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Wednesday, April 20, 2011

DOLLAR CYCLE

For many months now I've been warning we were going to have a dollar crisis and that dollar crisis would drive the final leg up in gold's ongoing two year C-wave advance. We are now on the verge of the panic selling stage of this three year cycle.

On Monday the dollar briefly rallied on the S&P downgrade of US debt (who knew?). That had the potential to mark the bottom of the current dollar cycle. But by this morning the dollar has given back all of those gains and then some.

I've noted in the premium report that the dollar's daily cycle often turns on the employment report at the beginning of each month. The previous cycle bottomed one day after the March report and the current daily cycle topped on the April report.

If this pattern continues then we can probably expect the current dollar cycle to stretch for another 2 1/2 weeks into the May report (give or take a day or two either way).

I seriously doubt gold is going to suffer any meaningful correction as long as the dollar is in free fall, so I expect we are going to see the gold cycle stretch also.


If the dollar does continue lower into the May employment report before putting in the cycle low it would then be set up for a more normal duration decline into the final three year cycle low due on or around the June report.

However with the dollar losing it's chance to rally here gold and especially silver are now at risk of entering a runaway rally.

Details in last nights subscriber report.

1,001 comments:

  1. Will there be a chance to add to positions?

    ReplyDelete
  2. Gary,

    If one's financial models indicated a likelihood DXY will bottom around 70, what is the way to compute an approximate and equivalent zone for gold and silver?

    Silver went up 5 or more bucks from much less than 1 point in the DXY. Are we potentially going to see $75 silver?

    ReplyDelete
  3. Thanks for the update Gary. This one has kept you hopping!

    ReplyDelete
  4. Gary

    With your chart pointing to the 3 yr low in the dollar now arriving in June, I am imagining metals would run until then...However...if they do

    Silver cant just go to $50, right? Its been going up .75/day at times.

    I would imagine in a run away move, It could hit $50 in 2 wks.

    Will you attempt to adjust your metals targets , since we were originally unloading at $50 silver , or just plan on selling near the 3 yr dollar low?

    ReplyDelete
  5. does anyone know what the likelihood of a May sell-off would do to our PM and miner investments? Is it probable right now? Is there any reason we would have one.. looking back at 2010 of May silver prices AGQ went down from 66-56.. a 15% drop!

    ReplyDelete
  6. niven,

    The dollar rallied from 85 and change to 88 plus during the time period.

    Now the dollar is collapsing

    ReplyDelete
  7. Since Gary is expecting a dollar to bottom in May, that means PMs will top then and move into a daily cycle low that we're expecting. Could be a hard decline to wash out the sentiment before the final move up.

    ReplyDelete
  8. Gary,

    Are you still waiting for another day or two to see if we will get a decline, or is that off the table now?

    ReplyDelete
  9. Elaine,
    No the dollar has clearly told me that it didn't bottom. Until it does a correction in gold is unlikely.

    Since the S&P downgrade couldn't force a bottom the next trigger should be the May employment report.

    ReplyDelete
  10. Beksachi,

    Following on from our exchange the other day, I cashed in my PSLV position yesterday. With it up 100% since I bought it in November and with a dizzying 25% premium to NAV, I figured it was a good spot to take profits.

    With silver powering on there's more gas in the tank for PSLV, but I'd rather be in another silver vehicle than one trading at such a high premium, which could deflate at any moment once Sprott decides to announce another share issuance.

    ReplyDelete
  11. Gary,

    Thank you. It's strange to see GDXJ and SLW lag while AGQ just powers on. I have some cash still, would it be best to just put it into AGQ for now?

    ReplyDelete
  12. With the Snp roaring up this AM, and both PMs higher, miners should be up strong today(for those of you playing the miners).
    Honestly, I could never do that, I just have one lottery play in a junior which I have held for a while (thats my only equity play).
    Alex, Jayhawk, SB, and others that do...good luck! I'm seeing green for you guys today :)

    ReplyDelete
  13. Aaron,

    As I mentioned yesterday, miners were breaking out. That was my signal. And SLW will hold $40. It was accumulated all day long if you look at the volume. Every deep has been bought. But I have a much larger allocation in AGQ due to the obvious reasons.

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  14. AARON

    Nothing like a good pep talk to boost the early morning spirits !-thank you!

    May your baskets overflow too!

    (and if the miners go up on light volume and continue to lag, I may jump into...

    SD, RAX , or a few others I've been eyeballing, because I stayed in my miners , when I should've been riding SIFY and REDF! :)

    ReplyDelete
  15. Aaron, I hold a number of miner positions, and I bought IAG and GG calls yesterday. AEM had a beautiful reversal, and I beleive the large cap miners will start punishing the shorts very soon.

    ReplyDelete
  16. Hi Alex
    Goro is that a cup and handle I see before me ?
    I,m tempted again?.
    Only kept exk of my junior pin plays 60 % and thanks

    ReplyDelete
  17. it would surprise me if HUI miners would go past 620 and not get sold there.

    I'm selling some at 620 no matter what.

    mr market is so emotional.. it's a global up day .. commodity futures are all green practically. USD sunk by a whole percent!

    in my opinion gold isn't runaway unless it closes this week above 1488

    we still need some more buyers in this market, 1500 is a pretty significant no.. are you going to be one stepping up? :)

    ReplyDelete
  18. I encourage everyone to read turd's report last night. I follow the Comex, and I agree with his assessment of a few days down. The Comex is closed on Friday and the LME is closed on Monday. Thin markets with options expiring next week could encourage speculators to take profits and/or roll positions.

    aligns with a daily cycle and with The Docs view. Last chance to load up for the June Expiry for gold.

    ReplyDelete
  19. FATBOY

    GORO does look tempting, if it breaks to all time highs, it has no overhead resistance, and thats a good thing :)

    little sloppy on the handle, not textbook, but it did recover nicely with some good buying. looks pretty good.

    ReplyDelete
  20. Bob from Hawaii

    Did you mean to leave a link to Turds report?

    Also, I think you may be right about some of the Large cap miners making a move...some look very good and I noticed your post yesterday on AEM ( I think that was you)

    ReplyDelete
  21. Bob,

    I agreed with Turd as well but saw it a little differently.

    We'll see a run up today and tomorrow with a pullback over the long weekend when markets are thin.

    I read it as sell tomorrow afternoon, not sell now.

    That being said, if we get a big enough run up today and tomorrow we can just ride out the "dip."

    ReplyDelete
  22. A PORTFOLIO CHANGE HAS BEEN POSTED TO THE PREMIUM WEBSITE

    ReplyDelete
  23. Elaine,
    It's pretty hard to outperform AGQ.

    ReplyDelete
  24. Alex, that was me. I own AEM calls and when I saw that candle I jumped on GG and IAG before they started moving.

    Hot Rod, I didn't mean sell today, but that we will have a dip before we rocket higher.

    ReplyDelete
  25. Gary,
    The November, 2009 low for the dollar was 74.23 (stockcharts.com). I don't think that has been broken yet. We are testing it. Below that there is not much support until the 71 area.

    Everyone on this board seems to be jumping in and I suspect that reflects the general market - chasing. It is making me a bit uncomfortable, especially since I too lightened up last week anticipating a daily cycle correction and am tempted to buy more SLV calls and get back into SIL.

    So my question is: shouldn't we be waiting until 74.23 is broken to the downside before assuming the dollar is crashing? Couldn't this develop into a double bottom and your original thesis of last week will play out (even taking into account the retracement of Monday's bounce and the unemployment report in 2 weeks)?

    ReplyDelete
  26. Damn, I really wish that us premium subscribers had a private Blog to talk about the content.

    Out of respect for Gary, I'll hold off.

    Happy trading this morning on the open.

    BTW - I read that "rookies buy the open" and "professionals buy the close"

    Is this true in all of your opinion? In the metals as of late, you wanted to buy the open or the dip in the early am and then sell the close (or buy more!).

    ReplyDelete
  27. Allenupl,

    No one has a crystal ball.

    I agree with Gary that there have been too many events the past month to potentially push the dollar into an uptrend but in every case it's reversed almost immediately.

    That being said, don't f--- with the FED. If they really wanted to, they could pull some shenanigans. I'm not betting on that right now, too much momentum.

    Going into May options expiration, maybe a lot of traders want the Blythe premium. ;)

    ReplyDelete
  28. Allen,
    It's so late in the cycle even if one miss times the trade and we do get the dollar bounce it will only last a few days and then gold will get back to making new highs.

    So is it really worth missing 2 and a half weeks of gains because you might get caught in a 3-6 day correction that will quickly reverse back up anyway.

    I will never give up 20% because I might have to weather 2 or 3% first.

    ReplyDelete
  29. What a ride! Kinda regret lightening on the way up.

    ReplyDelete
  30. RA, I agree. A newbie error for me
    but I look to add back miners I lightened up on last Friday. Let the party begin.... Always a big thank you to Gary!

    ReplyDelete
  31. I am getting out of EUO this morning with the dollar failing. Got a large pop, so set a break-even stop. Will lose a little due to large gap down this morning. TBT working and should continue if dollar keeps dropping.

    ReplyDelete
  32. Gary,
    So, ride until Silver hits 50? Do you have an alternative exit strategy?

    ReplyDelete
  33. Politics. total malarky.
    Look at this quote, from a senior KGB assbite who in the last Russian government promoted insane economic arrangements.

    He has a right to see the US as adjusting. But he's frankly too stupid to understand this devaluation of the USD is INTENTIONAL. Well, he's never had a reason to be honestly a liberal communist; hence, he's still an apperatchik.

    "close window Close

    * APRIL 20, 2011, 8:23 A.M. ET

    Putin Calls US Monetary Policy "Hooliganism"

    * Article

    * Email
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    * smaller Text larger

    MOSCOW (Dow Jones)--Russian Prime Minister Vladimir Putin Wednesday criticized U.S. monetary policy, calling it "hooliganism."

    "We see that everything is not so good for our friends in the States," Putin told lawmakers in the lower house of parliament. "Look at their trade balance, their debt, and budget. They turn on the printing press and flood the world with dollars," he said.

    "We don't have the luxury for such hooliganism," he added. "

    ReplyDelete
  34. Gary, don't be doing this at the Matterhorn.

    http://www.youtube.com/watch?v=G-dPjDYVKUY&feature=player_embedded

    ReplyDelete
  35. What we closed on 04/18/2001 was not a Half cycle, but maybe a Monthly (Gary calls it "daily") cycle.

    http://www.ellipsetrading.com/?p=239

    ReplyDelete
  36. Gary,

    Based on the premium post portfolio change would it be wiser to deploy dry powder to SIL as opposed to chasing AGQ at this level?

    ReplyDelete
  37. DG...

    Do you have any plans for the miners or SLW today? Are you still eyeing SLW?

    ReplyDelete
  38. AGQ is up 60 points in 5 days, I just can't jump back in. And if this corrects it will be more than 2 to 3 %. I think

    ReplyDelete
  39. Haggerty, I agree! Just looking at the miners.

    ReplyDelete
  40. HOTROD

    my opinion/personal experience on your question (sorry late, I walked away)

    I have bought the open, BUT I usually wait until after 10 a.m., because gap opens often get closed (not always though)

    It often depends on market conditions. Some Gap opens do not close...but I'd wait and watch it first.

    ReplyDelete
  41. New York,
    Only if you think miners will outperform AGQ going forward.

    (I doubt it)

    ReplyDelete
  42. It would be nice if this is our blowoff top?

    ReplyDelete
  43. Couple weeks ago people took issue with me when I said I was going back to 150% leverage and now the exact same people are rushing buying in today chasing this thing after it's up 6 days in a row & over 10%. I am seeing lots of fresh faces here and lots of newbie questions. Next week options are expiring and we will have very light volume early on as Europe is closed. So personally, I will be lightening up today & tomorrow with the intention of buying back in later next week. Good luck to everyone!

    ReplyDelete
  44. Some fun on this fine morning...

    Walking along in the mission in the rain...come again....

    Mission in the Rain - Grateful Dead

    I turn and walk away then I come 'round again
    It looks as though tomorrow I'll do pretty much the same.
    I must turn down your offer but I'd like to ask a break
    You know I'm ready to give everything for anything I take.
    Someone called my name you know I turned around to see
    It was midnight in the Mission and the bells were not for me.
    Come again, walking along in the Mission in the rain,
    Come again, walking along in the Mission in the rain,
    Ten years ago, I walked this street my dreams were riding tall
    Tonight I would be thankful Lord, for any dream at all.
    Some folks would be happy just to have one dream come true
    But everything you gather is just more that you can lose.
    Come again, walking along in the Mission in the rain,
    Come again, walking along in the Mission in the rain,
    All the things I planned to do I only did half way
    Tomorrow will be Sunday born of rainy Saturday.
    There's some satisfaction in the San Francisco rain
    No matter what comes down the Mission always looks the same.
    Come again, walking along in the Mission in the rain

    ReplyDelete
  45. Gary,

    Going forward, does SLW have a shot at outperforming AGQ?

    ReplyDelete
  46. Well if you waited on GORO..... Here it is......

    ReplyDelete
  47. Wes,

    Can you point me to somewhere on the Federal Reserve website where they talk about the details of QE, or even some other source that explains it as you do, that is, exchange one kind of debt for another and NOT exchanging long term debt for dollars as nearly the whole world believes.

    Everything I'm finding on the web, even Wikipedia, says QE is the Fed buying long term treasuries with newly created dollars. If that's not what QE is, then there are a lot of misinformed people out there.

    ReplyDelete
  48. Wes seems to be more knowledgeable on the subject of QE than even Mohamed El-Erian.

    ReplyDelete
  49. Gary,
    I know you talked about this in last night's report, but am still a little unsure why you took the "scary" correction scenario off the table when the dollar bounces (around the time of the jobs report). I think that you're probably playing the percentages and assuming it will correct in a magnitude similar to the last pullback, but do you think that a larger pullback is such a remote possibility? I ask this because the sentiment seems a bit frothy now and will likely be extreme if we have another 2 weeks of $1 day moves in silver.

    ReplyDelete
  50. Less: Nope. Missed the buy by a hair. I will add AGQ bits at a time.You just don't do as well when the low-odds scenario occurs. Forget the past and optimize profits starting now.

    ReplyDelete
  51. 100k put into June 200 AGQ calls @ Jan. low would be worth 2 million today! Wow

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  52. I'm still not at all impressed with the miners. If they can't out pace the metals for more than 5 minutes, I might just stick with futures on my next entry (or some DGP and AGQ)

    I won't be buying anything today, but am happy to post when I do.

    ReplyDelete
  53. Dan

    What do you get with your claim?

    That you are smarter than all those who sold some of its holdings? Dg, Polly, Gary and others..

    TZ was also right, but he was wrong several times last fall.

    ReplyDelete
  54. I love it when someone is right and then they try to denigrate people who had an alternate view. The last few days have had "capitulate and buy more" "rush in and buy more" "panic and buy more." How's this instead: "The most likely scenario has been aborted and traders are now adjusting to the new set of data." Where's the panicky emotion in that? I guess one can feel taller by trying to cut other people's heads off! Don't ever panic or rush in or out, but only a fool doesn't adjust his tactics when presented with new data. Gary will appreciate knowing that he is not "panicking" to redeploy his 15%!

    ReplyDelete
  55. At this point, timing the market is a dangerous game. I'm going Old Turkey until the three-year bottom.

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  56. Mr. M. Several people who did not lighten up have posted, essentially, "Now you fools have to panic and buy back what you sold." That's what I was referring to---those posters.

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  57. I capitulated and bought back AGQ. 130% invested now. No doubt AGQ is due to crash any moment now

    ReplyDelete
  58. DG,
    Oh, I see, didn't read the morning posts.
    I did lighten up a week ago but bought back in up to yesterday.
    I have less of a percentage invested now than before but that's because there's more money in my portfolio from the gains.
    I am satisfied.

    ReplyDelete
  59. Gary,

    Thanks.

    Does one wait for any significant pull back or at this point it's not likely until may?

    That being the case just get back in to AGQ now??

    ReplyDelete
  60. movax2,

    Yes, M3 is the money supply.

    ReplyDelete
  61. Never a panic here. I simply added some ot miners. Awaiting on AGQ, never chase. I listen to SB, DG, Alex and a few others besides Gary :)

    ReplyDelete
  62. Bud & Eamonn, I'm in with you. I pulled out way too much AGQ, all back in now. I swear I'm going to have my wife change the account passwords and not tell me until Gary posts we are at the 3 year cycle low.

    ReplyDelete
  63. NY,
    If this turns into a runaway move then there will be no way to time corrections and gold could just as easily rally along with a dollar bounce.

    ReplyDelete
  64. Alright I have to pick up friends from the airport. I'll check back in later this morning.

    ReplyDelete
  65. I think that a lot of the public will start buying here.
    The gold & silver prices have been going up and up, pile-in mentality will start and build up very very fast.

    ReplyDelete
  66. since USD is very imported for PM, tomy c posted his latest USD long term views. He has major lows in 2012 and 2014 as per his cycles. He still has siginificant top in PM this year in may-june and nasty correction too. But he has dollar continue go lower till 2012 (which may become gary next A wave top) and then USD rally later 2012-2013 with re-test of 2012 low in 2014 to end USD bear and PM bull in 2014. After that he predicts USD bull doubling USD value from 2014 low.

    ReplyDelete
  67. Wow look at that, the "amateurish" call on the SLW hammer candle on Tuesday looks pretty good so far.

    ReplyDelete
  68. Gold is still not going up as I would like it.
    The 1500$ psychological barrier was taken out, is it just too expensive now? Silver almost at 45$.

    ReplyDelete
  69. DG

    Good post. i was alerted to the dollar vs gold action yesterday and took off my aggressive short as the market action and volume was not showing any signs of large selling. I could have flipped my position given the new circumstances but patience persevered. Ill continue to wait. My point is even though i was right i preserved my capital. Capital preservation is much more important than ego.

    ReplyDelete
  70. ...Dan does have some valid points..I haven't been here long enough to see gary's guru status take fruition yet..but buying today is at the end of 6 up days and after a 2 dollar pull back...I suggested at 41.70 that a pullback at that point of 4-6 bucks seemed unlikely and was shot down...

    ReplyDelete
  71. $45 silver too expensive....heard that at $18 too....

    ReplyDelete
  72. If the USD closes here, it could be up tomorrow due to a BB trade... something to keep an eye on.

    ReplyDelete
  73. Gary,

    I see the public opinion is off the charts favorable for silver this morning. Doesn't count now ?

    ReplyDelete
  74. Man, SLW's looking like a laggard here. What gives?!

    ReplyDelete
  75. Just a fun perspective: This run in silver---as amazing as it is---is just a fraction of what the Hunt attempt to corner looked like in 1980 (at least if my memory serves). We will get a shot at one of those when the gold bull finally tops (2016-7?). If the financial system survives, that'll really be something!

    BTW, when that bubble popped silver dropped 50% in four days, I believe.

    ReplyDelete
  76. DG that is one short that I wish to take on when time comes!

    ReplyDelete
  77. Wes: Gold sentiment is---incredibly---just neutral. Gary has said it is gold that drive the PM complex, so this is good news. And the COT, even on silver, is neutral as well., thought it is true public sentiment on silver is too hot. And for the first time I am hearing people talk about silver. We are getting late, but for me I'd need to see at least some frothy numbers on gold to start to worry about it.

    ReplyDelete
  78. Alex-

    Our favorite miners are setting up again in that triangle consolidation pattern.

    AG


    EXK

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  79. This comment has been removed by the author.

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  80. Hi DG,

    Have you added anything today?

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

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  82. surely that information would require a premium subscription ;)

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  83. Even though JPM has a huge short position, it isn't just in the near delivery months, right?

    So, it is possible that they have changed to the long position in the short months and roll their shorts out to the longer ones, right?

    THis way, they mask their long trades because net/net they are short.

    Does anyone see what I am trying to explain?

    In other words, they are manipulating higher now.

    ReplyDelete
  84. Nike: Not yet, but I expect to. Bits of AGQ each day. If I see something worth noting I will post, otherwise this is just seat-of-the-oants stuff. It's always harder when my scenario doesn't play out. Frankly, Gary is probably right to just do it and not worry about the wiggles, but I am a long-time wiggle-watcher!

    ReplyDelete
  85. Wes,

    So I believe you are saying that the massive run up in the supply of money in every other measure is not related to the activities of the FED and in part, their purchases of US gov debt? Please correct me if this is not what you are saying.

    ReplyDelete
  86. I've been with Gary since May of 2007 and I can tell you that he was always advocating to stay old turkey for the duration of the intermediate cycle. Recently a lot of so called traders joined the blog and steering newbies into a trader's mind set which causes them to lose a very invaluable opportunity to make a lot of money. Gary has always said that timing the market is a losing proposition and old turkey always wins at the end. And I personally will continue ignoring all the traders out there cuz you just can't come even close to the returns that old turkey is making.

    ReplyDelete
  87. Take it for what it is worth. I listed some of my silver bars (I will/prefer buying back coins during the D wave) on fleabay at $50 2 days ago. All have sold.

    ReplyDelete
  88. n1tro,

    What type of silver bars did you have? 1 oz or the larger 100 oz bars and you got $50 per ounce? I have the 100oz bars and I'm being told the premium I can get is about 8 cents per ounce.

    Thanks.

    Steven

    ReplyDelete
  89. Jayhawk, I appreciate your charts and sense of humor.

    ReplyDelete
  90. I have just a few ounces of silver, I'm tempted to sell but they are so cute!

    ReplyDelete
  91. There are rumors the Yuan may revalue 10% this weekend (HUGE) and maybe even up to 25% over the next few months. This certainly could be what drives the dollar into a 100 year cycle low! JK But seriously, if China decides to do this they are finally making the decision to export some of the inflation BACK to the US and this should be damaging to the dollar. They also seem to like to do these moves on holiday weeekends. Just some thoughts. The Yuan curve is already beginning to price in these moves but by how much I don't know.

    http://www.bloomberg.com/news/2011-04-20/china-s-shift-in-rhetoric-may-signal-faster-yuan-gains-1-.html

    ReplyDelete
  92. Alright, we're seeing some slight outperformance by the miners now.


    Michael,

    My exit last week should not be mistaken for timing the market. I had no choice with the way miners acted in relation to the metals. had I been in metals only I would most definitely still be long them.

    Since I only have physical right now, I'd like to redeploy assets. Although this time it could be a runaway move as Gary has pointed out, predicting a runaway ahead of time has rarely been profitable for me. Regardless of the run, I cannot buy an extended market this late in the C-wave. Even after the last few days up, the holdings I sold are just barely above my exit level.

    Let's see what presents.

    ReplyDelete
  93. Steven,

    They were all 10oz bars. Pan American, Heraelus, Englehard, and Scotiabank bars. I got one big honking 100oz bar I may get rid of after silver passes $50/ounce because the premium on it would be low compared to coins or bars.

    ReplyDelete
  94. SB,

    I recognized that SLW is underperforming and I used the opportunity last tuesday at the panic low to swap out 1/3 of my SLW position that I was holding since 31.5 (intermidiate low in Feb) to the equaivalent dollar amount of AGQ @ 250.98. Looking back it was a very smart move since SLW didn't even come close to the returns that AGQ is making. However I didn't reduce my percentage base exposure. I am still holding a basket of 14 juniors that I purchased in March of 2009. I think that miners are behaving just fine. Patience will be rewarded.

    ReplyDelete
  95. Wes,

    Can you point me to a page on the Federal Reserve's website that explains the details of QE? Or even another website that does this?

    Everything I'm finding on the web, including Wikipedia, describes QE as the Fed buying long term treasuries with newly created dollars. I have not found a website yet that describes it as you do, that is, exchanging long term treasuries for short term T-bills. If it's as you say it is, then there are a LOT of uninformed people out there, many of whom should know better.

    ReplyDelete
  96. Angry Hippie,
    I do belive that the stops are stopped.

    ReplyDelete
  97. JAYHAWK

    I was looking at the same thing...I really want them to break free and run

    ( I also want a bit more volume so they dont get held back by resistance , in case anyone can grant me these wishes :)

    Congrats to Bob From Hawaii...wasnt that YOU?? ...GORO reminds me of him always saying he was accumulating around $22 or $24

    ReplyDelete
  98. Belive? What the hell?
    BeliEve.... damn stubby fingers!

    ReplyDelete
  99. ANgry Hippie
    I know Gary pulled the stops recently due to us being late in the daily cycle. I also wonder whether that has changed. On new positions I'm adding, i see the recent low at 1440 as a logical stop although w/o a blowoff top I would be hard pressed to sell on weakness. I much prefer to sell on strength.

    f

    ReplyDelete
  100. Yeah. Thats what I see, too. But since we are seeing uncharacteristic low odds behavior I was wondering if that is still the plan.

    Helluva run this past week.

    ReplyDelete
  101. Jayhawk

    AXU looks like a new high and volume may be right.

    ReplyDelete
  102. What the heck happened to GOld Seek's "Live" USD chart? As of midnight last night, its not updating...

    http://www.goldseek.com/quotes/charts/usdollar/usdollarindex1hour.php

    ReplyDelete
  103. Alright, folks, SLW looks like absolute garbage right now. Outside of just running over to SIL, are there any other solid silver plays you all like? AG? SVM? I've played with EXK before but seem to time my entries terribly.

    ReplyDelete
  104. Interesting info Steven!

    Thanks!

    ReplyDelete
  105. Jayhawk,
    Or anyone,
    What HTML code do you use when embedding a link? I tried "a" "/a" (with <>) but it boots my comment right after posting.

    ReplyDelete
  106. Hot Rod,

    you are right. I'm using this link this AM.

    http://www.marketwatch.com/investing/index/DXY

    ReplyDelete
  107. Alex, that is correct, GORO is a core holding for me. I also am accumulating NGD now, as well.

    ReplyDelete
  108. Looks like SPX futures will not record a DAILY Buy Setup. It has to close below 1310.20 for the 9 to register (1310.20 is the close four bars earlier), and that seems unlikely.

    DXY is quickly on the path to 72.5 - crisis? where was the crisis in 2008 - the dollar is flat, folks - lots of wiggles and squiggles in between, mind you, but it is flat, if not a little positive from its lows. We have been at these levels before and the world didn't blow up. Nothing is more universally despised than the dollar. And this sentiment should set up the contra-trade of this decade!

    ReplyDelete
  109. Anyone buy into that dip at $45.02?

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  110. Michael-

    You are correct, old turkey hold through intermediates with a turn off the computer and take a vacation strategy is the way to go.

    I looked at the move from July to Dec and compared several different portfolio type- a basket of my favorite hand picked juniors,a just SLW one and one with just AGQ. I talked about some strategies over the holidays with folks on the blog. The clear winner was AGQ only portfolio. Most were opposed to the strategy at the time and I decided to not uses it. Hindsight has perfect vision in trading and I have not regrets, but I wanted to say congrats to those who went that route. It took guts and you have been rewarded richly!

    I did hold old turkey for the majority of the run, got lucky by selling my AG & EXK close to their highs. I had large positions in SLW and SIL. All sold above current prices so I have not lost on that yet. The thing I've noticed is the psychological aspect of trying to get back into a market that looks over extended. DG talks about this and I agree.


    My main mistake was selling my AGQ positions last week and waiting for a brief correction. I know others just flipped capital from mining sales into AGQ, perfect move in hindsight. I'm re entered some mining positions this week and will keep adding as things go, but I can't bring myself to chase AGQ here.


    Interesting curve balls...Great ride so far and more upside to capitalize on. I did the best I could so I can't beat myself up.

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  111. I've been eyeing EXK as well, what's preferable here, options or shares?

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  112. isn't this fun !...michael, I have been on the blog since you joined but became a sub in '08. You are correct in that Gary has always preached old turkey. my returns following that approach are spectacular. I did reduce last week, (42.79), but only a similar percent that Gary did a few days earlier. Still just over 130% and enjoying this ride...makes up for mostly sitting and waiting for the last couple years. And the best part is instead of watching ticks, you go do other stuff.

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  113. Thanks for your reflections, Jayhawk. I have chased AGQ a few times since joining Gary. Always have been a little hesitant to get in when he says to, so I've missed part of the run-up each time. Surprisingly, AGQ still turned a profit for me every time. I had a little cash left waiting for the correction, so I added to AGQ this morning. Hope it still stays positive.

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  114. pima,

    Read this :

    http://pragcap.com/pomo-flip-matter

    Maybe that will convince you.

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  115. I bought my July Tulip Bulb calls (SLV) this morning, and now its moving up, up, up. Let the mania begin!

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  116. Natanarchist, I remmeber seeing a lot of your posts about accumulating physical gold coins in the earlier days :-) Yes it was a very profitable run, looking forward for the end though.

    Jayhawk, I was in SLW 100% last year in one account and a basket of juniors in another (that I am still holding) No AGQ. SLW did almost as well as AGQ last year, so no regrets. Then I recognized for the intermidiate run of this year that I'll be better off with AGQ, so I assigned 100% of my capital to AGQ and 50% to SLW. SLW did well from 31.5 to 47, it had a correction and now it is ready to come back. Not selling nothing, 150% in and holding strong.

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  118. pima,

    Read the comments to that article, also. Are people arguing that the Fed is funding the US government ? No, because there are a lot of informed people in the world, but they are outnumbered by the misinformed.

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  119. TRADERROB

    Just wanted to point out that AXU is breaking out from consolidation to new highs.

    I like EXK and AG ( AGQ , but buying here is not what I would do)

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  120. It seems to me that if gold is going to $1600/oz, then silver is going to go waaaaaay over $50/oz
    Or am I insane?

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  121. Did someone shred Gold's party invitation?
    Silver up 3%, gold up 0.6%.

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  122. Wow, AGQ is blazing...

    Question; with the original projection we expected to see AGQ reach 350-400.. right?

    With the recent break out scenario is that target being changed? If not, it makes it a little harder to chase this price at this point.

    What's the general thought? All opinions welcomed.

    TIA

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  123. It looks like Gary made some changes to his portfolio today and has not posted the update on the blog.

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  124. Silver pierced the upper channel line on the 60 minute chart. It has respected this channel for the past month. A drop below 45.10 will put it back in the channel. Maybe we cut right through and expand the channel if we have a runaway move in play. Intently watching...

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  125. Gary put the notice of portfolio change as a posting this morning in the current thread. I don't think a twitter alert was sent though.

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  126. PST,

    I'm a bit burned out on the subject. Plenty of people say the Fed is funding the debt, but nobody I've read explains how and for what purpose.

    Clearly, the money supply hasn't expanded.

    If you can post an article explaining how QE2 results in the Fed funding anything, I'll gladly read and comment on it.

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  127. Made the leap with AGQ at 313 this morning. Such a "sacrifice": Portfolio's up over 3%.

    Nice to be back on the train.

    80% AGQ
    9% Gary's SLV calls
    8% AG

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  128. New York,

    I guess if you think that a 25% return is not good enough (AGQ gets to $400 from here) then don't buy it. My understanding is that if we get there, it will be by about June - 6 weeks away. 25% is better than I was able to accomplish on my own the entire DECADE from 2000-2010.

    :-p

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  129. Loaded up with just enough cash to buy if it dips like crazy.
    Waiting for 50$+ silver....

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  130. Hey Vonda. Me too, same price. Thanks for posting it.

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  131. I couldn't jump in this morning and it just kept on grinding up and I finally just capitulated now and bought in but of course it's dropping. I have more dry powder so if it goes down more I'm buying more!

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  132. Hi,

    my apologies to anybody who I have offended in the past!

    Just can't help but come back to this blog. However, I promise that I won't engage in sarcastic rants of any kind and anything else that's not proper etiquette. I hope that's ok and that you guys can let it go too; that would be great!

    Thanks!

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  133. It was a tough spring to catch that one, eh Kal?!
    (aka Kevin)

    Good to be riding withya!

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  134. When I'm not looking I want somebody to hit me in the head with a bat, and don't stop till you exhaust yourself!

    TIA

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  135. "sprint"

    (It was Miyagisan's stubby fingers.)

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  136. Wes,

    Obviously you have put your faith in believing something that is not true. I can't say why you have chosen this. I wish you luck with getting past that and seeing what is really happening.

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  138. Hey, Vonda... Yeah, I got out at 275 like a newbie... Cause I am. But, I'm learning and I can chase. I'm like a good lab. I'll chase any toys you throw ahead of me, I guess.

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  139. Basil,

    Nice call on 45 silver. If silver breaks this month long channel on the 60 minute, it may just run up to the top of it's daily channel going back to 1/27. That channel upper trendline hits 50 on 5/3! Although with the volitility that could work it's way into the PMs I wouldn't be surprised to see trendlines breaking in both directions.

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  140. Movax2,

    The Fed has clearly increased everything they could, and none of this has yet resulted in an increase in the money supply, which is what they actually want.

    The money base is way up. I used the example of the apple seller who sold 3 apples a day by displaying 10 apples. Increasing the display size to 100 apples still resulted in 3 apples per day sold. (Apple seller= banks, apples= loans, display size= money base).

    Now, making more loans would increase the money supply. The Fed would love to find out how to do this.

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  141. Ryan, if you were the threshold "sacrifice," thank you very much! Come on down to the dining car; I'll buy you lunch. Don't worry; we won't even look at the tab until we disembark.

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  143. MrM:

    I'm in the same boat. Redeployed cash into SLV calls, but still have enought to double my AGQ position, just in case I get a pullback.

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  144. WB basil. The more the merrier. A lot of posters have had rocky starts.

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  145. Silverhound;
    Linky send to blanky..

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  146. I've missed you Basil, welcome back to the spice rack. :)

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  147. Kal,

    Hey Newbie, I got out at $270 and I've had the benefit of almost a year with Gary, which is still new-ish; obviously new enough to trip over my own paws. (Love the lab analogy.)

    Since last summer, I haven't minded jumping in at any relative price but I really got psyched out this time. It's been a good lesson which I imagine will keep delivering.

    Ultimately, it's like DG said: One makes the best decision one can for oneself at the time.
    Now throw the ball!!!

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  148. it would be really awesome if the juniors can start going too..

    c'mon mr market suck everyone in..

    unfortunately I feel a brief reversal is coming near...

    this is too easy.

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  149. Edwin

    Im expecting a short sharp reversal beginning next week. ABX has posted a nice hammer today. Invariably longs would have got sucked in. Aggressive shorts will see inverted hammer and go short (too early). Couple of days more strength will get rid of any stragglers before we see a move down into 1-2 week of may IMHO

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  150. Wes,

    this is a very interesting discussion and is causing me to think this through.

    Lets say, that years ago the US had expenditures that exceeded its revenues and needed cash. Instead of creating the money from nothing, it issued bonds. China bought $1 billion of those US bonds, and those bonds are now coming due. Instead of rolling them over like they usually do, they decide to take the cash instead (US$). No other investors want to buy those bonds either, and the US does not have the cash to pay the Chinese. It does not want to default on the bonds, so the Federal Reserve buys the bonds itself. It pays the Chinese its $1 billion.

    So now, the world has $1 billion more in cash than it did before. This causes inflation of the money supply and increased prices. No?

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  151. I'm curious about strategy, if anyone has done the math on AGQ options vs. futures options. I have been doing almost exclusively slightly OTM options on /si. That has worked pretty well, especially the last few days. Now I need to roll my May options and I'm wondering if I should try call options on AGQ instead. June 350 calls are $27/ea, so I could buy 5 of those for $13,500 or a July 46 call on /si at $12,250.

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  152. Slight bounce happening on this line.

    DXY

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  153. Hain-

    What do you mean hammer on ABX?

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  154. Vonda,

    Haha! I like it when a joke or smart comment keeps on going... My buddies and I used to do that via email and in online class chats. Good stuff!

    Good that you're still learning. I of course want to be able to say I know how to invest, but as soon as I admit I don't, and follow Gary and listen to smarter people, the better I'll do at this money thing.

    Now that you're on the train, the scenery is alot more fun to watch, huh?

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  155. Wes,

    Gold, silver, food, energy, even stocks says otherwise. a slight decline in ones man's estimation of M3 is not conclusive.

    I hope you hold in your mind that you may be wrong. I see no point in continuing - you can find out if you are right or wrong with an open mind and continued digging. Good luck.

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  156. Jay, ABX had a huge volume selling spike at about 10:30.

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  157. Will 1500 hold? The bulls won the battle below 1500 and now this next battle is being fought on the other side of the line, just above 1500.

    I hope it doesn't take another two days for a result here. And of course, I am hoping for the bulls to win, and did my part by adding a little at 1501.

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  158. Rick,

    The US would just print the money to pay off the bonds. No need for the rest of it.

    Bonds, as well as cash, are all part of the money supply at all times. There is nothing special about cash except it is the shortest maturing "bond" there is.

    Cash and bonds both represent demands against the US treasury.

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  159. To continue my previous question, the /si option is in the money with silver going up 2%. The AGQ option needs to go up almost 10% to be ITM, meaning silver goes up 5%. At that rate the /si option is $1.25 ITM ($6250 in intrinsic value), where the AGQ option would be just getting ITM (still no intrinsic value, only time value). Or, I could just buy 41 shares of AGQ for ~ $13k. If /si goes up the same 5%, they would be worth a whopping $650 more. Or I could use margin and double that, I suppose. I fail to see the reason not to just use futures options? What am I missing? I understand they can fall much faster than just holding AGQ, but if we are betting on a rapid rise, they seem to be the best bang for the buck. I get nervous if I hold too many, so I've been at around 25% of my high risk portfolio on options, up to almost 50% today just because of market rising. I am not doing this in my long-term portfolio because I would have a heart attack (just a mix of physical metal and cash, mostly).
    Gary, what am I missing?

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  160. Of course I'm simplifying here, the full intrinsic value in the options won't be realized until close to expiration, which definitely skews in favor of holding AGQ, but I still think the options have a much higher payout, and have the added advantage of limited downside in case of a massive gap down due to some black swan event.

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  161. Vonda,

    You're welcome, I couldn't take it anymore. I think the moment my order got filled it started dropping lol. So definitely the correction has started!

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  162. Wes, I don't disagree, but aren't there more demands against the US Treasury after the Fed buys its own bonds? Isn't there more US$ after my scenario? Isn't that inflationary?

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  163. Kal,

    I think I enjoyed it all better when I didn't need or want to know so much about investing. At least that's the mental frame I had when I found Gary.

    Since then I've come to enjoy the companionship of the blog community, so now I feel the responsibility to learn in order to contribute--and not just ride coattails

    But after the last couple weeks, yes, I'm happy to just sit back and enjoy the scenery.

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  164. Thanks, Wes.

    I read the article at the link you posted, but nowhere do I see anything about the Fed exchanging long term debt for short term. The do talk about the Fed BUYING treasuries. BUY means pay money for them, right? Money as in dollars.

    I have read about MMT and I believe I understand it (well, maybe some of it). I get it that things are different now that we are no longer on the gold standard, that we have a true fiat currency.

    All I'm asking is to see something in print that describes just what the Fed buys treasuries with. Is is as you say with T-bills? Or is it, as everyone else out there says, with dollars?

    This morning I watched a CNBC video that was taped last year in one of the Fed bank buildings. Fed prez Jim Bullard was there. The CNBC moderator explained QE as the Fed buying assets with newly created dollars and used the term "printing money". He explained that the Fed doesn't print physical money, they just credit the account of the seller of the asset, but that's the modern equivalent of printing money.

    When he was done, he asked James Bullard if his presentation accurately described QE and Bullard said yes. (He could have said, well we don't actually print money and we don't actually use dollars to buy the assets, we use T-Bills. But he did not say that.)

    Everywhere I look, all I see is that the Fed prints money (by crediting the account of the seller) when they buy treasuries (or any other asset).

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  165. Rick,

    Changing bonds into cash (and destroying the bonds) or cash into bonds (and destroying the cash)has no effect on the money supply since it is the sum of both.

    The Fed cannot create money. Only Congress can do that, and it does.

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  166. Good morning ... it's 1:57 am here in Tokyo.

    JamesR or others, is this a blowoff top? Thanks.

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  167. John-

    Big volume sell at 10:30 on ABX? Not really getting the significance of that.


    Also, looked at the chart. Hain are you talking about a possible hanging man? Even then, not quite seeing any warning signs there, IMO.

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  168. One point about the 'ABX'hammer call.

    It has to close there to be a "hammer' or reversal. It may be selling off at lunch and bought up after 3 p.m....cant really tell at this point.

    It does look tempted to fill that gap however

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  169. Pima,

    I guess I don't see your point. I think the actual transaction takes place by the Fed crediting the Primary Dealer's account for the long term security and debiting it for the short term.

    What was the transaction in ? T-bills, cash or just electrons ? Why does it matter ?

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  170. DG/SB, on the 60 min chart, after a gap-up, SLV usually pulls back to the 50 EMA ... right now it's like way above it ... I have to think that it will pull back.

    But I'm a beginner here ... your take sirs?

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  171. PST,

    My questioning Wes is not an assault. He pointed out yesterday that the Fed does not buy treasuries with dollars, that they are exchanging treasuries for short term debt, t-bills I believe.

    I am just asking him where he got that information. I generally take people at their word, but when they say something that is different from what the news media, the trading blogs, the financial blogs, and the Fed itself is saying, then I'd like to see where that information comes from. I have tried researching it myself, but I can't find it. So I am asking Wes (not assaulting him) for the source of his information.

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  172. Wes

    It is my understanding that Congress uses the Federal Reserve to create its money. I could be wrong. My money says "Federal Reserve Note" on it.

    Does the Fed destroy the bond when it pays it off with newly-created money? I thought they kept it on its balance sheet.

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  173. Wes,

    It matters because if it's just exchanging one form of debt for another, that would not have an impact on the money supply. But if it's exchanging debt for dollars, then new dollars are now in circulation and they are likely getting spent buying risk assets, stocks and commodities. To me it's a pretty big difference.

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  175. Bill,



    Just read your comment.

    I'm hoping this is a blow off top.

    I am sitting on the sidelines.

    I noticed in the previous cycle AGQ took 28 days to correct. We are now on day 27.


    James

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  176. Blowoff top?

    I hope not. The blowoff top should not happen for at least a few weeks.

    Daily cycle top? Maybe. If so, let's hope that that's what it is because if it's the blowoff top, then the D wave is upon us.

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  178. anybody saw something? silver lost a lot of ground in 2 minutes?

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  179. Thanks, PST.

    (I'm glad you couldn't take it anymore :-)

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  180. Looks like bulls lost that battle and the fall is sharp.

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  181. PST,

    The Fed doesn't publish M3 anymore, but it's still the best measure of money supply.

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  182. pima,

    I should have said an intermediate "blowoff top"


    James

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  183. Pima and PST.
    You are both correct!! :))

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  184. LMAO @ SLW. Rolling over little a little puppy dog!

    SLW to AGQ- "What time is the panic sell off? I'd love to join you for the fun!! I know I sat on my fat butt the past 2 weeks, but that elevator shaft sure looks like a fun ride."


    Grrrr...

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  185. Thanks JamesR and pima. My poor choice of using terminology that I don't fully appreciate here. Just meant a shorter term top, whatever that is called. Is see that SLW, SIL, GDX and GDXJ are all pulling back a little. I'll keep watching and looking for an entry.

    I myself still believe that the dollar cycle will turn up here, based on Gary's cycle chart. It's already way late. If cycles skip a beat then I'm sorta back in the mindset of "interesting stuff but can't use."

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  186. Or could simply be a gap fill.


    {shrugs}

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  187. Correction underway? It makes sense that it might start today.

    If gold and silver conform to the pattern of recent months, then we would expect some kind of low on Tuesday or Wednesday. If the move down starts today, then that gives only about 4 trading days to put in a bottom. Sounds about right.

    (Friday's a US holiday, Monday is a holiday for London)

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