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Sunday, March 13, 2011

GET OUT!

This is for all you folks out there with retirement accounts in the general stock market. I've been warning for many months that the cyclical bull we've been in for almost two years is still just a counter trend rally in an ongoing secular bear market. I made that same warning about the last cyclical bull market from `02 to `07. Many people ignored me in November `07 when I said the second leg down in the secular bear had begun. I suspect many people wish they hadn't.

There are now warning signs that this counter trend rally may have topped, and even if it hasn't the potential upside is so small that it's not worth the risk of getting caught in the next bear leg to catch a few more percentage points.

As of Thursday and Friday the stock market has now broken below the prior daily cycle low. When a daily cycle low gets violated it invariably signals the start of an intermediate degree correction.

The warning bells are going off not so much because an intermediate degree correction has begun, those happen like clock work about every 20-25 weeks,  but because of how quickly this daily cycle has topped. In only three days. That means we are now locked in an extremely left translated daily cycle. 

It is those extreme left translated cycles that do the most damage. The daily cycle following the flash crash last year was a left translated cycle that topped in only 4 days. We all know what that led to.

The bigger picture is the intermediate cycle. Notice the market is now on week 16 of the current intermediate cycle. I noted earlier that an intermediate cycle low is due about every 20 to 25 weeks. On an intermediate term basis the market is now due to move down into that major cycle low. The next larger cyclical structure is the yearly cycle. That is also due to bottom with this daily and intermediate cycle. The combination of all three cycle durations bottoming at the same time will almost always produce a very severe correction.

Because of how the dollar cycle is unfolding (available to premium subscribers) I expect the stock market cycles to bottom pretty close to the 1 year anniversary of the flash crash.



As a point of reference the last intermediate cycle low occurred in November. The danger is that both the industrials and transports might drop below the November bottom during this correction. If that happens a Dow Theory sell signal will be generated. If a Dow Theory sell signal is generated the odds will be very high that this counter trend rally is over and the next leg down in the secular bear market has begun.

And unfortunately Bernanke is not going to be able to just crank up the printing presses and rescue the markets like he did last summer. The problem isn't that there is a shortage of liquidity. The problem is that there is too much liquidity. It is causing commodity prices to surge out of control. 

Oil is back over $100 despite continued high unemployment and impaired demand. Food prices are going through the roof and have already trigger social revolt throughout the mid east and most emerging markets. Once the next leg down in the dollar crisis gets underway it won't be long before we here in the US will be looking at $4.00 or $5.00 for a gallon of gasoline.

As the dollar crisis intensifies Bernanke will be forced to end QE or risk breaking not only the currency but also the bond market. Without an endless supply of fresh money the markets and economy will quickly start to collapse. We saw this last summer when QE1 ended. The same thing will happen this time only Bernanke's hands will be tied by the dollar crisis and surging commodity inflation. He will be powerless to prevent the return of the secular bear forces. Well unless he's prepared to risk hyper inflation that is.

Personally I don't think Ben is willing to completely destroy the dollar and crash the bond market just yet. I suspect when he finally realizes that Keynesian economic principles have led us down a path of no return he will resign and someone else will put the finishing touches on his master piece.

The only question is whether those finishing touches will be to allow the deflationary depression that is required to cleanse 5 decades of debt from the system or whether we will choose the hyper-inflationary path to service the debt spiral we've gotten ourselves into.

In any case it is time to exit all general stock market funds and position oneself in cash to ride out the next leg down in the secular bear market. If one has a gold or precious metal fund available in their IRA we should have about two months left of spectacular gains as the parabolic finale unfolds in the gold and silver markets. But once that has run it's course even those positions will need to be exited as there is no real way to diversify against another severe bear leg down. 

The simple fact is that in a severe bear market everything gets taken down to some extent. Gold will hold up much better than practically all other assets but even gold will take a 20-30% hit during a  D-wave correction. And all parabolic C-wave finales are invariably followed by an severe regression to the mean profit taking event.

Unless one has the option of a gold fund, it's now time to get out of general stock funds and move IRA's to a money market fund until the next four year cycle low is reached (probably in late 2012).

891 comments:

  1. Gary,

    Something that you have mentioned over and over again: Here is to the next Secular Bull Market:

    http://www.economist.com/node/18304172

    DG:

    Amazing website! Another book order on the way.

    Here is to a million copies and a million $$$ from you, in AGQ! :)

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  2. Thankyou again Gary

    I can't begin to tell you the sheer panic I have felt since 06 or 07 over our economics. On princeable i knew how wrong they are(and one or two specific items). Tieing everything together and timing with the cycles puts the pieces together to a actionable strategy .

    Thankyou so much

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  3. The other good news is I think I found someone to jump on board that will catch on quick. That will give me someone to share with and learn with

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  4. hi gary ,so glad i subscribed to your premium site, it is what i missed, patiency, no panic, thank you very much,mario.

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  5. Oh No- You have now possibly totally ticked off Beanie! :)

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  6. Yes probably so. But then again most of us have made more in the last 6 months than Beanie made in the last two years, and that is assuming he caught the exact bottom of the bear market (he didn't).

    And none of us (SMT subscribers) got caught in the previous bear market. Beanie did.

    So with Beanie's less than stellar track record I'm not sure anyone here is terribly worried about his feelings much less interested in his investing advice :)

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  7. Gary

    I may be mistaken, but I thought that it was only a week ago that you agreed that "possibly ,though unlikely' , the dollar 3 yr low could come later this year , and a more sideways consolidation in metals could occur over the summer and the parabolic move in the Fall.

    Your wkend report sounds like you are quite convinced that, at this point, that the dollar is done now,and the parabolic move is likely imminent. Has something specifically changed in this regard ? ( You dont need to point it out on here,you can just say 'yes' , 'no' , or 'Wthe heck are you talking about??" )

    thx

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  8. Alex,
    That was always a low probability event and it's getting less likely by the day. If the November low is breached it will pretty much evaporate.

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  9. Gary - Can you please explain/clarify why you think miners will hold up and as you say "have about two months left of spectacular gains as the parabolic finale unfolds in the gold and silver markets." When on the other side you say exit now on everything else and state "The simple fact is that in a severe bear market everything gets taken down to some extent." - This doesn't make sense to me. When the market dropped the other day, miners got taken down as well as the general market.

    Also, if you were going to buy physical silver - would you buy today or wait until the D wave bottom (or best estimation for that time frame.)

    Thanks for your response.

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  10. Gary,

    Thank you. Just last night I was trying to convince my wife to move her money out of her 15, yeah that's right - 15, mutual funds and into a fixed account.

    She is sold on the idea of diversification. I was trying to make the point of now is the time for defense.

    Well, seeing this morning's post made me smile. I promptly showed her and now she is convinced.

    Thanks again

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  11. Visitor,
    If you want the complete story you need to subscribe (it's all about the dollar).

    But just briefly, miners will ultimately follow gold. If gold still has another two months into a parabolic C-wave top miners will be moving rapidly higher as they follow gold.

    But once that has run it's course everything will get taken down as the next bear market starts to sink his teeth into all asset classes.

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  12. Anyone know of a software app that you can setup to telephone you and leave you a message?

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  13. Yep, another top equities market call. I want to clear my eyes this time to see it isn't true.

    Gary, let's not make up stuff about my returns or my calls if it isn't true.

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  14. Dumb Moving Average

    I dont know an 'app' that does that, but my wife does it quite frequently...Google and see if theres a , "Hon, can you stop at the store on your way home.." app :)

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  15. Beanie, Why don't you save us time and comment elsewhere

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  16. Gary,
    POT, CHK, XOM held up well during the last part of 07 and the being of 08. Would you advise against these or is any dollar based sector the place to be during a dollar collapse?

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  17. what about FXF or timber, like RYN?

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  18. Even as generally bullish as I am, I had this to say back in 1/21/2008 (which is kinda odd reading it now as I don't like to be fear monger):

    Imminent Doom?

    Most bulls are hoping for a bounce, albeit short term, this week. Even some diehard bears think we are due a short term bounce. As i write this, the USA futures are getting their teeth knocked out. Many of the markets around the world dropped heavily on fears of a US recession. The Dow Jones are down 514 points and the Nasdaq futures are now down 76 points.

    Several things favor the bulls, like:

    - We are now in very oversold territory, and the VIX have spiked.
    - The Dow closed at above support on Friday.
    - An interest cut is coming next week, and we may even get an emergency cut this week.
    - The Bush economic stimulus package of $145 billion should limit the downside of recession if we are in one.
    - Some diehard bears have gone bullish.

    On the other hand, the bears can mawl the sh%t out of the bulls, like:

    - The bond insurers are in alot of trouble and any bankruptcy will spark a monumental selloff in the markets, as already indicated by Cramer on Friday.
    - The recession fears are growing strong by the day, and normally at best it takes 4-6 months to get out of a perceived recession. This means the bears can keep on mauling for a few more months, at the worst case for them.
    - The COT indicated the big boys have been selling for months.
    - Intel's miss will have a negative impact on tech, adding to the already negative sentiment about the economy.
    - Precious metals like gold recently spiked, indicating investor may favor hard assets.
    - Lack of trust for the Bush-Benanke-Paulson complex because they didn't give what market participants perceived as what they needed, when they needed it. The complex was seen as taunting the market, and now any fix is perceived as a little too late.
    - Historically, the crowning of a new Fed Chairman has resulted in big market declines in their first year on the job.
    - The Yen is spiking, forcing the end of the yen carry trade, which is highly leveraged (10:1). If the yen keeps on spiking and the dollar keeps on dropping, this can and will devastate many economies.
    - Warren Buffet is now at least $40 billion in cash. Typically he likes to buy at market bottoms with PE of around 8. The current market PE is around 18.
    - I can't help but recall what my astrologer (most cycles theories have its basis in astrology ,btw) said, though he was early by a few months. He was too early and too adamant about it to be useful at the time. Anyhow, he said the meltdown would be unforgettable and many people will get really hurt by this decline and that it would likely be a worldwide event. It will not be a multiyear thing but rather a few months.


    As you can see from the above list, sentiment is very negative out there right now. The bulls need to muster some type of offense this week, starting tomorrow, or we could be headed to 11,600 and ultimately to 10,000 on the Dow. They won't be able to do it without help from the Fed before tomorrow's close, which is what's really important. Even though the futures are crashing, the day is still young. We got today's session and then tonites session and then the close of tuesday, enough time for things to turn around even though i am less hopeful.

    The stock i will be look to add to my swing short is WYNN, which closed at 101.5. It has heavy resistance at 102. If it can't get above 102, i'm going in.

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  19. And I said this in April 3, 2009. Like I say, just about everyone has claimed they have called the top and the bottom. I guess what matters is how you say it and what you did as a result:


    Getting Ready For The Next Bull Market

    I was at Borders this afternoon with my daughter. I happened to come across the newspaper aisle and saw the front cover of the IBD (Investors Business Daily) newspaper. This is the photo, from the G20 meeting:

    http://homepage.mac.com/j.monro/20090402_150041_573612E0.jpg.jpeg

    Never mind that the guy in the middle will be totally bald pretty soon. This picture is all I need to see to believe that this bear market is about to end and a new bull market is coming. Everything we're doing to fight this potential depression differs than what we did in the 1930's. The Fed has been showering the economy with money and saving many big firms. Bernanke believes that it's better to do more than to do too little. We did too little in the 1930's and thousands of banks ended up failing. Roosevelt, as did Bush, also shunned the international community. He wanted to do things his way, rather than the right way. This is a global recession! Only the ignorant would not cooperate and work together.

    Some people, notably the vocal bears, believe we should let all these irresponsible companies fail. The Fed tried that approach by letting Lehman Brothers go belly up, and the markets got torpedoed in an egregious way. These companies are incredibly huge with widespread tentacles that they will disrupt all facets of the economy. The Lehman episode was shocking. I think the markets (and hence the economy) would have puked its brains out if AIG wasn't bailed out, and let go the way Lehman was let go. I believe people were nuts when they called for the death of FNM/FRE. There is a time for "free markets" and a time for necessary intervention.

    Anyway, with so much money thrown into the economy and the credit markets starting to thaw and the MTM repealed, it's hard to imagine the banks would not ease on their lending. So, I'm preparing for the next bull market. I believe some of these stocks listed below will be leaders. Stocks like AAPL and GOOG will continue to innovate and dominate their respective markets but, since they're already so huge in market capitalization, they're not gonna explode your portfolio from here unless they pay lots of dividends and do spinoffs. **Be sure to keep an eye on promising companies that will start going IPO as the stock market improves.

    In technology, the hot areas are likely:

    Virtualization - dominated by VMWare(VMW)
    Cloud computing - GOOG, Salesforce(CRM), AMZN
    Software as a service - Salesforce(CRM)
    Social networking - Facebook, Twitter, etc.
    Internet - GOOG, Akamai(AKAM)
    China internet - BIDU, Shanda(SNDA), NetEase(NTES)

    Retail - AMZN, Autozone(AZO)

    Financial - V, MA

    Alternative energy, with solar energy being the dominant theme as their technology continues to improve:
    First Solar(FSLR), Sunpower(SPWRA), Suntech(STP)

    I am leaving out Energy Conversion Devices(ENER) because it's a relatively smaller solar firm compared with the other 3, but they have huge number of patents for advanced technology (which is not yet viable at the present time but could be huge in the future).

    The reasons I believe we will have a huge bull market in alternative energy is because of the threat of global warming and because we're running out of oil with insatiable demand from growing economies such as China. Oil prices should spike higher in the years ahead. Any economy that depends mainly on oil consumption for their energy source will not survive in the future, imo.

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  20. Global warming is a farce. Enough reading will convince anyone with an open mind. Just another way to collect more taxes for the NWO.

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  21. My two cents.

    What I see is Gary having the guts to call it like he sees it, over and over again, with very little wiggle room to his forecasts. Not always right, but that's expected and he's good with it.

    I also see some character spouting off on Garys blog about a boatload of gibberish. If Beanie is worth $100 per month and wants to sell his book for $400 (using Garys blog), the least he can do is make some firm forecasts about the future markets. All I see is Beanbag cherry picking some of his past comments, maybe not actually past comments, that he thinks make him look good.

    Somebody else said it and what a beautiful contrast in metaphors the avatars are. Gary Savage bravely climbing a golden wall of worry and Beanie a small dog with no energy sprawled out on his back on a filthy..ugly day bed. Cute little chihuahua dog though.

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  22. Open your mind = letting everything fall out

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  23. Beanie,

    With all due respect, many of the posts on your blog are hedged 6 ways to Sunday. With that approach you will always be able to claim success.

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  24. Imposing policies based on global warming is also a good way to slow down the economy and thereby reduce population growth due to the extreme cost of 'green' energy. Even with fossil fuels increasing in price they are still much cheaper.

    And global warming being a farce doesn't mean it won't be a good investment. If policies requiring the use of green energy are (continued to be) imposed then it's going to be the way to go, like it or not. Bye bye free markets.

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  25. Redwine,

    You have mistaken. I've never mentioned about selling any of my wares here. Not once. In fact, I've already removed the links from the top blog page of my blog and brought them much lower.

    I'm only here for the intellectual (regarding the markets) challenge. I don't like bull blogs because we'll just be one happy dance there. :)

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  26. Beanie

    This is a bull blog. Don't you understand that there's almost always a bull market somewhere? It's just foolish to be a perma bear or a perma bull on any market because cycles are a fact of life.

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  27. silverman,

    No, they are hardly hedged. I'm just as vocal as Gary.

    But to say since I'm a bull I was totally unaware of the 2008 downdraft or the 2009 bottom is far from reality.

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  28. Gary will the Japan catastrophe have impact on metals do you think? Shouldn't this weaken the yen and strengthen the dollar?

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  29. I admit, back in 9/2008 I thought the bottom may be in, but I did add there was a possibility of another leg down before it ultimately bottoms. At that time, I was nibbling on stuff. But by April 2009, I was diving in head first. I don't pretend I called the exact bottom. The fact is nobody did. It took everyone at least 2 tries.

    Cycles theories don't tell you exact tops or botttoms either, despite the numerous claims by many practitioners. I've been peddled with Cycles Theory, Elliott Wave Cycle Theory, Square Of Nine Cycle Theory, and other numerous offshoots of cycles theories. They work and don't work just like anything else. Nothing more or less special. For if cycles theories have special powers, what kind of cycles theory predicts that the market goes up 70% of the time the last 100 years? None. (An average simpleton permabull did better than that just by staying long!) So there's no special powers to cycles theories and they're more wrong than just staying an average permabull (70% win) for life. I'm sure Warren Buffett realized that many years ago and that's why he doesn't believe in charts.

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  30. Similar analysis to mine.... in my view, the secular bear returns in 2011.

    Tim Wood agrees that this bull market is just a cyclical one within the larger bear secular market. Tim however is much more cautious about calling the top (will probably do so after a very serious and undeniable dow theory confirmation).

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  31. Beanie, are you really that intellectually challenged? Since 2001:
    gold-250.00 to 1420.00
    S&P 500- dead $ for 10 years

    HUH? Not something I would pay 100/400.00$ for:)

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  32. Beanie

    This is the type of gibberish I'm refering to:

    "what kind of cycles theory predicts that the market goes up 70% of the time the last 100 years? None. (An average simpleton permabull did better than that just by staying long!) So there's no special powers to cycles theories and they're more wrong than just staying an average permabull (70% win) for life. I'm sure Warren Buffett realized that many years ago and that's why he doesn't believe in charts."

    Your claim that the market goes up "70% of the time" doesn't take inflation (dollar debasement) into acoount at all. Besides that 70% of the time doesn't equal 70% return and 70% in 100 years is less than one percent per year nominal. What nonsense.

    Cycles are a fact of life in that we have long bull markets and long bear markets (cycles) of approx. 20 years in the broad markets and commodities markets and varying lengths of time in all markets. That's not to say that cycles theory is great for calling tops and bottoms, it's to say that being a permabull is assinine.

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  33. Without getting too complicated. GET OUT OF THE MARKET sounds like pretty good advice.

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  34. http://noir.bloomberg.com/apps/news?pid=20601087&sid=aGyXY_b8Deaw&pos=1

    QEJ seems to be on the horizon.

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  35. Sang, Tim Wood does great work with the cycles. His big problem is the influence Prechter has over his work. Tim has been bearish on stocks through this whole move, and only recently started being a little bullish.

    He doesn't recognize what is happening in PM's at all. He now expects an 8 year cycle top to be imminent, even though it will most likely be right translated.

    I use him for chart dating. He is very good at that.

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  36. Gary - I totally understand why one should be out of the market; however I'm confused about exiting precious metal funds - for example Tocqueville gold or PSLV - of course in '08 everything was taken down, but if we sit in cash until late 2012 don't we risk this incredible dollar devaluation that is taking place. I can only imagine what 18-21 months will do as inflation eats away at our principle. Any suggestions?
    Thanks you

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  37. http://apeakunderthehood.blogspot.com/2011/03/speculation-china-collape-allows-feds.html

    SPECULATION: China collapse allows Feds to unload QE bonds

    Enjoy

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  38. Redwine,

    Acutally, Beano did make a few specific recommendations like the semiconductors a few weeks back. Unfortunately for him, they've tanked harder than any other group.

    I'd wager either MU or CY will be defunct in the next 5 years, and I'd double down that Beano will confidently proclaim that this is what always happens with the best names while predicting a triple from .01 to .03/share. lol

    Beano, you're toast and you've been warned of what's coming by the same guy that has spanked you handily for years. Good luck.

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  39. Just can't see QE 2 ending,listen QE1 never ended .There is no way they can end QE2 --Simply, the U.S. bond market would INSTANTLY COLLAPSE if the bond-buying Ponzi-scheme ever ended--they may officially say they are ending it but will just call it something else.
    U.S. Treasury supply (read necessary purchases by the Fed) will explode as Japan will surely be a seller to repatriate necessary capital for rebuilding. Not that the Fed had any ability (pre earthquake) to stop QE never mind actually withdraw funds (actually tighten) but now global QE will need to ratchet up even more.

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  40. >SPECULATION: China collapse allows Feds to unload QE bonds

    You say that china has to deal with an increasingly inflationary environment or stop their growth to prevent inflation.

    Why not the prevailing view that they will let their currency appreciate while stopping the purchase of US debt?

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  41. I believe more than 3/4 of USG debt is in 5 year or less durations (last time I checked).

    The USG doesn't have the luxury of slowly debasing the currency any longer. The only thing I can see that might delay the inevitable would be another major sell off in equities, causing massive deleveraging (exiting margin) of speculations, causing dollar strengthening due to trading equities for dollars, which will allow interest rates to remain low or even drop further, allowing the USG to rollover more debt at low rates.

    This is basically what happened 08/09 melt down and will tie in with Garys' visions.

    The dollar strengthening wasn't so much due to "flight to safety" as it was due to the unwinding of margin (deleveraging) and trading equities and commodities for USD (demand for USD).

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  42. Dear Gary,

    You are expecting an up move in CRB index. On Friday many commodities showed strengths but crude oil didn't. Can you share your current view on oil? Thanks in advance!

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  43. That's right, Robert. Long before there were any QE's the dollar was being devalued (95% or so since 1913), so this was always the plan. Add on the current stress in financial markets resulting from all the theft and fraud, and now they must print more money to plug the leak.

    I have not doubt the Fed will posture and state, at some point, "no more QE'. This is nothing more than an attempt to get the masses to look favorable on the currency again, which they need to do if they want to steal as much value as possible. The last thing the Fed wants is everybody to lose interest in USD, so they'll say whatever it takes to scare some back to the ever-eroding paper. That does not make it more sound, and the smart individuals realize (and bet alongside) this fact.

    I no longer listen to what comes out of their mouths, as it's all just what they want you to believe for their benefit. Prices stable, sure. Unemployment decreasing, right. Everything is OK.

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  44. Whenever the Fed finally raises rates a 1/4 or 1/2 point to "signal" that it's the beginning of higher rates long term, and gold/silver sell off sharply, that will possibly be the best buy of this secular bull as all those that take the Fed seriously dump their holdings into our hands. :)

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  45. Perhaps the talk of possibly raising rates will usher in the D-wave in a few months?

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  46. I don't understand the theory that the economy must be expanding rapidly to produce inflationary price increases.

    I remember the seventies...early eighties and believe me, the economy was in terrible condition during the entire period of inflationary price pressures.

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  47. two other people I follow apart from gary. Tony C has bull market going most of 2011 till early 2012 to top out near all time high and then at least 50% decline of last uptrend. Although he has changed his views once during this uptrend, normally he is quick enough to change so that not get caught on wrong side more time.
    Other one is Andre Gratian. he also has bull market going on for some more months at least. I had invested in gdx at around 58 avg last October. Although I have no problem waiting its not very comforting that after 5 months we are around at same level.

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  48. missed to add that spx is from 1179 to 1300 in around same period from october. gold is up a little in same period.

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  49. Gold and silver taking off as futures start trading Sunday evening:)

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  50. big gap up for gold and silver on forex. usd pairs getting clobbered. hopefully it won't reverse. :)

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  51. More money printing (justified though it may be in this instance) from the inventors of QE:

    Reinforcing the Bank of Japan’s determination to keep markets stable in the wake of the disaster, the central bank governor, Masaaki Shirakawa, said Sunday that huge amounts of liquidity would be injected into the banking system on Monday.
    The central bank will probably provide 2 trillion to 3 trillion yen, or $25 billion to $37 billion, in funds through its market operations Monday morning, two to three times the normal amount, to soothe markets and keep short-term borrowing costs from spiking.
    “We will monitor market conditions and plan to provide markets with a lot of liquidity first thing tomorrow morning,” Mr. Shirakawa told reporters after attending a meeting of cabinet ministers on Sunday.

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  52. n1tro,

    Was there a gap up in gold & silver? I don't show it on my system. Are you sure?

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  53. You will recall that approx wed night I suggested that the big boys were just as able to see the multi-day triangle congestions in gold and silver just as we.

    I argued that a good move on their part would be to slam the metals lower and make it look like the congestion was resolving to the downside. That would create some panic selling, get pattern traders to go short, etc.

    By Thursday morning that is exactly what we had - a breakdown.

    I was shooting for 31.50-33 as a silver buy target.

    I'm already significantly leveraged and therefore try to limit my additional buys to 'deals' where the selloff has a good chance of being a lasting low and where I can put in a tight stop.

    We never went that low.

    By friday, the reversal and sharp rally higher was canceling the thursday drop and giving it all appearances of an artificial 'hit' to the downside. (A good rule of thumb in the mkt is an action which can't hold for at least 2 days isn't legit. They nailed it thurday, but it was already pushing higher by fri.)

    When I saw the clear reversal of thursdays drop, I chased it (you have to adapt) and increased my silver by about 20% - buying near the highs of friday (with about a 50 cents stop).

    It wasn't a good entry, clearly, but I'm pretty sure the stop will hold and we could be many dollars higher in days. So it isn't too bad and I'm risking less than 1% on the stops if wrong.

    My work, gary's comments, the fri reversal of thur's drop, japan, dollar, etc...ALL make me pretty confident the low is in and we now resume higher, but not before a likely whipsaw overnight or monday morning.

    When I chased and added I didn't increase position by much cause it was obviously a poor entry. I still want a bit more and at this point I'm going to look for that early morn entry point for a final add of some silver.

    I'm back up higher to 6x, but I'd like to get one more chunk (with small stop) before this next run gets underway.

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  54. The mistake everyone is making is to assume that conditions two months from now will be similar to what they are today.

    They will not be. The dollar will be hovering on the brink and ready to topple over into the abyss.

    In that scenario there is no option for the Fed but to immediately cease QE or risk the collapse of the dollar.

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  55. Gary,

    You said you couldn't block a poster, but I want you to realize you have another option should you desire to ever use it.

    All you have to do is just repeatedly delete the posts of someone you would like to 'move on'. After a few days they'll get the idea and do just that.

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  56. tz

    one heck of a open, at this point i think its buying into stregth. swing low isnt quiet complete, but big pop on the open

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  57. Gary,

    A day or so ago you fought back on a post saying how QE would HAVE to be stopped in the near future.

    You were commenting after someone posted interview/comments from Jim Richards.

    http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/3/12_Jim_Rickards.html

    You should listen to the interview before your reaction.

    Rickards (who has a LONG LONG list of qualifications) explains how the fed's balance sheet is SO LARGE now, that they can STOP QE and still continue printing simply by using the runoff payments of their existing securities payments.

    This situation has NEVER before existed in the world and the fed has already spoken (quietly) about it.

    They will be actually able to tell the world "we ARE and HAVE stopped 'buying'" and yet continue to conduct QE by holding their balance sheet STEADY.

    Listen to his comments and dont' be as reactionary.

    ReplyDelete
  58. PS: *yes* at SOME POINT, the fed will have to stop EVERYTHING. I agree with that.

    But Rickards is saying they likely don't have to stop NOW or at that boundary you are suggesting in a few months.

    They can just say "ok. we will stop BUYING", the world will think that is adequate and our rebound will start.....while they Fed keeps buying in the background from their portfolio payments.

    ReplyDelete
  59. I thought Gary said it would take a price over 1431.40 in Gold. I have seen prices over that-- 1432+

    ReplyDelete
  60. Gary,

    You have been bearish on bonds expecting rates to increase. What do you expect rates to do when the dollar collapses?

    ReplyDelete
  61. daniel

    yep i guess your right. the race is on i do believe

    ReplyDelete
  62. Now that bonds are in a bear market, they are no longer an attractive long.

    ReplyDelete
  63. If the dollar is crashing rates will have to rise to compensate for currency depreciation.

    Folks I warned money months ago that this is what would happen to the dollar. Almost no one believed me.

    I'm telling you again that once the three year cycle low is in the dollar will explode higher and Qe will be halted as the panic of a complete dollar collapse rears its ugly head.

    These big long term cycles just don't fail and I seriously doubt they will this time either.

    So everyone can delude themselves into thinking QE will continue indefinitely if they want to. The dollar bulls deluded themselves into thinking the dollar was a sound currency and the euro was crap. We know how well that worked out for them.

    If you make the same mistake with QE then the dollar rally out of the three year cycle low is going to run over you.

    ReplyDelete
  64. TZ,

    I'm glad you made the buy on Friday. All last fall I wondered why you didn't just make an arbitrary entry into obvious strength.

    Setting stops a small percent below your entry will limit the losses at any level, of course, and I think that many times you have a lower chance of having your stop hit if you enter during a strong up move rather than guessing at a low.

    Good luck on the trade.

    ReplyDelete
  65. 76.54 on the dollar
    the opening sceane is blood chilling as DR Brankinstins monster comes alive and terrorizes the world

    ReplyDelete
  66. Gary makes good sense. As the dollar bounces out of its three year low, due to cessation of QE, the markets will sink, margin will unwind, dollars will be in demand due to equity and commodity selling, and the US will easily sell treasuries. No need to print for awhile. Wash, rinse, repeat. Kind of like 2008/9?

    ReplyDelete
  67. If anyone knows Charles Hugh Smith, please invite him to this blog.

    http://www.dailyfinance.com/story/credit/why-the-feds-trickle-down-economics-is-failing/19687005/

    ReplyDelete
  68. Jeff/Aaron, where do you watch the sunday night trading?
    Thanks

    ReplyDelete
  69. must be a glitch or something.. it showed a "superspike" up to 83.5 on the dollar index..

    ReplyDelete
  70. atease

    i have a live platform from my broker
    bloomberg has a stock ticker with gold and silver, a few minuets delayed but it does not show the dollar index

    ReplyDelete
  71. thanks jeff, see what I can locate.

    ReplyDelete
  72. mister m

    83? not possible
    im reading 76.62 now
    i thought i was going to sit here and watch it dive. not yet

    ReplyDelete
  73. at ease

    futuresource.com

    you can get charts a few minuets delayed

    ReplyDelete
  74. mr m
    you should have grabed a put on that 83 lol

    ReplyDelete
  75. dumb m
    good artical .. thanks

    ReplyDelete
  76. S&P futures down only 6%. If I were trading futures, I would be shorting that baby right now.

    ReplyDelete
  77. Paladin down 13%. Uranium is taking a beating.

    ReplyDelete
  78. Here is a 24 hour USD chart:
    http://www.goldseek.com/quotes/charts/usdollar/usdollarindex24hour.php

    ReplyDelete
  79. Decision Point
    Carl Swelin

    http://blogs.decisionpoint.com/chart_spotlight/2011/03/a-bug-in-search-of-a-windshield.html

    ReplyDelete
  80. Here's NHK's TV online in English, much more current than CNN etc.

    http://www3.nhk.or.jp/nhkworld/

    Gary, nice post. Good eyes on the lower low in $SPX. Curious here on $GOLD, apart from cycles, the chart looks a bit like the $SPX - compare $GOLD's low on 3/3 at 1410.20 with 3/10 at 1403.10? Is that a lower low on 3/10? And does it matter? I know you say the charts are busted and all, so am just curious. Thanks.

    ReplyDelete
  81. The US$ spike was on fxstreet website,
    I'm pretty sure it was just a glitch.
    In other news, looks like Bahrain's having protests and whatnot today.

    ReplyDelete
  82. K,
    Now you know why I don't trade based on chart patterns. If I did that I would have missed the bottom in July and January and I would be thinking about selling when I should be buying.

    ReplyDelete
  83. For those interested, here are some sites to track relevant overnight action:

    http://www.kitco.com/kitco-gold-index.html
    http://www.marketwatch.com/investing/index/DXY
    http://finviz.com/futures.ashx

    Be aware that different closing times and such make the change # off a bit from close to close, but these should give you a good idea of what's happening

    ReplyDelete
  84. TZ,

    re:last week. According to Harvey Organ, the big boys were looking to drive silver further down on Friday to the lower 30's but were short circuted by the Japan earthquake.

    http://harveyorgan.blogspot.com/2011/03/japan-in-danger-of-nuclear-meltdownraid.html

    ReplyDelete
  85. To throw a monkey wrench in things...since this is a blog...this is a train of thought, not my thoughts.

    Once the dollar goes nose down, and the point comes to where the FED can no longer keep up with QE...which is the point....QE is not sustainable, it eventually results in hyper-inflation if not stopped.

    But I wonder if the result will not result in the end of QE, but rather the pause in US QE...ie the USD goes up, while other currencies continue the insane policies of the fed.

    This really isn't a complete thought. But the QEJ coming out of Japan has some thoughts flowing. A USD collapse can be paused if the world decides to proceed with stronger QE policies in their local currencies...please remember the word pause or delay, not stop.

    ReplyDelete
  86. Thanks DG and all on the sites.

    ReplyDelete
  87. keys

    your saying that they are going to "take turns"

    ReplyDelete
  88. keys
    hmmm so if they did take turns, that would be the 0W0 powers with a plan . ok, ill be laying in bed all night on that one.


    ya, that has my head spinning

    ok focuse, cycle, cycle, make money, make money

    ReplyDelete
  89. Folks there really isn't some mysterious group of guys in some back room deciding to "take down" silver.

    These are just normal profit taking events. They happen like clock work and are driven by normal human emotions and minor regression to the mean forces.

    Hell I've been telling you for a couple of years now when to expect them. Would I be able to do that if this was driven by some evil "cartel"?

    If you can get rid of this ridiculous need to believe in a higher power controlling the markets you will free yourself to make a lot more money in this business.

    ReplyDelete
  90. Gary,

    We now have a swing low, correct?

    That being said should we load up at the open with whatever we've been waiting to?

    ReplyDelete
  91. New York,
    I believe we do have a swing low in place.

    Remember nothing is 100% so only "load up" with as much as you can realistically hold on to if you are wrong and the dollar makes another spurt higher and gold one more push lower.

    If you are the kind of person that will freak out if you don't time the entry perfectly then keep your position size small enough that you won't sell into weakness.

    If you believe in the bull market and draw downs don't bother you because you trust the bull will correct any timing mistake then the swing, even if it doesn't mark the exact bottom, will be "close enough" so go ahead and take a full position.

    ReplyDelete
  92. Gary,
    Its been pretty well documented how the silver /gold markets have been manipulated for years .
    You would have to be blind not to see the manipulation that goes on in these markets.

    ReplyDelete
  93. gary

    i dont think they are after silver. i do believe there is a push for world domination. i dont think its 10 guys in a room. i think its a false philosophy that has caught on.
    shoot how many people on the street that are for being green. how the heck can ethonol even be in the market when its so counter productive. its all false philosophys

    or how many trading philosopys are there. gary, you even said elliote wave has lost more money for people, there is a bad trading philosophys.

    ReplyDelete
  94. Robert,
    That is complete and utter nonsense.

    If the market was manipulated gold would not be at $1400.

    If the market was manipulated shorts would not cover when gold drops back to the 200 DMA.

    If the market was manipulated cycles would not work.

    If the market was manipulated then gold is already much higher today than it would have been under normal market conditions. Anything that forces price below where the market would normally take it will increase demand resulting in much higher prices much faster than what would occur normally.

    People you've got to quit reading the GATA crap. It's nothing more than a marketing scam and every bit as bad as Prechters end of the world, shock and awe, marketing tactics.

    ReplyDelete
  95. Gary, gotcha. I'm riding this bull. Maybe I'll split my position into two piles and load up at open and hold the second half for a potential draw back...

    Thanks.

    Robert, I think the point is that it doesn't really matter. By talking about the conspiracy, however true or untrue it is, you are taking your focus off of the more important task at hand right now - making money in this secular bull market.

    The market is just to big a beast.

    ReplyDelete
  96. and it all may just possibly be of biblical proportions =)

    gary if pm's are manipulated then you are the master and im glad we are on your side. go tear them up

    ReplyDelete
  97. Gary ,

    If the prices were not manipulated just think how much higher the gold and silver price would .I agree with you on most things, but sorry these markets are manipulated big time by the bullion banks ( JPM ) and the Fed.GATA has done great work in exposing this.

    ReplyDelete
  98. im laughing so hard im crying. i had not seen garys comment on the preachers. then i wrote the biblical thing ... TO FUNNY

    ReplyDelete
  99. There are market makers in all markets.

    ReplyDelete
  100. If you absolutely have to believe that for some reason the Fed gives a damn about the price of a shiny yellow metal and is successfully forcing price down then what in the hell are you doing investing in it?

    That makes absolutely no sense at all.

    ReplyDelete
  101. With the BOJ pumping 85 billion into the Japanese banking system, seems like that will drive the Yen down and the Dollar up, no?

    Dollar is up strongly against the Yen as I write this. Gold and Silver made highs earlier this evening, but are now heading lower Silver is below Friday's closing price.

    ReplyDelete
  102. The only thing GATA has done is expose what a group of idiots they are.

    The debate between Murphy and Christensen several months back was just hilarious. Murphy came across as a complete fool. He couldn't back up any of his points with facts and when asked to his response was always "that's our stance and we're sticking to it".

    Like I said, nothing more than a marketing scheme to draw in novice investors that don't know any better.

    ReplyDelete
  103. Hi Gary,

    I asked a question on your previos post Deja Vu but I think you missed it...

    If the stock market has just topped and you expect the 4 year cycle low in the next 18 months, would that not make the cycle a right translated one as the last low was Mar 2009?

    If so, why would you expect the market to make new marginal lows in late 2012?

    ReplyDelete
  104. PC,
    If the cycle has bottomed then any weakness will be bought. If not then gold will be on day 30 and it's close enough to buy anyway especially if gold makes a lower low.

    ReplyDelete
  105. Gary,

    Have you ever applied cycle analysis to individual stocks (or sector ETFs)? Or do you just use cycle analysis for stocks in general with an index like the S&P 500?

    Some of us who do this for a living need to play in stock-land all the time regardless of whether there's an cycle violation, etc. I was wondering if there was a more efficient way to do this than simply going to the defensive sectors.

    I've also noticed the EEM seems to have successfully test its 200 DMA. There aren't any cycle violations on that instrument. Is this something you keep tabs on or does watching too many of these indices/ETFs cause "indicator fatigue"?

    BTW I thought you used to have Judo as a hobby on your blogger profile. Did you remove that? What gives!?

    ReplyDelete
  106. BOJ doing its own QE and SB comment brings this to mind, something I have been thinking about since the MMT discussions with TimAndJean (I'm not sure I have that name correct, but you know who I mean):

    I believe what we starting to see is a race to the bottom by all Central Banks and their fiat currencies. T&J said that the dollar was not going to head into hyperinflation unless all the world's currencies go down at the same time. I am now beginning to believe that that is entirely possible. We will continue to see the Dollar go up and down AGAINST OTHER CURRENCIES, while it continues to go ONLY DOWN against commodities and other assets. And the other fiat currencies worldwide will do the same thing.

    How long until they all go to zero measured against assets, I don't know. But I am beginning to suspect it will more likely be sooner rather than later, like in a few years, not a few decades.

    ReplyDelete
  107. Ra,
    I answered this somewhere else but I'll do it again. First off just because a cycle is right or left translated doesn't guarantee it will hold above or drop below the prior cycle low.

    The last 4 year cycle in the stock market was extremely right translated yet it still moved below the 02 bottom.

    But for reference I always calculate right and left translated from an average cycle length not an expected one.

    An average cycle length is 4 years so a cycle that tops in less than two (like this one possibly has) would be left translated.

    ReplyDelete
  108. Thanks for your patience Gary - looks like I must have missed your comment on that.

    As always, much appreciated :-)

    ReplyDelete
  109. Adam,
    The sector has to be large enough to encompass a large investor base for cycles to work. Individual stocks are way too small. Cycles mostly just work on the broad stock indexes, gold, oil and the dollar.

    Hmm I don't remember ever putting Judo in my bio. I was a national Judo champion when I was 14 but I gave that sport up when I tore my ACL ligament.

    ReplyDelete
  110. More Shtf for japan. another tsunami and explosion.

    http://www.zerohedge.com/article/nhk-reports-explosion-white-smoke-rising-fukushima-reactor-3

    ReplyDelete
  111. Ah ok. I've been doing Brazilian Jiu-Jitsu for 8 years on top of my wrestling background. You ever consider hanging up the rock-climbing shoes & giving BJJ a shot? :o) Maybe we'll show up at Slopefest and wear "Security" t-shirts.

    ReplyDelete
  112. Gary,

    I'm looking at silver and seeing that the consolidation from November to January could be the half-way mark of a larger T-1 move. If it is such a formation, I'm measuring the final top to be about 38 or 39 dollars. Is that what you see? Thanks.

    ReplyDelete
  113. Gary,
    Why are you so sure about dollar breaking lower? Yes, it is on brink of abyss - but still holding at the lower bound ~76.50 of ascending triangle:

    http://www.flickr.com/photos/53576901@N06/5507772027/

    In a normal market situation I would agree with you, but dollar is heavily manipulated now, and Fed has installed swap lines between all major central banks...

    ReplyDelete
  114. I don't put much faith in patterns of any type when it comes to silver. the market is way too thin and volatile.

    Silver will top when gold does.

    ReplyDelete
  115. Russian,
    Unless the Fed can print Euros the only thing Ben can do is make the dollar go down.

    Well unless he reverses course and decides to unload a couple trillion in treasuries on the market. Anyone want to make bets on that happening?

    ReplyDelete
  116. Sorry for the late reply. I get my quotes from my broker (live streamer), but if you like, there is a free streaming quotes site, on both gold and silver from netdania.

    ReplyDelete
  117. still think we have another high on SPX

    ReplyDelete
  118. In November, the S&P had a 14-day bull flag that it broke out of on the 15th day. The flag was limited on the downside by the 50dma. Now the S&P 500 has had another 14-day bull (?) flag, which also has been limited on the downside by the 50dma. If this bull flag resolves like the other one, look for a big up day Monday in the index. Right now the SP futures are in an ascending right triangle. If that breaks to the upside, shorts will be forced to cover. The huge S&P futures spike earlier in the evening should have been enough of a foreshadowing. This also recalls the London terrorist bombing where the futures were down 2% or so overnight and rallied to finish up big by the 4pm close.

    ReplyDelete
  119. Granted, I am not a raging bull as my article history has shown, and we are probably due for a healthy pullback, but companies today are much more valuable than they were during the dotcom fraud. It's easy to look at the price of the market and think we are overvalued again, but when you look at the earning power of the companies in the Dow for example, they are roughly 200% more valuable today than they were at the previous peak. The problem with stocks the past 10 years is that companies have not performed, it's that the bubble drove prices too high in relation to the underlying business.

    Take a look at the chart showing the comparison of the earnings power of stocks in the Dow today compared to the earning power of stocks in 1999:

    http://seekingalpha.com/article/255201-the-case-for-a-higher-dow

    ReplyDelete
  120. For those not inclined to read the whole article, here is the conclusion:

    "The Dow closed on Dec 31, 1999 at 11497, and ended 2010 sitting at 11577. It seems to be a lost 11 years for investors, which, if you look at the price, is true. Buying the 25 stocks we looked at using the 2010 year end Dow price of 11577, is the equivalent of buying the Dow in 1999 at 4277. I would guess you would do that if you could go back in time and get the Dow at 4277. Another way to view it, if these stocks were to return to a free cash flow yield like that of 1999 around 2.66%, then the Dow today would have to rise 168% from the year end 2010 number of 11577. That puts the Dow at 31120. I am not saying we get there, but want you to just see the comparison apples to apples. Bottom line, based on 1999 valuations, today's Dow would need to trade at 31120 to be a comparable valuation bubble. Now you can also understand the absurdity of the prices people were paying for stocks back in 1999.

    Today, you get over twice the cash flow for your money from these 25 Dow stocks, even though the price has not changed.

    This analysis causes the "caution bear" in me to stop and wonder why I keep waiting for the next crash. If nothing else, the case is there that these stocks could easily increase their dividend payout ratios to a level that is higher than the current yield on the 10 year treasury, and still have plenty of cash flow left over to expand the business, pay down debt, or buy back shares."

    ReplyDelete
  121. Comparing the dotcom fraud to now
    Yes valuable stuff

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  122. Gary

    I'm sure all of these funds know what is coming
    Why don't they protect the investor at all

    ReplyDelete
  123. i'd say: let the games begin

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  124. Why do I get the feeling that this is going to be a very frustrating week of rangebound volatility until the markets figure out that natural disasters do not have any effect on PM fundamentals, or at the very least, should be be PM positive since Japan's response is to print more money.

    ReplyDelete
  125. No concerns, Turning Japanese. So we wait a few more weeks (probably not even that long) before we resume our climb?

    Use dips to buy 'em!

    ReplyDelete
  126. SB,

    Would buy more on dips, but I am already all in, and highly leveraged to boot. I'd really like to get to $40+ as quickly as possible to give me a little breathing room. Shouldn't be this leveraged, but you only live once and its money I can live without if this C-wave stuff doesn't work out.

    ReplyDelete
  127. Gary,

    Re: manipulation

    Agree that there is probably no larger macro-manipulation going on in the PM's, but there are surely opportunistic MOMO algo's from the banks and larger hedge funds out there gunning for stops and that in itself is manipulation, is it not?

    Re: QE3

    Are you saying no QE3 ever, or just not back-to-back with QE2? I think it might be delayed, but I am almost certain Ben will bring QE3 after stocks get pummeled on the dollar rally. Also, the government cannot currently even fund itself month-to-month without QE, can it?

    ReplyDelete
  128. I've always said there is short term manipulation. That happens in all markets.

    But there is no long term successful manipulation holding back the precious metals. I doubt it is even being attempted but if it is then it is the reason gold is above $1400 and not at $1000.

    In a true bull market, with real demand, anything that forces price below where the market would naturally take it doesn't hold price back like the conspiracy theorists would like to believe. It actually accelerates price appreciation because it increases demand.

    So if the kooks over at GATA are right, and there is long term manipulation being attempted then gold is already much higher now than it would have been naturally.

    So instead of trying to sue JPM they should be thanking them for running the price up so far and so fast.

    Regarding QE3; no it won't follow on the heels of QE2 but you can bet your bottom dollar when we hit the next 4 year cycle low Ben will have learned nothing and he will run QE3, 4 & 5 in another failed attempt to defeat the secular bear forces.

    And he will get the same result. A brief period of gains followed by another even larger collapse.

    ReplyDelete
  129. Thanks, Gary.

    Also, don't take this as a challenge to your record, but without going back and searching through all the archives to find the answer, can you recap your calls during the last few C-wave tops, e.g. were you early/late, prices of your call and eventual top.

    I'm with you regardless, just wondering.

    ReplyDelete
  130. I'm almost always early. I exited the last C-wave at about $970 and it topped at $1025.

    ReplyDelete
  131. Thanks again, Gary.

    I know more than few guys that would come back some belligerent "Go f yourself" type response, or just dodge the question altogether.

    ReplyDelete
  132. rather be early than late... :)

    ReplyDelete
  133. Hi Gary,

    Can stop be moved up to $1403 now?

    Thanks

    ReplyDelete
  134. Not until I'm convinced we've seen the daily cycle low.

    Once gold makes a new high I will be convinced.

    ReplyDelete
  135. This comment has been removed by the author.

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  136. Anyone interested in uranium? The miners and the material, at least via Uranium Participation Corp, have been hammered big time this morning, though bouncing back.

    It's horrendous what's going on in Japan but no matter what the outcome there, nuclear power isn't going anywhere and is poised for a massive ramp-up with China leading the way.

    If it remains oversold due to events in Japan, uranium might be a sector to keep an eye on for capital allocation once the precious metals C-wave runs its course over the next month or two.

    ReplyDelete
  137. Gary, we have a swing low in gold. This indicates the daily cycle has bottomed, no?

    Should that not mean the stop can be moved up?

    Just trying to understand your logic. Thanks.

    ReplyDelete
  138. Wow! The Uranium space is getting absolutely clobbered! Most of the gains from the second half of 2011 evaporated on the Japan news. This shows what can happen overnight, when perception changes about a sector. Too early to get back into these as the news out of Japan might still worsen in respect to nuclear. I hope they won't!!!

    ReplyDelete
  139. I agree Basil, it's probably early to get in to uranium as the news out of Japan is liable to get worse before it gets better. But I'd definitely keep an eye on this sector as there are huge growth plans here in Asia for nuclear power that won't be deterred by whatever the outcome in Japan.

    ReplyDelete
  140. Way too early to look at Uraniums. The situation is building up to be a huge disaster...and we all know the governments will lie to cover their butts and to not induce panic. Think about the gulf oil spill and the initial spin coming out of that one.

    I'm thinking about coal & solar as a counter play here.

    ReplyDelete
  141. A swing isn't a guarantee of a cycle low. This late in the cycle it probably does mark the low but I want to see enough of a rally first before I call the bottom.

    A new low on the dollar would also confirm golds cycle low.

    ReplyDelete
  142. The contrarian play here is to buy Japan.

    Japanese stocks have just been through a 20-year bear market. Valuations are the lowest in the world. There is probably more weakness to come, because we are entering the next leg of the global bear market, but at the bottom of that cycle Japanese companies will be absurdly cheap.

    ReplyDelete
  143. Here's a good article about Japan and its dysfunctional culture. 70% of Japanese women are apparently unmarried and the country is turning into an old folks home. Regulatory democracy is destroying them.

    http://www.thedailybell.com/1866/Japan-The-Tipping-Point.html

    ReplyDelete
  144. The metals looking lethargic, it can only be the Fed meeting tomorrow that is causing that. If they pull back further, I will add to leverage...since that would mean that the Fed will say something PM bullish.

    ReplyDelete
  145. When we reach the bottom of our secular bear market, there will be a lot of articles about our dysfunctional culture too. At the top all the articles are glowing. When gold was at $275 all the articles and analysts were calling for $50 gold.

    Japan's hordes of single women (the horror!) have nothing to do with Toyota or Panasonic's ability to make money.

    ReplyDelete
  146. I'm not convinced we've seen bottom in pm's yet, but adding a bit to miners here.

    ReplyDelete
  147. Thanks Shalom, I am thinking the same thing myself. Might be getting a second bite of the apple on SLW.

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  148. By "a bit", I mean 5% of total portfolio.

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  149. Where is everybody around here today? I hope they're just taking an extended weekend, and not just watching their accounts tick lower! :)

    ReplyDelete
  150. I'm here! Just biding my time until silver hits $47. 12X leverage should give me a nice profit :P

    ReplyDelete
  151. debating on adding some more silver or SLW? Haven't decided yet.

    ReplyDelete
  152. "and not just watching their accounts tick lower"

    The beauty of being in SLV :)

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  153. HYG just showed up on my buy screen. It's a short term screen, but the idea is to get in, get a nice 2-3% pop, and then set a break-even stop. Sometimes you get out even and sometimes they just keep going (and o.k.---fair enough---sometimes it just doesn't work and you get out with a small loss).

    ReplyDelete
  154. SB, There was another Tim&Jean post, and everybody went in to hiding. Figure Hammy & MLMT can't be far behind.

    ReplyDelete
  155. SB,

    Just a slow day with silver being rangebound. Although the stock market is down hard, and miners are taking a beating, but silver and gold are range-bound. Usually when the stock market is down, silver is down as well, but I don't remember the last time when silver held up with the stock market down by a lot. That must be a sign of srength for silver and gold.

    Maybe the money is flowing from stocks into gold and silver just like Gary said it would.

    ReplyDelete
  156. I'm not sure today's action shows strength for the PM's. I don't like that the metals are up and the miners are getting hit. Hopefully today's behavior is just a wiggle.

    ReplyDelete
  157. "The contrarian play here is to buy Japan."

    That is correct David - and small cap at that.

    DFJ is down 10% today. The average company in the ETF trades at a valuation of $3 in sales for every $1 in market cap and at 75 cents on the dollar in book value. That is ridiculously cheap.

    If you could by every company whole in the ETF, the cashflow you would generate each and every year stands at a 34% return. Compare that to the Dow which stands a little over 7%.

    Crazy good numbers for those who do not have a weak heart!

    ReplyDelete
  158. " DG said...
    HYG just showed up on my buy screen."

    Does not that also mean SPY is a buy here?

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  159. Me, I'm just watching the dollar fall apart......

    ReplyDelete
  160. oa92: no! That's a totally separate thing. My SPX buys are done completely differently and have been backtested for 30 years. My individual ETF buys are very good, but not as good. I have no idea where the SPX is going to go over the next few days. For me, a lot of my work is about entry points, getting a pop in your direction, and then setting a break-even stop. Buy SPX at yourt won risk here!

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  161. Dollar steadily heading lower. Keep an eye on it.

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  162. 36 seems like a magnet for silver, both upside and downside moves seems to gyrate back to this level.
    Consolidation.

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  163. DG,

    On a day like today when the stock market is down 1%, the steady hold in the metals seems like strength to me. The miners or course will always get dragged down by the stock market. So if metals are decoupling from the stock market, that's a good sign. That is money leaking from the stock market into the metals. But my guess is as good as anyone else's.

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  164. Hi All, thanks for your comments and kind wishes late last week. My wife had a beautiful baby girl on Saturday morning. I was by her side for all 20+ hours of labor and delivery.

    Other than the joy of my first child, watching the birth process is just unreal in its intensity and animal nature. Wow, what an experience.

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  165. Folks everyone is watching the wrong thing again.

    The dollar is the key. It's what's driving this final C-wave surge. It's collapsing despite everything that's happened in the world.

    Long after everyone has moved on from the Japan incident the dollar will still be collapsing and investors will still need to protect their purchasing power from the three year cycle low.

    The best way to do that will be to hold gold and silver.

    Ignore the daily wiggles, especially on a day like today when emotions are in control of the market.

    Once emotions cool miners will get back to the business of following the metals higher.

    Remember those who can keep their head about them when everyone else is losing their cool are the people that stand to make fortunes.

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  166. The dollar is already very close to confirming a failed daily cycle.

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  167. romeo,

    know what you mean.
    had the same experience last year.
    then you realise that beyond the facade manners, etiquette,.. we are still beasts.
    one of the most beautiful things ever witnessed.
    btw, what's the name?

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  168. gary,

    what number are we looking for to determine if there is a failed daily cycle in the dollar? 76.1,75.63 or some other number?

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  169. Someone posted a link late lst afternoon that I can't find today, it was netdata? netsomething? for live streaming quotes of currencies and pms.
    I would appreciate it again please as I didn't bookmark it.
    As with the majority of you, patiently watching and waiting....

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  170. EUR/USD just recoiled from a weak attempt 1.40. Not very helpful for PMs today. Yen doing its part though.

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  171. Mr. Miyagi:

    http://www.netdania.com/Products/live-streaming-currency-rates-foreign-exchange/real-time-quotes/QuoteList.aspx

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  172. Gary,

    tell me otherwise, but I don't think PM stocks stand a chance to go up in the face of a weakening stock market; that is even despite rising silver and gold prices. I think being in PM stocks is the wrong move. Period.

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  173. Watching my Uranium stocks get blasted. Was so close to selling them for a loss on Friday.

    Surprised nobody made the nuclear connection last week (at least I didn't hear about it). I'm sure some did - seems so obvious in hindsight.

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  174. FNVIZ Futures screen is nice as well.

    http://finviz.com/futures.ashx

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  175. I hate that I was right about this rangebound BS today. Not like I am going to get shaken out even for a couple dollars in silver, but still frustrating. Would like to just not look at the charts for a month, but that's an impossibility with a drug like PM trading.

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  176. Basil,

    That question has been answered a thousand times.

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  177. I'm not concerned about metal vs miners. I like that miners own what's in the ground, and at some point the should outperform SLV, although it's not guaranteed.

    Either is fine if we're right about this C-wave.

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  178. http://finviz.com/futures.ashx

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  179. gpl is one high beta name, up & down like yo-yo ..

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  180. Basil,

    I would tend to agree. When the herd catch on and start to chase, they now have very easy to understand instruments like SLV and GLD, and will probably rather just chase the metal (albeit paper metal) than the fickle, underperforming miners. I mean, were GLD and SLV even around the last C-wave, or at least that well known?

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  181. gary is right,
    watch the dollar.
    I am buying back slw today.

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  182. sentiment on this board is becoming very negative for pm stocks in spite of Gary's message. I think we must be real close to a bottom and a skyrocket to new highs. I just got a quote on UUP and the low for the past 52 weeks was 21.9, we are now at 21.93 and tomorrow could be the day for a new 52 weeks low. hold on the faith for this week, please.

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  183. basil... ultimately we are all responsible for our own trades. It's always your decision to trade what you want.

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  184. If you don't think the miners can rise in the face of a falling stock market then you probably shouldn't look at the Hui from late 2000 to march 2003 or Nov. 08 to March 09.

    You are again making the mistake of extrapolating the past into the future. Just because the miners are getting dragged down today doesn't mean they won't rally violently once the selling pressure eases in the stock market.

    Ultimately miners always follow gold and silver.

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  185. To answer my own question, looks like both SLV and GLD were trading during the last C-wave.

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  186. Gary,
    do you know what is the historical ratio for gold/silver?

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  187. Sorry Gary, but I still say you contradict yourself . . . a lot. You just said . . "You are again making the mistake of extrapolating the past into the future. Just because the miners are getting dragged down today doesn't mean they won't rally violently once the selling pressure eases in the stock market."

    Well, you say get out of the market (yeah I know, not miners/metals) and yet above you said selling pressure will ease. I don't think you can have it both ways. Spin however you like.

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  188. marinho,

    I am not negative about PM stocks, I just think the metals will probably outperform this time around and am positioned accordingly in my highly leveraged trading accounts. That said, I also have massive positions (over 75% of my combined investments) in PMs in my retirement accounts where I am limited to mutual funds.

    However, Gary has the real experience here, so listen to him, not me.

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  189. Nothing goes straight down. There will be bounces in the stock market as this progresses. During those rebounds miners will rally violently. They will rally even if stocks are down mildly.

    Today we just have emotional selling.

    But hey if you don't want to own miners or metals then don't.

    For me personally I''m going to stay the course, especially since I've already made so much money with this strategy and I have a reasonable stop to prevent me from losing money. As a matter of fact we are close to moving the stop up to where we will not only not lose money but will lock in big gains even if the stop is hit.

    If you know a better way then I'm all ears.

    ReplyDelete

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