breakout in gold is too obvious. Lots of bulkowski readers are buying this breakout. Let´s see.
Just curious but how does one get an unobvious breaakout? Isn't a trend break a trend break?
Well, usually when there´s a long consolidation as we´ve had the past few days, the first breakout attempt usually is a fakeout. The most common thing to occur is for the market to attempt to break to one side, then quickly reverses and just zooms through the other side.What happened today is just a picture perfect entry point. Lots of traders bought the breakout at 1350 with a stop at 1320 or so. Sometimes these things end up working, but most of the time easy entries are traps.
I prefer the bottoms that don´t look like a bottom :) But anyway, I hope we just go higher from here.
Don't those kind of fake outs usually come on lite volume? Which certainly wasn't the case today as everything had above average volume with the one exception being SIL.
Currrently 70% invested. Buying Bull Flags, which I did this morning, and breakouts. F
I’m not to blame for Egypt, Bernanke says"...higher prices reflect strong global demand for commodities due to high growth rates in the emerging economies, not to anything the Fed is doing." Really Ben? It's not like we have 2 billion more people today then we did a few weeks ago! The demand for food is the fuking same! You flat out lying POS. Yeah the demand for metals building infrastructure may be higher but that's not what citizens get mad about!
Over the past 2 years I have played this stock a number times, always buying the dips and selling the tops. Well, it announced today its offering a $900M convertible senior note due 2016. The stock dropped down to $5.50 at the end of the day. The last time its been this low was back March of 2009. Seem to me this is a good price, especially with gold just starting to take off here again. Would like anyones thoughts on it please.
Sorry, the stock is JAG
No, Ben is the man, I was obviously just kidding.He's actually one of my favorite world celebrities. I'm actually going to vote for him for the Most Beautiful People 2011. It's is plainly obvious that there is a global currency war, I just find it hilarious these guys, the Fed, can stand in front of the world and indirectly deny that. It just again shows you how ignorant the masses are about money in general. The reason these lies are always used is because they are believed by more people than not, BY FAR!
Rod,Why not just play it safe and stick to the ETF's and SLW? You will make plenty of money and you won't have any company specific risk. Including dilutions.
It's my understanding that JAG is not a solid company Rod. I'm holding MLMT to his prediction of 44 on GDX
You guys thinking this has been some sort of an EASY bottom to buy and trade sure as hell haven't been playing the same market I have.We'll see about MLMT's call, but I definitely don't agree that gold and silver go lower. A pullback or retest of today's breakout in a few days? Sure, very possible, however.
TZ, just a question, have you publicly ever, once, said that gold and silver will possible go down besides partially agreeing to MLMT's scenario in that last post?It seems every time you post it is usually right after you have bought gold or silver futures, and you always say how much short term (daily/weekly) upwards potential there is but you never seem to address any downside risk at all.Now I am obviously agreeing with you that the long term is going to be mighty fine for gold and silver as long as fundamentals remain the same, but on the daily charts, and overnight, why do you even try to be so confident with predictions especially in one of the most volatile sectors? Seems like a recipe for heart failure if you ask me.
ROBERT,You havent' been reading. I said my stops on my positions were at a 1-2% loss (net worth). That is now larger around 3-4% cause I tried to get in silver all week and got whipsawed multiple times. The gold futures positions have been solid throughout.All positions profitable and with significant profit.I've been clear about my stop levels repeatedly. And by trading the metal futures I have pretty high confidence they will execute as needed without undue slippage.
Short stops on godl and silver with massive leverage, how the hell you going to ever win with that strategy? You'll have to perfectly time the bottom to like the half-hour on the absolute bottom day to strike it rich! Why not use less leverage with more of a room for a stop or no stop at all? Not trying to call you out, and you may not even be using massive leverage and tight stops anymore, but if you are I'm just trying to convince you there are better methods.
Well best of luck, seriously. I just wish I could teleport until 2015 when silver is over $100 and my miners have gone up 40x minimum today's prices. I hate seeing the future that is oh so far away. OT, anyone:If I move to a different country and invest in Canadian miners while having residency in whatever country, can I possibly pay less capital gains than if I lived here in America?
TZ, hypothetical,If a jeanie-in-the-bottle were to tell you in 2016 gold would hit $6000, and you were about to buy futures the next day, what would you do? Wouldn't the best strategy just be to buy and hold and trade D-waves, pretty much what Gary is doing? I mean if you're a smart ass you'll be all over the long-term options comment, but if the timing messes up a few years you could be toast.
I mean if it spiked from $4500 to $6000 in one week, chances are your options would not be positioned for that week now in 2016.
Rod, Jag just broke an important support level on a weekly chart and appears headed for the 3.00 range. Try and grab something going the other direction. They supposedly have major problems at their Brazil mine.
I have decided to let FRG go. I think the capital can be deployed more wisely in this on going C Wave advance. Price has been established for the sale, so further appreciation seems unlikely. Maybe I will pick up shares of the new company when the D Wave hits.
"If I move to a different country and invest in Canadian miners while having residency in whatever country, can I possibly pay less capital gains than if I lived here in America?"-No, you're taxed as an American citizen no matter where you live or where you invest. Worldwide income is taxed. The only benefit an American gets is if employed (not as a trader or investor) in a foreign country. In that case the first $93,500 is not taxed in the US if you can prove you paid taxes abroad.
Thanks for the welcome back TZ :)I've decided to only use these damn computers for what they're made for...Anyways if you calculate silver undergoing exponential growth at 22% a year (which it has for the last 11 years), you'll see silver will strike $60 in 2016, minimum. That is basically if you're just playing average from what we've already undergone in this bull as you all know. That doesn't take into affect bull phases which many here know more than I do about. In the mania stage we will see much higher prices.
Supposedly we'll see oil hit $150 here soon, and if the Suez canal closes $4 gasoline overnight, Ireland default, collapse of the Euro, possible Greece, Portugal, Belgium, and maybe even Italy, and Spain default:Lindsey Williams + Bob Chapman - Egypt Conflict by Design Pt1
TZ can you show us your math on how you have 1-2%loss on x7 leveraged silver position. There is no way that is going to work unless youre Bernie Madoff or you are not leveraging your entire account.
MLMT, care to put up a chart to let us see what you see?
Is anyone else concerned about tomorrow's job numbers? I'm not even sure if I want a bad number of a good one given how wacky normal correlations have been lately. I also could envision a scenario where gold and silver have relatively different reactions (although not in absolute terms). Thoughts?
I think it's pretty clear the market is selling dollars because Ben is printing them into oblivion, and the market is fleeing into the asset markets to protect against that devaluation.Everything else is meaningless.
Brian, I think selling FRG was the right move. NEM is never going to generate the kind of returns (or loss) you can get from a junior miner. I would split the sale profits and put it into two new juniors.
Need any encouragement for long-term gold? $2000-$2400 gold in 2011?Lindsey Williams + Bob Chapman - Egypt Conflict by Design Pt2 I just check up on LW every couple of months and today turned out to be one of those days. He has been right on thanks to his oil sources before with the price of oil. Looks like the only new info is prolonged Middle East crisis, increasingly expensive oil, $4-$5 gasoline, and dead dollar by sometime in 2012.
Gary does major collapse of dollar in 2012 fit into any of your cycles? Ironically what these oil execs usually say comes into tune with the cycles. FYI, LW also said in summer 2009 that stocks would go straight up for two years.
RAZ,I bought my main gold futures position last friday just as we were clearing 1320 and shooting vertical. I bought large with about a $3 stop. (That would be a $300 loss on a $130,000 position. Not a bad risk if it works out. It did. So far.)There is nothing magic about what happened. You simply have to be able to buy at a point where gold won't retrace back down to.It isn't easy. It takes work. You will miss a few times and take losses, but I've already said those losses aren't too bad. But you might end up taking 15 in a row and that wouldn't be good. So you have to find ways to increase the chances of getting those points that don't retrace.So far today you could have done the SAME THING at almost anytime from 10am to noon and there is a good chance gold will never again hit any of those numbers for the duration of this wave up. You didn't need much more than a $2-3 stop during those times to not get hit. It went vertical for 2 HOURS.Of course, again, the trick is to buy into those periods and not the ones that chop around.Instead of the two hour example today, almost ANY TIME over over the last WEEK it was *impossible* to do the same thing. Every point got retraced and whipsawed.So...1 week vs. 2 hours. Like I said, there is a bit of luck involved.This isn't appropriate for many. It is a technique among thousands that simply seems suitable to how I like to play. It has it's own risks like anything and I've taken a fair share of knocks using it. (I will be accumulating more of a turkey/stock approach after this next D wave).Finally, you can't do what I have described well with something that doesn't trade 24hrs with stops that you are pretty sure will work when hit (without slippage). Try this on SLW and you will get killed.Buyer beware. Not recommending this for anybody, but I hope it answers your question.
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Robert,No the dollar should be rallying hard by 2012.
RAZ,In short, do you see how during **anytime** today from about 10am to noon you could have bought gold futures with a $3 stop and NOT gotten taken out?If you want to own gold using my technique here the only question you ask is: "Ok. I want gold. If wrong, how much am I willing to LOSE.?"A $3 stop is $300/contract. So if I'm willing to gamble $6000 on a trade I can buy...20 contracts.Thus, you would have:20 contracts = $2,660,000 in value($1330 x 100 x 20)That would require:about $140,000 to make the trade.(about $7000 per contract)The $3 stop, if hit, would cost:$6000 (20 x $3 x $100)You are risking about 4% of your money if you are completely max fully margined at almost 20x.**Which is utterly insane**.So if your account is $500,000 instead. Then you would be about 5x leveraged on gold,risking $6000 on the trade if wrong,or a bit over 1% of your net worth. That's an example of how a high leverage position with reasonable risk could have been entered today.Warning: I'm not recommending anybody do this and there are issues I have not covered here and exceptions that increase the risk. There still can be gaps in gold. Your stop might have large slippage. Etc. But it is an example.
Poly,You conveniently left out the tail from Jan. 20th. If you draw the lines properly it turns into a rising channel.Be careful you aren't finding reasons to avoid honoring your stops. That's how little losses turn into big losses especially when trying to fight the cyclical trend.
RAZ,If you could find a way to enter with a $1.50 stop you could get 40 contracts.If you need a $6 stop based on your read of the charts you must settle for 10 contracts.A $12 stop only 5.The numbers are inversely related.A $0 stop would mean infinite leverage (but there is always slippage in a stop so this doesn't work as you get closer to zero).$60 stop would mean a SINGLE contract. Is gold likely to hit a stop $60 lower? Prob not, so you never get a loss....but you only profit from ONE contract.See the tradeoff?So the game is:a) you have to get a buy which doesn't go lower than wherever you put your stopb) you have to pick a stop as close as you can but not so close that it get's hit. The closer you *correctly* pick, the higher the leverage you can take.Bit of poker, but that's the game.(I continue to warn that I don't recommend this to anybody. Buyer beware. It isn't as easy as I make it sound and you will find that out very quickly.)
TZ,Do you have an opinion which broker has the least slippage? TOS seems at times to have a lot of slippage at times.
If the alligator has your leg it's usually better to sacrifice the leg than let him take the whole body under :)
Dan,I have a very strong preference for interactivebrokers.com in all trading.
$3 stop is way to small for my taste. I like at least a $20 even when trying to catch a leveraged bottom.
I noticed in one of Doc's comments that he was all for trading in the futures markets. I'd like to start out small with 1 contract of the emini silver, SIH11. Any suggestions on links, advice, etc.? Anyone who is actively trading the futures currently, I'm willing to learn more. I've been trading for 5 years, stocks and options. Thanks
DG,Gratham is generally pretty good, but if he still holds his current stance he will miss a huge bull market coming right up. John Paulson, who has the Midas touch, was right about the market the last 4 years (and made a personal income of $13 billion) is bullish on the economy. Having Paulson confirm my market view is totally awesome. The bull market continues.
Sih11 is not mini silver, it's the big silver. 1 contract = 5000 ounces, roughly 150,000 dollars
RAZ,A $3 stop is admittedly very small. I know that. I have only mentioned it cause that is what I used initially on friday. I adjust as necessary.An example of how I think from your reply is....Your $20 stop bet is equal to SIX $3 stop bets.Playing with a $3 stop allows many multiples of leverage over what you can do with $20 stop.The gentleman's wager, then, is whether with 6 tries I could get an entry that held vs you trying a *single* time. If I can (only once is necessary), then the gains will far exceed what you must enter to allow a $20 stop. And remember, you only have a SINGLE trade you can make.We have simply each stated our preferences and neither is right or wrong. They are just different ways of looking at the problem and aligning them with different personalities and risk profiles.
great blog,i signed up recently and like both premium service and blog
PolyIMO you should just cut loose the short position and get that capital to work in PMs. That's what I did on Tuesday, when the breadth was stronger than I would expect if we were about to tip over. Regardless, I realized it was not smart to continue to fight that battle when I could put it to work in the newborn interm gold cycle.I know, I know, Gary; it wasn't smart to be there in the first place. I've learned, really!I've already recouped almost half of those losses, and another 3% or so in gold (5% in silver; maybe less, just a rough guess) and I'll be whole again on that piece of capital and on to bigger gains. And rid of worrying about the equity market, to boot.As Gary often points out, it's best to put your capital to work in the secular bull, especially in a fresh new interm cycle.Just my opinion. But don't keep that position just to try to "conquer" the stock market; i.e. a "crusade." It'll make you feel smart to have successfully shorted, but who cares when your gains will most likely be smaller than they would in a bunch of miners, right?I feel your pain, and I'm not judging. Just an intervention. :-)
FWIW here is the problem with huge leverage, even if you get the direction and timing right. And it's what causes almost every trader that goes down this path to lose money.Let's say you get a perfect entry, which you will need if you are going to leverage heavily. And let's say the trade goes in the right direction initially. If you are leveraged heavily enough you could easily turn $100,000 into $400,000 very quickly.Sounds like a dream come true doesn't it?But here's what happens. Because you are leveraged so large any little wiggle can and will turn that $400,000 into $150,000 in the blink of an eye. Almost no one can control their emotions when they see that kind of drawdown especially after such a wonderful start. They freak out and sell before they give back all those wonderful profits.Now they are back to having to time another perfect entry. Unfortunately the perfect entry came and went. Usually what happens now is right after they sell then the market moves back up again and they are forced to buy higher. Emotionally they are kicking themselves for not holding their position. Stress is starting to build. The decision making process starts to become more and more emotional instead of logical.Then of course as soon as they buy higher a little wiggle turns their $150,000 into $90,000. Now they are down despite the trade going in the right direction.You do that one more time and you have a loss that you can't recover from.I'll say it again. Huge leverage always ends in a blown out account. There are never any exceptions to this rule...never.Folks we are all going to make fortunes off this bull market. All one needs is a little patience. Ask yourself do you really want to blow the greatest opportunity you are ever going to get because you couldn't control your greed?
Gary,If someone bought shares of SLW at the intermediate cycle low in gold, and then sold them at the intermediate cycle high, wouldn't they be better off than someone who trades like a madman, always trying to 'win'?
Rob,99.9% of the time.
Gary,With the current move in Gold, is probability for move down to 1300 or 1265 minimal or is it still high.I was trying to work out on maximum possible drawdown in my mind and will appreciate your feedback on this.
Rod, you posted a few hours ago about JAG, asking opinons. Looking at it over the past year, there is no reason to expect it to suddenly change and be a leader instead of a laggard. I think it will continue to grossly underperform. Want a gold junior at a discount? Look at GUY - I'm pretty sure it will zoom back up soon. The gold is there and this company is on track to mining it. You should make a much bigger gain than the black widow JAG, IMHO.Personally, I'm putting the money on the silver mining table; it did way better for me than gold miners overall in the last wave, and I agree with Gary that this will continue. K
TZ: I really can never understand why people keep saying "you have to get the bottom perfectly." You simply don't. You just need to buy at a point where the thing doesn't go against you. If you look at any chart there are TONS of places and times where the item started in a direction and kept going. Whether it is at a bottom or not is irrelevant. An item bottoms at 30. You buy it at 70 on the way to 1000, and it goes from 70 to 75 straight-away without pulling back. Now you are safe. What does the fact that it bottomed at 30 have to do with anything? Oh well. What you are doing is perfectly clear to me, and I remain puzzled by all this "perfect timing" talk that tries to make it sound like magic. And yes, it is for the emotionally stable and disciplined. Good luck!
Of course in real time one has no idea whether 70 is going to be a good entry or not. With really tight stops you can hit a whole bunch of 69's before you catch a 70.
Gary: What do you make of the fact that the level of bearishness in the U.S. Treasury market is at one of the highest levels in many years (according to sentimentrader.com)? Seems like everyone "knows" Treasurys are doomed.MLMT: You posted gold is about to get killed. Any reason for this opinion or just gut feeling?
DG,I don't really pay that much attention to bonds. Most of the time the bond cycle appears to run in correlation with stocks but not always.I guess I would have to study the bond cycle in depth before I really could form an opinion one way or the other.I will say that the move down into the three year cycle low on the dollar index seems to be driving everything. There seems to be a relentless exit out of dollars and into anything that offers protection from the Fed.In that scenario it makes sense that bond holders would be running for the hills.
Gary: Again, a slightly silly example. If you really have "no idea" whether 70 is a good buy point, then don't buy! If you assume complete incompetence at picking spots the strategy won't work! But there are lots of people (myself included) who are able to pick spots and do way better than random. I just posted FCX as a short at 57.50 Tuesday and it went all the way to 57.58 before caving in. That's .1% against me. I toughed it out. I covered because i am not bearish, but had I been I could hold it for months. If TZ got a good entry point he may make enough on this gold trade to be set for life. Seems like a good plan to me! All it has to do is not pull all the way back to his entry point. Hardly random with this good head start.
DG,That assumes he can control his emotions when the inevitable swings occur. If not then the very scenario I outlined will happen.You make it sound easy to pick these no draw down entries but I can say without a doubt that I couldn't do it and I've been trading and investing for a long time.99% of traders are not going to be able to pick entries with no draw down. Assuming that because you can do it (I suspect it took you 20 years to learn) that it's easy is like me saying you should easily be able to Clean & Jerk 200 lbs. For me it's a warm up but for 99% of the population it's an impossibility.
Gary,In the long term chart of gold with the last 8 times the Blees rating hit 95 or higher marked with the red arrows, you didn't say anything about the fact that this is the only time that the price hasn't at least touched the 200 dma. What, if anything, do you make of that?TIA
Bede,What does the 200 DMA have to do with the Blees rating? The Blees rating is a measure of net commercial futures contracts.
No it's not easy and yes it has taken me 20 years, but the appeal of one trade netting you 300% is pretty good. And of course you have to master your emotions (you have done a pretty good job of that it seems, so that part is possible, eh?) I should add that I do not myself trade this way because I do not trade futures (though TZ is warming me up to the idea.) I bet if you put the time into studying entry points that you have into studying cycles you'd be good at that too (anyone who can do excellently at both gold trading cycles and lifting knows how to work and knows cycles to study). All I'm really saying is that it's a perfectly valid system. I just get a littleput off by the casual dismissal of the approach. Hell, almost anything really worth doing is done well by only a small percentage of people. 'Nuff said.
Gary,My question got missed out, hence repeating.With the current move in Gold, is probability for move down to 1300 or 1265 minimal or is it still high.I was trying to work out on maximum possible drawdown in my mind and will appreciate your feedback on this.I don't mind 3-4 % but would be very scared of 10-15 %!
Let me put it this way. I've never seen anybody yet that used huge leverage that didn't eventually blow out their account. No one.Occasionally a huge trade works. Sometimes it works several times. But what always happens is that those victories convince the trader that he was smart when he was really just lucky. So he continues trading huge leverage thinking he's immune to the law of averages. Ultimately he or she hits a losing streak or loses control of her emotions and that leverage ends their account.So if some one wants to play Russian Roulette with their capital I won't stop them. But I will certainly let everyone on here, especially the novice traders who are most at risk of trying to imitate this strategy, know the ultimate outcome if they start down this path.
Sandy,I tend to think we probably do have a bottom. But if you aren't capable of holding through a drawdown to sub $1300 then lighten up on position size so that you can.
Gary,I didn't mean that the blees rating and the 200 dma had a direct link. It just seems to me that you linked the blees rating to bullishness in the commercial traders, and I thought that the fact that they weren't willing to wait for the price to hit the 200 dma, when they had been willing to wait before then--well, it seemed to me a sign of the hunger to "get on board."
I agree with MLMT.I think what we have here is a bull trap : OI think gold will still correct below 1300 in the next cycle.Reason:1. Big money has not bought this rally.2. Dollar will go higher.3. Markets will correct.4. A very nasty bear flag in GDX James
I have to think, this rally the retail people jumped in with their stops below 1350.Big money is salivating.James
James,My 2cents response to your points:1. The COT readings indicate big money sentiment - or am I missing something?2. Dollar may rally but not for more than a few days I reckon.3. Markets will correct but when and by how much in the face of a dollar collapse? Besides, the market correlation with mining stocks may not exist in the face of major dollar decline.4. GDX may have a bear flag but how reliable is the pattern in light of all the other indications? Besides, how much is the downside even if you are right? 3-5%? I think the risk is greater to the upside.I think better to be in with a reasonable position than out :-)
If MLMT is right again I will subscribe to his blog. In the meantime, I am Old Turkey.
Hi Ra,I didn't see huge volume today. The volume was higher than normal, but not huge. SIL was below average and the others lessthan 1 1/2 X.I think it was retail chasing.I sold out yesterday with a tidy profit.So we will see.Good luck to you!
James,Thanks and good luck to you too!If you (and MLMT - GDX to 44) are right, I will hold and add when GDX = 44.I will also add more if GDX breaks the trend of lower lows and lower highs.
RA,There's a gap at 44. But I think that's a reach.I would say about 50.James
James,Why not hold your position with a stop below the recent low. If the stop is hit then you have good odds of being able to get in at 50. If this is the intermediate bottom then you certainly don't want to lose your position. You want to be adding to it.
James,The gap at 44 is 17.6% below the 200 MA.Gold is showing all the signs of starting up the next intermdiate cycle.A stop below 52.46 should be fine.Once GDX breaks above the 50 MA -- then the real pparty starts.
Looks like more rock festivals in Egypt tonight.
Gary,I know that you will consider me as a whimp, but I sold my Gold April at 1350....Cash is king in this kind of market, I will reload lower....sorry... :-)
NFP is 36k on expectations of 146k. If that is not bullish for gold then i give up
Sophia,What do you do if you never get a lower price?If this was an intermediate low, and I think the odds are good that it was, then you just got your chance to reload lower.As long as you aren't leveraged then you can't get knocked out of your position. It is a bull market after all. If you make a timing mistake the bull will correct it.Emotions are an investors worst enemy. Someone comes on and says THIS IS A BULL TRAP.Your emotions take over and fear of losing any profit causes you to bail out of a winning position.If one were thinking clearly they would weigh the odds and make a logical decision. Is gold deep into an intermediate cycle? Yes it's actually pushed slightly past the normal timing band so it is very deep in the cycle. Is gold deep in the daily cycle? Yes gold is very deep into the daily cycle.Has gold formed a daily swing low? YesHas gold formed a weekly swing low? YesHave down trend lines been broken? Yes, across the entire sector.Are the mining stocks participating? Yes, and they are leading.Has the sector regained the 10 DMA? Yes and in the case of silver and miners the 20 DMA and the 10 is starting to turn up.Have the fundamentals changed? No they have gotten better.Now for the cons: Someone who's crystal ball doesn't work any better than anyone else's says this is a bull trap. No particular reason given other than gut feel.So I have to ask do you decide logically based on what is happening, knowing that the bull will correct any timing mistake anyway...or do you make a decision based on someone you don't even know's best guess?
More buyouts in the future?http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/2/4_Gold_Mining_Acquisitions_to_Continue_in_2011_%26_2012.html
garyit looks like silver is gapping up... you still going to try to wait for an intraday pullback before adding leverage?not
On the topic of leverage that we were discussing last night I want to relate a story that took place a couple of months ago.A trader joined the SMT in late Nov. early Dec. He emailed me right after joining to tell me he joined because he needed help spotting exits. He also wanted to brag about how much money he had made during the recent rally. He said he was up 400 or 600%, I don't remember which it was.I immediately realized he was going all in on options and advised him to be happy with his winnings and sell those options.He informed me there was no way he was going to sell. He was sure silver was going to the moon by January.Then of course we had a big dip in Dec. His 600% vanished in the blink of an eye. Now keep in mind he joined the SMT so he could learn when to exit. When I told him to exit he ignored me. Makes one wonder why he joined in the first place if he knew what the future held.If he had followed my advice he would have kept all his profits and if he had jettisoned the leverage strategy he would have kept those profits for the rest of the bull market and multiplied them many times. Instead he became angry, emailed me that the service was worthless and wanted his money back.Amazing huh since if he had listened to me he would have kept his winnings?He made the catastrophic mistake of thinking that he was smart when in reality he was just lucky. When his luck ran out he lost everything.This is the evil lure of leverage. One or two big victories and your emotions take control, you convince yourself your smarter than the market. That the law of averages doesn't apply to you.Then when your luck runs out you lose it all.I've been doing this a long time and I have yet to see anyone survive the leverage temptation. Massive leverage is just like a casino if you stay at the table long enough the house will take all your money.
Hi Gary,When picking bottoms I don't use stops. I will scale in and hold through a drawdown.James
Not,It's only up 4 cents, I will wait.
Hi Gary!Nice call again. I listen to you and got a much lower leverage this time. I can stand a move down now. Thanks for that. 100% invested at the moment.The thing is that it seems that a lot of people think that this bottom cant be it for gold and silver..Maybe it is to easy for them. But it depends who you asking..Some people for sure didnt think that it was easy to find a bottom..And in this case I think its little scary..You did the right call again..And maybe some people think that you cant always be right..lol!Maybe they think so because they are afraid for the stockmarket to fall a lot soon and take gold and silver lower. That scares me also..Some kind of flashcrash and silver and gold go down 3-4%..Pang! But you cant either sit and wait and silver just go higher and higher and higher..But the dollar rises and it seems that commodities dont care about it. Thats good and support the 3 year cycle low.The jobreport today wasnt that good..But if its not good investors think that Bernanke will launch QE3 så that maybe support the market..Silver is moving higher..:-)Gary one more question about the yield. If the jobreport came in higher then expected..Then probably the yield/Rent go up? Thats not good and maybe thats why the report is in no mans land..?Have a nice Weekend all!
Gary,I know that if I follow the plan, I will be OK, but the last few months have been difficult, so now, I see money, I take it...It is the wrong approach for big money, but I need to be able to stay in the game andI feel better like that....Gold is very volatile, you nailed it pretty well since I have been following you, but I don't have enough conjones...
Sophia, Then you are betting too big.You need to have a smaller position so you can think logically.Obviously 100% invested is too large for you. Scale back to 50% so you can take your emotions out of the equation and give yourself a chance to ride this bull.
I agree that I am betting too big...Thanks Gary, this discussion and forum is helping me a lot...Take care...
Hi Gary,My reasons are based on your original thesis.I think you were right the first time.: )
Gary, i know it's way to early to start talking about exit strategies at the end of the C-Wave, however I don't feel I have a strong exit plan.I usually wait for a large run up patiently and the first time I see a large down candle with large volume (like the one early Nov) I exit all my positions...only to see a few more downdays and then my previous shares rocket away from me...Do you think it's better to scale out in 25% increments? ...what's worked for you at the end of prev. C-Waves? Thanks
James,So just put a stop under your position at the pivot and you are protected both ways. If it's hit you will get to re-enter lower. If not then you are in for the ride.
Ollie,I will go over what we need to look for at C-wave tops in the nightly reports once we get closer to the top.This will only be week one of a new intermediate cycle so obviously we don't need to worry about exit strategies for two to three months yet.
Cool Thanks Gary, will study the nightly reports as and when...thanks
To anyone who soldI understand the concept of 'scaling in' when gold goes down...BUT, what if it just keeps going up for a bit. Sometimes when the train leaves the station...more and more buying pushes it higher and higher. THEN when one who sold finally says, "HEY , that wasnt a bear flag!" They buy...it pulls back a bit , they then panic and sell for a loss...then it goes up again!Thats when the BULL bucks off weak hands.15 minutes into the day GDX had 1,250,000 volume!!! If it continues, it would be 4 million in the 1st hour. Thats 1/2 the AVG DAILY VOL. lately , in one hour.Something to consider.p.s. waited 15 mins before sending this...GDX has over 2 million @10.a.m. Thats buying demand.
For those so inclined to take the time:http://seekingalpha.com/instablog/475264-tim-ayles/134563-debunking-myths-of-us-collapse
No luck with a pull back! Do we add here.
Sandy,You might wait for the early morning enthusiasm to wear off and see what happens later this afternoon.
Gary,Sounds good. I am 75 % in, hence not overly worried but do want to get to 100 % soon.Great job keeping everybody focused.
Just took a $11,000 hit on S&P short. I know Gary has been saying not to short but I took my gamble convincing myself that it would drop hard. It pretty much erased my earnings from the last 3 months. Hopefully this will be the last expensive lesson and others take more precaution as well!Up $3000 on gold and silver since yesterday and hopefully this leg up will bring me back to decent gains.
Cramer says "Gold has bottomed, Buy, Buy, Buy." Maybe it's time for a low in Gold?;-)
Tim: O.K., I am going to get and read that book by Wray. I advise a lot of people on finances and the world economy, so I feel obligated to read it. I am always happy to have my mind changed and head-in-the-sand is an unimpressive posture. I'll get back to you after if you are still here. Thanks.
Tough call re pullback...SLW, GDXJ, and GDX are all touching the top of their new uptrending channels that began at the recent lows. Those charts would indicate a pullback, or at least a sideways consolidation.However, the uptrending channels in both gold and silver have more room on the upside, so those charts would suggest more upside is possible (but not necessarily guaranteed!).I'm am in, but still have some dry powder. I plan to wait till later today, and more likely till Monday or Tuesday, before buying more.
DG - Maybe just respond in the comment section of the article so as to respect the wishes of this blog to not debate anything else but gold.
T&J,I believe you posted a link to an article that had a couple of charts showing how consistently POMO days have pushed the stock market higher.I went thru the comments here at Gary's blog, but couldn't find it.If you have that article bookmarked, can you repost the link?Thanks!(PS I also plan to read more about MMT. Some weeks ago I read some online articles by Mosler and they were eye openers for me.But I still come back to the practical problem: No one understands MMT. Even many economists don't get it. How will it ever be possible for the politicians to do the right thing with spending and taxes if they are still thinking of the US as if it were a big household and needs to keep a balanced budget?)
No, Tim, I think it's fine. We discuss lots of other stuff here. The other thread was just going on too long. Little side things are fine as long as they don't overwhelm everything else. Plus, the topic engenders a lot of passion around here, so it was a bad combination. Catch you later... (hopefully I'll finish it this year!)
Damn, Alex. I went out for a minute and missed that little pop in FCX. I would have reshorted it at 57.40 and will if it get there again. Stop at 57.65, so nice and tight.
T&J,Many folks on this blog are also interested in the overall stock market. So the article on POMO should be useful, even though the primary interest here is in the PM bull market.
@gurvirMe too. About 1% of my account. My indicators said Mkt would go down beginning about mid Nov '10. Gary said no at the time and continued to say no. Had to see who was right. He was. Lesson learned.
pima - It just takes more and more people becoming aware of Monetary Reality, and then they won't just vote party lines once they realize both parties are wrong in their responses.Here is the link: http://seekingalpha.com/article/246471-during-a-correction-or-a-crash-funerals-keep-going-consider-hillenbrand
DG,Why are you shorting FCX? It's a copper and gold miner, no?Is this a hedge?
@JDkinda makes me feel better that I am not the only one! :) Funny thing is last week on Friday when it dropped to low 1260 I was only down $4000 and I continued to wait hoping it would drop lower. Then as it started heading back up I added a few more contracts thinking it would tank on the job report today. So hard controlling these stupid emotions.
thanks, Tim.That's the one! I wanted to take a longer look at that POMO chart.
Pima: A few reasons 1. It is much more copper (and molybdenum) than gold and copper has already gone nuts 2. the chart pattern 3. I have an easy place for a super tight stop. I'll trade almost anything that allows a sensible tight stop.There was a guy in Market Wizards who said you could throw a dart at the WSJ, hit a stock, and tell him whether to buy it or short it and he'd still make money! It's all about risk management and letting winners run while cutting losers.
Regarding Cramer's "buy gold now!" call: I don't follow him. I know some folks like to think of him as a contrarian indicator and he gets a lot of ridicule.However, does anyone know his actual track record? How many of his calls are losers versus how many winners? Is he really that bad that we can use him as a contrarian indicator--sell when he says buy and vice versa--and actually make money doing that?
T&JI have an idea for you... If GARY finds it agreeable... You mentioned -"Maybe just respond in the comment section of the article so as to respect the wishes of this blog to not debate anything else but gold."Some here enjoy both, but just wish we could separate thew two so we could follow more of a 1 theme at a time thread. You know...one asks a question about an immediate gold trade and has to surf through lengthy other debated subject matter before finding Garys answer...soWhy not come on here when you are to have a discussion and direct anyone who wants to discuss YOUR economic ideas to THE LAST POST..you understand what I mean??Like you ask any interested to go to..."energy, No Thanks" post and blog there. THAT WAY..we ALL can blog comments in a continuous and complaint free environment.
@gurvirIf it's any consolation, I do believe in the whole QEII/POMO effect on the mkt, courtesy zerohedge. I think it's manipulated. OTOH, Gary's dollar cycle stuff is compelling, and does indicate support for mkt. Good luck from here on.
For the record I don't mind discussing/debating other topics besides gold and the stock market.I was never the one complaining about the debate. Actually I was actively participating in it.
DGNice, practicing your dart throwing :) Practice makes perfect.
Yeah that MMT debate was fun to read-- It did take up quite a bit of space though!! Reminded me a little of the Inflation/Deflation debate a while back :))
CNBC just flashed an interesting and suprising piece of data. #1 asset owned by ETFs is gold at over 6% of total assets.#4 is silver at over 1% of total assets owned. AAPL #2Exxon #3I'm not happy to learn this.
Gurvir, I hear you, in the same boat here, a good 5 figure "paper loss" on S&P for me too, although I've still stubbornly stayed the course, giving today a chance to work down as I worked a correlation to last April suggesting a top could take this long to materialize. I know Gary is still spot on about finding excuses not to stop out, but the fool in me believes today is still a good candidate for a turning point and the market will want to close lower today. Worse case I get out before the close for a "loss to remember".Catching up on reads, thanks for the comments Onlooker. Actually I'm already fully invested in my miner positions, got in last week and earlier in this week and took good deep in the money positions on GDXJ, SLV and SIL. Time to sit back and watch.
thanks, DG. Good luck with it!What do you think of the Euro??I cut half my EUO position a couple of days ago at a loss, but just sold the other half at a profit. Looks to me like the Euro had an impulsive 5 waves down to this morning's low (from the 2/1 high), which also touched the bottom of a an uptrending channel. IF the Euro is now in a downtrend, then we would expect a retracement back to 1.3666 or even 1.37, before heading lower again. I'd consider reshorting there, but if the dollar is headed lower into its 3 year low, then it's unlikely the Euro will continue in a sustained downtrend
Pima: I saw an article that did a statistical analysis of his calls and it showed that you were better off fading him (in the short run) than following him, but it wasn't overwhelming.Alex: Yeah, I've been practicing my dart throwing. I may have to stop though. Last week I dropped a dart on my foot and it stuck so I tried to short it, but gave up because I couldn't borrow it. And damn, there goes FCX again (without me).
Gary Yes, and I didnt think you minded it that day. I did notice that some subs were frustrated trying to ask you a question and felt the other debate was time consuming...so I just thought of a fix for the problem ( if it was a problem, as T7J's comment implied). I'm sure any who like both would jump back and forth from blog discussion to blog discussion.
Gary, regarding your story of the guy who didn't listen.I found you out for the same reason ... to help me time my exits.Not to diminish your entry's but I feel entry's (for me anyway) are easier to time (as you always say the bull will correct bad timing). ... it's the exit that always gives me issues.My story is similar but reversed ... I lost a lot of money (profits) when I did not know when to get out ... got frustrated and started looking for someone who actually had the timing right.That's how I found you ... when you say sell ... I sell.Thank you.
I have doubts about the accuracy of that data. The percentage of Rydex funds in gold compared to all other sectors is down to 12% from a high of 35% a couple of months ago.
Pima: No opinion on FXE now. It did what I thought it would do and worked off the overbought extreme. The $ looks sick so maybe FXE rallies again...? If Gary's $ 3 year cycle low happens you don't want to be long EUO. My heart is in short China (FXP) as that country is already in a bear market and they are raising rates to kill inflation which is usually miserable for equities. These are toys to keep me amused compared to my long PM's though.
T & JThanks for the links. Here's an interesting link on hyperinflation/defaltion/gold:http://fofoa.blogspot.com/2010/09/just-another-hyperinflation-post.html
@dgDon't know if anyone here is old enough to remember, but WSJ used to have an occasional column where they'd have monkeys throw darts at stock charts. Very often, monkey's picks were better than pros. Got to be so embarrassing that they dropped the column. True story.
Poly,FWIW it looks like the dollar has finally found a cycle bottom. The temporary bounce should be the best opportunity for the stock market to drift lower. Timing the bottom of that correction and the top of the dollar rally could be tough though.
PIMA C called channel lines as overhead resist , and since then , many have turned away from there ( nice observation Pima)Could be a buying opportunity for some ( nice call also Gary, who advised waiting until the morning excitement died down).I know this because my portfolio was up up and down like a ship in a storm, being 100% in
Thanks Gary, appreciate it. I agree, I'm not trying to be at all greedy here, but I've drawn "another" line in the sand and believe I might be able to get out with only losing a foot. Looking for possibly a 2-4% turn down in the S&P over the next 4-5 day dollar rally. I've also got to place some faith in some sort of S&P daily cycle bottom here to escape.
Miners are leading the selloff now.It would not surprise me if we get a bearish engulfing candle today.James
JD: Yeah I remember that. I believe after they canned the column the monkeys wound up running some large money-center banks in NY.
Actually the miners are just following gold. Like I said the normal pattern after a huge day like yesterday would be for the sector to either form a small bull flag or trade sideways for a couple of days before another push higher.
Gary,Thanks for that short essay on leveraging. It will put my head straight.James
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