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Thursday, April 14, 2011

SILVER STRETCH

I'm starting to get the feeling that many people have now come to the conclusion that silver is bullet proof. First off let me warn you that we still haven't seen anything that looks like a daily cycle correction yet, and gold is now moving into the latter part of the timing band for that short term correction. When gold dips down into that trough silver is going to follow.

Next let me show you a couple of longer term charts so you can get some idea of just how overbought this market is and how dangerous this is becoming especially this late in the cycle.

In the first chart I've noted that silver has now rallied 100% above the last C-wave peak. 


That's much larger than any other C-wave rally. It's pretty rare to ever see an asset rally 100% above a prior peak. That alone warrants caution. I also noted that silver is currently stretched 60% above the 200 DMA, also a new all time high. 

I suggested in a nightly report that we could easily see a $3-$6 correction in silver once the move down into the daily cycle trough begins. I have a feeling most people at this point think that's virtually impossible. But is it really? Look at a $6 correction on that long term chart.


A $6 correction is almost insignificant. It wouldn't even take silver back to the 50 DMA. A $6 correction would just be a normal pullback to test the March pivot and ease the extremely stretched conditions.

I'll tell you what else a $6 correction would do. It would destroy all the over leveraged players. It would convince everyone that the silver rally is finished. And more importantly it would set silver up for the final spike higher to my expected target of $50 during the final daily cycle.

Ask yourself, are you so heavily leveraged that a move back to $36-$37 would completely freak you out and knock you out of your positions? If so then maybe you need to focus on these long term charts and ease back on your leverage until gold moves down into it's cycle bottom.

When gold gets this deep into a cycle a move higher by the dollar almost always triggers a corrction.


The dollar is due for a short term bottom any time now. I expect this time won't be any different in that a dollar rally will trigger gold's move down into the impending cycle low.

This late in a daily cycle and this stretched above the mean it is becoming increasingly dangerous to keep your foot to the metal (pun intended). If you're driving 200 MPH you might want to slow down to 100-120 for the next week or two.

572 comments:

  1. Frankly, I think all it would take to terrify weak hands is a dip to $38-39.

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  2. New York,
    In case you didn't see it at the end of the last post before the change:
    http://stockcharts.com/help/doku.php?id=chart_school:chart_analysis:gaps_and_gap_analysi

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  3. Sophia,
    The 3 yr low on the dollar is at 74.17. We are currently at 74.726.

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  4. Of course you guys can't find my ticker AGQX. Are you elite like me? No. You can't find it on your precious Yahoo message boards.


    I've been an Old Turkey so long my talons are petrified.

    My entire trading life has been a massive C wave.


    You are are perma-D wave wannabees.




    Come on DG, not at all funny? I tried my best. :(

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  5. If there is one rule that I would follow is that when Gary ( who is a pretty aggressive trader) advices for caution, I follow the advice

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  6. hey Parsley,
    are you or have you ever subscribed to Garys newsletter?

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  7. I'm done posting here.


    My trading partners amoldyhamsammich, mylifeislame wish you all success.

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  8. "petrified talons"
    That's a good one!

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  9. 4Life,

    ?? just, in general or are you referring to something in particular?

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  10. lol Parsley,
    Thanks for the parody and chuckle...I noticed one herb you were missing was Basil :)

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  11. Francisco,

    To answer your question regarding AGQ getting filled at 225.

    Yes, that would mean the trade would trace back to 225 and then resume upward.


    James

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  12. This comment has been removed by the author.

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  13. Vonda,
    Yes, something in particular.

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  14. I hate to say this, but I would LOVE to see a dip to $36 because I want to buy more physical silver for my precious metals IRA.

    Sorry guys, nothing personal. ;-)

    Besides, after that silver will REALLY take off!

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  15. "My entire trading life has been a massive C wave." - Best line ive heard today.

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  16. James R,
    I understand that this gap fill happens, but what is the technical reason for it?

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  17. Thanks Gary for clarifying the risk for everyone. Too many talking turkeys (not old turkeys either) were strutting around.

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  18. at ease... My email to you is bouncing back

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  19. Thanks for the hand holding Gary! ;)Hopefully, your detailed picture here will help calm nerves and help folks keep the bigger picture in mind.

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  20. Thanks for the heads up Gary.

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  21. 4Life,

    Well, that clears things up!

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  22. Gary, looking at your chart, I see a virtually uninterrupted uptrend in gold from the end of January until the beginning of March. Is there some reason why we couldn't see something similar now -- i.e., no meaningful pullback for a few more weeks?

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  23. I gave the reasons in the post.

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  24. BTW we already got a $3 correction in March. It's almost not visible on that chart. A $6 correction would look almost insignificant too except to those who are over leveraged.

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  25. Gary, my bad. You did indeed describe the factors that would make the current situation different. Sometimes it's hard to remember all the pieces of the puzzle.

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  26. Vonda,
    Clearly. Lol!

    I thought it unbelievable, at a time such as this that somebody could come up with such things.

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  27. Gary, great post.

    At what price level it will seem that signification correction (3-6$) is not going to occur soon and it might correct at 50$. thanks in advance.

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  28. Eamonn, blackberry died. LOL, having a real good time finding things online... testing my tenacity to stay on this bull ride. ;)

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  29. As an FYI...

    Silver = 36 means AGQ = $218

    that's a 60 point correction where we are today - would be like a 22% correction in AGQ

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  30. From the end of the last post thread

    TRONDE56

    Can you post charts, I cant go back that far intraday?

    Thanks either way

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  31. You can't always correlate a rising dollar with lower gold/silver prices.Back in late Oct and Nov. 2009 the dollar was marching up and also gold had a great run up also , up over $140 in Nov..There are many examples of this occurring as there are examples of what you showed on your charts.So anything can happen, i think the physical shortage of silver is a big reason for the price spike along with rising inflation .

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  32. 86d4life,


    The technical reason maybe based on fibonacci retracements.

    A stock may usually retrace itself
    a certain percentage. The most common percentages are 38.2%, 50% and 61.8%.

    In this case if AGQ would to retrace itself 50% from 280 to 174 (where 174 is the start of the run) we would get 227, which is about 225.

    Not exact, but close enough. In fact we may shoot a few points below 225 if this would to actually happen.


    James

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  33. James R,
    Thanks, preciate it. The fibos never dawned on me. With so many different theories and ideas flying around at a time like this, even the simple stuff can be elusive. Have you ever had the chance to use that in advance? Meaning found a gap, plotted it with fibos and then used it for a long or short target, which ever applies?

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  34. Robert,
    I don't see a shortage in silver any more. When I go to any of the dealers everything is in stock.

    That's what price does. When it rises high enough supply comes back into the market.

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  35. You missed the point though. Whenever gold gets deep into a daily or intermediate cycle a rising dollar triggers a correction. Early in a cycle gold can resist a rising dollar. late in a cycle it can't.

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  36. Nike,

    Interesting if you combine that info with the gap in AGQ at 225 that someone mentioned earlier.

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  37. Doc posted a silver chart from Spring 2006...You will get chills if you see it. Price was motoring higher and high and was then slammed down out of nowhere for a -20% day. (April 20th, 2006). Price eventually formed a double top a month later, so old turkey at least gets you out then.

    I was thinking about AGQ...Since on the downside that puppy over compensates would it be down -50%?

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  38. 86d4life,

    Yes, I used the gap theory to buy SIL at 21 for our intermediate correction back in January.


    James

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  39. We must be near a top when the "yacht" talk starts coming out.

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  40. James R,
    Pretty sweet move! Is it reliable enough to be used for shorting or just an additional indicator?

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  41. So far this is played out exactly how Gary had envisioned it; retesting the $42ish mark with silver and approaching the $1500 again with gold. He also said that he thought the dollar would continue downwards because last week it was too early for a cycle low.

    He laid it out really simply yet detailed, yet there is still tremendous argument about gold/silver declining in the short term- this is also expected at this time.

    I'd quit the arguing and just see how things play out- and if you disagree with Gary the odds are not in your favor for being right this time.

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  42. many people are excited and looking forward to this correction...wow

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  43. Understand I'm not advocating exiting ones entire position. I certainly am not.

    I'm just warning those that are heavily leveraged to be prepared in case we do see a sharp correction. If you can't weather a $6 correction in silver then you are probably too leveraged and need to ease off the accelerator.

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  44. Well just look at the chart- silver doesn't have much more room to go higher for the time being according the the law of gravity.

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  45. 86d4life,

    I would not use it to short a security, (though I am sure hedge funds do) but use it as an additonal indicator.


    James

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  46. I understand, and if you are heavily leveraged if you have a proper stop, no harm done. I personally was 200% silver as of Monday when I then reduced down to 135%. I have since reduced down to 90%, and about 60% a mix of spy and qqq. I am 23 and can gamble with a little lev, but stops are important with the spy and qqq as well.

    I just would not sleep tight right now with anything close to 130%+ with silver so far stretched.

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  47. I just hope though that most people don't exit everything and then somehow get burned, being too nervous to reenter when the time is right or getting involved in another trade without being able to transition back. There will certainly be some people lost when there is a correction, that is a guarantee.

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  48. Silver eater-

    Lay off the roids man! Not the leverage, but those crazy pumped up freak in the profile pic. :O

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  49. Gary,

    If someone had theoretically exited their positions...unwisely... would you suggest they re-enter to some unleveraged point right away to avoid missing an unforeseen blowoff move?

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  50. I eat trolls. That's why I'm here. And I'm always hungry :)

    I'm in the works of building a BALCO II for all us athletes that need to pass the testing :)

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  51. I'm hoping silver corrects nicely because I need those big C-wave blowoff top gains to afford my diet of 600 hard broiled eggs a morning. No kidding, it takes me 1 hour 5 minutes a morning for breakfast.

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  52. I don't really know what to tell you. All I did was take off a little of my AGQ position to put into some SLV calls.

    Anyone who followed me still has plenty of skin in the game. Those that exited everything are probably going to have to watch gold go to $1500 before correcting. And of course if you get in banking on $1500 then it won't get there before the correction.

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  53. Gary - Thanks for your answer. For myself a friend only sent me here a month ago, couldn't establish a modeled portfolio yet.

    However, it would seem that someone having exited entirely, what they would want to do is to re-establish a portfolio on your model, even as we speak.

    This would mean buying in at reduced leverage.

    I left with profit in the mid-260s so that won't hurt too much and will hedge both sides of the door.

    Make sense at least? Well, thanks.

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  54. For you newbies and less experienced what you have to do is ignore all the noise and simply pay attention to the ACTION Gary takes. There will be a lot of comment on various market trades, cycle lows/highs in gold and silver, BUT if Gary doesn't ACT then he doesn't see any probability really leaning in his favor. It is extremely wise if you follow his ACTIONS not words. This takes tremendous patience and fortitude, BUT if you can follow the plan you will be rewarded in the end.

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  55. Yes, that's me Silver, thank you. I am Mr. Newbie now but hope to accompany this generous fellow with you to the end of the last C-Wave in 2016!

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  56. Gary,
    you are missing the point when it comes to silver shortage.The comex warehouse has seen almost 800,000 ozs of silver withdrawn in the last 3 days but only 2,135 ozs were received . The comex is in deep trouble that is one of the reasons the price has gone up .It has nothing to do with going to your local coin store.The price of silver is determined at the comex , not local coin dealers . there is no silver left at these prices .sentiment etc is irrelevant if there is no silver

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  57. Postcards from the edge: All week I've been lightening up my positions and twice today I filled out orders for AGQ and twice I canceled them. This is driving me crazy. Pull back already damn you!!

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  58. Is anyone going to trade the dollar (i.e. UUP)once gold trades near 1,500?

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  59. I am considering shorting the Yen etf, but not with too much.
    I want to make sure I have enuf dry powder to buy when gold/silver bottoms.

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  60. Robert,

    The silver supply at the comex warehouse has barely changed in weeks. You are listening to Organ aren't you?

    Go directly to the CME site and get your data instead. The warehouse has been around 100mil oz for a while now (40mil registered 60mil eligible).

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  61. $6 selloff in silver? Sure it could happen.

    But I also suspect, instead, that we might now be caught in the final blowoff wave of the metals.

    It will become clearer friday afternoon. A strong surge higher on friday (which I suspect) will help confirm it in my mind. And the final move up doesn't require a sharp pullback - it could just go and go. (However you do often get at least one - in middle of night as well.)

    If the metals *are* in their final blowoff wave (as I define it, not gary) then I would say 2-5 more weeks and then it's over.

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  62. TZ, you are the only contrarian view on metals not having a final correction that I read. All others say there will be a drawdown/correction and then back up within a week according to the cycles and time of year. Why do you believe there will be no further correction or drawdown with the dollar pop?

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  63. Gratitudo,
    I don't think its worth the small return this etf could bring with a bounce in the dollar.

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  64. I'm a newbie here, have been reading the blog since Feb. and this is my first post.

    I am invested in PM looong term and have a few miner stocks. Is it too late to get into this C-wave? If I understand correctly, I should wait for the dollar-gold correction, then buy - what? AGQ?

    Thanks, Gary and everybody, for being so helpful on this blog - what a nice group of people!

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  65. Hi Diana, Yes we are waiting for the dollar gold correction. Gary will post for the subscribers once the USD bottoms what he recommends to buy for the parabolic C wave finale. You just need to have your funds ready to buy when he sets the trigger for the subs. Should happen pretty quickly here soon, week or two. Keep reading closely. Cheers!

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  66. I've been wondering ... "What ever happened to Chicken Burrito" ... then Parsley Sage shows up ???
    ...is this the new manifestation ?

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  67. Moondog

    Basil, Parsley, Chicken.......
    so many herbs come and go. Maybe an Angry Hippie smoked em while waiting for the next train to leave the station :-)

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  68. Morning all or evening, where ever you may be in the world.

    I've been catching up on some of the posts. Vonda I do enjoy your wit, a nice balance to the odd negative post on here. Your comment on mentioning position size is common sense and it shouldn't matter. I actually find it inspiring when I hear in conversation what people are making and how. Unfortunately in the real world it tends to bring out the ego's. Shame. Hope you enjoy your bourbon 'n croissant waiting for the next train.....

    It's been an interesting day.

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  69. King Dollar!
    Come on! Swing already!

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  70. Aaron, King Dollar is going to make you sweat! Probably will silently swing in the middle of the night.

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  71. Morning Silverhound. Still waiting for some action.

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  72. I am finding myself on the fence of 50/50-ville.

    I see Garys thoughts playing out ,I liked this POST even better than the nightly report, but also I see reason for TZ's scenario playing out too (no big slaqmdown before lift-off).

    I am NEW to cycles (Aug with Gary, but not new to metals at all)...so I rode the 2006 run up but where were we in 'cycle timing' in 2006? I dont know..did we need a trendline break before lift -off then?? I dont remember.

    Yesterdays inflation numbers(p.p.i.) surprised to the upside-Silver up..Today C.P.I. in 2 hrs. inflation surprize?
    I CAN see that # bigger than expected, Gold takes off wkly for 3 wks, the fed does an interest rate hike SURPRIZE in May, and Gold slams down D-wave begins.

    Gary says in a C-wave blow off, indicators and trendlines mean absolutely nothing. If its now, do we need a trendline break here? I dont know.

    I also see a C.P.I. #, suckers rally to $1510, THEN sell-off , blow off C-wave...based on Garys Post last night,including the dollar and p.m. relationship.

    50/50 right now, but tradeable, Saw good signs in AXU, AG EXK MGH recently...GPL looks ALMOST READY?

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  73. Robert,
    I've heard the Comex default nonsense at three C-wave tops now if that tells you anything.

    And I'm sure we will hear it again at the next one.

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  74. NIKEBOY
    If you're reading this, I am replying to yesterdays email now, need to draw up a chart.

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  75. Alex,
    I think the miners are giving a clue.They should not be diverging this badly with gold at all time highs. Even SIL is diverging.

    The one thing that has been consistent has been the cycles in gold. While the stock market has stretched and warped gold has adhered to it's cycle count unvaryingly.

    Just about the time one thinks there won't be a cycle correction that's the time it will begin. Right when the retail crowd panics into the long side.

    They will get knocked out during the correction and then be the fuel to drive the parabolic move as they chase the next move.

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  76. Regarding the miners, unfortunately I would have to agree with Gary.

    The miners must either break out decisively and soon, or the metals correction is about to begin. Yesterday was news related, but if they can't get upside momentum by early next week, I'll begin to trim positions.

    I don't feel any rush to exit and believe the bull will offer better prices to clip some shares, but miners had better get in gear!

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  77. Gary,
    What do you think of the liklihood that a higher than expected CPI number this morning will be the catalyst to the dollar forming a bottom (end expectations of an immediate QE3)?

    Or do you think these numbers are meaningless in your cycle work?

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  78. yes the seasonal guy is back, whats interesting here is that my gold seasonal model (PM Miners) is showing some weakness now with some further strength in equities. Personally id prefer more of a pullback on equities before jumping back on the equities train (financials), definitely some downside volatility is needed to shake out weak longs. But gold is showing more of a prolonged move downwards now into beginning to mid may.

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  79. Alex,

    Whenever I get lost in the wiggles I always go back to the big picture. Some more on the repeating ranges that we discussed in our last post. You may already be familiar with this, if you are please accept my apologies.

    One of my mentors introduced me to the concept of repeating ranges a couple of years ago and I have seen much about it on the net and in TA articles since. It changed the way I look at charts.

    The current range on gold has some way to go before completion. The MACD crossing above the trendline was confirmation of this current range for me. There will be traders watching for this. If it is a blowoff top as is expected then we may need to look at some fib extensions for the final target, I've shown the 161%.

    Once the range is complete we have the SMT indicator to zoom in on the final top.

    Gold ranges

    Cheers
    Darren

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  80. like at 39.4 when the train was leaving and everyone was told to get on board.. wrong... Then immediately after it was it's time to get off for now... wrong... now silver just broke 42.70..it doesn't look like a pullback is coming till higher levels...sorry but prob wrong again..Not trying to be mean to anyone but facts are facts and if you are wrong your wrong...

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  81. Hi Mathew

    Do you have evidence to support your comments or is this just your opinion?

    Cheers
    Darren

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  82. THE CPI numbers are a joke and meaningless.

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  83. Gary

    do miners always lead the metal going into and out of corrections?

    Not

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  84. Matthew,

    Traders like myself are wrong a lot of the time. I got over that many years ago. :)

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  85. I'm taking TZ's view, we could just keep going up for a few more weeks and that would be it for this run/season-we enter a correction that lasts into late summer.

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  86. Matt,
    Who said to get off. I clearly said this was for overleveraged players to just reduce leverage not get off.

    In my own account all I've done is reduce my AGQ position 15% in preparation to put that capital into SLV calls at the next cycle low.

    That's hardly jumping off the train.

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  87. Gary

    I DO agree about the recent divergences, and thus your caution on being too heavily leveraged is good and necessary advice due to that too. Thx.

    SB, I agree with that too. I was planning on lightening up on AG as it bounced on light volume, but it wasnt light volume. And even GDX seemed to have slightly above avg volume-but thats just 1 minor indicator I look at.

    With Garys thoughts in mind, I could see something like Ag and EXK double top here,and still look great when the sell off is over.

    Silverhound

    yup, I am familiar with that ( the big picture ,I use fibonacci projections, etc) and I like that chart. Thx

    OK, I'm 70/30 now -

    3o being surprises to the upside factor :)

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  88. Volatile times ahead, up and down. I hope the next few weeks work out well for everyone. I will be looking for that reentry point and if i doesn't come I will see y'all close to the bottom of the D-wave.

    Hopefully I can upgrade my sailing vessel soon. :)

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  89. Hippie

    NAH, that vessel is a beauty! reminds me of my childhood...just buy 2!

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  90. Wow Gary,
    Kudos to you for going above-and-beyond with this most recent blog post. It helps newbie, non-subs avoid a disaster! And yet, the premium site contains so much more valuable info. For any non-sub, scrape up the entry fee to support a straight shooter. The only thing you risk is losing some ignorance.
    And, you'll love the ride.

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  91. A miss on the CPI#'s metals will go higher. Inflation # in China and Europe were both misses.

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  92. Trust me gold and silver aren't being driven by CPI numbers. They are being driven by the dollar collapse... and momentum.

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  93. There were more hits on the blog yesterday than any other day in history. That alone should make overleveraged players nervous.

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  94. Alex, If you keep up with those good calls on the juniors, I might even be able to afford three or four tugs.

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  95. Gary,
    Your answer to my CPI question was a little ambiguous, can you tell me how your really feel (sarcasm)?

    Are your dollar cycles completely based on sentiment then? How do you factor in other exogenous factors (like greece/portugese bond yields, ecb rate hikes, etc.) or are these factors captured in the sentiment data?

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  96. Gary
    Congrats on the hit's you are getting. I couldn't believe it when I logged in and saw nearly 1200 posts on yesterdays thread.

    Hippie
    Keep the little red tug but at least upgrade the "Toot Toot" horn to something bigger so people get out of your way when you are bumping around in a heavy fog lol.

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  97. Cycles are just a measure of human emotions. When we get a little too bullish then markets have a pullback. Too bearish and a rally begins.

    Individual asset classes have a "normal" timing band for when these turns typically occur.

    So for instance if the dollar was getting late in the timing band for a short term bottom and sentiment had also reached a bearish extreme one wouldn't want to push short positions. The same holds true for gold or stocks.

    Gold is now deep in the timing band for a correction and short term sentiment, as evidenced by the rampant call buying has reached bullish extremes. The precious metals market is now in jeopardy of running out of buyers (briefly).

    Once the dollar rallies it should trigger a minor profit taking event in the gold and silver market.

    That will reset sentiment and then we will be ready for the final blow-off phase of this C-wave.

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  98. Thank you much!

    By the way, you should consider selling advertising on your site with the number of hits that you're getting.

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  99. This comment has been removed by the author.

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  100. Gary I posted this yesterday and you did not respond, so I am hoping it was the blizzard of posts, and not that it is a lame question. One more shot: Do you have any historical data as to how often the final C-wave blow off is preceded by a stiff correction? I, like Alex, am 50-50 on this question. Are there usually/always such correction before the final run? TZ, do you have this data?

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  101. Great observation by Gary re: number of hits + over leveraged players = ripe timing for a correction. It will hopefully make us more money than any other mathematical formula ever has! :D

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  102. Dollar showing signs of life at this moment?

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  103. I actually bought some AGQ puts for May yesterday (250's for $12.80I also intend to sell my SLW calls today and go to a core SLV call position.

    I shorted oil on Monday and Wednesday via UCO puts.

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  104. imho DG..

    I think we are going to see a shot at 43 by close.. Now we would have to see a $2.70 pullback just to hit 40 again from last week. Now for this "pullback we would have to see a $4-6 quick pullback for a decent pullback... $4-6 buck quick drop seems unlikely IMHO.. but I am hoping that it will because I know alot of people follow Gary and I would like to see everyone make money..I am hardcore turkey with 20% willing to go on options and leverage so.. by the way I am sorry about the jump earlier it was premature...

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  105. I agree it's a 50/50 shot whether we correct before resuming the C-wave or just go directly higher.

    Either way, pay me now or pay me later! :)

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  106. EMI big to the upside! Help for a dollar bounce?

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  107. DG,
    I was out climbing yesterday. When I get back there is anywhere from 200-400 posts. I don't even attempt to go through those anymore.
    In 06 the final cycle up was preceded by a 6% correction in gold. In 08 the final leg was led by a 5% correction in gold.

    If gold can make it to $1500 and we get a 5% correction we would see a move back down to $1425.

    I would have to think that would easily trigger at least a $6 correction in an extremely overextended silver market.

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  108. Thanks, Gary. I figured you were out doing your thing. So the last two times we were in this situation silver did correct. For me that shifts the burden of proof (that we aren't go to get one) solidly to the "no-correction" camp since there are a number of other things indicating a pullback first.

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  109. Gary,

    Scary post!

    From the chart, looking at the way silver has doubled since the last C wave top AND is now stretched so far above the 200 DMA, seems like there's a good chance the D wave could start any day now. So the obvious concern is that when the next move down begins, that WILL BE the start of the D wave.

    What gives you confidence that that move don't will NOT be the beginning of the D wave and instead that PM's will see one more push to new highs?

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  110. Because I don't see any sign of the three year cycle low in the dollar yet.

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  111. For bloggers throwing out percentages and dollar amounts of potential corrections, are these your opinions based on your experience and gut feel, or are there any type of analyses that supports your numbers? If you have something that supports your predictions, it would be helpful to this newbie if you could let us know how you're forming your conclusion. Thanks

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  112. The interesting thing is, we have for sure entered the momentum phase. I have friends who were telling me I was full of it for 2 years who have sold sold their stocks and dumped it into PM's. They will be buying any dips for sure.

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  113. ITS JUST A GUESSTIMATE -

    A mental target that could change/morph

    Dont shoot the messenger :)

    http://www.screencast.com/t/68Nbpl5ryLIh

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  114. Sorry DG

    So are you saying that you think we are going to get a pullback or not?

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  115. To prevent myself from doing something stupid, I may not even open up my platform this morning.

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  116. Thanks Alex. Those charts are helpful to understand how you're coming up with your numbers.

    Not shooting the messenger at all. I just want to be able to seperate the ones that have some kind of rationale behind them, versus ones were people just conclude randomly that we're not correcting.

    For the camp that just follows their gut, it seems like alot just thought that we'd have a correction on Monday and Tuesday, and now we're heading to the moon after yesterday's action.

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  117. This comment has been removed by the author.

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  118. Just to be clear, that wasn't a knock on people posting their opinions. Everyone is entitled to their opinion, I just like to know how it's being formed.

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  119. Gary,

    What would be the signs of a 3 year low in the dollar? Don't we already have extreme bearishness on the dollar? Are you also looking for a technical feature to confirm the 3 year low, like breaking below the 2009 low?

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  120. Thanks for all the commentary here. Learning some valuable lessons... You all are a great community. Gary has given me some ideas on call options already. DG, Alex, etc. would you mind sharing your purchases when the time comes, and how they turn out? I'd like to see some specific real-world results from your trades. Thanks for helping us rooks!

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  121. The big thing here is a lot of what Gary says gets immediately misinterpreted. For instance: Gary says he wants to raise a little cash to deploy elsewhere if we get a correction.

    Translation: 1. Gary is coming off leverage. 2. Gary says to get out now! 3. Gary said to go to (insert % here).

    It's tough being Gary!

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  122. Divergence on the MACD suggests there is a potential correction coming as well although this isn't a difinitive indication and could go on for some time as we saw in the move through October, November, December.

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  123. PC: NO D wave yet. Gold sentiments is barely above neutral

    Hag (I guess I ought to add the "gerty to your name): I think a correction is likely in part because they have preceded the other C-wave blow-offs according to Gary, so why not this one? Especially with the dollar due to bounce.

    Kevin: I rarely buy calls. I will load up on AGQ when correction comes. I will post my timing there.

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  124. Yash

    Are you able to post a chart?

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  125. At the rate he's going, ALEX should be retired by mid-May. :)

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  126. Yash,
    Most people here and most successful traders don't follow EW because it simply doesn't work. The most followed EW'ers of all, Prechter and McHugh, are consistently near the top of the list for worst timers. Case closed.

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  127. Does anyone have the USD 3 year low price we are looking for?

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  128. This comment has been removed by the author.

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  129. FRANCISCO-

    I believe when I wrote ''dont shoot the messenger'', it was just self preservation mode, not directed to you, because I hadnt read your post right before mine was posted,yet. I was writing mine while you posted yours.

    no worries man

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  130. Would 145.50 be 1500 in spot gold price?

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  131. tore - i am not saying ew should be used. I do not use it myself as primary tool. but it helps to calculate numbers if ew count and gary analysis is matching which is case of tony silver /gold count. Tony c us equities count is different story.
    why not pick up good things from everyone.

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  132. I believe it's the 2009 low of 74.17

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  133. KEVIN

    Sure, but I have to ask...You new here?

    you said, "DG, Alex, etc. would you mind sharing your purchases when the time comes, and how they turn out? "

    I think together we've posted over a 100 real time trades :)

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  134. Thanks Francisco, so close, yet so elusive.

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  135. At ease. The triangle on the monthly dollar chart has a target of 62ish, for what it is worth. Lots of folks don't like targets and we will get other signs like oversold rsi on the monthly, etc.

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  136. at ease,
    I think it's closer to the 146.20$ mark.

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  137. Cycle high on day 23 (today)...the correction coming next week (if it comes) should be swift. Blink and you miss it, for those waiting to get back in.

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  138. Yash

    Thanks for posting the chart. Much appreciated.

    Cheers
    Darren

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  139. Thanks MrMyagi, mine seemed low. :)

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  140. SB, Maybe in July Alex will buy a winter place in Paradise. All good still with you?

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  141. Aaron, is it just an intraday quick drop and back up low or will it be for the day spread low?

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  142. S.B.

    Actually I retired from my fulltime job last year do focus on this, but agreed to sign on as a consultant. They only seem to call me in when I really want to be by my P.C. (like all this week, between DR appointments! No time for the markets :(

    And so I am off for the day again...expect something to happen while I'm gone!! Its like clockwork :)

    Good day Market men and woman!

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  143. Yash,
    I respect your right to present ideas, it's just that there are tons of blogs that deal with EW. Gary has posted that EW is not useful. This is a great blog that is not polluted by EW. I encourage you to not post EW stuff here. I agree with you: "i am not saying EW should be used." If folks want to read about EW counts, they can always go elsewhere.

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  144. At ease,
    I think that Gary thinks that it is possible to overshoot that low before we see a bounce. We should probably go back and reread the premium posts to confirm.

    BTW, Is anyone besides myself doing the math in their account for how much (more) you would've been up if you hadn't reduced your position sizes this week? Perhaps Basil will come post this morning to tell me how stupid I was, so that I can feel worse than I already now :0)

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  145. Usually a daily cycle decline will last 5-8 days. This one will probably be no different. It takes not only price but time to ease sentiment.

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  146. miyagi,

    just saw that chart you reposted THANKS! That's exactly what I was looking for.

    And thanks in case someone esle made that original post I didn't bother to go back and look...

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  147. atease, as Gary mentioned above, its a few day event, yet the majority of the spike down could be a 1 day event, and it could be intraday for all we know. This is afterall the final stage of a C wave, and things can easily get out of hand.

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  148. Gary that would also let the averages catch up right?

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  149. Fran,
    I'll let you in on a secret. You are never going to catch the exact top or bottom or any move.

    You might as well start calculating how much you would have saved if you got out and avoided the correction. The problem is that very few people can sell into strength. It takes getting caught in the down draft before they can exit. By that time they have given back a lot of profits.

    I'm very confident we will see a cycle low and those that stay heavily leveraged are going to be in trouble at some point in the next week or two.

    They will pay the price for trying to catch every last penny.

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  150. gary

    do you expect this 5% correction in gold to be a multiday affair, or do you expect it to be done in a few minutes?

    NOT

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  151. Torero

    No kidding on McHugh!

    I got his free 1 month subscription and signed up with Gary at the same time last Aug.

    He emailed me for 5 months warning of a terrible Hindenburg omen crash / Market great depression all last Aug,Sept,Oct,Nov-

    I just didnt see it, so I kept trading,but Very Distracting to say the least!

    How DOES that guy make money??

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  152. I have deleted post related to ew. sorry for them.

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  153. I think we are do just because of the two huge gap up day's in Silver, yesterday and Today. I just bought some may zsl (19) calls only with play money.

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  154. Gary, perhaps this can be answered in your nightly report, but with this cycle running long, would the next cycle (the last of this C wave)be expected to run short? and would it also be LT since it would have to roll? Meaning that we would only have 10 days or so to go up 150+ dollars...

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  155. Thanks Francisco, just look at it this way, you can now pick what you want to ride up with.

    Thanks Aaron, just trying to figure out how to add back in, scale it in or all one shot (here it is, there it goes).

    Thanks Gary, that makes more sense, more drawn out agony. :)
    As I have to be at the computer more than I had planned during this time away.

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  156. This comment has been removed by the author.

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  157. This cycle isn't long yet. Normal is 20-28 days. gold is on day 23. If it were to top today and then drop for 5 days it would just be a normal cycle.

    But let me say again I think this is being driven by the dollar cycle. If the dollar cycle runs short then we could see a long dollar cycle that would drive a long gold cycle next month.

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  158. Thanks Gary. I was just kidding and actually feel pretty comfortable taking profits into strength. I got in much higher than alot on this board, so I really didn't want to be exposed if we had an ugly correction.

    I stated yesterday that I still do expect some type of correction (gut feel)to provide another entry point. If not, I'm comfortable adding at higher prices, once I believe (with your confirmation) that the next leg up has really begun. I don't mind forgoing some profits in the meantime. Like you stated, I've learned that I can't top-tick a stock, nor can I call the absolute bottom.

    Thanks again though.

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  159. My long dollar/short euro trade is starting to work. I am content to hold it until the dollar bounce gets out of the way, even if there is one more dollar dip. The dollar rally should coincide with the correction in PM''s so everything is fairly lined up from my perspective. Of course if silver does correct $6---from $45---that's fine with me!

    Still long SPY---Poly, are you? Bought PHO a couple off day ago, but it's just a toy as it is too thin to buy much. Mostly just waiting...

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  160. McHugh=McFade.

    Thanks Yash. If Gary and EW are in sinc, it's just a random event. You know what they say about a broken clock (EW), right? :)

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  161. Gary and all: When the time comes, the experienced traders are going to light up this board with Sell! posts, so anyone who misses it and gets caught is a fool, stubborn, or both! Prepare yourself mentally now to sell "too early." You really don't want to get caught the day after a parabolic rise peaks. I have seen many of those and EVERYONE runs for the exit at the same time that next day. Gary is not kidding when he says silver could drop 20% in a day---that's 40% on AGQ! You probably don't want to be long that day, eh? Prepare mentally now or you won't be able to pull the trigger.

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  162. Yash

    I enjoyed your posts on EWT and hope you keep posting as you see fit. I'm sure there are closed minds around that don't believe in cycles either.....

    Cheers
    Darren

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  163. traderlady,

    Yes, Everything is still OK, and getting better all the time! :)

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  164. Google dragging Nasdaq down for today. No secret there!

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  165. thanks darren. ew fibo ratios definately work. all computer trading had to programmed and there has to be some mathematics behind it. it cant be just random. problem is there are just too many ratios and possibilities and so people keep one ratio in mind and something else happens and then they ew is useless. its just taken from pure mathmatics sense and keep options open. e.g. 41.93 could have been top too as that was fibo 1.2 ratio too and thats why we got at least some correction but now it want to go higher so go to next ratio. you can not say becuase 41.93 top did not work ew is useless. as you say same goes with cycles. top can come on 20 days or 28 days. its just time band. anyway I agree that ew is bad mouth a lot so i won't bring it here again.

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  166. Maybe dragging is a bit much, more like weighing...

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  167. Gary, with so many comments to manage now, I would suggest that a great improvement for you and the rest of the people who read comments here would be to take TK up on his offer on his comment system. You can't beat free!

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  168. Thanks DG, LOL... I have been preparing for that day for months now. This trigger finger is ready... I am not afraid to sell (sold off half for profit and riding half full now, waiting for cycle low to load back up). I just need to be at the computer at that time when you all holler out SELL! So the worry is not about selling, but getting to the computer to push the button fast enough! LOL

    Right now just trying to get through to the load back up holler point. Half the time, I am resetting computer, looking for access connectivity while traveling. No place like home and those comforts when you need them. ;)

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  169. Haggerty
    ok, knock it off. Appaerntly we were bidding for the same position. I picked up some 18's instead...so there!

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  170. C'mon cycle low, I have cash waiting for youuuuu!!!!

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  171. DG,

    When you and other experienced traders put up your "SELL!" posts how much do you plan to sell?

    Will you sell EVERYTHING ... or keep some in the market just in case you and Gary miss the call?

    I am currently 100% invested (no leverage) and I plan to keep 30-35%in the market after the "SELL!" signal just in case it proves to be wrong since nobody can really know for sure what is going to happen.

    What do you think of that plan?

    Thanks for all your great posts!

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  172. At Ease. The drop is unlikely to come during the day. Most likely is a blow-off huge up day that weakens mid-day and closes down. The down won't be that bad, but the next day could be an eye-popping drop. So you don't have to worry about being a few hours late, but you do NOT want to be a day late. And Gary said he sells "too early". I like to see that reversal before I exit but will lighten up some on the way up.

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  173. GoattaHaveIt,
    That's a personal choice. I would say if you are not selling everything, 30-35% is a little high.
    Maybe 10% maximum.
    Put in another way, you'll sleep better.

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  174. Gary,

    I am trying to understand something here...is there a technical reason why Apr 12 wouldn't be a daily cycle low with an 18 day cycle. Assume that this is say, the first or the second daily cycle coming out of the intermediate cycle. And there aren't really an expectations of the bog parabolic C wave end in the following daily cycle.

    In other words, whether Apr 12 can be called a daily cycle low in its own merit without future cycle expectation.

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  175. Gotta: I will sell every share. You have not lived through one of these parabolic blow-offs before. Keep one share of AGQ as a keepsake if you like, but you don't want to see AGQ down 150 points from 375 one day do you?! If I am early and it goes higher, it's o.k. with me that someone else makes some money. Your expectancy is very negative (small additional gain vs. horrendous loss).

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  176. DG, I like to see a reversal also before selling, however realize this is one time, I will sell early. No problems there. Anything to be made is on the way up. :)

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  177. yes,
    I answered your question in last nights report.

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  178. After studying the intraday carts of silver before the final takeoffs in 2006 and 2008; -There were no scary corrections beforehand. Just patterns very similar to today's
    2006,4 hours candlestick chart +On the upper left is stages of last days development inserted:

    http://www.flickr.com/photos/58720171@N08/5620883312/sizes/l/in/photostream/

    Note the similarities, and same rate of ascent, the correction even started on he same date, 11 April, both years. (An equal percentage-wise rise today would take silver to 46$).

    Intraday chart (4 hour candles) 2008:

    http://www.flickr.com/photos/58720171@N08/5620513537/sizes/l/in/photostream/

    In 2006 came another top, i.e. double top, 16 trading days later. In 2008 one can see that there were also double top, then the D-wave started.

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  179. Gotta, I planned on keeping a 1 share of gold and a 1 share of silver, just as a momento of the great C wave. Will keep it in my Roth as a remembrance. :)

    No need to stay on board as you will reload at the bottom of the D wave getting ready for next ride up for A wave.

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  180. DG,

    OK ... I have seen the light!

    I will follow your (and Gary's) lead because you are right, I have not "been there, done that" in the PM market before like you guys.

    That's why I'm here!

    Thanks for saving me from making a bad mistake.

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  181. Hasn't someone warned us many time that the correction before the C-Wave finale will scare many into thinking the D-wave has begun? Sure seems like a lot of people are convinced this is the finale, so the next correction must be the D-wave. Interesting.

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  182. Gary,

    Ok, I see....Doc's trendline theory.

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  183. DG,

    Just curious ...

    I know it's impossible to know for sure, but what is your guess for a range of how low the silver price might go during the D wave drop?

    The reason I ask is because I'm planning to add to my stack of physical silver and I'm wondering if you think we will get back to the low 30's or even lower.

    In my case, the lower the silver price drops the more I like it.

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  184. Trond, thanks for sharing those charts of previous C top offs. Scary enough to reinforce... time to SELL as you don't want to be on that D downslide!

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  185. Gary: If you feel to, a response to, I'd love to hear a response to Trond (nice work BTW, Trond). I assume that you feel we are in a different place in the rally from what he has shown, though the patterns do look well correlated.

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  186. Gotta. No idea where the low will be. I work off sentiment and oversold and it's hard to know how far we have to drop before people get too bearish. Gary put out an estimate at one point and I'm sure will again once the D-wave has started (I think it was 1/2 the rally--?). I also own no physical because I believe we have another cycle or two before things collapse. I will buy later (as for a shortage later, everything is available at a price and I will have hopefully made so much trading the PM's that I'll happily pay up for the physical).

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  187. The price is threefold now so those ups and downs are magnified as well.
    Most kell over like frightened goats at a 1$ drop, can you imagine the herds thudding at a 6-8$ drop?

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  188. Gary,

    I second Duuuuuuude's idea. It would be great if you could take up TK on his proposal to give you free access to the Disqus commenting system. Perhaps during the D wave.

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  189. Dg,
    I don't really think matching patterns from a prior C-wave to today has much predictive value.

    This C-wave has already turned into a three leg move as opposed to the two legged rallies in 06 and 08.

    Every daily cycle has come like clockwork for 10 years now. Every intermediate cycle has played out on cue.

    The same with the dollar.

    So I don't see any reason to expect a sudden change other than too many people are getting extremely bullish into extremely stretched conditions.

    I'm just going to continue to follow my plan. If gold can move above $1500 I will decide if i want to reduce AGQ positions a bit more.

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  190. Alex,

    Yeah, I've totally noticed your posts. Just wanna make sure I see what you do, cause you're one of several here on the board whose trading thought process I like, and I respect your comments and general attitude.

    I guess you could say "I like your moves... I like your style." Not crushing, just a quote from the Starsky and Hutch move...

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  191. I would warn again for those who are over leveraged that the miners are not confirming the move in gold.

    SIL is not confirming the move in silver either.

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  192. Gary if they are not confirming, what does that mean, adjustment to funds. Can you explain... just trying to understand, although I am not overleveraged. thanks in advance.

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