In one of Gary's earlier comment, he said he would never sell into a cycle low, and his new post more or less confirms that this is under way, so I don't think he will sell tomorrow. Also, he will post in real time any trade he makes, so hopefully we'll know then.
I agree, but we're not at a cycle low. We are just staring the dip into the cycle low (maybe).
Also, he is not doing just a straight sell as we all know. It is a switch.
I do see some things in the report that contradict what he posted on the blog earlier, to the effect that I believe he is still carrying it out early am.
Looking at the daily chart of silver, IMO this correction will likely drop to the 39 - 40 range. It may stop at 41, but I'd give 40 and even 39 higher odds.
Gold's not as obvious to me, but 1490 - 1520 looks likely.
We don't sell into daily cycle lows, instead, use them as buying opps. Good luck all!
When the D wave hits, how about going long ZSL with 2-5% of portfolio instead of OTM SLV puts?
As a side note, is this Black Swan event of Osama being dead the good news on which this cyclic bull tops? News on terror cannot possibly get better than this!
"I won't be making any decisions before the market even opens. However now the potential reward has again swung in favor of silver as the move back to $50 is much larger percentage wise than a move from here to $1650 for gold. If you have cash you are now better off putting it in silver."
He's not doing anything until he sees how things shape up in the morning.
In this rally in silver since last August, the pattern has been for the daily cycle to put in a low at the 20 MA on the daily chart and then move up slowly, hugging that 20 MA for 2 - 5 days.
The 20 MA for silver right now is roughly 42.86 on the futures contract. Eyeballing spot silver on Kitco, it looks like the low for tonight in spot was roughly 42.30 -- so silver has already gone below the 20 Ma by about 50 cents.
I wouldn't be surprised if tonight's low marks the daily cycle low for silver, and then it hugs the 20 MA for 2 or 3 days and then starts to move up away from it in the new daily cycle.
I guess we know why gold and silver were going down. Obviously some folks knew that this was going to be announced. :) Martin Armstrong often says that cycles tend to be able to predict major events.
TOS upped the margin requirement on their mini-silver futures contract to $6,007, twice the exchange requirement. I chatted with a CSR and was assured that I would get a surprise liquidation, but I could get a margin call tomorrow with two days to meet it.
I will never sell into a cycle low. Not to avoid a draw down, and not to convert silver to gold.
If you don't see a portfolio change then I didn't do anything. People you know this, why do you continue to ask this same question over and over.
Daily cycle lows almost never last one day so don't get it into your heads that this will be over in one day.
Also you can throw away your charts your trend lines and your moving averages. They are worthless right now and will just cause you to make a stupid mistake based on something with no predictive value.
Just let the correction play out and buy once a swing low is formed.
I'm confused. Gold leads the way and silver follows. Gold closed at $1565 on Friday and given tonight's events only slipped to $1540 and is now trading about $1551. So the move a $25 drop is still within the runaway scenario isn't it? Why are we talking all about silver and what its going to do?!
I purchased gld options earlier when gold was at 1535. Should I sell them with a profit and buy call options on slv or slw while it still has a lot of potential?
Not, Because there's no way the greatest C-wave of the entire bull market tops with a whimper. This is going to top with the largest parabolic move of any C-wave to date. Silver has already shown what is possible.
Now it's gold's turn to follow the silver parabola.
Niv, I can't answer that one for you. You know what I'm doing with my portfolio and you will know the minute I make any changes. If you want to do something different then make a plan and take your best shot. Then have the discipline to follow your plan.
if I understood correctly, yesterday you mentioned in your report that the PMs might top out earlier than what you had expected. In today's report however you sound convinced that the C wave will likely last for quite a bit longer. You are also raising your targets on gold somewhat, while I think that yesterday you mentioned that gold might end its run prematurely.
Is there a discrepancy between your outlook from Saturday to Sunday, or did I misread anything?
To me today's spot price action almost seems like confirmation of the caution you expressed in yesterday's report, where you were concerned that the run could end early; the only surprise now is that PMs seem to be tanking on the news that Osama bin Laden is dead rather than on the unemployment report.
My question is, what has changed that is causing you to alter your view from yesterday's caution to today's optimism?
Would be great if you could answer that. Thank you!
I will try to answer it for you since I read his update this evening. Simply put, the difference is that this decline has offered up a discernablee cycle bottom. Gold is no longer in 'run away move' which disregard cycle length. Now that cycle bottom is forming this week, he can make a better forecast as to what the top would look like. And his conclusion is that we have another parabolic up move over the next cycle.
Does it make sense to you? I am not a cycle expert but since Gary probably went to bed, I'd like to help out.
Hopefully you're feeling better now - and maybe you lost enough weight now to do a 5.12d in Oregon, eh? ;-)
Re: the dollar cycle in your report, is it still within the statistical mean of how cycles work for the dollar? I would have thought that's it's too late now to have a cycle dollar change.
Also (general q) why (someday) consider DGP, instead of UGL? DGP is DB's ETN, not PowerShares ETF which is UGL (sister to AGQ). Is it because DGP has more liquidity?
I think the difference is that the dollar still has yet to make a new 3 year cycle low.
I think if Gold would have extended its gains this week and Dollar made a new 3 year low then we would have been looking for the exits, because there would be nothing left driving this C wave advance in PM's.
Well looks like Gold hit it's cup n handle target on the chart and had it's correction, painful as it is to watch, it was expected. This chart doesn't have the correction day on it yet.
Hope you're all enjoying the draw down, I'm not :-)
Sometime I wish I could just draw a chart and press fast forward to get past the ugly bits.....
Good morning. As much as I hate to see my portfolio go down, I am glad we may have a cycle bottom, for it means a potentially spectacular finale. Since I am all in, I will ride the wave... at least I have no decisions to make!
Geez still the dollar can't get any kind of bounce. If the dollar continues to collapse the expected (and hoped for) daily cycle correction could come right back off the table.
V, If you already have gold then just leave it as is. It's probably a tossup at this point. Both gold and silver have come back strongly from the lows and the dollar can't find a bid at all.
If the dollar continues to collapse this week then I wouldn't expect this corrective action to last very long. Heck it might not even last into the open.
What do you all make of the fact that commercial traders’ short positions in silver have dropped to their lowest levels in many months...this is the 'smart money' after all!
IMO, a decreased short position will likely mean that there is a belief that silver has a greater chance of rising in the future, and that any short covering will be more muted.
It's all relative, since I believe, that the short book is still good sized.
Discreet, Someone commented on this earlier. The COT's are only predictive at bottoms when the Blees rating is above 90. Other than that trying to read something into every little wiggle is a fruitless endeavor.
Sometimes a top will come once open interest hits all time highs. But then it can stay at that level for a month or more so it isn't an actionable timing tool.
Gary has said - and correct me if I'm wrong - that the metals will not top until we see a panic low in the dollar. Period. I'm being cautious this week but until the dollar really gets creamed the metals will have upside.
Now that we know what the silver miners were discounting the last couple weeks, I might have to buy some back if they can show strength relative to the metal. No rush, but I don't think we should overlook them when it's time to buy.
Gary, I am trying to understand the end of this intermediate cycle as you portray it in your new post. You outline two scenarios with charts based on a current daily cycle correction. The first involves one more daily cycle but the second looks to involve two more daily cycles (one RTL and the other LTL). Am I interpreting this correct and if so, how does that affect the future timing bands for the end of this intermediate cycle?
One other point, is the back end of the final daily cycle of this intermediate cycle the dreaded DWave hence the LTL requirement as you stated?
Everything is OK and the only decision for me is when and how much to buy. I'll observe th open and plan to get heavily long into a daily cycle low if it presents.
In case it does not materialize and we begin a slow march higher, I intend to put another 2% of portfolio at risk today (bringing me to 4% total risk). Bigger purchases to follow later in the week.
I hate trading off news events as they're impossible to quantify, but if I'm not mistaken, this weakness could persist into the close as these margin hikes force sales by the end of the day.
Believe me, I don't believe any of the government BS about 9/11. I just didn't know this about bin Laden that he may have been dead already for many years. Thanks for that link.
Paul, I was pointing out that all intermediate cycles end with a left translated daily cycle. That isn't possible with the current cycle as it extremely right translated. Once this bottoms then we have to see either a cycle that fails to make a new high and rolls over in less than 10 days or we see a spike to marginal new highs that tops quickly and rolls over into a left translated cycle.
I don't believe for a second that the largest C-wave of this entire bull market will top with only two daily cycles up. I also don't believe this will top before gold and miners make a big parabolic move. That leaves the second scenario (second chart in the report) as the most likely way this will unfold.
Either way we need a recognizable daily cycle correction so we can take the runaway move off the table. I don't want to deal with a runaway move because my cycle tool becomes ineffective and it becomes hard to spot the timing band for a top.
SB, can't understand why silver looked sick last Friday while gold rocketed. That, and the breakdown of the cycle analysis/ theory with no cycle low. When I can't explain something it bothers me.
We didn't know the reason for the move of Friday, but we do now.
I can promise with absolute certainty that the best traders/investors (with the deepest pockets) are not doing anything but making buy lists. It doesn't mean we turn around immediately, but only the inexperienced and emotional traders will sell into this.
It really is not a viable option, even if we go lower first. The bull will let you out.
Miners were the tell over the last few weeks, so let's keep an eye on them. When they begin to show relative strength vs. silver, it might foreshadow the end of the pullback as well.
Trust me Gary, I am your number 1 fan and I really look up to you for the way you lead this blog and do your work. You are a rare human being. All I'm saying is that I'm nervous, but I will always follow what you are doing. Lost far too much money trying to be cute and the Market making a moron of me.
Bankers are not tipping their hand this morning. We have made it past the 8am and 9am potential "raid" spots and is looking more like a "back to business as usual" up trend.
Gary You said you'd never sell into a daily cycle correction; therefore you won't convert to DGP & GLD call this morning.
The question I have is: Does this mean that the plan you had to convert silver to gold is not off the table for the remainder of this C-Wave finale?
What I'm really asking you is: Was your original plan to convert to Gold based on the fact that it was a runaway move in gold, but now with the daily cycle correction on the way that plan is off the table for good til the C-Wave TOP and you'll remain in Silver til the TOP?
And by the way, thank you for the great report last night :-)
MG, My original plan was to convert to avoid a possible extreme correction in silver close to or at the top of the C-wave.
I think gold has one more complete daily cycle higher before this tops. I will wait and see how silver acts as the metals rally out of the next cycle low. If it pops back very strongly to $50 very quickly, then the odds are probably high that silver will easily cut through $50 and go much higher.
In that scenario I will hold silver for a while before converting to gold as the percentage gain will be much larger.
I must confess I don't entirely understand cycle theory but I follow Gary's recommendations with great interest. What I don't understand is with so many events occurring how it's possible to say with confidence that some sort of cycle event is taking place. This correction in silver is most likely being driven by massive margin increases. Are events like these considered "catalysts" of cycle events, or are cycle events supposed to happen on their own, independent of external events, or does it matter?
Previous margin increases have proven to be buying opportunities but this one was relatively harsh so it may take a few days to play out.
From Bloomberg "Bin Laden’s body was buried at sea, the Associated Press reported, citing an unidentified U.S. official."
Yeah, sure. Okay, I believe they killed him yesterday. And buried him at sea? WTF??!! He was killed in the MOUNTAINS on the border between Pakistan and Afghanistan and then they flew his body hundreds of miles away to the ocean, so he could be buried at sea??
This comment may not hold long, but I believe the low in gold overnight was all we will get and resumption higher is imminent. I'm betting on it with a stop at the low (on a partial addition to my position.)
It isn't a huge risk. It's just what I'm seeing and playing for now.
Noticed what looks like a fairly significant jump in the "gold lease rate" charted on the Kitco site over the last few days. Not sure what the gold lease rate is. What might an increase in this rate mean?
pima: Bin Laden was killed in a medium-sized city about an hour north of Islamabad. He was in a very secure compound there. He wasn't killed in the mountains (the so-called "tribal areas").
Okay, my bad. However, Islamabad is in NORTHERN Pakistan, very close to the mountains, and more than 1000 kilometers from the ocean. Why fly the body 700 miles to dump it there? The story just sounds fishy to me.
So would this be the right time to buy those "out of the money puts" on silver"
"The way to handle this? - simple - stay long and buy yourself cheap protection in the form of out-of-the-money Put options in silver itself, or Call options in something like the ProShares Ultrashort Silver, code ZSL. The cost of these options is peanuts compared to what you will save yourself if silver should suddenly tank."
PK, It's way too early to buy puts on SLV now. We need to get the final daily cycle up. The time to buy puts is after we see gold rally in a massive parabolic move and put in a high volume exhaustion day.
That's probably still a month away at least.
Silver could easily move to $60 or even $70 by that time.
I have been saying I will not buy miners again having sold them weeks ago. This correction has changed that. If we go down 3-5 days as Gary predicts I may even get a buy on one or two (AG probably!). Even aside from the buy, these prices are getting too juicy to resist. I will buy SLW when this is over, at least. I think this drop is going to make us a lot more money than we'd have made had it not occurred. just sit tight for now. I don't know cycles anywhere near how well he does, but I do know markets, and he's right: A move like this is not going to end with a whimper.
What we want to see right now is some follow through to the downside over the next couple of days so we can get a recognizable daily cycle low.
That will set up what I expect will be a truly amazing final cycle up.
What I don't want to see is for gold and silver to recover today. That would keep the runaway move alive and I don't want to have to deal with a runaway move because it's almost impossible to spot the top in real time. And when they do top they tend to crash with no warning.
So in order to avoid getting caught in the crash one has to get out early and sit and watch the market just continue to go up with out them.
I like the idea that someone proposed last week about having the London boys chasing come Tuesday. Now, I didn't think it would happen this way but if that's what transpires, I'll take it.
I think the miners may have bottomed already. Then the next three days or so gold can drift lower with the miners not making new lows. That relative strength ought to occur before the bottom just like the weakness did before the top. Still best to wait for the cycle bottom though, IMO
Personally, I don't think gary will agree with me. But, I think last night was a take down by the big boys. It was low volume euro session just like the other sunday. Before this wave it seemed like there were take downs in the euro session all the time...
Matthew: Is there any practical use to determining whether it was a "take down by the big boys" or just normal trading? Should it affect our investment decisions somehow?
I wonder if the hundreds of hedge funds who move amongst hot risk asset had anything to do with it. After bidding up Silver 100% in months, their leveraged futures accounts are up %100's.
No practical use for me at this point no. Just an observation. However, I do know people that try to trade with institutional investors. All of the trading we are doing is observational at this point. Cyclical trading is just trading off of past observations. If it were off of solid fundamentals the most prudent thing to do would be to buy hold wait for fundamentals to kick in and sell...
I think the dollar needs to buy a vowel. Unbelieveable. Someday someone needs to write a book about the Invisible Hand vs. debasement of currency. Amazing the ability of the (somewhat) free market system to the see reality behind complex monetary moves.
I can tell you without reservation this was not a daily cycle low. Daily cycle lows are visible on the charts from across the room.
This could be a one day correction in a continuing runaway move or it might be the start of a move down into a daily cycle low but it was not a daily cycle low.
Interesting that gold's pretty much back to where it finished off Friday, while silver has recovered the lion's share of its smackdown.
I wonder how much we should be reading into today's "overnight" action as the raid on the PMs came on a day when most of the world was closed for May Day.
Seems to me that it's along the same lines of the action to start last week when silver when on a big sprint in thin trading amid another holiday in many markets to start the week.
That said, the near tagging of $50 was this time last week was good enough for me to pull out of half my silver and move across to gold. So I don't maybe today's action does portend a downweek, or maybe it's just some monkeying around amid holiday market closures?
Hot Rod, Without an obvious daily cycle low in place I can't tell you with any certainty when a good time to buy is.
I can tell you with a great deal of certainty that the C-wave isn't done. So as long as you are emotionally capable of holding thru a draw down anytime is a good time to buy.
My thoughts on silver are that it is a BLENDER here. And I'm not interested in jumping into a blender.
I am 100% completely POSTIVELY MASSIVELY happy I sold all my silver futures within about $1.50 of the top last monday morning.
That is the trade (holding too long after massive profits and a blowoff move) that, in the past, I would hold through and end up destroying much of my profits. Not this time.
Clearly silver could continue up and make new highs but it will NOT be an easy thing to either play or hold through due to the volatility now. And maybe it does NOT make a new high. I don't envy you guys holding AGQ.
Since silver is now easily moving 50cents+ on the smallest of sneezes, it is very difficult to get a good position and hold it with minimal loss. I'm not saying I might not try if things turn more positive, but I've moved my position over to 5x gold futures and I'm happy.
And I wonder-- I wah-wah-wah-wah-wonder, Why, Why, why, why, why, why she ran away, Yes, and I wonder, A-where she will stay-ay, My little runaway, Run, run, run, run, runaway.
Remember when it used to take a week for silver to move $.50-$1... Good times. The changing scale on those Kitco charts messes with my head. When silver moves slowly over 3+ days its all zoomed in so that small moves look huge, then when they zoom it way out like this - these $1 moves look like nothing.
Silver is on a roll. I think too many people shorted it expecting it to collapse at the open when the SLV/AQG orders hit. The price action last night was a low volume liquidation and the futures contract was trading above the VWAP for most of the night. At this rate we will see a swing high and a swing low in the same day ;) J/K. The real challenge will the consolidation high volume areas between 48 and 49. If it can take out 48.80ish area I think 50 will go like a "hot knife through butter"
Also Gary, keep in mind that the time-horizons in which moves happen, at least among the professionals have shortened a lot thanks to 24/7 market, computerized trading, HFT etc. Sentiment swings now should be measured in terms of hours and not days.
And the CME is probably going to have to raise silver margins again today. In 12 MINUTES last night we had a move which was TWICE the margin amount per contract.
Thus, even if a person was trading at HALF max margin level they STILL got their account destroyed last night.
Generally margins should be set so that a reasonably expected move does *not* take out a persons account. The exchange has to set levels so that holders of contracts have enough money in the margin to cover expected moves.
The amount of an 'expected' move to consider in setting margins just skyrocketed last night. We'll see what they do today.
I'm appalled (as a US citizen) and amazed at the weakness of the dollar. Dollar sentiment remains very bearish (bullish for the $)and, as Poly has mentioned, the Intermediate cycle is more than overdue to end. What will it take for the $ to bounce?
I'm in the same boat TZ - except I'm never 5X anything ;). I like the blender analogy. I still held a small stake of SLV calls but even let those go Friday after seeing the suspect decoupling of silver from gold.
Although my account is in the green today since I'm gold only, I agree with Gary that a daily cycle correction is long overdue and would have preferred a good shakeout for more sustainable gains later.
I think Big Bob who loves Hawaii said that some silver miners are reporting soon. Do you think that could be the jump start for miners to start acting right?
Gary, Are there any books you recommend on cycle analysis? I have seen some work on Walter Bressert on the web but not much as far as books to really break it down. I have learned a good amount of elliot wave, but I like cycle analysis since it seems like a less complicated view.
Awesome job on covering the metals. My subscription has already paid for itself. Thanks again.
It's ironic, but contrary to popular belief, profiting from parabolic tops are so difficult. We lick our chops in anticipation of a parabolic ending, but in reality, the money is made in the gentle accumulation months leading to a parabolic run.
If you're going to have any chance of making real money during the final run, it will require nerves of steal to avoid selling the dips and buying the pops, they will occur almost daily.
Now that you are convinced this is not the daily cycle correction and are re-confirming this a runaway move, will you sell your AGQ and SLV this morning and move into gold as originally planned? If not, when do you anticipate making the switch?
Gary did not say he is convinced this will not turn into a daily cycle low. What he said is that we do not have a daily cycle low right now.
The market could head south again and gold could drop to 1515 or so. That would be a low enough low to qualify for a daily cycle low. And it could start that drop right now. If it does, it would likely be over in a day or three.
But if the low that came in last night is all we get, then we do not have a daily cycle low and the runaway move is still in place.
The point is that right now we don't know whether we're going to get the daily cycle low or not.
good point. This is my first intermediate cycle and the thing that I have learned is that the closer we get to the top the more I need to lighten my exposure not add to it.
Yes, THIS was not a daily cycle low. This means "this", as in what we have so far.
At least that's the way I read it.
How can he or anyone else possibly say what's going to happen for the rest of the day today, or tomorrow? Unless you can say for sure that you know what's going to happen later today and tomorrow and the day after that, how can you be sure we won't get the daily cycle low?
FWIW, we have a nice looking double top on the 30 min chart and gold futures are dropping hard. Maybe we get the daily cycle low after all.
The TL break we would need to confirm it is down around 1519 on tomorrow's date. That's a pretty big drop, but not out of the question. On Wednesday that TL is around 1523.
It's not possible to get a swing high today. But we might get one tomorrow. That would open up the possibility for a move down into a cycle low the rest of the week. But we need the dollar to bounce.
Gary,it looks like correction is already started. If you have to enter a new possition,what woyld you prefer to buy at the bottom of the corection Gold or Silver?
Miners are really sucking wind again. I have a decent amount in 401k accounts, but they just blow. SIL especially has been a dog the entire IT cycle.
I'm dumping them all for UGL and some AGQ, if they go for a run in the final weeks, that would be a surprise to me, even if they have always done this during past c-wave endings (All 3 of them)
Poly So far the down action has felt more corrective rather than impulsive. During the down move SI is finding support where it should (Fibs, VWAP) and the bounces are sharper than the declines (so far).
It has auctioned very well. Top of the day was near that 47.26 low of last Thursday; and continues to honor technical price levels very well.
sprott sold silver last week: http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/eric-sprott-sells-his-silver-trust-units/article2006755/
According to Turd, he hypothesized that gold would test the levels of 1560-65 which it did today. If gold reaches that point it would begin to consolidate lower at supports of 1540 or even 1525. This week we still have the factory report, the ISM non-manufacturing, Jobless claims, nonfarm payroll and unemployment report out. If any of these signs show a positive improvement in our economy than perhaps the dollar will appreciate for a short time which will hopefully signify the next parabolic move in silver?
Silver miners such as AG showing oversold according to stochastics. This is the same level seen at last IT cycle. Therefore I think we should see a bounce later in the week or early next, especially if we enter parabolic phase as Gary mentions. Would be foolish to sell now IMO.
Gary,
ReplyDeleteIs the plan for tomorrow early still on, or is it on hold?
Thanks?
Nice report Gary... Somebody more experienced than me here once mentioned using Andrew's pitchforks..
ReplyDeleteAt the last daily cycle low I drew a pitchfork for Gold and Silver and the accuracy of S/R is quite intriguing:
Silver Pitchfork
Gold Pitchfork
oouppss... looks like my gold chart has some stop orders in it... please disregard them and follow Gary's stops!
ReplyDeleteThanks Gary. Given tonight's insanity, the report was very much appreciated.
ReplyDeleteThank you for posting Gary...much appreciated :)
ReplyDeleteI guess Osama doesn't affect cycles!
ReplyDeleteAs I said a few lines ago, the $ Index hasn't gone through the roof.
I noticed that on the leg up silver normally 25 dma acts as support. I think it will not go lower than the 25 dma.
ReplyDeleteAs it is the current intraday low is 15% off the recent high.
So I added spot silver at 43.5. Will add more if it gets back down to 43.
Gary,
ReplyDeleteWow...what a report! At a time it was needed the most. Thank you!
Hot Rod:
ReplyDeleteIn one of Gary's earlier comment, he said he would never sell into a cycle low, and his new post more or less confirms that this is under way, so I don't think he will sell tomorrow. Also, he will post in real time any trade he makes, so hopefully we'll know then.
Gary, please enlighten us explicitly! Thanks!
HKC,
ReplyDeleteI agree, but we're not at a cycle low. We are just staring the dip into the cycle low (maybe).
Also, he is not doing just a straight sell as we all know. It is a switch.
I do see some things in the report that contradict what he posted on the blog earlier, to the effect that I believe he is still carrying it out early am.
Looking at the daily chart of silver, IMO this correction will likely drop to the 39 - 40 range. It may stop at 41, but I'd give 40 and even 39 higher odds.
ReplyDeleteGold's not as obvious to me, but 1490 - 1520 looks likely.
We don't sell into daily cycle lows, instead, use them as buying opps. Good luck all!
Gary / DG / Others:
ReplyDeleteWhen the D wave hits, how about going long ZSL with 2-5% of portfolio instead of OTM SLV puts?
As a side note, is this Black Swan event of Osama being dead the good news on which this cyclic bull tops? News on terror cannot possibly get better than this!
Hot Rod_
ReplyDeleteGary said in his blog post earlier
"I won't be making any decisions before the market even opens. However now the potential reward has again swung in favor of silver as the move back to $50 is much larger percentage wise than a move from here to $1650 for gold.
If you have cash you are now better off putting it in silver."
He's not doing anything until he sees how things shape up in the morning.
In this rally in silver since last August, the pattern has been for the daily cycle to put in a low at the 20 MA on the daily chart and then move up slowly, hugging that 20 MA for 2 - 5 days.
ReplyDeleteThe 20 MA for silver right now is roughly 42.86 on the futures contract. Eyeballing spot silver on Kitco, it looks like the low for tonight in spot was roughly 42.30 -- so silver has already gone below the 20 Ma by about 50 cents.
I wouldn't be surprised if tonight's low marks the daily cycle low for silver, and then it hugs the 20 MA for 2 or 3 days and then starts to move up away from it in the new daily cycle.
I guess we know why gold and silver were going down. Obviously some folks knew that this was going to be announced. :) Martin Armstrong often says that cycles tend to be able to predict major events.
ReplyDeleteTOS upped the margin requirement on their mini-silver futures contract to $6,007, twice the exchange requirement. I chatted with a CSR and was assured that I would get a surprise liquidation, but I could get a margin call tomorrow with two days to meet it.
ReplyDeleteMy oh my. These are interesting times!
Arrrrg. Blogger needs an editing function. Meant to say I WOULDN'T get liquidated.
ReplyDeleteI agree JH
ReplyDeleteGary took stops off too...not shown on blog...for info
ReplyDeleteI will never sell into a cycle low. Not to avoid a draw down, and not to convert silver to gold.
ReplyDeleteIf you don't see a portfolio change then I didn't do anything. People you know this, why do you continue to ask this same question over and over.
Daily cycle lows almost never last one day so don't get it into your heads that this will be over in one day.
Also you can throw away your charts your trend lines and your moving averages. They are worthless right now and will just cause you to make a stupid mistake based on something with no predictive value.
Just let the correction play out and buy once a swing low is formed.
PC,
ReplyDeleteSee here:
http://en.wikipedia.org/wiki/Benazir_Bhutto
She was assassinated shortly have making the statement re. OBL. It was on YouTube. (It was after 9/11.)
Gary
ReplyDeleteThanks for posting. It def settled my emotions.
Benjamin your pitchfork drawing makes me want to use the rest of my dry powder to buy AGQ.
Gary
ReplyDeletewhat makes you so confident that it is the "latter" that we will see?
so if the next daily cycle is left translated, what is the timeframe for which you expect the D wave to begin?
I'm confused. Gold leads the way and silver follows. Gold closed at $1565 on Friday and given tonight's events only slipped to $1540 and is now trading about $1551. So the move a $25 drop is still within the runaway scenario isn't it? Why are we talking all about silver and what its going to do?!
ReplyDeleteHey Gary,
ReplyDeleteI purchased gld options earlier when gold was at 1535. Should I sell them with a profit and buy call options on slv or slw while it still has a lot of potential?
Not,
ReplyDeleteBecause there's no way the greatest C-wave of the entire bull market tops with a whimper. This is going to top with the largest parabolic move of any C-wave to date. Silver has already shown what is possible.
Now it's gold's turn to follow the silver parabola.
Niv,
ReplyDeleteI can't answer that one for you. You know what I'm doing with my portfolio and you will know the minute I make any changes. If you want to do something different then make a plan and take your best shot. Then have the discipline to follow your plan.
Off to bed so I can get a workout in the morning. Hopefully this will continue and give us a recognizable cycle low.
ReplyDeleteGary,
ReplyDeleteif I understood correctly, yesterday you mentioned in your report that the PMs might top out earlier than what you had expected. In today's report however you sound convinced that the C wave will likely last for quite a bit longer. You are also raising your targets on gold somewhat, while I think that yesterday you mentioned that gold might end its run prematurely.
Is there a discrepancy between your outlook from Saturday to Sunday, or did I misread anything?
To me today's spot price action almost seems like confirmation of the caution you expressed in yesterday's report, where you were concerned that the run could end early; the only surprise now is that PMs seem to be tanking on the news that Osama bin Laden is dead rather than on the unemployment report.
My question is, what has changed that is causing you to alter your view from yesterday's caution to today's optimism?
Would be great if you could answer that. Thank you!
Good post, keeping the faith.
ReplyDeleteGary,
ReplyDeleteThank you for the post. I really misinterpreted some of your earlier posts. I appreciates tonight's report!
Hi Gary,
ReplyDeleteLast week I went ahead and converted 30% of my Silver position to Gold.
Should I exit Gold and move back to Silver now or let it remain same.
V
Basil,
ReplyDeleteI will try to answer it for you since I read his update this evening. Simply put, the difference is that this decline has offered up a discernablee cycle bottom. Gold is no longer in 'run away move' which disregard cycle length. Now that cycle bottom is forming this week, he can make a better forecast as to what the top would look like. And his conclusion is that we have another parabolic up move over the next cycle.
Does it make sense to you? I am not a cycle expert but since Gary probably went to bed, I'd like to help out.
Gary,
ReplyDeleteReminds me of the japan earthq week: I was nervous as hell but you were rightly confident in cycles and your experience.
Great report- I will try to remember that week as we go thru this week
Hi Gary - nice report.
ReplyDeleteHopefully you're feeling better now - and maybe you lost enough weight now to do a 5.12d in Oregon, eh? ;-)
Re: the dollar cycle in your report, is it still within the statistical mean of how cycles work for the dollar? I would have thought that's it's too late now to have a cycle dollar change.
Also (general q) why (someday) consider DGP, instead of UGL? DGP is DB's ETN, not PowerShares ETF which is UGL (sister to AGQ). Is it because DGP has more liquidity?
Thanks.
Basil
ReplyDeleteI think the difference is that the dollar still has yet to make a new 3 year cycle low.
I think if Gold would have extended its gains this week and Dollar made a new 3 year low then we would have been looking for the exits, because there would be nothing left driving this C wave advance in PM's.
Evening all,
ReplyDeleteWell looks like Gold hit it's cup n handle target on the chart and had it's correction, painful as it is to watch, it was expected. This chart doesn't have the correction day on it yet.
Hope you're all enjoying the draw down, I'm not :-)
Sometime I wish I could just draw a chart and press fast forward to get past the ugly bits.....
Gold Cup
Regards
Darren
From Market Watch:
ReplyDeleteMay 2, 2011, 3:05 a.m. EDT
"U.S. stock futures rally after bin Laden’s death
Dollar jumps; crude-oil, silver futures slump"
Beep
ReplyDeleteBeep
ReplyDeleteGood morning. As much as I hate to see my portfolio go down, I am glad we may have a cycle bottom, for it means a potentially spectacular finale. Since I am all in, I will ride the wave... at least I have no decisions to make!
ReplyDeleteGeez still the dollar can't get any kind of bounce. If the dollar continues to collapse the expected (and hoped for) daily cycle correction could come right back off the table.
ReplyDeleteBill,
ReplyDeleteI would suggest sticking with DGP. It is much more liquid than UGL.
V,
ReplyDeleteIf you already have gold then just leave it as is. It's probably a tossup at this point. Both gold and silver have come back strongly from the lows and the dollar can't find a bid at all.
If the dollar continues to collapse this week then I wouldn't expect this corrective action to last very long. Heck it might not even last into the open.
Congrats to you folks from the USA on getting Osama bin Laden
ReplyDeleteWhat do you all make of the fact that commercial traders’ short positions in silver have dropped to their lowest levels in many months...this is the 'smart money' after all!
ReplyDeleteThanks for the update Gary, it's all very clear. Let's see what the week brings.
ReplyDeletediscreet-
ReplyDeleteIMO, a decreased short position will likely mean that there is a belief that silver has a greater chance of rising in the future, and that any short covering will be more muted.
It's all relative, since I believe, that the short book is still good sized.
Discreet,
ReplyDeleteSomeone commented on this earlier. The COT's are only predictive at bottoms when the Blees rating is above 90. Other than that trying to read something into every little wiggle is a fruitless endeavor.
Sometimes a top will come once open interest hits all time highs. But then it can stay at that level for a month or more so it isn't an actionable timing tool.
Nice post Gary.
ReplyDeleteMy only concern is the dollar IT. Is there enough time and juice in that to support a parabolic gold cycle? The IT is already stretched.
Gary has said - and correct me if I'm wrong - that the metals will not top until we see a panic low in the dollar. Period. I'm being cautious this week but until the dollar really gets creamed the metals will have upside.
ReplyDeletehttp://seekingalpha.com/article/266896-did-the-silver-bubble-just-go-pop?source=email_the_daily_dispatch
ReplyDeleteThis is just another guy that shall have to cover and add to the next big move up in silver! LOL
Now that we know what the silver miners were discounting the last couple weeks, I might have to buy some back if they can show strength relative to the metal. No rush, but I don't think we should overlook them when it's time to buy.
ReplyDeleteGood Morning SB with your words of wisdom:)
ReplyDeleteGary, I am trying to understand the end of this intermediate cycle as you portray it in your new post. You outline two scenarios with charts based on a current daily cycle correction. The first involves one more daily cycle but the second looks to involve two more daily cycles (one RTL and the other LTL). Am I interpreting this correct and if so, how does that affect the future timing bands for the end of this intermediate cycle?
ReplyDeleteOne other point, is the back end of the final daily cycle of this intermediate cycle the dreaded DWave hence the LTL requirement as you stated?
Good morning to you, traderlady. :)
ReplyDeleteSB, is everything still ok?
ReplyDeleteEverything is OK and the only decision for me is when and how much to buy. I'll observe th open and plan to get heavily long into a daily cycle low if it presents.
ReplyDeleteIn case it does not materialize and we begin a slow march higher, I intend to put another 2% of portfolio at risk today (bringing me to 4% total risk). Bigger purchases to follow later in the week.
I only have NUGT and physical, but even if I were longed up to my eyeballs, selling into this decline would not be an option. :)
ReplyDeleteThanks SB. silver making me nervous. Cycles not behaving, losing control of the situation
ReplyDeleteI hate trading off news events as they're impossible to quantify, but if I'm not mistaken, this weakness could persist into the close as these margin hikes force sales by the end of the day.
ReplyDeleteEamonn,
ReplyDeleteNahh, you haven't lost control. Can't control the market anyway, a trader can only control his reactions to it.
Expect heightened volatility for the rest of the C-wave.
Driver,
ReplyDeleteBelieve me, I don't believe any of the government BS about 9/11. I just didn't know this about bin Laden that he may have been dead already for many years. Thanks for that link.
Paul,
ReplyDeleteI was pointing out that all intermediate cycles end with a left translated daily cycle. That isn't possible with the current cycle as it extremely right translated. Once this bottoms then we have to see either a cycle that fails to make a new high and rolls over in less than 10 days or we see a spike to marginal new highs that tops quickly and rolls over into a left translated cycle.
I don't believe for a second that the largest C-wave of this entire bull market will top with only two daily cycles up. I also don't believe this will top before gold and miners make a big parabolic move. That leaves the second scenario (second chart in the report) as the most likely way this will unfold.
Either way we need a recognizable daily cycle correction so we can take the runaway move off the table. I don't want to deal with a runaway move because my cycle tool becomes ineffective and it becomes hard to spot the timing band for a top.
SB, can't understand why silver looked sick last Friday while gold rocketed. That, and the breakdown of the cycle analysis/ theory with no cycle low. When I can't explain something it bothers me.
ReplyDeleteEmmonn,
ReplyDeleteWhen you get nervous and start questioning the big picture you end up making emotional mistakes that cost you money.
Eamonn,
ReplyDeleteWe didn't know the reason for the move of Friday, but we do now.
I can promise with absolute certainty that the best traders/investors (with the deepest pockets) are not doing anything but making buy lists. It doesn't mean we turn around immediately, but only the inexperienced and emotional traders will sell into this.
It really is not a viable option, even if we go lower first. The bull will let you out.
Miners were the tell over the last few weeks, so let's keep an eye on them. When they begin to show relative strength vs. silver, it might foreshadow the end of the pullback as well.
ReplyDeleteTrust me Gary, I am your number 1 fan and I really look up to you for the way you lead this blog and do your work. You are a rare human being. All I'm saying is that I'm nervous, but I will always follow what you are doing. Lost far too much money trying to be cute and the Market making a moron of me.
ReplyDeleteWednesday we have GG and HL reporting. That may tell something???
ReplyDeleteI'd hate to take shares off others here that hand them over. Let me take somebody else's shares off them, but not fellow SMT'ers!
ReplyDeleteAlright, I'll give the posts a break. I'm just getting excited at the prospects. :)
Thank you SB. I look up to you too ;-) You strike me as someone who has had years of grizzly experience in the market
ReplyDeleteBankers are not tipping their hand this morning. We have made it past the 8am and 9am potential "raid" spots and is looking more like a "back to business as usual" up trend.
ReplyDeleteGary
ReplyDeleteYou said you'd never sell into a daily cycle correction; therefore you won't convert to DGP & GLD call this morning.
The question I have is: Does this mean that the plan you had to convert silver to gold is not off the table for the remainder of this C-Wave finale?
What I'm really asking you is: Was your original plan to convert to Gold based on the fact that it was a runaway move in gold, but now with the daily cycle correction on the way that plan is off the table for good til the C-Wave TOP and you'll remain in Silver til the TOP?
And by the way, thank you for the great report last night :-)
AEM and GG just went flat pre market. This is a hopeful early indication.
ReplyDeleteNever mind early morning chop.
ReplyDeleteMG,
ReplyDeleteMy original plan was to convert to avoid a possible extreme correction in silver close to or at the top of the C-wave.
I think gold has one more complete daily cycle higher before this tops. I will wait and see how silver acts as the metals rally out of the next cycle low. If it pops back very strongly to $50 very quickly, then the odds are probably high that silver will easily cut through $50 and go much higher.
In that scenario I will hold silver for a while before converting to gold as the percentage gain will be much larger.
SLW 100dma @38.68
ReplyDeleteGary,
ReplyDeleteI took a small portion of my SLV Call money off the table at the close on Friday. My intent was to move it into GLD calls today.
Will you be giving a signal for those of us who are not all-in with some guidance as what to do with our cash (e.g. watching for lower lows)?
Thanks!
I must confess I don't entirely understand cycle theory but I follow Gary's recommendations with great interest. What I don't understand is with so many events occurring how it's possible to say with confidence that some sort of cycle event is taking place. This correction in silver is most likely being driven by massive margin increases. Are events like these considered "catalysts" of cycle events, or are cycle events supposed to happen on their own, independent of external events, or does it matter?
ReplyDeletePrevious margin increases have proven to be buying opportunities but this one was relatively harsh so it may take a few days to play out.
Driver,
ReplyDeleteFrom Bloomberg "Bin Laden’s body was buried at sea, the Associated Press reported, citing an unidentified U.S. official."
Yeah, sure. Okay, I believe they killed him yesterday. And buried him at sea? WTF??!! He was killed in the MOUNTAINS on the border between Pakistan and Afghanistan and then they flew his body hundreds of miles away to the ocean, so he could be buried at sea??
Pimacanyon,
ReplyDeleteSo his burial spot does not become a "holy place" and a rallying point for jihadists, would be the reasoning.
This comment may not hold long, but I believe the low in gold overnight was all we will get and resumption higher is imminent. I'm betting on it with a stop at the low (on a partial addition to my position.)
ReplyDeleteIt isn't a huge risk. It's just what I'm seeing and playing for now.
Noticed what looks like a fairly significant jump in the "gold lease rate" charted on the Kitco site over the last few days. Not sure what the gold lease rate is. What might an increase in this rate mean?
ReplyDeleteTZ,
ReplyDeleteWhat are your thougts on silver?
Thanks.
Pima,
ReplyDeleteYes that one smells a bit
pima: Bin Laden was killed in a medium-sized city about an hour north of Islamabad. He was in a very secure compound there. He wasn't killed in the mountains (the so-called "tribal areas").
ReplyDeleteIf you're curious about the burial at sea of OBL's body, read this:
ReplyDeletehttp://www.economicpolicyjournal.com/2011/05/so-much-for-verifying-that-it-was-osama.html
I'll add that doing it so quickly will likely result in more fodder for the conspiracy theorists.
That post details the Islamic burial traditions.
ReplyDeletePics of his hideout, for those that care:
ReplyDeletehttp://www.zerohedge.com/article/pictures-bin-ladens-hideout-released
SLW just broke Japan lows.
ReplyDeleteThe weakness we are seeing here (i'm talking gold) is expected. We should be at new highs no later than tomorrow.
ReplyDeletejhneuman,
ReplyDeleteOkay, my bad. However, Islamabad is in NORTHERN Pakistan, very close to the mountains, and more than 1000 kilometers from the ocean. Why fly the body 700 miles to dump it there? The story just sounds fishy to me.
It looks like SLW is going to roughly double-bottom with the last daily cycle low (the Japanese Tsunami low).
ReplyDeletepima -- I agree that it sounds very fishy.
ReplyDeleteSo would this be the right time to buy those "out of the money puts" on silver"
ReplyDelete"The way to handle this? - simple - stay long and buy yourself cheap protection in the form of out-of-the-money Put options in silver itself, or Call options in something like the ProShares Ultrashort Silver, code ZSL. The cost of these options is peanuts compared to what you will save yourself if silver should suddenly tank."
http://www.safehaven.com/article/20820/silver-market-update
So to protect my long positions in silver, should I buy "cheap protection in the form of out-of-the-money Put options in silver"
Would it make sense to do this today?
Shalom
ReplyDeleteAre you stepping in here? Dollar not rallying though?
Not yet, I'm sitting tight and deciding what to buy.
ReplyDeleteSeems the big miners are holding up better than juniors, but EXK sure looks great under $10. :)
ReplyDeleteoff the trigger, let the positions work.
ReplyDeletei go in with no leverage. because one may get killed when timing goes wrong. no one knows the future remember that.
did anyone really think no one wasn't going to collect on the top trend line last week... haha you got to kidding me. this is profit taking.
let the games begin.
key levels are - 1515 gold, 45 silver
PK,
ReplyDeleteIt's way too early to buy puts on SLV now. We need to get the final daily cycle up. The time to buy puts is after we see gold rally in a massive parabolic move and put in a high volume exhaustion day.
That's probably still a month away at least.
Silver could easily move to $60 or even $70 by that time.
I have been saying I will not buy miners again having sold them weeks ago. This correction has changed that. If we go down 3-5 days as Gary predicts I may even get a buy on one or two (AG probably!). Even aside from the buy, these prices are getting too juicy to resist. I will buy SLW when this is over, at least. I think this drop is going to make us a lot more money than we'd have made had it not occurred. just sit tight for now. I don't know cycles anywhere near how well he does, but I do know markets, and he's right: A move like this is not going to end with a whimper.
ReplyDeleteWhat we want to see right now is some follow through to the downside over the next couple of days so we can get a recognizable daily cycle low.
ReplyDeleteThat will set up what I expect will be a truly amazing final cycle up.
What I don't want to see is for gold and silver to recover today. That would keep the runaway move alive and I don't want to have to deal with a runaway move because it's almost impossible to spot the top in real time. And when they do top they tend to crash with no warning.
So in order to avoid getting caught in the crash one has to get out early and sit and watch the market just continue to go up with out them.
PC,
ReplyDeleteYou can see how the gov't creates a lack of trust in itself. It's been going on for a long time if one just opens their eyes with an open mind.
Gary, for people who just joined your crew and have cash on their hands, what are your suggestions?
ReplyDeleteWhen do you think will be time to come in and into what?
I like the idea that someone proposed last week about having the London boys chasing come Tuesday. Now, I didn't think it would happen this way but if that's what transpires, I'll take it.
ReplyDeleteDriven,
ReplyDeleteJust wait for a swing low. I will post in the nightly report when I think the cycle has bottomed.
I think the miners may have bottomed already. Then the next three days or so gold can drift lower with the miners not making new lows. That relative strength ought to occur before the bottom just like the weakness did before the top. Still best to wait for the cycle bottom though, IMO
ReplyDeletethe 10.5% silver drop overnight sent some shockwaves.. the usd rally didn't even last for half a day though..
ReplyDeletea little bit of profit taking, higher margin requirements, and perpetual fear happening as i read this
stay the course
Personally, I don't think gary will agree with me. But, I think last night was a take down by the big boys. It was low volume euro session just like the other sunday. Before this wave it seemed like there were take downs in the euro session all the time...
ReplyDeleteI'd also like to see the early dip buyers feel a little pain over the next day or two. Buy the immediate dip has worked too well lately.
ReplyDeleteMatthew: Is there any practical use to determining whether it was a "take down by the big boys" or just normal trading? Should it affect our investment decisions somehow?
ReplyDeleteDays like this I wish we had the troll meter up!
ReplyDeleteNow the big boys are taking it up :)
ReplyDeleteI wonder if the hundreds of hedge funds who move amongst hot risk asset had anything to do with it. After bidding up Silver 100% in months, their leveraged futures accounts are up %100's.
i'm not a day trader. used to be. now with this bull market in metals, i work off intermediate moves.
ReplyDeletethe only buy i got was back in january.
imho just sit this out.
Pima-
ReplyDeleteCan you show me what channels you are watching on gold & silver.
On 4 hour chart, I show silver now back above it's intermediate channel again.
/SI
Looked like a final wash out move on SLW to me. Could go green today.
ReplyDeleteNo practical use for me at this point no. Just an observation. However, I do know people that try to trade with institutional investors. All of the trading we are doing is observational at this point. Cyclical trading is just trading off of past observations. If it were off of solid fundamentals the most prudent thing to do would be to buy hold wait for fundamentals to kick in and sell...
ReplyDeleteplanning to get some GLD July 145 calls, what do you guys think?
ReplyDeleteEXK 50 DMA & trend line
ReplyDeletehttp://screencast.com/t/Os5Eyp321WG
matthew - of course. no one knows the future.
ReplyDeletecycles, technicals, sentiment gets you pretty close to a pretty good trading system. if you know how to read them.
many on this blog are talented traders. Gary, DG, TZ, Poly, SB, to name a few.
no one knows the future.
you are playing with sharks here.
SB: You snooze, you lose :-)
ReplyDeleteGeez the dollar is just pathetic.
ReplyDeleteGary,
ReplyDeleteDo you think we might have to wait until May 6th for the dollar to rise again?
So maybe we'll end up just "hanging out" again with no definitive move all week till the Jobs Report Friday makes some kind of $bounce?
ReplyDeleteJayhawk,
ReplyDeleteHere are the two main channels I have for silver. Chart is 4 hour bars.
http://screencast.com/t/9eeKiq2hQGf
Just been looking at the same thing. The `party` for OBL was short lived.
ReplyDeleteDamn, TZ, I was just about to pull the trigger after your post earlier thinking we may drift.
ReplyDeleteGood call again. Train has left the station.
I beginning to wonder if the dollar will ever bounce. Ben sure has done a number on our currency.
ReplyDeleteJayhawk: Agree on SLW. A high probability that this morning was the daily cycle low. As you said, final washout move.
ReplyDeleteGary,
ReplyDeleteFor those with cash, should we just contine to wait or is there a technical level we can key off of to buy in?
You mention 5 minute oversold on the RSI, we have not hit that so far today.
Michael,
ReplyDeleteNo worries here. It won't matter when I buy (this morning or tomorrow), as long as we're done going down.
Quotes just now on CNBS:
ReplyDelete"Gold looks unstoppable"
"S&P daytraders have switched over to silver daytrading"
"Gold is acting now like it is the world currency"
"Gold will continue to be the safe haven....and pull the other commodity markets with it"
I think the dollar needs to buy a vowel. Unbelieveable. Someday someone needs to write a book about the Invisible Hand vs. debasement of currency. Amazing the ability of the (somewhat) free market system to the see reality behind complex monetary moves.
ReplyDeleteSIL hit it's lower channel
ReplyDeletehttp://screencast.com/t/35Dk2aFj0W
Hot Rod,
ReplyDeleteI guess that confirms it; get ready for the dollar to pop!
It's odd that gold isn't ripping higher with silver, being it's been the strong horse lately.
ReplyDeleteI can tell you without reservation this was not a daily cycle low. Daily cycle lows are visible on the charts from across the room.
ReplyDeleteThis could be a one day correction in a continuing runaway move or it might be the start of a move down into a daily cycle low but it was not a daily cycle low.
Interesting that gold's pretty much back to where it finished off Friday, while silver has recovered the lion's share of its smackdown.
ReplyDeleteI wonder how much we should be reading into today's "overnight" action as the raid on the PMs came on a day when most of the world was closed for May Day.
Seems to me that it's along the same lines of the action to start last week when silver when on a big sprint in thin trading amid another holiday in many markets to start the week.
That said, the near tagging of $50 was this time last week was good enough for me to pull out of half my silver and move across to gold. So I don't maybe today's action does portend a downweek, or maybe it's just some monkeying around amid holiday market closures?
Hot Rod,
ReplyDeleteWithout an obvious daily cycle low in place I can't tell you with any certainty when a good time to buy is.
I can tell you with a great deal of certainty that the C-wave isn't done.
So as long as you are emotionally capable of holding thru a draw down anytime is a good time to buy.
Steve,
ReplyDeleteWhat about silver?
My thoughts on silver are that it is a BLENDER here. And I'm not interested in jumping into a blender.
I am 100% completely POSTIVELY MASSIVELY happy I sold all my silver futures within about $1.50 of the top last monday morning.
That is the trade (holding too long after massive profits and a blowoff move) that, in the past, I would hold through and end up destroying much of my profits. Not this time.
Clearly silver could continue up and make new highs but it will NOT be an easy thing to either play or hold through due to the volatility now. And maybe it does NOT make a new high. I don't envy you guys holding AGQ.
Since silver is now easily moving 50cents+ on the smallest of sneezes, it is very difficult to get a good position and hold it with minimal loss. I'm not saying I might not try if things turn more positive, but I've moved my position over to 5x gold futures and I'm happy.
Back above friday's close on gold. Nice.
ReplyDeleteThank you TZ for that thoroug explanation. I really appreciate it.
ReplyDeleteGary,
ReplyDeleteStarting to feel like you were right about that runaway.
With the dollar up against its IT timing band and stretching, maybe we just run away for another 15 days while the dollar finds its 3 yr low.
You can get very parabolic from these gold/silver levels in 15 days.
Poly,
ReplyDeleteYes gold is certainly not doing what I wanted it to do. Now we are back to the runaway move scenario.
gold retraced all its losses from last night and then some. runaway move still on the table folks.
ReplyDeleteThe last 20 minutes, silver has run out of steam and gold pressed a lot higher.
ReplyDeleteAnything to take from this as it is a repeat from Friday.
Gary, even though it would hurt my position I'm pulling for your daily cycle low. I'd feel more confident if you were more confident.
ReplyDeleteAnd I wonder--
ReplyDeleteI wah-wah-wah-wah-wonder,
Why,
Why, why, why, why, why she ran away,
Yes, and I wonder,
A-where she will stay-ay,
My little runaway,
Run, run, run, run, runaway.
http://www.youtube.com/watch?v=8TLLcvWeiKw
:P
Hot rod,
ReplyDeleteYou really need to turn off your computer. Now you are trying to read meaning into ever 5 minute move.
The most inane thing would be if silvr acually finishd up or the day.
ReplyDeleteRun out of steam? Wow Rod, you're a real tough critic!
ReplyDeleteRemember when it used to take a week for silver to move $.50-$1... Good times. The changing scale on those Kitco charts messes with my head. When silver moves slowly over 3+ days its all zoomed in so that small moves look huge, then when they zoom it way out like this - these $1 moves look like nothing.
ReplyDeleteSilver is on a roll. I think too many people shorted it expecting it to collapse at the open when the SLV/AQG orders hit. The price action last night was a low volume liquidation and the futures contract was trading above the VWAP for most of the night. At this rate we will see a swing high and a swing low in the same day ;) J/K. The real challenge will the consolidation high volume areas between 48 and 49. If it can take out 48.80ish area I think 50 will go like a "hot knife through butter"
ReplyDeleteAlso Gary, keep in mind that the time-horizons in which moves happen, at least among the professionals have shortened a lot thanks to 24/7 market, computerized trading, HFT etc. Sentiment swings now should be measured in terms of hours and not days.
ReplyDeleteAnd the CME is probably going to have to raise silver margins again today. In 12 MINUTES last night we had a move which was TWICE the margin amount per contract.
ReplyDeleteThus, even if a person was trading at HALF max margin level they STILL got their account destroyed last night.
Generally margins should be set so that a reasonably expected move does *not* take out a persons account. The exchange has to set levels so that holders of contracts have enough money in the margin to cover expected moves.
The amount of an 'expected' move to consider in setting margins just skyrocketed last night. We'll see what they do today.
BOUGHT 5000 MDW
ReplyDeleteI'm not waiting around. Picked up some May GLD $150's.
ReplyDeleteDid that selloff last night happen to coincide with the OBL death news (or leak of the news)?
ReplyDeleteWhy would the price of gold have anything at all to do with Osama Bin Laden?
ReplyDeleteI'm appalled (as a US citizen) and amazed at the weakness of the dollar. Dollar sentiment remains very bearish (bullish for the $)and, as Poly has mentioned, the Intermediate cycle is more than overdue to end. What will it take for the $ to bounce?
ReplyDeleteI think it's pretty obvious the dollar intends to make new all time lows before the three year cycle low occurs.
ReplyDeleteminers wtf...they are acting inversely to gold
ReplyDeleteIt'll really through the market for a loop if they raise gold margins tonight.
ReplyDeleteStill holding and waiting.
ReplyDeleteSlept in this morning well sort of because it's 0825 and I am up..
Strange strange 24 hours so far....
Friday after market close. Insider trading.
ReplyDeleteThe seller should be identified and prosecuted.
Agreed, Gary. It's unfortunate that the only thing we can really do about the dollar's demise is take advantage of it through PMs.
ReplyDeleteI'm in the same boat TZ - except I'm never 5X anything ;). I like the blender analogy. I still held a small stake of SLV calls but even let those go Friday after seeing the suspect decoupling of silver from gold.
ReplyDeleteAlthough my account is in the green today since I'm gold only, I agree with Gary that a daily cycle correction is long overdue and would have preferred a good shakeout for more sustainable gains later.
Gary
ReplyDeleteI think Big Bob who loves Hawaii said that some silver miners are reporting soon. Do you think that could be the jump start for miners to start acting right?
Miners don't move on old news they move on expected forward price of silver or gold.
ReplyDeleteIt seems they have been expecting a daily cycle low for about three weeks but the metals haven't cooperated.
Gary,
ReplyDeleteAre there any books you recommend on cycle analysis? I have seen some work on Walter Bressert on the web but not much as far as books to really break it down. I have learned a good amount of elliot wave, but I like cycle analysis since it seems like a less complicated view.
Awesome job on covering the metals. My subscription has already paid for itself. Thanks again.
Gary, I have no idea why. I just asked if it did. If it was a trigger, it would make sense to me that it would not stick.
ReplyDeleteSilver miners continuing their one month downtrend....hello people.
ReplyDeleteIt's ironic, but contrary to popular belief, profiting from parabolic tops are so difficult. We lick our chops in anticipation of a parabolic ending, but in reality, the money is made in the gentle accumulation months leading to a parabolic run.
ReplyDeleteIf you're going to have any chance of making real money during the final run, it will require nerves of steal to avoid selling the dips and buying the pops, they will occur almost daily.
Gary,
ReplyDeleteNow that you are convinced this is not the daily cycle correction and are re-confirming this a runaway move, will you sell your AGQ and SLV this morning and move into gold as originally planned? If not, when do you anticipate making the switch?
wingman,
ReplyDeleteGary did not say he is convinced this will not turn into a daily cycle low. What he said is that we do not have a daily cycle low right now.
The market could head south again and gold could drop to 1515 or so. That would be a low enough low to qualify for a daily cycle low. And it could start that drop right now. If it does, it would likely be over in a day or three.
But if the low that came in last night is all we get, then we do not have a daily cycle low and the runaway move is still in place.
The point is that right now we don't know whether we're going to get the daily cycle low or not.
Poly,
ReplyDeletegood point. This is my first intermediate cycle and the thing that I have learned is that the closer we get to the top the more I need to lighten my exposure not add to it.
Pima,
ReplyDeleteThanks for the feedback. However, what Gary said at 7:44a.m. was "I can tell you without reservation this was not a daily cycle low."
That's a pretty decisive comment and I'd like to hear how it's affecting his trades.
Yes, THIS was not a daily cycle low. This means "this", as in what we have so far.
ReplyDeleteAt least that's the way I read it.
How can he or anyone else possibly say what's going to happen for the rest of the day today, or tomorrow? Unless you can say for sure that you know what's going to happen later today and tomorrow and the day after that, how can you be sure we won't get the daily cycle low?
If I make a trade it will be posted in real time.
ReplyDeleteCould be a swing high in GLD today, see how it closes.
ReplyDeleteFWIW, we have a nice looking double top on the 30 min chart and gold futures are dropping hard. Maybe we get the daily cycle low after all.
ReplyDeleteThe TL break we would need to confirm it is down around 1519 on tomorrow's date. That's a pretty big drop, but not out of the question. On Wednesday that TL is around 1523.
It's not possible to get a swing high today. But we might get one tomorrow. That would open up the possibility for a move down into a cycle low the rest of the week. But we need the dollar to bounce.
ReplyDeleteAt one point weeks ago doc said he expected a very sharp, but very brief correction. This seems to qualify.
ReplyDeletebut I think we wait for corrections to be confirmed always during NYSE market hours, don't we?
ReplyDeleteYes a correction must be visible on stockcharts which means it must occur during market hours.
ReplyDeleteI'm not buying for one minute this notion that a daily cycle low can occur during a thin after hours market.
Daily cycle corrections are profit taking events that clear sentiment. That can't happen over a couple of hours in the after market.
We still might get it, looks like she wants to drop again. The chart since 11am top has been all down hill.
ReplyDeleteGary,it looks like correction is already started.
ReplyDeleteIf you have to enter a new possition,what woyld you prefer to buy at the bottom of the corection Gold or Silver?
Miners are really sucking wind again. I have a decent amount in 401k accounts, but they just blow. SIL especially has been a dog the entire IT cycle.
ReplyDeleteI'm dumping them all for UGL and some AGQ, if they go for a run in the final weeks, that would be a surprise to me, even if they have always done this during past c-wave endings (All 3 of them)
Anybody have any theories what caused the dollar pop last night?
ReplyDeletePoly
ReplyDeleteSo far the down action has felt more corrective rather than impulsive. During the down move SI is finding support where it should (Fibs, VWAP) and the bounces are sharper than the declines (so far).
It has auctioned very well. Top of the day was near that 47.26 low of last Thursday; and continues to honor technical price levels very well.
gold setting up for a swing high tomorrow - hopefully we get our swing low on Friday
ReplyDeletesprott sold silver last week:
ReplyDeletehttp://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/eric-sprott-sells-his-silver-trust-units/article2006755/
According to Turd, he hypothesized that gold would test the levels of 1560-65 which it did today. If gold reaches that point it would begin to consolidate lower at supports of 1540 or even 1525. This week we still have the factory report, the ISM non-manufacturing, Jobless claims, nonfarm payroll and unemployment report out. If any of these signs show a positive improvement in our economy than perhaps the dollar will appreciate for a short time which will hopefully signify the next parabolic move in silver?
ReplyDeleteHook,
ReplyDeleteI agree. In the past miners at least SIL would have a 5-7 day correction then a sharp reversal.
What I am seeing is an intermediate type of correction that has lasted 14 days and counting.
This is not what I would consider a normat cyle correction.
James
is this the pain that everyone was looking for before going long?
ReplyDeleteSilver miners such as AG showing oversold according to stochastics. This is the same level seen at last IT cycle. Therefore I think we should see a bounce later in the week or early next, especially if we enter parabolic phase as Gary mentions. Would be foolish to sell now IMO.
ReplyDeleteanybody buying today
ReplyDeleteTo me this does look like a correction that can be seen on stockcharts:
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=SLV&p=D&b=5&g=0&id=p17347661645
Bought a little AG just for the hell of it.
ReplyDelete