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Thursday, May 26, 2011

Second portfolio change

Another portfolio change has been made.

183 comments:

  1. Why not add SPY? Just curious.

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  2. There is already a position in SPY.

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  3. I saw that, just wondering why not add some more; QQQ and SPY almost move in tandem.
    Also, end of last post, I asked if you still use AAPL to gauge (not sure if right wording) S&P like you did a few times in the past month or so.

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  4. Now Gary's portfolio is in sync with mine as i have owned the Q's for a few days. Hopefully he will be right ;-)

    I also bought some IYT when it touched the lower BB and 50DMA yesterday.

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  5. I watch not only AAPL but also IBM, AMZN and the BKX.

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  6. Ok thanks, I see AAPL is kinda floating there...

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  7. Gary I know the metals are going to move without you for now but do you like the way they have fought back today?

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  8. Sophia,
    I was waiting for the swing for one thing. and I only decided to take the trade when DG mentioned it :)

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  9. Haggerty,
    The GDX/GDXJ trade is done. I could care less where it goes to now. I will look at it again when I think the intermediate cycle has bottomed.

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  10. I know gary's not taking the trade anymore but the fact that PM stocks are green while gold/silver are down is a pretty good sign. Add to that if the stock market heads up from here, it sure won't hurt the PM stocks.

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  11. Just for the record: I think the PM trade will probably still be good, but I think the SPX/NDX trade is more likely to work, has less risk, and has at least as much potential. I don't know what's going on with the dollar, the Europeans selling gold, the silver busted parabola, etc. The mkt rally is much clearer to me. Why marry the PM idea? I'll take 10% wherever I can get it.

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  12. I just broke out like a rash on my PM positions, Made some money back thanks to the G man.
    I think your right DG there is less risk with the new trade.

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  13. DG,

    Your making a valid point and I am holding non commodity related positions for the first time in many months so I definitely agree and have had similar thoughts the past few days.

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  14. Gary,

    Are we good to initiate stops at 1311.88 on the S&P (or 131.38 on SPY)? Thanks.

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  15. Bob,
    I need to see enough of a rally to be sure that we have the daily cycle low in place before we can place stops.

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  16. Thanks Gary,

    I have bought the NSQ 2 days ago- 24th, suffered a bit but I held it as I believe in what you say and only act if I feel confortable ( I couldn't buy on the 19th), and NOw, I am definitely 0.5% in the green...SOOOOOO, I am happy if you buy now, I will feel in good company

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  17. Selling 2/3 of my DGP and half my July 133 GLD calls. Needed a move and not seeing it, so getting lighter.

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  18. Perhaps a seance to commune with the spirits of the market...?

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  19. DG,
    You might get that buy signal on the Dow yet.

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  20. Light volumes tomorrow is my guess as some have long weekend with Monday.

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  21. Is it possible we're in a potentially left translated new daily cycle on stocks that is only 7 days old?

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  22. Man, this is frustrating. I can't remember the last time I got so close day after day. Oh well, the up close completely ruins the steup. No buys even possible until the middle of next week and I see no reason to expect one then. The clock is completely reset---back to square one.

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  23. DG, What were you trying to buy into?

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  24. silver,
    I don't think so. The market didn't rally enough to convince me we got a cycle bottom.

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  25. DG ,

    do you use TYH or QLD for QQQ?

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  26. Gary,

    A few months ago, you did a very nice post on long term treasuries. Do you remember when you did it and could I get it from your archive please?

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  27. Sorry not a clue. Bond cycles turn so slowly that I really have no desire to play the bond bear at all.

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  28. Playing this market is like sailing with choppy wind. You don't know which way to tack/jibe.. and with the whipsaws can shred your sail (account).

    Agree with the low volume comment. Not crazy about going long in a decreasing volume market.

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  29. RacerX - depends on which markets. in stocks yup no direction this month. chop chop chop.

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  30. I will unload all my ES in the 1330's. Let it go higher without me.

    Damn SI made its move overnight. If I'm lucky ZSL will give me another entry soon.

    P.S.
    Can hardly wait to short the IYR, me thinks. Not sure why some of these REITs like SPG and ESS are back up to their levels during the real estate bubble.
    Maybe the legal bandits are pumping the stock price AND collecting the respectable dividend return.

    Hhahahha

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  31. Well, everything being such a mess and me having only a 1000 euros to waste, I put my money on ZSL. First time shorting anything, hoping for beginner's luck.

    This goes against Gary's "never short a bull market"-principle, so I'm not suprised if I get my ass kicked.

    Since the silver coil jumped up and went straight back down, how big is the chance it's going to continue down and for how long? What's people guessing? Is there a good stop point at which I should get out and take my losses? If silver holds above 38?

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  32. A tEase: I have a trading system that generates buy and sell signals on the mkt as a whole (so SPY or QQQ). It has been backtested for 25 years and is about 85%+ accurate.

    oa92: QQQ, or QLD if I think I might get heavy enough i need the leverage.

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  33. Also, what's the general consensus about weak dollar and weak PM's?

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  34. Sampa its sounds like your treating this like a casino.

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  35. I posted my thoughts in tonight's report.

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  36. anyone interested in shorting silver, if so how are you playing it?

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  37. Shorting Silver is Scary Business....

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  38. Gary has not said anything about that.

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  39. Dan,
    with my inexperience, I have no doubts my bets are just lucky shots. It's still based on the premise that silver is likely to follow downstream. I'm just worried about that dollar weakening, will the PM's catch on it and start rising. That would hurt my ultrashort.

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  40. What a predicament.... It seems the dollar needs do decline to help the world markets and even our own out..... I wonder if Gary knows some inside info about the dollar getting stronger and is not sharing it with us. Why else would he plan a trip to Switzerland over the summer if he knew the exchange rate would be horrible!!!???

    Something to consider....

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  41. This is all very valuable information...

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  42. Gold and silver both "just" overbought.

    I agree with Gary tonight, Gold better get on its horse or longs may be in trouble.

    At the same time, today's pullback in gold didn't do any chart damage (for those not leveraged), in fact at first glance, it is a normal healthy pullback to make a higher low.

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  43. I own some IJK. I think it's a better bet than SPY. Midcaps have been outperforming for some time now.

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  44. Gary, if you are there: what do you think will happen to stocks, PMs, and the US Dollar after June 30? Do you see rapid deflation and accelerating indicators of economic woes leading to a recession if QEIII is not introduced, or do you believe the US economy has become self sustaining at this stage?
    Thank you for your thoughts :o)

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  45. Everything should make new highs next week, with dollar breaking trendline today. Got aggressive & bought GLD June 151 call @ $1 today. Should be worth $5 next week (or zero, we shall see).

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  46. How much does opex affect gold and silver price?

    TZ wrote 1-2 days ago that he expect pm prices to fall because of the opex.

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  47. aklaunch - that was pretty funny. about the exchange rate comment.. :)

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  48. Saw this on stock charts dot com

    "Success is a lousy teacher. It seduces smart people into thinking they can't lose." - Bill Gates

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  49. Perhaps Gary has a big deposit to make into his swiss account.

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  50. DG, NICE!!! I know you haven't been using it that long ;)
    Thanks

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  51. The Tech Revolution Is Here -- green tech, mobile tech, and web 2.0.

    Get them while there's still time! It's all over for precious metals (at least for the next several years). Whe the dow gets to 30,000 that when you want to start loading up on pm's.

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  52. Beanie, what are your best tech recommendations?

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  53. And Beanie on Q to mark the market top in 3.2.1.....

    Thanks again buddy! Will sell all my short term longs in the AM!

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  54. This comment has been removed by the author.

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  55. Romeo,

    Not sure why you're saying this. They cyclists all have been saying the equities will pullback since early last year. Well, guess where we are now, and some of the hardcore cyclists are still calling for plunge in the equities market. I'm the only few who said we keep chugging along higher and relatively soon the old Dow highs will be exceeded.


    At..ease,

    I have 2 absolute favorites (1 greentech, 1 mobile tech), each I believe has good potential to be minimum 10 baggers within 5-6 years. They have potential to be future Intels. But I don't give them out publicly anymore. However, I do recommend buying the 5 Horsemen of Social Media as they go ipo --- LinkedIn (LNDK), Twitter, Zynga, Groupon, Facebook. I'm pretty sure at least 1/2 of those will eventually have market cap well north of $200 billion when the bubble is done.

    Have a great day!

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  56. Gold often spikes into it's cycle top, you can see plenty of evidence of that from past charts.

    $1,600 -$1,520 is $80. Sorry I don't mean to pick, but it makes a big difference if the argument is counting days. Yes the cycle is not getting younger, buy it has up to 10 days, if this is the final cycle before the moves towards IT lows begin. $80 in 10 days for gold with a declining dollar is nothing, espeically if it's a final rally to IT cycle high's. Even a double top is good returns.

    It's important for us holders of timed June calls, that move is $8 on GLD, HUGE. I've said it since $1,477 and screams of Puts, I will let the cycle fail (now $1,500) before I give up on my remaining positions. Granted, small positions.

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  57. Poly!

    I think that the call to sell was ok, but Im not so sure that the price will fall back at this point.

    Seems that the focus is on the stockmarket instead.

    Still got some gold futures left and if we go past 1530 this can be fun and I will add some..Not much!

    Whats you opinion about the opex?

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  58. Beanie likes to live in the past. It's a common mistake that many investors make. They always want to run back to what treated them well during the last bull market.

    The thing is the leaders of the last bull market never lead during the next one.

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  59. The call to sell is perfectly fine! Never go wrong protecting or being in cash. Yes being in straight GLD is limited. My point of contention is reading into the action as being something else!

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  60. And we know how green tech has paid off.

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  61. Well maybe for Al Gore, he has that nice mansion living with the stars.

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  62. Beanie just trolling sites looking for suckers to folk over $500 (whatever the price) on "trading secrets" he holds, lol.

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  63. Web 2.0 and "Green" Tech aren't going to offer millions of new jobs for our nations unemployed. Green Tech=jobs for Chinese workers, not American workers. Look up how many employees Facebook has compared to Yahoo (old-new tech.) This is the new model. A few thousands workers at most for the most popular companies. So, yeah, their stock may have a pop if/when it goes public, but it is not some new job/economy paradigm. But keep dreaming!

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  64. Beanie,

    Web 2.0 is past. We're on web 3.0 for the wave of the future. Or at least a year or two.

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  65. I love LNKD...as a put. It's optionable starting tomorrow.

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  66. Jim Chanos

    Smartest short seller around, just announced at Ira Sohn Conference that he is shorting "green" stocks.

    Just another government boondogle.

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  67. Beanie,

    You have a backward: When GOLD gets to 5000 (in 2016? 2020?), that's when you sell gold and buy the DOW (likely at under 10,000). Then hang on for the ride to DOW 30,000.

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  68. No, Beanie had it exactly right.

    He will ride the Dow to 5000, then sell in 2016 and buy gold and ride that down to $850 over the next twenty years.

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  69. DAVID ROFLOL!!!

    Poly, Secrets... Secrets? We ain't got no secrets here.

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  70. Both metals up nicely in after hours.

    Poly, you are always the voice of reason. Thank you. $80 in ten days is easily doable, and for all the good reasons that Gary has presented over the last week.
    Just last week Gary said that sooner or later the "jobs report" trigger won't sync up any longer. I think the fixation on gold having to make its move by June 3 may be as artificial a measurement as silver having to hit $50 was.

    I do understand his desire to be more cautious in his guidance to traders, though. Real good advise to keep powder dry for the next A wave.

    Anyway, it's nice to hear a valid contrarian argument. It keeps us thinking for ourselves.

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  71. I was working all day today and couldn't access Gary's portfolio changes. I own GLD July calls. Poly, With the USD dropping below the daily cycle trend line today, the chances still look good for gold to sprint to challenge the highs of 1575. USD still may roll over into a daily cycle decline in which case those GLD calls could get up to your $8.

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  72. It's unlikely gold will rally for 10 days. The cycle may stretch to 25 days, but you have to allow time for the move down into the cycle low. That usually takes 5-8 days.

    Don't forget the last daily cycle was exceptionally long. Usually that is followed by a short cycle.

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  73. Gary,

    Please comment on the fact that gold rallied hard with the dollar on the 20th and 21st. Gold seems to be doing its own thing right now, and it looks like dollar weakness doesn't seem to necessarily mean gold strength. How does effect your cycle tool?

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  74. The cycle tool is mostly what I'm depending on right now. Gold is simply running out of time. The last cycle ran extremely long and corrected exceptionally hard. Gold was going to rally out of that bottom no matter what the dollar did.

    Now though the dollar is moving down into it's cycle low. That should be the impetus to drive gold to new highs. Instead gold dropped on a day when it should have rallied.

    It simply boils down to not much time left in either the intermediate or daily cycle. Not a heck of a lot of upside potential. And now gold isn't acting like it should.

    Under those conditions I choose not to play the game anymore. There will be a much better setup once the intermediate cycle bottoms. I'm content to wait for that setup.

    If others are willing to gamble on one more spike up in these iffy conditions then more power to them. I'll cheer from the sidelines.

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  75. I should point out there is also the possibility that the dollar is forming another bull flag and will rally all next week and turn down on the employment numbers instead of bottom.

    Under those conditions gold and silver will probably struggle and in fact will probably begin the move down into their cycle bottoms. If those bottoms fall below the prior bottom then it's all over for the metals for now as we would have confirmation that an intermediate degree correction is underway.

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  76. http://www.crowderoptions.com/high-probability-mean-reversion-options-portfolio-up-another-7-2-in-may/

    Changing up the daily format. Any thoughts/suggestions would be greatly appreciated. Thanks all!!!!

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  77. Gary,

    I hear you on your position. My concern is, and what I was basically trying to say was this. If gold is "not acting like it should right now", and the dollar weakness/gold strength fact seems to be irrelevant right now, doesn't this make your cycle tool ineffective?

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  78. Gary,
    Would that intermediate cycle down be the D wave move we are waiting on?

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  79. Why do you think the cycles will all of a sudden quit working?

    For that to happen one would have to postulate a universal change in human behavior.

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  80. Guys: There are markets other than PM's. I think it's a good idea to get used to different investment vehicles rather than trying to force one sector to do what you may want. Gold may well rally, but the setup in stocks looks quite a bit better IMO. Just move the capital over. Forcing trades, or trying to make money back in a sector that just dealt us a setback (AGQ) and "owes" us is a mistake, I believe. Plus there will be a good opportunity at some point this year for the PM's again.

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  81. At ease,
    I can't say at this point. It would probably depend on if the dollar has made the three year cycle low or whether there will be another leg down this fall.

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  82. With things playing out the way they have been recently it seems there has been a change in human behavior. Thats my point. Thats why I am questioning the cycle tool now.

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  83. Other than a couple of stretched stock cycles and one stretched gold cycle they seem to be running like clock work.

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  84. Then why all the confusion lately?

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  85. Gary: I've never quite understood the "change in human behavior" idea. Certainly human emotions will not change, thus there will always be cycles as we move between greed and fear. But the length can change completely, no? Who knows how long it will take in the future to generate either extreme? A cycle could be 20-25 days now and be 10 days or 50 days next year. Human emotions will not change, thus cycles will always work, but human emotions do not decree a fixed cycle length. That comes empirically---from watching them. Cycle will always work but measuring them is not simple already---if the periodicity changes dramatically and somewhat suddenly it'll be even harder. Does that make sense?

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  86. Because gold deviated from what I was expecting it to do.

    Once that happened I didn't want to play the game any longer. It's safer to wait till the next really good setup arrives than to gamble on a 50/50 bet.

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  87. So the C wave could get stretched out to the Fall timeframe with a D wave to follow in the Fall rather than this summer?

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  88. In theory maybe so except these cycle lengths were developed over the last 100 years.

    Now maybe QE will stretch the cycles a bit (it certainly appears to have done so in the stock market) but absent that I think I will trust 100 years a data.

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  89. I agree, all we have done is churn some broker fees trying to catch the upswing of this cycle. We tried, best now to reserve capital to get in at the bottom again.

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  90. at ease,
    yes if the dollar still has one more leg down into it's three year cycle low.

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  91. Wow--really? 100 years? That is, the gold cycles (daily and IT) have been about the same length for 100 years? That's fascinating and amazing to me!

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  92. Do you think the billion more China buyers has anything to do with how the metals are acting?

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  93. Gary are you not concerned that Gold will deviate again from what you thought, and what you thought might be a better setup in the future might not be?

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  94. Well gold has only traded freely since 71 when Nixon took us off the gold standard but the stock cycles go back to 1896.

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  95. William,
    It's too late in the intermediate cycle to gamble on a maybe. If this was week 5 or even week 10 I would be a lot more willing to hold my position.

    Week 17 with a potential top already in on week 14 and certainly in for silver is just too risky in my opinion if gold starts to act wrong.

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  96. Gary, Ok, so back to watching the dollar. Thanks.
    I hope you get a good nights sleep tonight as I think you were up late last night or up early. Need your healing rest.

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  97. I just noticed this. The only time the HUI ever trades below a prior daily cycle low is when an intermediate decline has begun.

    The recent decline took the HUI below the March daily cycle low.

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  98. Gary when you say "if gold starts to act wrong" what exactly do you mean by that?

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  99. I mean just what I said in tonight's report. The weak dollar should have drove gold 20 points higher today. Instead it sank and made a swing high. The miners also formed a swing high.

    This is not what I was expecting at this point. Tuesday's narrow range day was another warning that something wasn't quite right. I was willing to give it the benefit of the doubt but today's action sealed the deal for me. I don't want to play anymore.

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  100. LOL...that was funny Gary "I dont want to play anymore"

    The dollar broke its trendline to the downside today, do you not think it will continue lower now and push gold higher?

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  101. That's what I was expecting except it didn't happen.

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  102. After what happened during the last 3-day weekend (4-day weekend for much of the world), I'm not surprised that gold and silver are very skittish with Memorial Day coming up, providing cover for all sorts of shenanigans. As I recall three day weekend is often soft for commodities. I remember a lot of years when gas prices peak this very weekend.

    By the way, great report tonight, Gary. It's not a huge report, just pivotal at this juncture, imo.

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  103. I mean soft on this particular 3-day weekend...

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  104. If gold dont break above 1533 today I would think its going to head south and break trendline to the downside by next week.

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  105. To have any chance of breaking to new highs gold needs to reverse the swing immediately.

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  106. Maybe gold will bounce off the trendline again before making new highs.

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  107. Gary,

    You expect the new position to be a shorter term play, like the SPX play?

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  108. Cycles work because you can label every move or cycle as being "shorter" or "longer" than "normal" and then re-label A, B, C etc. waves as necessary. I am confident if I drew a random chart free hand and asked a cyclist to label my "stock chart", he could "successfully" do so.

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  109. Fortunately cycles are nothing like Elliot waves.

    Cycles have an average duration so we know when to step on the gas and when to coast or come to a stop.

    The stock market is possibly entering the timing zone to step on the gas. Gold on the other hand is clearly in the timing band for caution.

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  110. Gary,

    With QE2 possibly finishing end of June (~5 weeks away), would the "pressing the gas" be really in play? I saw what happen shortly after QE1 but who's to say the big boys won't pull out early this time around leaving those pressing on the gas holding the bag?

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  111. This has nothing to do with QE2 ending in June. This is purely a cycle low/sentiment play.

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  112. Beanie,

    If you like those tech companies, wouldn't it make more sense to be long the companies underwriting that rubbish? Have you ever used Groupon? I signed up out of curiosity when I heard about the bid they turned down by Google. That company is a piece of shit. Have you seen the product? It's awful. That's a 2nd semester project your senior year of college - tops, not a real company that deserves your equity capital. There are so many other REAL, proven, dividend-paying companies deserving of investment. At least with a company like DuPont you can get paid while you ride the secular commodity bull. But having a front seat to Tech Wreck Volume 2? You can't be serious.

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  113. Jim Willie's latest:

    http://www.financialsense.com/contributors/jim-willie/green-shoots-exit-strategy-no-qe3

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  114. Adam,

    We love Groupon. We got a pool club membership for the summer for $1k, when it is normally $2.4K. I got a full car detail for $125. List goes on.

    Here's how it works, we have a friend who did one (company side).

    Let's say you run a restaurant and offer a $30 groupon food credit for $15 for the consumer. Groupon gets $7.50 and you get $7.50. You then owe the customer $30 of food.

    For the business owner, it is really a high cost. To the consumer, it is awesome.

    In my opinion, it is really just marketing for a Biz and that's the budget it should go out of. YOu get publicity and new customers.

    That being said, investing in them in a manipulated market, no thanks. I'll just go for the super discounted services.

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  115. Hot Rod,

    All I know is I keep getting emails for $69 hair removal and equally obscure (and useless) things like that which I definitely don't want. If it was finding new ways to get cheaper Chipotle, Shiraz and Strippers I'd be 100% into it. :o)

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  116. What is the benefit to the FED/Gov't of a crashing stock market? Or a stock market in a slow and extended decline?

    We're at 12,000+ on the DOW. A bring back to the 10,000 level is a pretty big correction, right? From my question above, won't it make bond rates stay low and the dollar go up?

    So our government wants a lower stock market so it can service it's debt, right?

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  117. I think we will get som answer today if gold can go higher or not. The dollar is very weak.

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  118. The dollar index futures are tanking right now and gold is not budging higher, this is crazy.

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  119. Yes it is! But we will see later on if this remain..Gold can have a pop anytime..:-)

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  120. Adam,

    In my opinion Groupon isn't big enough. In my area (Westchester county New York) we get the daily deal and there is usually only one.

    You are right, they are most often crap that we won't use. But, when they do come and it is something we need or want, its great.

    Example....Today's deal is $99 for laser hair removal. They are advertising the retail cost is $425 for a savings of $326. Yes, if you were getting this anyway, it's like a jackpot (as we were with the pool club membership). We don't care about it so we ignore it.

    I agree, bring on the Chipotle Groupons.

    Here is another one....$189 for a flat screen TV installation including the wall mount. THe value is $390 and it is in home. Not bad. $200 for install of a TV including the mount....

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  121. The dollar is sitting on its 20dma right now, and slightly lower it will be at its may 20th low

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  122. For Chipotle, wouldn't you invest in McDonalds?

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  123. Last night I watched the dollar break low also and gold rallied slightly then took a dive.

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  124. Whats happening? Anyone knows?

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  125. It looks like gold is going to break down again, even with the dollar weakening.

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  126. Hot Rod,

    I've never seen anything remotely as useful as the things you have seen. I've been on there like two months so perhaps not long enough? I wouldn't take them up on the offers you did, but at least I wouldn't deride it as much as I have been.

    If they had coupons for The Spearmint Rhino I'd tell you it was the greatest thing since Vodka Whipped Cream on fake boobs from the Eastern Bloc looking for a beautiful American husband.

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  127. Yeah but give it some time..:-)

    We might get a 15-20 point pop today....I can feel it in my finger..

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  128. I would say gold is heading lower tomorrow from what im seeing now.

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  129. The dollar just dropped below its may 20th low, and gold still is not climbing amy higher.

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  130. Gold should be atleast above 1532 right now, but its not.

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  131. Then we know that the run is over for now.

    But I think that we will get a rally in both gold and silver today. At least 1540! Easy

    Lol

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  132. If the dollar pulls back up even slightly gold drops immediately.

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  133. Moneyman and William...
    Head to head, one says up the other down.
    I say go down ya sum' bitch!
    Go down so we can regroup for the A wave, this is getting to be unpredictable like a fine woman.

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  134. Gold is extremely fragile right now, it cant even break above 1527, I would say this run is over and we are headed lower tomorrow. Im long right now and want gold to rally even a little, but it dont look good.

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  135. Ah... the old reverse psychology shim-sham...

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  136. Holy shit, you guys aren't kidding.

    I just logged into terminal and didn't realize DXY is down under 75. Gold ain't going anywhere.

    S&P Mini's are up....Whew. (for now).

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  137. i find that doing the opposite of the blog is generally very effective.

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  138. If not tonight, the dollar will most likely bottom tomorrow and then head up, and down goes gold.

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  139. Burton,

    The Blog is all over the map and on both sides.

    What is the opposite now? Short SPY and long silver?

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  140. Hot Rod,
    Even Doc and Gary are of somewhat opposing views. Then there's Turd and the whole Kitco Peanut Gallery...

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  141. Gold is hittin its head real hard on 1527

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  142. I'll take a down down down day..
    That's it for me, got to prepare my wife's lunch for tomorrow.
    See youz guyz in the mornin'.

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  143. LOL@MrMiyagi...Don't forget her foot-rub.

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  144. USD getting beat down. Gold up 6 bucks....huh?

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  145. Usd isn't down...it's just the Euro that's on fire currently. Nothing is reacting...everything is just steady to slightly up...adrenaline junkies!
    :)

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  146. USD made a lower low, maybe setting up for a head and shoulders pattern

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  147. I am a bit jaded with Groupon restaurant coupons.....once in a while you will find gems but trend is towards degradation....


    You have to read the fine print so carefully: examples- drinks not included, for dinner only, no holidays, breakfast only, happy hour not included etc etc.

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  148. Gary,
    We have talk about the parabola in Silver many times.
    But if we just have an intermediate correction instead of D wave,would you buy Silver again at 21-24-27 area at the bottom of the correction or you will prefer a Gold miners?

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  149. Ivan,

    Silver will consolidate for years. You can buy it for a trade, but if you want long-term appreciation, you need to focus on gold miners.

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  150. Gary:

    How do you reconicle “gold is not doing what you expect it to do” with the COT data? Is the COT early?

    Any past experiences you can think of where there looks to be a disconnect between COT and Gold price?

    And, since all good things come to an end, has the reliability of the COT come to an end?

    Thanks!

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  151. If day trading in general is a losing proposition, it is more than that for the precious metals.
    Gold might or might not be done, but whether it's done or not is definitely nowhere in the charts.
    In precious metals you are either in or out and stick with your decision, at least longer than just a few days; to get in and out and try to make money on some wiggles leads obviously nowhere.
    Sorry to say, but whenever this site turns into a day trading site I don't find it worth the read. It becomes very directionless, confusing, and even dangerous when impacting your decisions back and forth.
    A few days ago gold was supposed to go up, yesterday it was supposed to go down, now it looks like it might be going up again, or down perhaps? Apparently gold isn't supposed to do anything but give day trading ambitions a very hard time.

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  152. basil,

    We are very close to the end of the ABCD cycle. It's not clear whether we are in a C-wave or a D-wave. As a result, extreme caution is warranted and holding times are much shorter.

    At some point, hopefully this summer, we will be able to go all-in again and sit Old Turkey, but that's not safe right now. So the tactics are different.

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  153. Basil,

    Good post. I agree with everything you said except that this blog isn't worth the read. Still da bomb, lots of cool cats. Essentially no trolls.

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  154. David,

    holding times on PMs should not be much shorter; there shouldn't be any holding times at all if you think it's dangerous.

    to your earlier post...
    Silver consolidating for years might be a stretch. Why are many other silver bugs (including prominent, long-time silver bugs who have been right all the way) who sound more positive on silver wrong, and why are you right?

    Btw, whenever I hear an 'absolute truth' on this site or in investing in general, it is usually relatively quickly negated by reality.

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  155. basil,

    For the record, I am out completely. I have no interest in short-term trades of the sort Gary and the others have been making of late. It's late in the cycle and seasonality is against us.

    You do have the option of sitting back and waiting for a fat pitch.

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  156. David,

    was meant to read:
    right now, holding times on PMs should not be much shorter; right now there shouldn't be any holding times at all if you think hat extreme caution is warranted.

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  157. Basil,

    My statement on silver is based on how it's acted in past bull markets, such as the 1970's.

    That bull market was characterized by two major spikes, one in 1974 and one in 1980. Between those two spikes silver stayed in a consolidation. Other metals such as Palladium have exhibited similar patterns -- gigantic spikes followed by multi-year consolidations.

    Of course, this bull could be nothing like the 1970's, but if that's the case, then what basis do we have to believe that silver hasn't already shot its wad? The bull case for silver right now is that this is like the 1970s and that we will enjoy another superspike bigger than the one we've just experienced.

    In general in markets, the bigger the rally, the longer the consolidation. That's not a law, but it is a rule of thumb. Based on what we've just experienced, we should hope for a long consolidation, because that will form the basis for the huge superspike we're hoping for in a few years.

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  158. RE: holding times

    I believe in sitting it out if conditions are uncertain. Interestingly, my nemesis Shalom Bernanke is of the same philosophy.

    But other people here, who are presumably more nimble, can certainly scalp a trade with defined risk using stops, etc. That's what Gary, et al have been doing. Nothing wrong with that if their risk is limited.

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  159. Basil,

    Examine this chart of silver from 1970-1978 to get some context.

    After 1974, silver stayed in a trading range for several years, then exploded by 700% in 1980.

    http://www.sharelynx.com/chartsfixed/SI1974.gif

    There's nothing that says that this pattern has to repeat, but then, there's nothing that says that silver can't go back to $4.50/oz, either.

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  160. David,

    thank you for posting the chart.

    Point taken.
    I do think however that conditions for precious metals are more favorable now due to excessive money printing and lead currency uncertainty. Nevertheless, if we are in for a repeat of the 1970s it would be sobering.
    When looking at your chart however, there is nothing that suggests that we should retreat to $21 in silver, as Gary is suggesting. On the contrary, if this is a repeat, we could be close to being done with this correction.

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  161. PS: ...close to being done with this correction in terms of price low, not time (when taking your chart as a guideline)

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  162. If the USD is liable to have some weakness over the next few days, with the end of the month upon us, I'm thinking to slosh some money over into the FXA Australian Dollar ETF. Can buy in on or before Tuesday to pick up the monthly dividend. Any thoughts on this?

    http://www.currencyshares.com/products/distributions.rails?symbol=FXA

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  163. Maybe Beanie meant Cloud computing instead of Web 2.0.
    Riverbed Technologies is a play in this field.

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  164. Gary,

    I realize its late in the cycle, and I can see the case for bear flags on GDX, XAU, HUI, etc ... however this move out of the lows looks no different than the moves off last Octobers low, Januarys low, the Jan 2010 low, etc.

    It seems like the same meandering move. Sure, it may fail but recent history suggests it has more gas in the tank.

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  165. Although I completely understand Gary's reluctance to trade I must say this morning that the dollar behaves as though he has it on his own leash - Gary says "sit up and beg" and "roll over" and the dollar moves. Amazing analysis on that cycle.

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  166. However you choose to label this, I think in the long/medium term we are in a correction/consolidation phase. This bounce we are seeing now is simply a bounce and within a couple weeks well probably roll back over again. However these bounces can be very profitable on the long side for short te traders.

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  167. People you can hope that gold will just not enter an intermediate correction all you want but it always does. Just like clock work year after year after year.

    If you think that isn't going to take silver and miners down hard again, I'm afraid you are going to be sadly disappointed.

    Every intermediate correction so far since this phase of the bull began has taken gold considerably below the 50 DMA and fairly close to the 200 DMA.

    We are looking at a minimum of probably 1400 and if this turns into a D-wave at least a 38% retracement of the prior C-wave which would be $1300.

    Do you really think silver will be able to hold it's current level if gold dips to $1300 or even to $1400?

    This is what you are risking getting caught in by trying to squeeze the last few pennies out of the sector when it's clearly not doing what it should be doing at this point.

    My feeling is that it's not doing what it should because it may already be caught in the intermediate correction.

    So I now have no desire to hold any longer. I will wait till it puts in the intermediate correction or the D-wave. At that point I will have another 12-15 weeks of upside potential and I will be able to hold the trade much longer.

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  168. Apropos historical charts, here is an broken parabola, doubling within 10 months, and then breakdown:

    http://bullnotbull.com/archive/gold1979.html

    Consider what then happened afterwards:

    http://bullnotbull.com/archive/gold1980.html

    To the left of this chart is the 'broken parabola'.

    Or consider what happened to the wheat price last summer; it went parabolic (amid russian export ban etc) broke abruptly down in August. Then already in January much higher than the August top. So anything can happen, both to the downside or to the upside. There are no 'rules'.

    The wheat-price parabola broke down, and it made a new high shortly afterwards. There are numerous similar examples.

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  169. I would urge everyone on this board to take that silver trade if it gets down to the low 20's. I know I will be taking that multiyear trade if it comes up.The last silver trade paid 300% from 2008 and it was a very low risk unleveraged play.If it gets to low 20's this trade will almost certainly pay more but will require patience.

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  170. Trond,
    Your charts are for the final bubble phase of gold. Unless you think we are in that bubble phase now they aren't applicable to today's conditions.

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