Keep in mind that this doesn't necessarily mean that we will catch the exact bottom. The SPY could easily fill the gap from 4 weeks ago before the bottom.
WHo are the big boys? SOunds a bit mysterious. I see billionaires, banks, and hedge funds often make wrong decision; and certainly they are not making all the same trades. So this thing about 'big boys' sounding like a mysterious clan or force working always smartly against the rest of us is a bit of a fairy-tale if I may say so, and it is certainly misleading to believe there is a 'big boys smart money' behavior that is always right with what they do.
"Yes, I've heard. Kills men by the hundreds. And if HE were here, he'd consume the English with fireballs from his eyes, and bolts of lightning from his arse. "
so if I understand correctly, there is another daily cycle up in stocks / commodities and another one down in the dollar? Getting out of shorts and dollar for now is the trade, nothing else? Thanks.
Basil, I doubt the dollar will make new lows at this point, at least not for a couple of months and maybe not for a year or more.
Gold and especially silver are both caught in an intermediate degree correction and possibly a D-wave correction. So no new highs in the near future.
The determining factor is whether or not the dollar has put in just an intermediate cycle low or whether this was the three year cycle low. We probably won't have an answer to that one for at least a couple of months.
is anyone on this board using scottrade elite? I'm trying to set my RSI parameter to 5 but then I have to input the field for "parameter-period" and "smoothing-period" I have no clue what to enter for these fields. I tried 5 on parameter period...and left it on default which was 14 for smoothing period.. tried that on SPY and I get an RSI of 84.66% Please help!!!!
I struggle with what's the dog and what's the tail and what's wagging what. :)
From a fundamental standpoint the market can't reasonably know if the Greece/Europe can will be kicked a week, a month or a year down the road, right?
Add the unpredictability of the Japanese disaster, which so far is just getting more and more precarious. Three reactors open to the air and with the container bottom likely breached is bad.
So whatever happens with the dollar should be a consequence of how it fares compared to the dollar and Yen – plus of course if/when QE3 is announced.
I don't see how anyone could possible infer the future of this from past chart patterns.
Hence, I think caution is warranted here. I have a very small put position on FAS (Bull Financials) and besides my physical PMs I'm flat right now.
hmmm, I see none of my brokers charged commission to trade SIL today. Apparently the Global X family of ets is covering them under some sort of promotion. Just a heads up.
Going through some individual names, I'm amazed to see stocks like SVM down 41% from the highs already. They sure come down fast once they decide to go lower! :)
Yes many of the juniors are acting like a D-wave is coming and many majors are now trading below the 200 DMA and some even have a 50/200 cross over. If the miners are any indication gold has entered a D-wave decline.
For my SIL trade to have had any potential of working well, miners should not have broken this morning's lows on the late morning pullback.
I won't lose much, if anything, but am inclined to exit into a mid-day rally. I want to see where the rally takes us before deciding. I'll post if I exit, and if so, will look to take another stab later in the week (possibly tomorrow?). I don't like that gold has begun to trend lower on the 30 min charts, which typically suggests more short term weakness ahead. Either silver holds on gold's strength, or gold looks to take it's turn moving lower. The second option appears to be the case at the moment.
Gary, It seems odd to me that after all this damage to various PM stocks and sectors, that gold is still above its 50 DMA. I'd have thought that in a D wave gold would go below that rather quickly after the top. I guess your feeling is that while this is odd there is too much other evidence that the D has started (?)
Gary, I guess I didn't understand what to wait for exactly. What I got from reading the post is that a cycle low and turn to the upside is imminent... Did I misread?
Folks here need to listen to what the miners are telling them. The action there is ghastly. They are telling us in no uncertain terms that gold is headed lower soon.
There is still a lot of denial, and worse, hope on this board.
We may well get an oversold bounce here, but anyone dabbling in AGQ is taking their life in their hands.
2nd day of divergence between pm stocks and metals. Metals down stocks more or less unchanged or slighly down. Are we getting close to a short term bottom in the pm stocks? I sold last week, but more or less the prices on GG and AUY are at the same level or slightly lower, while gold and Silver are decisively lower. Gary, what do you think? any sign of strenght by the gold miners will be squashed by a fall in gold to below 1460?
SLV price below cloud, below base line and conversion line below base line. All three are bearish Ichimoku cloud indicators, the only other bearish sign is the cloud color which in this case is still not bearish. Silver's signals are almost the same, the price is however in the cloud but almost to the point of being below it.
In spite of others saying this is 2007 or 1970, the market is acting just like the backside of 1980-81 silver parabola. Same intraday high tag, same swift, unbelievable drop, stabilization in the mid 30's, minor fluctuations in this range. After this bounce, the next steps would be 25 and then 20.
For 20 years, up to 2001, I watched gold and silver decline and wear away courage and conviction, and I watched interest wane and wane again. Only the nutcases held silver and gold in 1990's and early 2000's, no matter what Sinclair or Dines or Russell boasted recently.
At the floor, like Gary references, nobody wanted the PM's. They were cheap because nobody would buy them as an investment vehicle because they had failed to perform for long enough that there was a consensus they would not rise.
And now, with the China public jumping in, this will be the last hurrah. They're gonna grab the albatrosses, sling them over their necks and drown the prices of the PMs.
Sadly, these markets are gonna be declining and moribund. This bounce, and "see y'a". Sigh.
"Slumdog said... In spite of others saying this is 2007 or 1970, the market is acting just like the backside of 1980-81 silver parabola. Same intraday high tag, same swift, unbelievable drop, stabilization in the mid 30's, minor fluctuations in this range."
Another alternative scenario: Since the $$$ did not make a new 3 year low, could it be possible that the next 3 year cycle in the $$$ unfolds as a Right translated one instead of a Left? Of course, we won't know till much later (maybe sometime in 2012), but would'nt such a sceanrio imply end of the PM bull?
92000, Yep, this is the bounce that rescues. I'll pull the short trigger when I see the top of this bounce.
The "fundamentals" for this are the wave of Chinese newbies, the little people, who will be slaughtered after they dash in to get their chance to drink the Kool Aid.
IMO, this will be an obvious, rare opportunity for the commercials to unload into those who will soon learn this is the backside of the parabola.
Thanks, for the Barchart Top/Bottom 100, Eamonn. Though I suspect most here will be using the bottom hundred for ideas, I noticed LLY is one of the top hundred.
I just bought a little. Looking at the monthly chart, it's broken a 10-year downtrend line. With a p/e of 10 and 5% dividend I think it's worth a shot, though I don't see it as a trade. May add more on weakness. Healthcare/pharmaceuticals is about the strongest sector of the market right now.
I have no particular idea what gold is going to do going forward, but what we just had this year is NOTHING like what 1980 was. I was shorting gold after the bubble popped and made a fortune (even though silver was the bubble, gold also collapsed). Heck gold isn't even below its 50 DMA yet. Weird collapse. We may go down but this is not at all like 1980---I will never forget it.
@Slumdog With a falling EROEI there is 0% the current unbacked fiat experiment surviving. So unless we go Roadwarrior, Silver will return to its historic value.
I played the model trade a little differently today by setting an additional conditional stop to buy if we re-hit the daily low which it did and gained me a small profit for a one day trade. It may or may not do better or worse but I am quite happy with this as I am getting ready to go out of town.
The PM market is slowly driving people away by price action. Price decline will probably be affected by disinterest along with other factors. My opinion... bla bla bla..
At least the Chinese are getting their feet wet, while most of my countrymen at so broke and braindead they haven't even considered metals or realize they can protect wealth.
Americans are still busy lining up at gold and silver parties to dump their jewelry at 10% of it's value. Of course, we have some very intelligent people too, but I would never suggest the Chinese somehow don't measure up. Who has the jobs and all the money?
So if this does turn out to be a D-wave and the $$$ continues rallying for a year or so,the next bottom in 2014 should also be Left Translated and not Right Translated even though no new 3 year low was made?
The only reasons nominal new low wasn't set in the dollar index is because every country in the world is printing. In real terms, priced in gold the dollar made big new lows.
There isn't a specific trigger. One has to look at a chart 5 minutes before the close. If the 5 day RSI is oversold then take profits on the trade if you are going to use the conservative exit.
If you are more aggressive wait for the SPY to fill the gap or for a swing to form.
The Federal Reserve isn't part of the Federal gov't, so it's separated all right. The Fed gives the cream to WS and the elite bankers, and we get the skimmed milk.
$silver is now red and in a trend very similar to 2006.
In 2006, silver bottomed at the 200 DMA and crawled up it.
This time around, the 200 DMA is surging very fast and may be over 30 within a week or two. Don't think it will hold this time (didn't in 2008).
Who is actually buying spot silver now? Could be more hedging going on and industrial uses, but I would think they get their silver directly from the refineries and not futures, no?
I just exited the SIL into this midday bounce (small profit). It didn't show much conviction, so maybe the expected bounce isn't ready to occur or will be weak when if it does.
Entirely flat, 100% on the sideline except physical.
I wasn't planning on writing this now, but the people here seem much more rational than the other trading sites I had been hanging out on. My background is in systems analysis. TA is newer to me. I've been winging my trades based on macro analysis until recently.
Energy Return on Energy Invested. When oil was first found, it took 1 barrel of oil to get 100 barrels out of the ground. We're now down to 3 barrels from 1 in the US, and 10 barrels from 1 in Saudi Arabia. This means energy costs more, and therefore growth costs more. Eventually it will mean the end of growth.
U.S. peak oil production was in 1971. Note that Nixon closed the gold window, U.S. debt started to rise, the labor participation rate started to move higher, manufacturing cities started to decline, and the U.S. started to turn to paper shuffling and technology all around that time. Labor participation rate and paper shuffling (read that as pushing our garbage on the rest of the world) hid the problems in the U.S.
Peak oil isn't a conspiracy. Anyone who understands physics, knows that energy is a foundational block of human knowledge and civilization. Energy is the gateway resource to all other resources. Give someone enough energy and they can grow food on the moon. A falling EREOI means a rising cost for energy. Anything that depends on energy is going to rise in cost, i.e., everything That in turn means falling living standards.
Oil production will peak. That is indisputable. If there's a finite amount it will peak. If it's abiotic, renewing, usage will outpace the rate at which it renews, and it will still peak. Even the conservative International Energy Agency says oil production peaked in 2006. Lower quality energy like tar sands and nat gas means less Net Energy. Less Net Energy means less growth. Solar and wind have low EREOIs
The $ price of oil can fall despite Peak Oil being true. We all know how fickle fiat currencies can be. The real measurement of peak oil is permanent falling global percapita living standards. Life is turning into a zero sum game. Those who control the energy resources through soft or hard power, will hold their standard of living, but at the cost of the rest.
Charles Hugh Smith lays out a decent case of how the $ price of oil can fall in the short to intermediate term. Essentially, most oil regimes are corrupt and weak. The U.S. is still the strongest in soft and hard power. The U.S. will manage to have those regimes overthrown, and move their interests in. The U.S. managed to pull out of the 70s-80s doldrums after the fall of the Soviet Union. The U.S.'s proxy, the IMF moved in to exploit Eastern Europe.
Ignorance of peak oil also keeps the price down. If people understood it, exports would be cut back to conserve. (See also the Export Land Model) Faith in technology is another dampener. People don't understand that all of industrial technology has been built to exploit energy as fast as possible, not to use it in the most conserving fashion. Even if technology could save us, the change over to non-oil based system had to be started before peak oil hit. Now all energy must be used to hold together the current system. None can be spared for the change over.
I think we could see the real oil price explosion after the gold bubble bursts. (Note that in bursting I mean go from like $20,000 back to a new permanent level of $5-10,000 in today's dollars) The smart money is getting out of paper assets ahead of everyone. Gold is better to hold since it's so mobile. But who knows, maybe oil prices will grind everyone down and gold will never bubble.
It is possible to have a decent standard of living after peak oil. Cuba after the Soviet Union did it, but their lives in no ways look like ours.(see The Power of Community: How Cuba Survived Peak Oil) If you go from working to Wall Street to working at McDonalds you can still lead a decent life.
It seems that people from technical backgrounds have a hard time connecting the dots between energy and the financial markets. I suspect, because it's to difficult to model the connection between two systems that are extremely complex in their own right. John Michael Greer is the best peak oil writer I know of. James Howard Kunstler, Max Kesier, and Chris Martenson also do a decent job at trying to connect the dots. All of them have multifaceted educations.
if silver goes back to $20/21 after having not even taking out the previous high made in 1980, I agree it would be an awful sign; At this advanced stage of the bull (we are not in 2003/4/5 anymore - we have massive public awareness) the movement to the upside - while interrupted by corrections - should be way more decisive.
If I see silver at $20 I will have a hard time believing in it hitting $200 or $300 during the course of this bull. To interpret a fall to $20 as an action intended to just throw everyone off the bull so that it can rage again, that's a real stretch for me.
To me, if silver doesn't take out $50 this year and/or doesn't hold $30 or at least just beneath it, I think a loss of interest in the metal is probably warranted.
By the way and with all due respect to Gary, I don't buy the view that silver could go down to $20 and then fifteen bag until 2017 - in just six years of which Gary believes two to three years silver will do more or less nothing.
That would be the trade of a lifetime indeed. Too good to be true.
if silver cannot blossomed to more than $48 this year, after a decade with a major terror attack on US soil, the US engaged in several wars, with a near-collapse of the financial system and the global economy, with trillions in money printed, with a historic debt level, with the inflation trade on, sovereign debt defaults on the horizon - what on earth can bring it from $20 to $300?
That must be WW3 perhaps in conjunction with a few nuclear meltdowns around the world, the collapse of Europe, collapse of the financial system, the burst of the China bubble, a pestilence outbreak, a hyperinflationary depression, revolution? I am not sure, but considering what's happened in the past ten years it seems like it would have to take an awful lot.
On the other hand, I don't see the problems mentioned above go away any time soon; so why do you think this is the back end of THE parabola?
Let me take a view that is between what I understand to be yours ('PM bull is done'?) and what I understand to be Gary's ('bull is done for now, will drop much further, and will then rage to new highs').
Why can it not be that we just saw a spike on the way up with a bottom at around $30? Perhaps a much flatter D wave? With new highs by year's end or in early 2012? What's so utterly impossible about that?
it could. I would just interpret it as a bad sign; bad sign meaning that I would then question it's ability to reach aggressive and popular upside price targets with what I believe is a realistic timing band for this bull.
I tend to believe (my soft opinion only) that industry is likely the only way to get silver out of the 50 range.
Like a huge invention or more widespread applications of fuel cells or solar power. Take palladium for example.
Other theory is that we just get a long term slow trend line with spikes and retracements due to slowly diminishing supply. Is it true that silver is upside down right now, meaning more is consume than dug out?
In 1980, over half of the world was in shackles. Stock market P/E's were at generational lows. Real interest rates were moving dramatically positive. The baby boom was just starting to make its presence felt as the greatest borrow and spend generation in the history of the US. Tax rates were getting ready to come down substantially. The shift from real to paper assets was just about to get underway. There is absolutely no comparison between 1980 and today.
A better analogy is the temporary squeeze the margin call from LTCM put on the financial markets in late 2008. NASDAQ got hammered and then took off like a rocket again as soon as order was restored. IMHO
the fundamentals behind nasdaq's run and the PM's rise would hardly equate, from what little I know, right? Or was nasdaq also a destination for fiat liquidity expansion during economic collapse, and now we've merely switched to PM's?
Gary, does it look like a local bottom forming on the HUI? Is it worth playing the next rally, or do you think they will go all the way down to.... where?
IMO each bull has a different name and story, but what drives manias or bulls is the same - mass psychology. A climatic faith in the future of the internet and now climatic faith in the end of the world.
"was nasdaq also a destination for fiat liquidity expansion during economic collapse, and now we've merely switched to PM's?" I think both were/are a destination for fiat liquidity expansion, yes. I don't see any economic collapse right now; I saw the threat of it in 2008/09.
Interesting. If silver tested near $20, the movement from "mass psychology" would be damaged; but what about the collapsing dollar? Do gold and silver then diverge for an indefinite long-term? I was wondering this anyway if it may go into hibernation for 2 years...
silver drifting up from $20 to $50 in about two years, which might happen as you suggest, would be a very good trade, because that would pretty much equal what it was doing over the past 12 months.
I'm a bit of an anomaly on this blog because I don't trade, I don't have the disposition for it; so I'm the wrong person to ask about a near term target for anything.
I expect pm prices in general to be substantially higher a year or two from now, so I'm just sitting with my positions.
Thanks for the quick update Gary.
ReplyDeleteThanks Gary!
ReplyDeleteAre you doing it at the last minute of the trding day to make sure that you have all the parameters in hand, right?
If it's going to be obvious any time in the last 5 minutes will suffice.
ReplyDeleteGot it! Thanks!
ReplyDeleteKeep in mind that this doesn't necessarily mean that we will catch the exact bottom. The SPY could easily fill the gap from 4 weeks ago before the bottom.
ReplyDeleteThis is just a conservative exit.
Gold down 30$
ReplyDeleteSorry 20$
ReplyDeleteI'm showing it down $10 to $1480.
ReplyDeleteit's all about 50-day MA in stock mkts today
ReplyDeleteNDX - 2333 SPX -1324
below those numbers the big boyz will sell, above bulls still have life
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=8&dy=10&id=p53807186733&a=153926932&listNum=61
gold if stays under trendline 1484 the big boyz will sell
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID660602&cmd=show[s207388401]&disp=P
"gold if stays under trendline 1484 the big boyz will sell"
ReplyDeleteYou mean the big boys held all the way down from 1575?
Yeah those big boys aren't too smart :)
ReplyDeleteU expect PM's to rally here then?
ReplyDeleteI expect gold to fall below $1462 and confirm a left translated cycle.
ReplyDeleteGold took out last week's low already. Next downside test is 1460.
ReplyDeleteWHo are the big boys? SOunds a bit mysterious. I see billionaires, banks, and hedge funds often make wrong decision; and certainly they are not making all the same trades. So this thing about 'big boys' sounding like a mysterious clan or force working always smartly against the rest of us is a bit of a fairy-tale if I may say so, and it is certainly misleading to believe there is a 'big boys smart money' behavior that is always right with what they do.
ReplyDeleteThe big boy..
ReplyDelete"Yes, I've heard. Kills men by the hundreds. And if HE were here, he'd consume the English with fireballs from his eyes, and bolts of lightning from his arse. "
William Wallace
Braveheart
Burp
ReplyDeleteGary,
ReplyDeleteso if I understand correctly, there is another daily cycle up in stocks / commodities and another one down in the dollar? Getting out of shorts and dollar for now is the trade, nothing else?
Thanks.
slw , sil show strong support @ 200 ma
ReplyDeleteFubsy: They look sold out to me. I bet we get our chance on EUO and DUG this week.
ReplyDeleteoa9200,
ReplyDeleteI noticed the same thing. Might even take a short term trade (1-2 weeks max) long SIL, but only into weakness if it occurs.
This is not a call on the bull resuming, only looking at a bounce candidate. Will post if I do anything.
Basil,
ReplyDeleteI doubt the dollar will make new lows at this point, at least not for a couple of months and maybe not for a year or more.
Gold and especially silver are both caught in an intermediate degree correction and possibly a D-wave correction. So no new highs in the near future.
The determining factor is whether or not the dollar has put in just an intermediate cycle low or whether this was the three year cycle low. We probably won't have an answer to that one for at least a couple of months.
Are wild swings like these normal? It seems to me wilder than usual.
ReplyDeleteGary,
ReplyDeleteare you taking any long trades at this time?
Gold's intra day range is about $12. That seems fairly normal to me.
ReplyDeleteNo long trades here. I won't trade the metals from the long side until I think the intermediate cycle bottom is in. It clearly isn't yet.
ReplyDeleteI won't take a long side trade on stocks because we have a weekly swing high and there is a possibility that the secular bear is waking up again.
This is just one of those times were the right thing to do is nothing.
is anyone on this board using scottrade elite? I'm trying to set my RSI parameter to 5 but then I have to input the field for "parameter-period" and "smoothing-period" I have no clue what to enter for these fields. I tried 5 on parameter period...and left it on default which was 14 for smoothing period.. tried that on SPY and I get an RSI of 84.66% Please help!!!!
ReplyDeleteAlright, I took a shot long SIL right here, risking 1% of total account.
ReplyDeleteNot too excited about it, but worth an attempt.
I struggle with what's the dog and what's the tail and what's wagging what. :)
ReplyDeleteFrom a fundamental standpoint the market can't reasonably know if the Greece/Europe can will be kicked a week, a month or a year down the road, right?
Add the unpredictability of the Japanese disaster, which so far is just getting more and more precarious. Three reactors open to the air and with the container bottom likely breached is bad.
So whatever happens with the dollar should be a consequence of how it fares compared to the dollar and Yen – plus of course if/when QE3 is announced.
I don't see how anyone could possible infer the future of this from past chart patterns.
Hence, I think caution is warranted here. I have a very small put position on FAS (Bull Financials) and besides my physical PMs I'm flat right now.
Should of course be "against the Euro and Yen".
ReplyDeletePlease e-mail me if you subscribe to The Document.
ReplyDeleteI have a question.
pos8383@hotmail.com
For those looking for stocks to short, this tool is useful for picking specific stocks: http://www.barchart.com/stocks/signals/bottom100
ReplyDeleteOf course, in a stock bull market, this version works better: http://www.barchart.com/stocks/signals/top100
I have used these tools very successfully
just took a small shot at calls 110Brent august11 ...small and fast one...
ReplyDeleteBot AGQ
ReplyDeleteWhy are you trying to catch a counter trend trade in a collapsing parabola?
ReplyDeleteOf all the trades one could take that one has to have the smallest chance of being successful.
hmmm, I see none of my brokers charged commission to trade SIL today. Apparently the Global X family of ets is covering them under some sort of promotion. Just a heads up.
ReplyDeleteI agree, don't follow me...
ReplyDeleteGoing through some individual names, I'm amazed to see stocks like SVM down 41% from the highs already. They sure come down fast once they decide to go lower! :)
ReplyDeleteA lot of resistance at 33$ for silver.
ReplyDeleteMake that support.
ReplyDeleteYes many of the juniors are acting like a D-wave is coming and many majors are now trading below the 200 DMA and some even have a 50/200 cross over. If the miners are any indication gold has entered a D-wave decline.
ReplyDeleteFor my SIL trade to have had any potential of working well, miners should not have broken this morning's lows on the late morning pullback.
ReplyDeleteI won't lose much, if anything, but am inclined to exit into a mid-day rally. I want to see where the rally takes us before deciding. I'll post if I exit, and if so, will look to take another stab later in the week (possibly tomorrow?). I don't like that gold has begun to trend lower on the 30 min charts, which typically suggests more short term weakness ahead. Either silver holds on gold's strength, or gold looks to take it's turn moving lower. The second option appears to be the case at the moment.
Sold my inverse ETFs, because of today's post. Sniff!
ReplyDeleteThe trade was to wait till the close.
ReplyDeleteGary, It seems odd to me that after all this damage to various PM stocks and sectors, that gold is still above its 50 DMA. I'd have thought that in a D wave gold would go below that rather quickly after the top. I guess your feeling is that while this is odd there is too much other evidence that the D has started (?)
ReplyDeleteWho has recommendations on books about cycles in stocks and commodities?
ReplyDeleteThanks for any suggestions.
" Gary said...
ReplyDeleteWhy are you trying to catch a counter trend trade in a collapsing parabola?"
Gary, I don't think we have any trend in this market now..
Gary,
ReplyDeleteI guess I didn't understand what to wait for exactly. What I got from reading the post is that a cycle low and turn to the upside is imminent... Did I misread?
92000,
ReplyDeleteIf that isn't a down trend in silver then I've never seen a trend before.
Labels all depend on the timeframe, fellas. :)
ReplyDeleteGary: Is that a crawl on the HUI just below the 200dMA? Break to the upside leading Gold which could dip marginally below 1462?
ReplyDeleteCrawel's are continuation patterns not reversal patterns.
ReplyDelete"I will do this in the last 5 minutes of trade just to make sure the parameters have been met"
ReplyDeleteFolks here need to listen to what the miners are telling them. The action there is ghastly. They are telling us in no uncertain terms that gold is headed lower soon.
ReplyDeleteThere is still a lot of denial, and worse, hope on this board.
We may well get an oversold bounce here, but anyone dabbling in AGQ is taking their life in their hands.
TBT taken to the wood shed today.
ReplyDeleteOutta my AGQ. One of the best scalpers out there, for my system.
ReplyDeleteToodaloo,
2nd day of divergence between pm stocks and metals. Metals down stocks more or less unchanged or slighly down.
ReplyDeleteAre we getting close to a short term bottom in the pm stocks?
I sold last week, but more or less the prices on GG and AUY are at the same level or slightly lower, while gold and Silver are decisively lower.
Gary, what do you think? any sign of strenght by the gold miners will be squashed by a fall in gold to below 1460?
SLV price below cloud, below base line and conversion line below base line.
ReplyDeleteAll three are bearish Ichimoku cloud indicators, the only other bearish sign is the cloud color which in this case is still not bearish.
Silver's signals are almost the same, the price is however in the cloud but almost to the point of being below it.
In spite of others saying this is 2007 or 1970, the market is acting just like the backside of 1980-81 silver parabola. Same intraday high tag, same swift, unbelievable drop, stabilization in the mid 30's, minor fluctuations in this range. After this bounce, the next steps would be 25 and then 20.
ReplyDeleteFor 20 years, up to 2001, I watched gold and silver decline and wear away courage and conviction, and I watched interest wane and wane again. Only the nutcases held silver and gold in 1990's and early 2000's, no matter what Sinclair or Dines or Russell boasted recently.
At the floor, like Gary references, nobody wanted the PM's. They were cheap because nobody would buy them as an investment vehicle because they had failed to perform for long enough that there was a consensus they would not rise.
And now, with the China public jumping in, this will be the last hurrah. They're gonna grab the albatrosses, sling them over their necks and drown the prices of the PMs.
Sadly, these markets are gonna be declining and moribund. This bounce, and "see y'a". Sigh.
slumdog,
ReplyDeleteI'll take a bounce - to buy some puts!
*
ReplyDelete"Slumdog said...
ReplyDeleteIn spite of others saying this is 2007 or 1970, the market is acting just like the backside of 1980-81 silver parabola. Same intraday high tag, same swift, unbelievable drop, stabilization in the mid 30's, minor fluctuations in this range."
there is a bounce from 32 to 39...
Gary,
ReplyDeleteI had a brief moment to check in, if one has a july put short on GLD should that person just stay put today?
This just has to do with the spx im assuming
ReplyDeleteGary:
ReplyDeleteAnother alternative scenario: Since the $$$ did not make a new 3 year low, could it be possible that the next 3 year cycle in the $$$ unfolds as a Right translated one instead of a Left? Of course, we won't know till much later (maybe sometime in 2012), but would'nt such a sceanrio imply end of the PM bull?
92000,
ReplyDeleteYep, this is the bounce that rescues.
I'll pull the short trigger when I see the top of this bounce.
The "fundamentals" for this are the wave of Chinese newbies, the little people, who will be slaughtered after they dash in to get their chance to drink the Kool Aid.
IMO, this will be an obvious, rare opportunity for the commercials to unload into those who will soon learn this is the backside of the parabola.
it's pretty tempting to pick up on the miners as they are hovering at their 50 day SMA, on a weekly
ReplyDeleteno one knows for sure what's going to happen. lots of uncertainty. qe2ending.
dollar and gold price could also move up together. (sure it's some head wind with dollar moving against you -- but its happened before)
next couple of weeks is a true test of where the gold trade is at imho.
SPX had tested of 1318, if it cracks this, it going to crack gold too.
I'm hoping it doesn't crack because shorts in a rigged bull market are tough to time.
Time for a vacation. :p
Thanks, for the Barchart Top/Bottom 100, Eamonn. Though I suspect most here will be using the bottom hundred for ideas, I noticed LLY is one of the top hundred.
ReplyDeleteI just bought a little. Looking at the monthly chart, it's broken a 10-year downtrend line. With a p/e of 10 and 5% dividend I think it's worth a shot, though I don't see it as a trade. May add more on weakness. Healthcare/pharmaceuticals is about the strongest sector of the market right now.
I have no particular idea what gold is going to do going forward, but what we just had this year is NOTHING like what 1980 was. I was shorting gold after the bubble popped and made a fortune (even though silver was the bubble, gold also collapsed). Heck gold isn't even below its 50 DMA yet. Weird collapse. We may go down but this is not at all like 1980---I will never forget it.
ReplyDelete"The "fundamentals" for this are the wave of Chinese newbies, the little people, "-slumdog
ReplyDeleteWhere do you come up with this stuff?
I suppose you're not one of the "little people", right? lol
ReplyDeleteIs that a reference to their stature?
ReplyDelete@Slumdog
ReplyDeleteWith a falling EROEI there is 0% the current unbacked fiat experiment surviving. So unless we go Roadwarrior, Silver will return to its historic value.
I played the model trade a little differently today by setting an additional conditional stop to buy if we re-hit the daily low which it did and gained me a small profit for a one day trade. It may or may not do better or worse but I am quite happy with this as I am getting ready to go out of town.
ReplyDeleteNo secular bull market in history has ever ended without a bubble phase, especially gold.
ReplyDeleteDuring a D-wave you will start to question if the gold bull is done...it isn't.
My guess is he's calling them "little people" because they are newbies, not because they are Chinese.
ReplyDeleteBlindweb,
ReplyDeleteWhat is EROEI?
Thanks
The PM market is slowly driving people away by price action. Price decline will probably be affected by disinterest along with other factors.
ReplyDeleteMy opinion... bla bla bla..
At least the Chinese are getting their feet wet, while most of my countrymen at so broke and braindead they haven't even considered metals or realize they can protect wealth.
ReplyDeleteAmericans are still busy lining up at gold and silver parties to dump their jewelry at 10% of it's value. Of course, we have some very intelligent people too, but I would never suggest the Chinese somehow don't measure up. Who has the jobs and all the money?
I meant industry, not jobs, as they don't get paid very well on average.
ReplyDeletePoint is, China is spanking America everywhere one looks.
Thanks Gary:
ReplyDeleteSo if this does turn out to be a D-wave and the $$$ continues rallying for a year or so,the next bottom in 2014 should also be Left Translated and not Right Translated even though no new 3 year low was made?
Gary would you post trigger numbers for us who are technically inept.
ReplyDeleteThe only reasons nominal new low wasn't set in the dollar index is because every country in the world is printing. In real terms, priced in gold the dollar made big new lows.
ReplyDeleteThere isn't a specific trigger. One has to look at a chart 5 minutes before the close. If the 5 day RSI is oversold then take profits on the trade if you are going to use the conservative exit.
ReplyDeleteIf you are more aggressive wait for the SPY to fill the gap or for a swing to form.
If the BoW numbers continue to hold for the rest of the day I would suggest taking profits this evening.
ReplyDeleteHas Obama de facto much influence on the actions of the Federal Reserve, e.g. in pressuring for more QE, or is there a strict separation of powers?
ReplyDeleteThe Federal Reserve isn't part of the Federal gov't, so it's separated all right. The Fed gives the cream to WS and the elite bankers, and we get the skimmed milk.
ReplyDeleteMr. M,
ReplyDeleteGood looking out on the I Cloud.
$silver is now red and in a trend very similar to 2006.
In 2006, silver bottomed at the 200 DMA and crawled up it.
This time around, the 200 DMA is surging very fast and may be over 30 within a week or two. Don't think it will hold this time (didn't in 2008).
Who is actually buying spot silver now? Could be more hedging going on and industrial uses, but I would think they get their silver directly from the refineries and not futures, no?
Any ideas why silver is up and gold is down almost $10. And the dollar is up. Doesn't make sense.
ReplyDeleteI just exited the SIL into this midday bounce (small profit). It didn't show much conviction, so maybe the expected bounce isn't ready to occur or will be weak when if it does.
ReplyDeleteEntirely flat, 100% on the sideline except physical.
Hi DG,
ReplyDeletedid you get a buy signal on anything?
Please post if you do...thank you
I wasn't planning on writing this now, but the people here seem much more rational than the other trading sites I had been hanging out on. My background is in systems analysis. TA is newer to me. I've been winging my trades based on macro analysis until recently.
ReplyDeleteEnergy Return on Energy Invested. When oil was first found, it took 1 barrel of oil to get 100 barrels out of the ground. We're now down to 3 barrels from 1 in the US, and 10 barrels from 1 in Saudi Arabia. This means energy costs more, and therefore growth costs more. Eventually it will mean the end of growth.
U.S. peak oil production was in 1971. Note that Nixon closed the gold window, U.S. debt started to rise, the labor participation rate started to move higher, manufacturing cities started to decline, and the U.S. started to turn to paper shuffling and technology all around that time. Labor participation rate and paper shuffling (read that as pushing our garbage on the rest of the world) hid the problems in the U.S.
Peak oil isn't a conspiracy. Anyone who understands physics, knows that energy is a foundational block of human knowledge and civilization. Energy is the gateway resource to all other resources. Give someone enough energy and they can grow food on the moon. A falling EREOI means a rising cost for energy. Anything that depends on energy is going to rise in cost, i.e., everything That in turn means falling living standards.
Oil production will peak. That is indisputable. If there's a finite amount it will peak. If it's abiotic, renewing, usage will outpace the rate at which it renews, and it will still peak. Even the conservative International Energy Agency says oil production peaked in 2006. Lower quality energy like tar sands and nat gas means less Net Energy. Less Net Energy means less growth. Solar and wind have low EREOIs
The $ price of oil can fall despite Peak Oil being true. We all know how fickle fiat currencies can be. The real measurement of peak oil is permanent falling global percapita living standards. Life is turning into a zero sum game. Those who control the energy resources through soft or hard power, will hold their standard of living, but at the cost of the rest.
Charles Hugh Smith lays out a decent case of how the $ price of oil can fall in the short to intermediate term. Essentially, most oil regimes are corrupt and weak. The U.S. is still the strongest in soft and hard power. The U.S. will manage to have those regimes overthrown, and move their interests in. The U.S. managed to pull out of the 70s-80s doldrums after the fall of the Soviet Union. The U.S.'s proxy, the IMF moved in to exploit Eastern Europe.
Ignorance of peak oil also keeps the price down. If people understood it, exports would be cut back to conserve. (See also the Export Land Model) Faith in technology is another dampener. People don't understand that all of industrial technology has been built to exploit energy as fast as possible, not to use it in the most conserving fashion. Even if technology could save us, the change over to non-oil based system had to be started before peak oil hit. Now all energy must be used to hold together the current system. None can be spared for the change over.
I think we could see the real oil price explosion after the gold bubble bursts. (Note that in bursting I mean go from like $20,000 back to a new permanent level of $5-10,000 in today's dollars) The smart money is getting out of paper assets ahead of everyone. Gold is better to hold since it's so mobile. But who knows, maybe oil prices will grind everyone down and gold will never bubble.
ReplyDeleteIt is possible to have a decent standard of living after peak oil. Cuba after the Soviet Union did it, but their lives in no ways look like ours.(see The Power of Community: How Cuba Survived Peak Oil) If you go from working to Wall Street to working at McDonalds you can still lead a decent life.
It seems that people from technical backgrounds have a hard time connecting the dots between energy and the financial markets. I suspect, because it's to difficult to model the connection between two systems that are extremely complex in their own right. John Michael Greer is the best peak oil writer I know of. James Howard Kunstler, Max Kesier, and Chris Martenson also do a decent job at trying to connect the dots. All of them have multifaceted educations.
Blindweb,
ReplyDeleteThanks for sharing that. Very interesting.
Slumdog,
ReplyDeleteif silver goes back to $20/21 after having not even taking out the previous high made in 1980, I agree it would be an awful sign; At this advanced stage of the bull (we are not in 2003/4/5 anymore - we have massive public awareness) the movement to the upside - while interrupted by corrections - should be way more decisive.
If I see silver at $20 I will have a hard time believing in it hitting $200 or $300 during the course of this bull. To interpret a fall to $20 as an action intended to just throw everyone off the bull so that it can rage again, that's a real stretch for me.
To me, if silver doesn't take out $50 this year and/or doesn't hold $30 or at least just beneath it, I think a loss of interest in the metal is probably warranted.
By the way and with all due respect to Gary, I don't buy the view that silver could go down to $20 and then fifteen bag until 2017 - in just six years of which Gary believes two to three years silver will do more or less nothing.
That would be the trade of a lifetime indeed. Too good to be true.
Blindweb,
ReplyDeleteI was just wondering what the oil sector might be doing. What is your knowledge or opinon of making money on the oil sands?
miyagi
ReplyDeleteare you exiting your SLV shorts?
Slumdog,
ReplyDeleteif silver cannot blossomed to more than $48 this year, after a decade with a major terror attack on US soil, the US engaged in several wars, with a near-collapse of the financial system and the global economy, with trillions in money printed, with a historic debt level, with the inflation trade on, sovereign debt defaults on the horizon - what on earth can bring it from $20 to $300?
That must be WW3 perhaps in conjunction with a few nuclear meltdowns around the world, the collapse of Europe, collapse of the financial system, the burst of the China bubble, a pestilence outbreak, a hyperinflationary depression, revolution?
I am not sure, but considering what's happened in the past ten years it seems like it would have to take an awful lot.
On the other hand, I don't see the problems mentioned above go away any time soon; so why do you think this is the back end of THE parabola?
Let me take a view that is between what I understand to be yours ('PM bull is done'?) and what I understand to be Gary's ('bull is done for now, will drop much further, and will then rage to new highs').
Why can it not be that we just saw a spike on the way up with a bottom at around $30? Perhaps a much flatter D wave? With new highs by year's end or in early 2012? What's so utterly impossible about that?
basil,
ReplyDeleteI don't understand, silver broke out from $20 only last fall; why couldn't it test the breakout on a major correction?
Blindweb,
ReplyDeleteThanks. What are you implying is silvers historical value? You talking $4 or you talking inflation adjusted, gold ratio amounts like $150?
Even if it is agreed upon the endgame, it doesn't help with timing and the path to get there.
Financial markets seem completely irrational to me.
Peak oil philosophy not so much so.
An interesting article about the decrease in oil discoveries in the past 80 years
ReplyDeleteNot to forget is that emerging economies push oil demand higher as well.
Felix,
ReplyDeleteit could. I would just interpret it as a bad sign; bad sign meaning that I would then question it's ability to reach aggressive and popular upside price targets with what I believe is a realistic timing band for this bull.
Felix,
ReplyDeleteor did you see the Nasdaq drop 60% from a major run up before heading to it's all time high in 2000?
I tend to believe (my soft opinion only) that industry is likely the only way to get silver out of the 50 range.
ReplyDeleteLike a huge invention or more widespread applications of fuel cells or solar power. Take palladium for example.
Other theory is that we just get a long term slow trend line with spikes and retracements due to slowly diminishing supply. Is it true that silver is upside down right now, meaning more is consume than dug out?
basil,
ReplyDeleteThanks, I'll look at it
Silver is a very thin market, nothing at all like the Nasdaq.
ReplyDeleteI wouldn't underestimate silver. It could take two years to drift back up to $50 and then rocket to $100 or $150 in 3 or 4 months.
In 1980, over half of the world was in shackles. Stock market P/E's were at generational lows. Real interest rates were moving dramatically positive. The baby boom was just starting to make its presence felt as the greatest borrow and spend generation in the history of the US. Tax rates were getting ready to come down substantially. The shift from real to paper assets was just about to get underway. There is absolutely no comparison between 1980 and today.
ReplyDeleteA better analogy is the temporary squeeze the margin call from LTCM put on the financial markets in late 2008. NASDAQ got hammered and then took off like a rocket again as soon as order was restored. IMHO
basil,
ReplyDeletethe fundamentals behind nasdaq's run and the PM's rise would hardly equate, from what little I know, right? Or was nasdaq also a destination for fiat liquidity expansion during economic collapse, and now we've merely switched to PM's?
Nike: No signals. Got super close on SLW this morning, but no cigar!
ReplyDeleteNike: No signals. Got super close on SLW this morning, but no cigar!
ReplyDeleteGary, does it look like a local bottom forming on the HUI? Is it worth playing the next rally, or do you think they will go all the way down to.... where?
ReplyDeleteFelix,
ReplyDeleteIMO each bull has a different name and story, but what drives manias or bulls is the same - mass psychology. A climatic faith in the future of the internet and now climatic faith in the end of the world.
"was nasdaq also a destination for fiat liquidity expansion during economic collapse, and now we've merely switched to PM's?" I think both were/are a destination for fiat liquidity expansion, yes. I don't see any economic collapse right now; I saw the threat of it in 2008/09.
Power,
ReplyDelete"NASDAQ got hammered and then took off like a rocket again as soon as order was restored".
Wouldn't that make my point that order will be restored in the PMs and they will take off, and not a drop to $20?
What preconditions you feel are currently missing, that we had in the late 70s, which would drive silver higher over the next few years?
basil,
ReplyDeleteInteresting. If silver tested near $20, the movement from "mass psychology" would be damaged; but what about the collapsing dollar? Do gold and silver then diverge for an indefinite long-term? I was wondering this anyway if it may go into hibernation for 2 years...
[Isn't it funny how the RSI is floating up and down around the trade number as if they were reading Mr. Savage LOL]
ReplyDeleteGary,
ReplyDeleteRE: covering our shorts at the close today, it looks to be a photo finish. 5-day RSI just kissed below 30 and is hovering...
Gary,
ReplyDeleteWhat happens here if you get the RSI trade but not the BB trade signal with 5 minutes to go.
Right now, that seems to be the case.
Gary,
ReplyDeletesilver drifting up from $20 to $50 in about two years, which might happen as you suggest, would be a very good trade, because that would pretty much equal what it was doing over the past 12 months.
B,
ReplyDeleteI'm a bit of an anomaly on this blog because I don't trade, I don't have the disposition for it; so I'm the wrong person to ask about a near term target for anything.
I expect pm prices in general to be substantially higher a year or two from now, so I'm just sitting with my positions.
Paul,
ReplyDeleteEven if it is a short term bottom I doubt it is the final bottom. I don't usually try to play counter trend rallies.
Gary,
ReplyDeletebut do you see/expect a counter trend rally from here?
Paul,
ReplyDeleteNo idea. I've never been worth a darn at calling short term moves. Sometimes I can spot a cycle low pretty close but it's too early for that.
Is this not a BB crash opportunity?
ReplyDeleteNo BB trade or VTO trade if the market closes here.
ReplyDeleteThank you.
ReplyDelete