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Sunday, May 8, 2011

TRANSITION TO D-WAVE

Don't let the title fool you, for reasons I've outlined in this weekend's report I think gold likely has one more move to new highs before the D-wave begins. 

However the action in the dollar and silver this week have probably taken the parabolic phase of this C-wave off the table. Rather than the normal sharp spike up it appears that this C-wave is going to end with a more modest move than prior C-waves. That being said it did last much longer and gain just as much above the prior C-wave top as any other C-wave. So in terms of duration and magnitude this C-wave has fulfilled every expectation.

I've noted in the past that a D-wave is a regression to the mean, profit taking event. That regression tends to be most severe when the C-wave ends with a parabolic move. Action and reaction.

However this time it appears there will likely be no parabolic rally to top the C-wave. In that case the D-wave will probably be milder than prior D-waves. As a point of reference every D-wave so far has retraced at least 62% of the prior C-wave advance.



Without the parabolic stretch I think it's likely that the impending D-wave will only retrace roughly 50% of this C-wave. If gold pushes up to a marginal new high slightly above $1600 (in the weekend report), then it will probably only drop to around $1250 which just happens to mark the upper boundary of last summers consolidation zone.




What should follow after that is a fairly strong A-wave surge. A-waves usually test the but don't break to new highs. At that point gold will enter a long sideways period to consolidate the massive gains made during the this last C-wave. During this period it will get very tough to make money in the precious metals market. 

However there is still some upside potential once gold puts in the daily cycle low that is trying to form now. Great potential during the D-wave if you know how to use puts and excellent upside potential during the A-wave next fall, before the metals sink into the consolidation doldrums.




This year still has great opportunities left and of course we still have the next C-wave to look forward to in 2013. That one should make this C-wave look puny in comparison.

1,465 comments:

  1. Gary, I totally agree with this analysis, especially in the short term. Open interest for May silver and June gold are still very high. This is deep pocket investors holding.

    My suspicion is prices will move up until gold stand for delivery day (end of May).

    Pressure will start to subside for the summer.

    ReplyDelete
  2. Thanks for the guidance Gary.

    There are 2 interesting long term charts I wanted to put up on silver. The first is a 10 year linear chart on silver and shows that we are at or near a major support trendline: http://screencast.com/t/C6DKkqs4

    This 2nd chart shows silver on a log scale and showed that silver hit its head on the top of its 10 year channel and was a good indicator of a pullback coming. Wish I paid a little closer attention:
    http://screencast.com/t/mCiisgFA

    ReplyDelete
  3. Gary, BLH,

    You recommend mostly, only buying DITM options. Is it to help protect oneself from market drawdowns like last week?

    ReplyDelete
  4. S,
    I don't think I would put a lot of faith in lines on a chart. In order for them to work enough people have to trade off them.

    Silver is a thin market and as such very volatile. Volatile markets aren't good markets to trade off technicals.

    Especially in your first chart. I really doubt a line on a chart is going to halt a parabolic collapse. Those almost always have to return to the point at with the parabolic move began before the selling abates.

    ReplyDelete
  5. Sibek,

    Awesome trend lines there. I was messing around with similar lines but just could not get them drawn straight. I do see that this spike low in silver does look like it is in the support range. I do hope that this action is simply a "reset" button being pushed.

    My biggest issue is that I am overly optimistic so I am looking for analysis to tell a story I want (bullish).

    I think a bigger surprise to the market would be a silver launch higher and into the $60's.

    I hope JPM sees this as a short covering opportunity to get out and then go long - so we can get back to supply and demand fundamentals.

    ReplyDelete
  6. Gary,

    On your point about the trend line I agree that it won't "halt" the decline dead in it's tracks.

    But, it may indicate a range that we'll trade around.

    ReplyDelete
  7. I,
    There are times when in the money or even out of the money options are appropriate but for the vast majority of the time I'm just substituting options for shares.

    As in, if I wanted to buy 100 shares of XYZ company I could accomplish the same thing with 1 call option.

    In that case buying DITM means the option will move almost in lock step with the stock. (If XYZ gains $1 so will my call option) The upside is that the price of 1 call option is a fraction of the price of 100 shares so my return on invested capital is greatly magnified.

    ReplyDelete
  8. Gary,
    You marked the beginning of this current c-wave as 2009 apr. Should it not be nov 08 that was the start of this wave?

    ReplyDelete
  9. HR,
    I can tell you exactly what will halt the decline. Gold putting in it's cycle low and rallying :)

    Silver will follow although I think this time silver will show relative weakness compared to gold instead of strength.

    ReplyDelete
  10. RA,
    The A-wave began in `08. The B-wave bottomed in April `09. The C-wave began when the B-wave bottomed.

    ReplyDelete
  11. BRAD: Thanks for posting that Sinclair post in the last thread. It's always good to get his perspective.

    ReplyDelete
  12. Gary,

    What are the negatives with buying inverse ETF's like DZZ or ZSL during D wave?

    Thanks

    ReplyDelete
  13. Happy Mothers Day to all the Mothers out there. Have an enjoyable day.

    ReplyDelete
  14. Gary, I know your analysis has a lot more experience behind it than my own but I do think there is something to be said for long term trend lines. I know a few investors that were paying attention to the upper boundary of the silver chart. I'm not saying it was going to stop a parabolic phase, but I do believe many technical guys may have jumped in once that trendline was broken... you can see how it goes parabolic at that point. Again not saying it was going to stop anything but more of a confirmation. Thats why It think on the way down it will serve as some pause and may bounce there initially.

    ReplyDelete
  15. S,
    If gold decides to bottom here then yes silver will rally and it will look like the trend line halted the decline. But if gold continues lower silver is going to ignore that line and follow gold.

    You might be better off drawing trendlines for gold.

    BTW gold just tested the 38% retracement of this intermediate rally.

    ReplyDelete
  16. S,
    Post away. I would never stop anyone from expressing their ideas, thoughts and questions especially ones that are contrary to my analysis. It's always good to see the other side's view.

    ReplyDelete
  17. G... sorry forgot to post both gold charts. Thanks for the feedback:

    http://screencast.com/t/HzrfRnBn
    http://screencast.com/t/usN9aJSe

    ReplyDelete
  18. jhnewman,

    Ross Clark is on www.howestreet.com every week being interviewed with charts.

    If I see any of Alf's pieces I will let you know.

    ReplyDelete
  19. Gary,

    Just read the weekend report. When did you get out of AGQ? Didn't see any note to that effect in your premium updates.

    You laid this out as an alternate strategy in a 5 May update, but don't see anything to say that you were acting on this strategy.

    Was it intraday Friday that you exited your positions? Even so, wouldn't that prompt a "portfolio change" update to the premium section?

    Too many posts in the blog to catch these kinds of things and just want to be sure I'm not missing them in the future as they happen.

    Thanks

    ReplyDelete
  20. Gary,

    Where do you usually invest your money after the A-wave is over? Do you put your money elsewhere or do you ride out the consolidation period until it reaches the next C-Wave?

    ReplyDelete
  21. Gary,
    Once we have more solid confirmation that the 3 year dollar low is in, will not there be money to be made shorting equities (certain sectors)?

    ReplyDelete
  22. I highly suggest everyone Read Jesse, and especially his last post.

    He has strategic clarity.

    http://jessescrossroadscafe.blogspot.com/

    ReplyDelete
  23. Gary,

    With QE2 stretching cycles and altering so much is it possible the consolidation phase won't be what's expected too? Either shorter or longer then you would expect?

    Also, how does this never before seen monetary policy affect you cycle analysis?

    ReplyDelete
  24. Jabalong,

    Gary got out of AGQ on Thursday morning. I think it was in the alternative strategy somewhere.

    ReplyDelete
  25. Gary,

    Another thought I had. Huge hedge funds got caught in the margin hikes and started to unwind margin and run for the doors because they needed liquidity. You mentioned in report how big money often likes to push prices above or below key support and then take the other side of the trade.

    Do you think the possibility exists that this huge shakeout could be the perfect storm scenario for something like this? Having smashed silver sentiment and leaving the retail investor scarred from the sharp silver decline being the perfect set up?

    ReplyDelete
  26. I am watching silver for a bounce, and my trigger is a cross of the 10EMA over the 30 EMA on a 15 minute chart.

    My long term daily 10/30 did not cross, but is squeezing, a price bounce off of that is very bullish, a break and well down we will go IMO, or at least I am not long.

    The momentum indicators are way overstretched, so risk reward is on my side.

    ReplyDelete
  27. Here's two year slv log scale:

    http://screencast.com/t/0xODjGo9N6

    On linear scale that trendline is at around 31.30....

    ReplyDelete
  28. I,
    The downside is your risk is unlimited with inverse ETF's.

    With a put option I know exactly what my risk is if the trade goes against me.

    ReplyDelete
  29. J,
    I posted the alternate strategy right before I got on the plane then decided I didn't like the idea of being unable to watch what was happening as I was in the air so decided to opt for it myself.

    I was frantically trying to get the trades off before they closed the doors and I missed my flight.

    ReplyDelete
  30. Niven,
    If I can find something where I think I have an edge then I will buy or short it during that period. If not I will just go to cash in my portfolio and wait till I think the next C-wave is ready to move.

    ReplyDelete
  31. Patrick,
    If I'm certain stocks are back in another cyclical bear then yes we can try shorting. I have to be completely convinced though before I go that route.

    ReplyDelete
  32. Props to Gary for his calls so far. He's been bang on the money as far as I'm concerned.

    Riding this PM bull with silver and leveraged ETF's is a high risk strategy and all about position sizing and accepting that while there are high rewards for those that know how to trade them there is also the potential for huge loss if you don't understand them. For those that have lost paper profit, that is unfortunate but you haven't really lost anything. For those that came in late and are down on their capital, I feel for you as I've been there myself but you have have to understand that once you press the buy button on a trade you take ownership of that trade. If you enter near the top of a rally you should use a reduced position size so a loss won't wipe you out. By all means take advisement from your mentors but do some research so you understand what you are doing and know what can go wrong.

    I've posted before that it only took 3 minutes of reading one of the free SMT gold cycle reports before I was looking for the subscription link. The cycle tool is enough to give a trader a valuable edge to ride this PM Bull over the coming years. One of the things I look for when I buy shares in Junior Miners is that management has skin in the game (a decent number of shares in the company) so they have to take ownership of how they run the company. With SMT, Gary has skin in the game. I'll be following his cycle work as long as he is generous enough to share it.

    Looking forward to the action over the coming weeks.

    Thanks Gary

    ReplyDelete
  33. I am never going to hit one of these 200 mph curve balls.

    ReplyDelete
  34. Gary,

    Continuing from the posts last night about not getting out of silver in time. I have a few thoughts.

    First, you have always been thoughtful and even often answering my personal emails. You have also by and large been very correct about events.

    I take full responsibility for not selling, however, the responsibility I take was in listening to you. It is wrong to say most of the experienced traders did not get out in time. Many did in real time and I saw it in real time. So it is not true what you say that who could have seen it in real time. I saw Doc sell Sunday night (another rule I don't understand is that you do not consider after-hours trading even though this is a 23.25 hour market and global in nature).

    However, I cannot understand some of your rules. You say you always sell early. Yet you did NOT expect more than a "tag" of $50. why wasn't the high 40s good enough? You always say not to get the last few percent yet you tried to get the last cent here as it appears.

    Further, your reasoning to make the switch was to avoid a huge fall. Why play it so risky in that situation?

    I simply cannot understand what was so magical about the $50 number. I personall gave up months of profits. And that means alot in terms of money and time as I was at this full-time.

    I spoke to more than a few friends who follow your service and ALL of us were completely baffled the week BEFORE the massacre why you were not selling or at least scaling out. We assumed you knew something we didn't. We were wrong and some of those people are in big losses as they bought AGQ much later in the game.

    I don't know. I looked for your advice that first day and I think you were traveling (either Mon or Tues).

    Really most (if not all) of the experienced traders on Mon/Tue/Wed saw what was going on. And then the sell comes on Thurs, almost $200 points down.

    I have so much more to say but I do think you tried to do the best for your subscribers. It's just this time I think you were really playing a game of chicken with $50 when nobody would have cared about even $45, especially if you were going to switch to a gold-related vehicle.

    My self-examination is that I have to understand why I didn't listen to my gut instincts, logical review of the situation, other experienced traders, etc.

    Rules are a good thing. But here it simply seems you adhered to some and ignored others (selling early when you didn't expect much past $50 anyway). Perhaps you could consider the possibility of looking at why this happened. Nobody would believe me if I said how much I lost this week but that is not the real issue. The real issue is that everyone was counting on you getting us out in time and you were playing a very risky game imo.

    But again I take responsibility for not hitting the sell button. But I think you are simply overlooking many facts (and there are more but these are enough for now) in your error.

    I do have tremendous respect for you and your analysis had done very well up until now and thank you for your service. You are one of the best ones out there (maybe the best) but for the life of me I cannot understand why you played it so risky with the biggest trade of almost all of our lives?!

    ReplyDelete
  35. New York,
    QE is stretching virtually all cycles. That's how it's affecting them.

    I don't think QE is going to alter the consolidation phase. That is more a product of human emotion similar to regression to the mean.

    These really large C-wave advances require a long consolidation period before they can take the next step up.

    It's like running up a really steep mountain. The higher and faster you run the longer you have to rest and catch your breath before the next sprint.

    ReplyDelete
  36. No kidding......this was the scripture lesson at church this morning:

    1 Peter 1:17-19 (New International Version)

    17 Since you call on a Father who judges each person’s work impartially, live out your time as foreigners here in reverent fear. 18 For you know that it was not with perishable things such as silver or gold that you were redeemed from the empty way of life handed down to you from your ancestors, 19 but with the precious blood of Christ, a lamb without blemish or defect.

    ReplyDelete
  37. Gary,
    Will there be a alternative strategy for people who dont use options to play the DWave?

    Many thanks

    ReplyDelete
  38. Steven,
    Ok let me try this again. Monday morning I was ready to sell. I told everyone in the weekend report that we would sell Monday. At that point I thought silver had gotten close enough. So I didn't miss that call, I got it right on the money.

    But the market gapped down $3 Monday morning. My mistake was in not being able to see that silver was getting ready to crash 30% in 5 days. If there was some way to know that in real time don't you think I would have gone ahead and sold into the big gap?

    Did anyone anywhere predict a 30% drop in 5 days? No of course not. That is something like a 4 or 5 standard deviation event and not predictable.

    Historical precedent from every other C-wave for the last 11 years said that this wasn't the top and that the correction in silver should be mild. If that was the case then getting caught in the daily cycle correction should be no big deal. We would just ride it out like we rode out every other daily cycle correction and then be ready for the next leg up.

    Only this time historical precedent failed and something completely different happened that had never happened before.

    Again you are trying to rationalize something with the benefit of hindsight that couldn't be done in real time.

    I guarantee if we had gotten out and silver had rallied to $60 or $70 dollars you would be just as upset, probably more so.

    So enough with this Monday morning quarterbacking it's starting to get ridiculous.

    ReplyDelete
  39. The ball is all over the place...the hitter doesn't know where it's going.

    Also, another reason why knuckleballers are of limited effectiveness: it's difficult to throw a strike on command, which can be a problem when you're behind in the count and you have to throw your 80 mph fastball for a strike.

    ReplyDelete
  40. Steven,
    If you were seeing other traders get out why didn't you follow their lead? If you were talking to people a week before about getting out why not then? On Friday, I wanted to get out as I was seeing a lot of things that I didn't like but Gary was still in so I was still following the plan. Well, the lesson I learned here is that I can make my own decisions (duh) and follow my own calls. I absolutely have to do this if I want any longevity in this game. If I had sold on Friday and then silver had a short, scary pullback Monday I would have thought I was a genius but then when silver goes ballistic Tuesday and runs to 60 I would have been very disappointed. Sure I would have made fine money but then I would have questioned why I didn't just stick to the plan. Either way you have to own up and you know that but you also have to let it go and move on because you are doing longer term damage. Move on and get back to making money.

    ReplyDelete
  41. Steven

    If you and your friends thought $45 silver was good enough why didn't you sell?

    ReplyDelete
  42. Hindsight is 20/20 is what the new boss told us when we heard him admit that the guys working on the equipment had a lot of problems. Get over it is his point. There are always a lot of problems.

    The hindsight bias is defined as a tendency to change an opinion from an original thought to something different because of newly provided information.

    ReplyDelete
  43. Silverhound: very well put about Gary and this site. I too was OVERJOYED to stumble across his cycle work for gold/silver. That knowledge gives a trader an INCREDIBLE edge, and it was the missing link to my crafting a devastatingly-effective swing trading strategy for gold/silver/miners.

    *****I too want to thank Gary for sharing his insights.*****

    ReplyDelete
  44. One OTM idea that offers nearly 3 to 1 return is to buy the June 40 and sell twice as many June 45's.

    Close the position between $40-$41, set a stop on the trade at break even once it gets there.

    ReplyDelete
  45. jh

    There aren't many guarantee's in life but sometimes you have those aHAH moments when you stumble across something good ;-)

    ReplyDelete
  46. Silverhound: agreed. I almost did backflips when I ran across Gary's gold/silver cycle analysis -- and I would've done 'em -- if only I knew how to do backflips!!! ;^)

    Are you an Aussie?

    ReplyDelete
  47. Gary,

    I've been thinking that maybe all of the dollar cycles since QE2 started in November have been extended and lasting closer to 30-35 day range. If this is the case, then every time we broke a cycle low (indicated by black arrows), we have rallied to test that breakdown and fallen. In this case, that means testing the 75.5 level on the $USD. This counter-trend rally in the dollar can last up to ten days-ish as evidenced in February. My reversal swing projections give me a cluster of reversal dates that give me an area to expect a trend reversal. We will probably expect to see the ROC in the dollar rally slow as we get closer to these swing reversal dates, where we will watch for a swing high.

    As you see in the metals & miners charts, the damage doesn't look quite as severe given the extended count.

    On the bottom chart, I have 10 year yields. It looks like its consolidation will be ending next Monday, May 16th if my reversal swing date is correct. The Andrew's Pitchfork tool coupled with the reaction line gives us a price projection of 3.031% which is almost the exact same size as the first lurch lower in yields. I would expect yields to begin putting in a failed lower low and we will likely see them to begin their next move higher. That makes perfect sense given the lack of QE2 to keep rates artificially low. Plus, the big boys like Bill Miller and Dan Fuss expect rates to be moving higher and have allocated their portfolios as such. That's big money that will not be buying Treasury bonds. I think this decline in interest rates is merely due to Treasuries putting in their annual cycle low which comes in the first quarter or early 2nd quarter. I think that this will be a left translated cycle and indicative of a big shift in the bond market. (Yields will have to move thru the February high to get a left translated cycle in Treasury prices) With yields moving higher, that will weigh on stocks - which will most likely be attributed to summer doldrums by the financial media.

    They can try to fool us into believing that inflation pressures "transitory" by collapsing commodity prices by raising margin limits & spooking investors, but the story has not changed. Commodity markets will recover from this because the longer term story is still in tact as the markets continue humming along. Gold may not be the "best" investment in this scenario, but it will probably keep pace with a rising commodity index.

    If I'm incorrect and the global economy cannot sustain its growth, we will have another deflationary scenario on our hands. In this case, precious metals will outperform other commodities.

    http://2.bp.blogspot.com/-Nk0WTwHVrjE/TcbAPbFIUBI/AAAAAAAAAVk/2-wyc03TIwg/s1600/2011-05-08%2BDollar%2BGold%2BYields.png

    ReplyDelete
  48. Gary
    You have used the term "close enough" many times in your reports. On April 25th with AGQ up +20 at the open and DG making a comment he sold some of his AGQ position, for me that was "close enough" and I sold it all. That big red candle (17% drop) you had on your and Doc's report scared me to death.
    On the flip side, I got some miners I have to unwind. But hopefully I can do that on the bounce. I will be watching Gary and DG for clues. Oh forgot Poly..

    All `

    Don't get down on Gary. He is human. I imagine he has lost sleep over this like many others. I've been following him since the summer and he is great. So as Gary says "Clear your head dust yourself off and let's make some money".

    ReplyDelete
  49. Gary,

    I have not been posting much on this subject so it's not fair to say enough of this Monday morning quarterbacking. The point is that you did NOT expect silver to go to $60 ot $70 and even if it did we would have sold everything at $50.

    You always said you thought this C wave would "TAG" $50, not go beyond it. So you in essence were trying to grab every last cent in a way especially if you said you were selling everything at $50 so the argument that $60 or $70 would make eveyrone happy is not correct as we would have been out.

    You know the size of my account and the losses were beyond belief enough for my grandchildren to be taken care of...again, my mistake but rationalizing it from your vantage point is not helpful for any of us to learn from.

    Yes, it is spilled milk. And my dismay is of course losing the money but really it's the way it happened. If $50 was the ULTIMATE target (as you always said this C wave would tag $50, not go beyond it) what were we waiting for??

    In any event I still do thank you for everything else you have done for us.

    ReplyDelete
  50. One thing I misunderstood is that you said if silver had gone to $60 or $70 I would have been upset. I truly know I would not have been and we would have captured much of those gains through the gold plays. I'm over and out on the subject but extremely burned.

    ReplyDelete
  51. Steven,

    You are obviously still in the denial phase. I think your best bet is to transition to acceptance at this time so your emotions don't interfere with your ability to make money moving forward.

    If Doc made the call, and all the experienced traders you saw realized what was happening in real time why didn't you sell?

    You think Gary wanted to take the hit on AGQ by selling Thursday as opposed to Monday for sh!ts and giggles?

    ReplyDelete
  52. jh

    Yes mate, Aussie here. In North Queensland.

    ReplyDelete
  53. New York,

    You are correct. I very clearly said it was my responsibility for not hitting the sell button. I just didn't understand in real time what the difference was between $48 and $50. But Gary had not let me down before so I just waited for the call. Again, enough but I needed to say this much.

    ReplyDelete
  54. Silverhound: I've never been there, but I know it's a beautiful country.

    Watch out for those salt-water crocodiles!!!! :^)

    ReplyDelete
  55. Gotta run. The big Mother's Day Celebration is about to kick off here. Ciao!

    ReplyDelete
  56. Steven,

    I think Gary is a great trader but he's human.

    In the past he had often been early in his trades, and that had cost money. I think this time that was in the back of his head. I also think there was a false sense of security about silver passing $50. Success breeds overconfidence and that's what happened here. Gary has icewater in his veins but even he is susceptible to human emotions, particularly when "coaching" a "team" of 2500 subscribers.

    What I have observed is that cycle theory is a great tool for seeing the big picture, but that there's a lot of "play" in terms of short-term timing. Things like daily cycle corrections can be off by a few days and be apparent only in retrospect.

    Gary has a lot of faith in his cycle tools, and that may also be a cognitive bias. He was "expecting" a daily cycle correction, so that led him to underestimate the magnitude of the drop when it came.

    More than anything, we (you and me, Steven) have misunderstood the nature of the service Gary provides. Gary is a point of view, he is not a prophet. He is wrong sometimes just like all the other great traders.

    ReplyDelete
  57. What Steven is failing to mention is that he took, if I remember right, a modest 2-4 million dollar account to apparently 63 million and then lost it back to 14 million.

    So all in all he's still up at least a couple hundred percent. I find it really hard to feel sorry for someone that's up a couple hundred percent.

    Steven the problem isn't that we missed a call. The problem is that you were massively leveraged. That leverage felt wonderful on the way up but hurt like hell on the way down.

    ReplyDelete
  58. It's not the croc's that get you, it's the damn mosquitoes!

    Enjoy :-)

    ReplyDelete
  59. Steven

    If we hit $50 on silver and you sold, and say silver hit $70, believe me you would be upset. AGQ would be > $570. You would be boo hooing about all the money you left on the table.

    ReplyDelete
  60. OK, Gary. Now you have crossed the line from when you were alway a gentlemen and someone I could count on for privacy. I sent you a private email that you chose to publicly put out there. And you did it before you got my next email. Very wrong what you just did and very misleading if/when you get my next email. I never in a million years thought you would take a private email and post it for the public, let alone in a completely misleading way.

    I agree I had leverage but I just think some of your own rules were violated BUT AGAIN I TAKE RESPONSIBILTY FOR MY ACTIONS SO PEOPLE PLEASE STOP TELLING ME IT WASN'T GARY'S FAULT I LOST THE MONEY.

    Enough of the topic...Happy Mothers Day to all mothers.

    ReplyDelete
  61. and we still have the A wave coming up shortly......and the next C wave, then the next A wave, then the next C wave........lots of opportunity there

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  62. Steven,

    I hear you. I got burned too. My account was up 100% in two short months - killing it. All of which I NEVER would have been able to achieve without Gary. The mistake many of us made was thinking he was bullet proof and so many overlooked their own instincts and comfort levels opting to follow blindly. Gary has said many times his risk tolerance is such that he could lose 50% of his account and not skip a beat.

    I actually got nervous with all the Euphoria about $50 silver and sold 75% of my AGQ in 1/4 lots at 290, 300 and 340. Then I let greed take over and bought back higher. Yea it burns but I've lived to see another day and the best thing I can do for my account balance now is to accept, learn and move forward.

    Best of luck.

    ReplyDelete
  63. Steven,

    To be fair, I also remember that you had a lot of inside information about the silver market from a big buyer, and that led you to be extremely confident as well. Perhaps overconfident.

    This is a classic example of confirmation bias -- you selected "sources" that confirmed your own position.

    All in all, $14 mil is not bad. You got out in pretty good shape compared to a lot of other players.

    Don't make the mistake of mentally "booking" that $63 million, or I guarantee you will lose everything. That money never existed. I am down big $$$ as well (nowhere near as much on a percentage or absolute basis), but I'm not thinking about where I was a week ago. I'm thinking about where I am now.

    ReplyDelete
  64. gay could you answer my question please when you get a minute

    ReplyDelete
  65. Steven,
    You publicly told everyone on the blog several months ago that you had taken a 2-4 million account to, I think it was 16 million at the time.

    So I didn't revel anything you hadn't already said except that you had now made it to 63 instead of 16.

    ReplyDelete
  66. clark,
    I've said this before that I really don't recommend playing the D-wave other than in put options.

    In your case you should probably just sit still for a couple of months.

    ReplyDelete
  67. I think the real issue was everyone being over leveraged.

    AGQ is designed to burn you if it tanks, get that into your head, it's a double leveraged ETF.

    The fact that Gary had it so close, by making the call that once at 50 he is out, shows that this was one massive whipsaw to remember!

    I think that everyone should think of these ETF's that they're like options, that will put it in perspective.

    ReplyDelete
  68. Yes, that is what I am talking about. Obviously if I wanted everyone to know my finances I would have posted that on the blog and not sent you a private email. But, again, spilled milk. I just didn't think you would have done that but you have always been a gentlemen so I'll assume this was a one time thing and let it go.

    signing off for now.

    ReplyDelete
  69. Still long 25% GDXJ, 16% QID, 10% DUG, 8% GLDX. Short 7% SLV. Cash 34%

    ReplyDelete
  70. from John Hathaway who probably knows more about the gold/silver markets than everyone here combined
    "When asked about silver specifically Hathaway had this to say, “My instinct is that this was too quick for this to be final. It’s like a haymaker (in silver) and it knocked everyone for a loop. Could it go to $30, could it go to $28? Yeah I suppose so, it could, but it wouldn’t bother me.





    The long-term fundamentals for silver are no different at $35 than they were at $45 and what they were at $15. It’s a hard idea to get across, but I think people get too wrapped up in current price action.”





    When asked about gold Hathaway remarked, “Well gold has hardly corrected. I thought silver by comparison was very spikey and for it to go to $60, it couldn’t have done it from $45 without doing this first. This is just a correction for gold that may not be over, it may take more doubters. It’s a shakeout, we had this huge run and a lot of investors and traders probably got in too late if they were short-term in their thinking, but that is not the big picture.





    The precious metals markets may just chop around for a bit. After that, gold and silver should set new highs. I think people will be amazed at what gold does. Once it (gold) had the last breakout, it did tack on close to $200 in no time flat, I think it will do the same thing again on the next breakout.





    You’ll see an advance that nobody gets, nobody anticipates, and it all comes down to the fact that there is a lot of money to go into a very small space. Somebody likened it to trying to put the Hoover Dam through a garden hose. If money wants to move into gold just stand back because who knows how high the price will go

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  71. Steven,

    It's an anonymous blog. The only thing anybody "knows" is that somewhere in the world there's a guy named Steven with x dollars.

    I don't get the sensitivity about money here. Many people got offended when Cory revealed he had $20 million. Who cares?

    ReplyDelete
  72. I think we all realize we F*** up. My F*** up was in going SLW for the RUN instead of AGQ ... others sold too early and bought back in, others sold too late.

    Lessons learned .. lets just make sure now we capitalize on the bounce and miss this upcoming D Wave. I would personally like to get my account up into the 7 digits by 2013.

    ReplyDelete
  73. We should all be a little more sensitive to Steven. Can anyone comprehend losing $50 million dollars? Even if it was paper profit, it wasn't Monopoly money.

    Steven, if its any consolation, you can still buy and sell me. :)

    ReplyDelete
  74. Gary,
    I don't like your new portfolio post. I want to participate in the d-wave with out of the money call options. I don't want to sit around. I'm sure most people don't too. This new portfolio will hobble the service. Please reconsider

    ReplyDelete
  75. Nobody is giving Steven a hard time.

    Trading is a tough game. You have to learn to roll with the punches and move on or you'll miss the next opportunity. And not count your chickens before they hatch. Thats rule 1 in every trading book.

    A lot of people only dream about being able to realise 7 x gain, whatever the $$$$ amount.

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  76. Eamonn,

    You can probably just play the dollar using UUP, or whatever equivalent they have in the UK.

    It won't double your money, but it's not a bad idea to play it relatively safe right now.

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  77. Gary, I think you are doing a fantastic work for us.I follow you since August and I'm up 50%. Never did before.

    Can you please keep posting option trades on the premium site? I wouldn never be able to ride a D wave without options.

    And please, can you keep the old "single portfolio" with the new "family man" portfolio? I'm single.

    Thank you and sorry for my English.

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  78. gary, I agree with Eamonn ... we depend on you, especially now, to at least guide us into suitable stocks/options to maximize our returns, but, in the end we are responsible for ourselves. I for instance, was concerned about the ultra ETFs and mostly stayed away from AGQ ... personal choice. I also stayed away from options, as I realize they are to be used sparingly. Having said that I would like to use them , especially when a DWave comes to gain back some of these recent losses, and I am hoping to have some guidance from you, from which I can then pick a time/entry level which better suits my needs.

    ReplyDelete
  79. thanks gary, if you do think of another play for amateurs then that would be appreciated

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  80. I feel just as bad for someone losing $50,000 on a $63,000 account. Probably worse. $50,000 can help send a kid to college. $50 million is enough to screw your kids up for life.

    Besides, if he plays it safe and smart, he will make that money up in fairly short order.

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  81. Thanks David for your idea on UUP. I still don't like the portfolio being hobbled. It seems lame now.
    Btw, I'm in the Republic of Ireland, not UK (touchy subject that, here). After Greece blows up, we will be next.
    I wonder if the US economy will be able to walk on its own legs when QE2 ends? I sense a massive debt day of reckoning coming for Europe and the USA.

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  82. Steven .. it sucks to lose that kind of cash. I am sure you will make it back shortly. On the other hand. if you do have some type of confirmation, we would appreciate you sharing some of that info with us ...

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  83. I agree with Eamonn that Gary should not change his posting of his personal proposed positions, even if it involves a lot of leverage or options.

    There may be some subscribers who don't understand how options work, or understand how leverage is a double edged sword, but there are also plenty of us here who do in fact have extensive experience with both and are completely comfortable assuming the risks contained therein. We're big boys, we can take it. And if someone can't, or didn't understand the risks going in, then they didn't do their own due diligence and is their own fault.

    If anything Gary, you should post two portfolio choices--one for experienced investors and traders that includes any choices you are making personally, and a "model" portfolio for those who are inexperienced with options and leveraged funds.

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  84. Folks, If you know what you are doing then you will know what options to buy when and if I think the D-wave has begun. You don't need me to tell you that. If you do need me to tell you that then you have no business buying options.

    From now on people are going to be forced to make realistic decisions about their true risk tolerance.

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  85. Yes, a "Family Man", risk adverse portfolio, and a "Single Man With No Obligations" portfolio. What what I can see, its easy to get a "Family Man" type investment anywhere. There are loads of conservative funds out there. I want something well thought out, but with some cojones, to make some real money

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  86. I think what has happened here is that everyone had gotten used to Gary always being write and dismissing the fact that even the best investors cannot predict the market's next move.
    Instead of thanking Gary for all the hard work, a few have been complainers.
    It is such a shame that these complainers have the ability to change the format of this blog and potentially the way in which Gary discloses HIS transactions and HIS thoughts.
    I for one am grateful for all your hard work and thoughts Gary and am very saddened if you choose to change your structure and postings on the Pay Site.

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  87. MD, my sentiment exactly. This will just destroy the service. If theres money to be made in out of the money puts on gold/silver in the d-wave, I wanna know about it

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  88. MD

    Exactly. Even Jim Rogers was buying $USD a couple of months back. During the rally that the smart money was selling into.

    Not sure too many here can say Jim doesn't know what he's doing, he's the master of Old Turkey.

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  89. I REALLY am not trying to restart this discussion. I just had a post that I realized never actually posted and I'm just posting it now but it was from over an hour ago.

    I guess maybe the bigger point was holding on after such big down days mon, tues, etc.…at least that was my mistake.

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  90. I agree with MD, Eamonn, and others concerning change of format. It really is too bad that someone harvesting 200% is whining and maybe even causing Gary to alter a beautiful format (revealing his trades while suggesting alternatives).

    I feel sorry for you Steven with your paltry earnings. I'm ONLY up 33% this year.

    I was looking forward to option ideas, from you Gary, for the D wave. Oh well.

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  91. Gary,
    Please continue to post investing ideas as that is what attracted me to your sites. I am new to options, but used your opinions and others who comment here to make some good trades. I am learning options within my risk tolerance, and I love to hear discussions on what strike, expiration and why. Maybe you need a premium, premium service for those not adverse to risk. No risk....no gains.

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  92. Sure would be nice if gold continued to climb past 1550$ and over 1600$!
    In thin trading Saturday in India, gold closed at 1506$ and silver at 36.95$. Does this mean anything? I don't know, we saw what happened the last time!

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  93. Well I will say it Steven. Gary probably tossed that tidbit to get you to STFU.

    To have those kind of gains and think you somehow deserved more is unfathomable. Then to come on here and blame Gary for you not cashing in your chips is beyond belief.

    My own father called me Thursday last and said he thought we had gone far enough. He cashed in that Friday and kept his gains. You had friends in high places telling you to get out also, and chose not to.

    In my book, everything happens for a reason. Usually it takes a good while to deduce that reason, but it always comes to pass that we find it out.

    You should ask for your 200 back and leave. Playing this blame Gary game has gone past any semblance of reason. Just my 2 cents worth.

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  94. Gary,

    I'd like to second the previous suggestion about a two-tiered model portfolio, with one being for most investors and the other being a riskier portfolio including options. I've been planning for some time now to ride the D-wave with some combination of put options (and I'm sure I'm not the only one). While I'm an experienced options trader I still respect your opinion and was looking forward to seeing how you were planning on using options for this next wave.

    I feel like some of us have been acting like - for lack of a better analogy - a bunch of drunken teenagers. Our cool Uncle Gary has been letting us try his beer and teaching us how to drink properly but some of us got completely hammered and wrapped their cars around a lamppost. Well, now Gary's taking away the beer because you obviously can't be trusted to act responsibly. So here's some apple juice, instead. Feels kind of demeaning.

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  95. Eamonn,

    I sense some revenge trading going on here.

    One of the points I have heard many times froom the greats is that when things are not going your way or when the trend is unclear, you need to trade smaller.

    This is not a good time to learn options, particularly on silver, which could easily reverse and go to $70.

    UUP should net you about 20%. The a-wave should net you 100%. That's 140% in six months with no leverage.

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  96. Here's what I will do. I will publish several portfolios including extremely aggressive ones. The only portfolio I will post in the normal SMT newsletter is the model portfolio.

    In order to receive the other portfolio and aggressive strategies one will have to buy a separate subscription. That subscription will be emailed to those subscribers only and I can tell you right now it's going to be expensive.

    If you can't afford the subscription then you have no business even contemplating aggressive strategies that involve heavy risk.

    If you want the subscription you are going to have to email me and ask for it.

    I really hope that no one decides to go this route. As I've said many times in the past heavy leverage always ends in a blown out account.

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  97. I found this to be a pretty sensible outlook on silver by Clive Maund. Some good analysis.

    http://news.silverseek.com/CliveMaund/1304872923.php

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  98. As per some ideas on D-waves in puts.
    D-wave....what about a layered approach to buying puts, instead of them all at the same strike.
    One note I will say on options is that it really depends on the premium at that time. If the premium is too high you are forced to go deeper into the money to avoid it...and if you are so deep in the money you might as well go short at a certain point.
    My experience with options is rather mixed...I may buy some puts, but only if they are cheap...I will stay in cash if there isn't an easy trade to gain from...SLV for example has puts that are way too expensive. No intentions at all to go short into this market..So either I get a good deal or no deal.

    This would be a token position as well...My real move, get back to full unhedged positions at the beginning of the C-wave, and hold my positions until the next parabolic move. Normally, just to show how we can adapt Gary’s work in our own, I would buy and hold after the D-wave…however since an A and B follows, I will most likely adapt a full Turkey position only after the B completes. Ie stop watching pops and drops…Hopefully at this point, since I hope people are out of silver, silver tanks back to 10(dreaming), but that would be an easy value trade.

    Going forward I plan, but not certain yet, on taking off my put protection on gold...I don't see the demise in gold happening yet...however, my gut may tell me otherwise...at which point I will just keep it on. If I see a gap down tomorrow, I will most likely take them off into the gap. Especially if the gap is fairly large. Double etfs, options, etc won’t be in play. Miners as well I won’t touch…again since Gary’s work is so valuable, I know a D-wave is on the rise, and I don’t want to get too risky. So a pure gold play for me. Until I get that eery feeling again, and then it goes back on for the duration of the D.

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  99. I mentioned in the previous thread that a move like this would probably come to pass. Gary has to look out for his own portfolio too. When he has to deal with the ration of BS he has taken this week, it can be very distracting.

    Personally I want my coach focused on the big picture. I can surely figure out how to allocate my money.

    For those wanting option exposure, there are many good posters here to learn from. Write the names down when you see them. Bob, Wing, Wes, Poly, to name a few. Educate yourselves, and enter the game as you choose.

    As the coach gets busier, the available time for hand holding will go down dramatically. We all have to stand tall.

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  100. Wow. What a difference a week makes!

    This is the nature of the beast. Making money brings euphoria and good will to all men, losing money the opposite. Please control your short term emotions folks and grow up a bit. I'm not even a sophisticated trader, and I recall many times Gary giving excellent advise with his portfolio stating what trades to make depending on your risk/age/objective tolerance. If you can't stand the heat..

    Gary - That being said..I am disappointed with the change in portfolio strategy. The strongest, and I believe most truthful, fact I can say is that these people will lose their money with or without your portfolio methodology change. Even if you were making large returns per month, they will always find a way to be greedy and lose. The world is filled with these people, and there is nothing you can do to prevent them imploding themselves.

    Keep giving your advice, caveats, and don't lose sleep over those who do not read the warning label.

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  101. David, maybe you are right about revenge trading - I don't know. I am too inexperienced yet to recognise that within myself.
    But, it seems to me, 5-10% on options is fair if the odds are stacked in your favour that a d-wave is coming and that prices will fall heavily. I don't see any heavy risk or gamble in that compared to other trades.
    I want to step back from further trading until I see what is going on. By that I mean, is this dollar rally a massive head fake and a the predicted event occurring with the gold daily cycle low? Or is it in fact the 3 year cycle low?
    I don't think I will step back in until I know what is going on in the dollar. If the dollar 3 year low is in, I will go long the dollar and short gold. If the dollar low is not in, I will go long gold

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  102. Gary, I am a recent subscriber and I hope you will not change the way you present your portfolio to us. I don't know how many subscribers you have but I'll bet 95% realize the risks in this game and just roll with the ups and downs as they come. If someone thinks they can do better running their own money then just cancel your subscription and move on. The squeaking wheels shouldn't get the grease in this case to the others detriment.

    Like you, I am one of those who can lose 50% of my net worth and it wouldn't make a bit of difference. In fact I have lost 50% of my net worth in this game in the past and it didn't make one bit of difference.

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  103. Everyone giving me a hard time can seriously take a hike. I did nothing more than many other people did on this board over the past week. All I said was that I questioned some of Gary's tactics and rules. I also incessantly said that I take full responsibility for my own actions and THANKED GARY A MILLION TIMES FOR HIS BOARD. So don't blame me for anything. He is not making this change because of me. Maybe I'm just the last person who made a comment that finally broke the damn but you don't change an entire business model just because one person has a difference of opinion. So are you saying I have no right to question Gary? And if Someone questions Gary then they are the bad guy. I know of many respected people on this board that have questioned him many times (TZ & DG come to mind but many others as well). Change the format or don't that's up to Gary. I have tremendous respect for him but I did and continue to question his actions and I'm entitled to my opinion.

    So quit the mob mentality. And like I said you have no idea what my financial situation really is as Gary did not give you the entire picture which makes it completely different. I ask that he does not do it and I've ended this subject.

    I never thought of Gary as someone who could not be questioned. Now he makes a change and the mob is after me with pitchforks!?!?!?!?!?!

    Here, I'll make everyone very happy. I will do my best not to post here anymore unless it is to a specific member or absolutely necessary imo. But I'll refrain from being an active participant since this is obviously not a free speech environment.

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  104. Here's another sub that will be disappointed if Gary changes his approach to presenting his portfolio. I'd hate for the site to change because a handful of posters refuse to be responsible for their own money.

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  105. ALEX IN MONTANA:

    Thanks very much.

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  106. Gary,

    People are obviously not following the model portfolio already. From what I've seen nobody is. Some people are using massive leverage. Others are not not following your timing. So what's the point of three more portfolios no one follows?

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  107. I don't like the sound of that Steven. We must work through this all together.

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  108. David, good point. I almost said in my above post that I didn't follow Gary's portfolio, but I liked seeing and thinking about his approach.

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  109. Does anyone think that Hong Kong's gold futures starting in 9 days will stabilize wild overnight swings as well as compete with COMEX?

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  110. Gary,
    As per the model portfolio…I am in the indifferent category…Whatever is best. :)
    Aright really time for that beer.

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  111. Steven

    You said Doc and other traders on here exited silver near the top. You failed to mention that they had also exited earlier in the rally thinking the daily cycle top was in and got it wrong.

    If you only lost a paper profit it was just a number on a screen, you haven't lost anything. Step over the dead horse and move on to the next trade.

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  112. akalaunch,

    What else can I do. The mob is after me because I questioned Gary. I clearly said he is the best I have come across and all I did was question him. And now everyone is doubly pissed becuase it looks like Gary changed his entire business model because of ME! Anyway, I'm a good person and I believe Gary is as well. And I wish well to all.

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  113. Steven,
    The portfolio change had nothing to do with you.

    It just became very apparent this week that a great many subs did not take me serious when I said everyone has to decide what level of risk they are willing to take. Many were just mimicking me even though my risk tolerance was much greater than theirs.

    Those people are now going to have to make real decisions about the amount of risk they are willing to accept.

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  114. Steven ... I think you are overdoing the mob mentality. Many people here feel bad that you lost such a large sum of money. Trust me, if I went from $4M to $63M and back down to 14M$ I wouldnt be happy either. Nonetheless, sh*t happens, this is the stock market, and yea, in Gary's defense this thing went down pretty quick. I expected a bounce at Silver 43$ and dipped my toes in AGQ for a tidy 33% loss in 2 days. I think as a board we need to get over this and move on.

    Gary ... like someone else mentioned, you could post 15 model portfolio's and some people will find ways to lose money in the bull. I will ask you to look at the big picture as well .. you got a lot of folks here who accept the risks and invest within their means and who have done very well over the past few years ( I am one of them ) Lets not lose focus of that.

    Cheers

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  115. Steven,

    I hope you don't think my comments are "after you".

    I certainly don't think questioning Gary is off-limits. I have certainly questioned him (respectfully). But the simple fact is that he made a mistake. All traders do it, even the best ones. The important thing is to acknowlege it(which he's done), learn from it, and move on.

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  116. David,

    Agreed 100%. It just seemed that this one was a bit glossed over and I had some thoughts to put out there. I wasn't blaming Gary. I was just giving my personal thoughts.

    Steven

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  117. Over a year ago, I postulated that the nature of the PM bull had changed after the 2008 liquidation event. Rather than seeing parabolic moves separated by huge consolidation periods, the market switched to a strong trending mode. This change in character explains why the ABCD methodology doesn't fit anymore (and I suggested as much back then).

    What we should expect, therefore, are successive intermediate cycles... much like the last four... which unfold as trending moves followed by mild declines into intermediate lows. The exceptions will come when gold needs to take a breather in order to allow moving averages to catch up. In these cases, we are likely to see an intermediate cycle complete a triangle consolidation. The weekly action in 2009 provides an example.

    That said, I highly doubt price will retreat to $1250. Unless gold is ready to enter its 8-year cycle decline, intermediate lows should not be violated. Therefore, whether or not gold treats us to another rally during this cycle, the coming intermediate decline should be rather mild and hold above the $1310 pivot.

    Since commodities in general are due for a decline into a 2.5/3-year cycle low, I suspect the following intermediate cycle will then complete a triangle consolidation into early next year. Gold will then launch out of the consolidation as commodities come out of their own major low.

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  118. Miners look oversold. Remeber they had a head start on the decline. Hope to get a nice bounce next week.

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  119. My two cents...on future portfolio info. I don't think gary should have to provide 2 or 3 different portfolio's. Or he can charge for them. But a better suggestion might be to use the resources of this blog. There are enough experienced investors/traders to help "build" a portfolio for the conservative long term investor to the more experienced more risk taking trader. This way, if things go wrong, everyone owns up to their trade/investment and we don't crap on one guy.

    Gary..noticed the blees on silver is back above 80. Not necessarily guarantee's higher, but is a good sign that we are bottom or close to it. I also noticed Silver open interest was still significantly off its all time highs at this recent peak. I know you have commented that the COT is not good for tops but do you see anything relevant in terms of short term bottom?

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  120. Stephen,
    I would say everyone is pissed. There may be a couple posters who are expressing irrational thoughts and blame. Ignore them. You have every right o question anyone on this board. Gary has set the groundrules and your behavior is well within them.
    f

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  121. Why I'm choosing option 1 from the weekend report Gary laid out.

    I think this period in front of us is frought with more uncertainty than usual, thus I want the market to proove to me that we are not yet in a D-Wave. I am taking the most conservative of courses becuase it will offer me a clear stop, and the market will have to show some initial strength for me to reset for a postentila C-Wave finale.

    Anyway, this has been my decided course of action throughout this correction, and thus far the market hasn't given me a signal to buy as no swing reversal has occurred.

    I'm assuming those who subsrcibe will be able to understand this post.

    f

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  122. Like the miners and metals, we are diverging from the task at hand.
    Quit bitching, quit bitching at eachother and let's make some money.

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  123. Nat,
    I do think we are close to a bottom but more because the daily cycle low is due than because of the COT.

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  124. Doc,
    You may very well be right although I'm not convinced gold can continue to just keep chugging higher without a third round of QE. And I don't think that's politically feasible until we get at least another mini crisis.

    Either way a rally as massive as what we've seen over the last two years is going to need to either correct (D-wave) or enter a very extended sideways consolidation to digest those kind of gains.

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  125. The gap down on Monday was, indeed, difficult to follow. I was contemplated buying puts on silver or even shorting to hedge my gold longs, but could not chase the move lower. As Gary said, no one could have predicted a 30% liquidation over 4 days.

    I think everyone should remember that Gary is posting his opinions, but no one should just take his thoughts and action for granted. We all had access to the same info, and anyone could have sold on his or her own.

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  126. Steven,
    You have a right to share feelings as so many others do here. I read everyone's posts and some I agree and some I don't. Same way with trading decisions.
    It's not fun to express something and next thing you are being attacked. And I agree, it does become mob mentality at times even with just a few.
    Don't let the blog Nazis determine what you feel you can and can't do or say here. Keep on posting, we all learn from everyone here whether they admit it or not.

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  127. Thank you Fusby. Means alot. And thank you Gary for making it clear the change in the portfolio struture was not due to my posts.

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  128. Are you ready for the last tech boom? Are you ready for the green energy revolution? This tech boom should last thru 2016-2018, taking the Dow to 36,000...after which, all hell breaks loose and the bears win.

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  129. Steven: I am just catching up on the blog after a long break (I don't check much on weekends). just for the record, I generally support what you have written and find little that is objectionable in it. There are two possible reasons for going over the past: To complain, vent, or Monday-morning quarterback, or to learn something. The first is useless, the latter MANDATORY if you want to get better, at trading, any other skill, or at life. I plan to post Monday as I want more people to see it, but Steven, while I felt disappointment in your posts and a touch of complaining, they did not seem at all grossly out of line to me. I have spent the entire weekend reviewing what went wrong for me. The claim that one can never do better in real-time that what one did in the recent past is simply and obviously absurd on its face. That would mean improvement is forever impossible. More Monday...

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  130. This comment has been removed by the author.

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  131. Gary,

    will I ever make back the money I lost in AGQ during this unreal drop in 5 days?

    How long do you think it will take foor silver to go back up to 50?

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  132. fubsy_cooter, RE your post on selection Option 1 from the Premium site. I have the same feelings. I want to see clearly what is happening before I commit. The dollar could just as easily strengthen and gold rally quickly fizzle out. As Doc says "Its ok to miss a trade", and I will be watching very carefully before I commit anything

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  133. Thanks for those thoughts, Doc.

    First, in 2008, we saw a more complex D-wave than we had seen before. And that has been followed by a more complex C-wave than we've seen before.

    And it makes sense to me that this more complex C-wave might alter the next D-wave in ways that we haven't seen before. Specifically, that support zones may have been created by this complex C-wave that will stop this next D-wave higher than we'd "normally" expect. Which means higher than our "historical models" would indicate.

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  134. Not sure if this was directed at me or not.

    "The claim that one can never do better in real-time that what one did in the recent past is simply and obviously absurd on its face. That would mean improvement is forever impossible."

    I never said one couldn't get better. I said there will always be black swan events that will manage to catch us no matter how good we are.

    Trying to fix a perfectly good system so it doesn't get caught by a 4 standard deviation event is just silly. All you will accomplish is to ruin a perfectly good system trying to prevent something that has already happened and is very unlikely to happen again in the same way.

    The next event will come from an entirely different direction so fixing the problem from this time isn't going to catch the problem next time because next time it's going to be a completely different scenario.

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  135. Steven,

    To have questions is reasonable. To step over the line to long post after long post of the same questions over and over crosses quickly to whining.

    Quite frankly if I pocketed 12m after starting with 2m, I think I would be off celebrating and not berating Gary. I guess to be as levered up as you had to have been, Gary is probably right, you will eventually give it all back.

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  136. eeelove,

    It is likely you will never make it back if you owned AGQ in the 300's. You never want to buy ultra etfs in the hundreds. Never. When an extended correction comes, you'll be shattered. Daily compounding cuts both ways and is deadly if you're on the wrong side. (Look no further than reverse-splitmeister ZSL.) Take any bounce this coming week and get rid of it.

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  137. Doc, I'm a sub to your service also, and you and Gary are excellent. I think you are entirely correct about the ABCD formations. I also think they won't occur just like they didn't after the big correction in the mid 70's. After that correction we got support at the 65 week MA and I think the same will happen for us moving forward. That average is currently at 1296 and moving up strongly.

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  138. Doc

    So basically you are suggesting that for the next 5 odd years we have a series of repeating ranges with consolidation in between similar to what we have seen since late 2008, with no major corections in between. Then we have the final blow off top at the end of the PM bull.

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  139. David: P.S. I admire your psychological insight!

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  140. David,

    Thank you for the class and the wisdom that you bring to this board. Your posts have really helped me to keep things in perspective.

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  141. Thanks, guys. I'm just on my best behavior because its Mother's Day ;)

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  143. Nothing like a little Animal House humor to bring some perspective!

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  144. TZ: Great stuff! The look on Flounder's face at the end of that clip is priceless.

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  145. I lost money last week, but to complain about it is pointless. I have been trading a long time, and two things I was told early on is you can't spend other peoples profits, and if you dwell on your last trade you can't successfully prepare for your next trade.

    Regarding Gary and what he did or did not do or should have done has been addressed. He has a system that strategically positions him for outsized gains to the market, and will not change due to an outlier event.

    If people wish to modify his/her approach for their own portfolio, then just do it, Gary addressed that, as well, before this blow up. He was prepared to ride this down further than most here can or should.

    It seems like everyone wants Gary to apologize or admit he was wrong, and he has addressed it.

    I wish we now can just focus on our next set ups. Everyday is Groundhog day in trading.

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  146. This comment has been removed by the author.

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  147. I will make one more point, regarding having a bad week in the market, it focuses your mind and attention to your set ups.

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  148. Steven,

    I recall your posts from a few weeks ago regarding your success up to the levels you posted here today. If your are comfortable sharing how you got from that level to the higher level in such a short period, would you? I'm not trying to pry... or emulate, but am very curious!

    Thanks in advance and if you don't care to, I certainly understand.

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  149. FWIW gold has formed a large and small T1 pattern out of the 09 B-wave bottom. The summer 10 consolidation marked the mid point consolidation that targets roughly $1650ish.

    The smaller T1 pattern started out of the July bottom with the recent 5 month consolidation marking the midpoint consolidation. This smaller T1 pattern also targets gold in the $1650 to $1700 range.

    As the second leg up is usually just a bit short gold should trade up to about $1640-50 then if the T1 pattern is valid it should drop back down to the large correction zone at $1250.

    The only problem with that is that during the entire bull other than the 8 year cycle low the 75 week moving average has halted all corrections. That average is going to move up to $1300 soon.

    I would be a buyer at the 75 week moving average regardless of where a T1 target is especially if the Blees rating is over 90.

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  150. Well, Steven has proven to be a whiner before, even dumping SMT because of my opinions.

    I see everybody that took leave has decided to come back! :)

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  151. jh

    EW isn't the most popular subject on this blog, however.

    Further on the dicussion about Alf Field earlier. The last EW chart I saw of his was in January of this year when everybody was saying the top was in for gold. Alf was suggesting we were in an extended 5th wave and the correction into the January low was a wave (iv) of the extended 5th. He pretty much nailed the low with his call. He then expected the 5 waves up of wave (v) to his target of 1540~1650 odd. I haven't seen him post anything since so I've taken the liberty of continuing the wave count myself. Please excuse the dogs breakfast as this is my working chart and hopefully I've labelled it correctly.

    As you can see we've completed waves 1, 2 & 3 up from the January low and look to be in the wave 4 correction. If the count is correct it suggests a final wave 5 of (v) to come.

    Gold EW chart

    Have you seen anything more recent on Alf's count?

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  152. Hong Kong is opening a gold and silver futures market. This is a game changer, as now traders can arbritrage between exchanges, and Hong Kong does not have embedded naked short positions, and also this exchange will need physical gold and silver, in Hong Kong.

    This is good news.

    http://www.zerohedge.com/article/hong-kong-mercantile-exchanges-1-kilo-gold-contract-end-comex-gold-futures-trading-and-bang-?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

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  153. As far as the D-wave goes, very few will make money even if they are correct. It's a poor bet, even though I agree metals will get hit.

    I like the "easy" money.

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  154. Time to shorten expected hold times,and use tighter stops in each trade (with more size, keeping total risk constant).

    The steady trend is busted, but metals will find buyers into every upcoming dip.

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  155. There is no reason for Gary to start another subscription.

    If people are ready for higher risk, they should be well educated enough to alter Gary's normal portfolio and build their own high risk portfolios. If they can't and have to rely on Gary, the new subscription will only open a door for them to blame Gary when they fail. They will because they are not well educated to do it at the beginning.

    The least thing we want to see is to have Gary diverges his focus on the normal portfolio that helps most of us.

    We need Gary to stay focus!!!

    This weekend's report is good enough and should continue. It has given us options and mention about the opposite outcome (D-wave confirmation). Good to see it covers both sides.

    If anyone is still not satisfied, they should go find another blog. I lose money this week too but I want to be reasonable. There is only so much you should ask for.

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  156. Now might be a good time to create a big list of your favorite minors and watch which ones get hit the worst (weak ones) through the ensuing D and A waves. The ones that do descent should be posed to make the most gains out of the B wave into another C wave. I think when the B wave comes i will take a bit of my portfolio and buy some nice looking miners and hold onto them for the long haul. My phantasy is to hold something for more than a year or two and make a sweet profit with out having to pay the man so much.

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  157. Silverhound: That's certainly no dog's breakfast. Very interesting chart. I don't know enough about EW to add much to what you've done, but it seems like a very plausible count and scenario to me.

    I haven't seen anything recently from Alf. I wish he'd post more. You're a compatriot of his, go down to Sydney, buy him a few pints, and persuade him to put more of his stuff out there!

    About EW: if it's something you'd like to master, you might think about learning the DeMark indicators. As I understand it, Tom DeMark invented an indicator called "TD D-Wave" that supposedly helps take the subjectivity out of Elliott Wave, it makes Elliott Wave more "mechanical" and therefore probably more accurate. There's a chapter about this indicator in Jason Perl's book "DeMark Indicators". These indicators are supposed to be absolutely devastating in their "forward-looking predictive power". But I just haven't had the time to learn them yet (which is the case with a lot of more advanced technical analysis tools which I know about). And you need something like TradeStation, CGQ or, ideally, Bloomberg to learn them and apply them. Again, I just haven't had the time (this isn't my real job).

    Again, I haven't seen anything recently from Alf, but, if I see ANYTHING from him in the future, I'll bring it to this forum, and I'd ask you to please do the same.

    Cheers! And once again, I'm outta here.

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  158. SB, It is your animal spirits that keep them coming back. They try to stay away, but the magnetism is too strong.

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  159. Veronica,

    You mentioned you are a sub to Doc's service and he is also excellent.

    Do you have the website address?

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  160. Gary: thanks for the very informative post. It reminds me that I should be spending more time doing my own research and planning. So I'm outta here. Catch you on the flip-flop!

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  161. jh

    Cheers mate. I'll look into the DeMark stuff you have suggested but the EW stuff is only a secondary indicator for me also.

    If I can get a postage stamp on Alf's forehead.....where should I send him :-)

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  162. Silverhound: send him to my hometown: Minneapolis, Minnesota, U.S.A.! We have such big mosquitos here (Land of 10,000 Lakes!), that they're the "official state bird"!!!

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  163. Veronica,

    Please e-mail me at
    pos8383@hotmail.com.

    I have a question.

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  164. Here is what I take away from this disaster, because I think it is important to learn from this. Gary is not a guru, he is an advisor. All trades are the responsibility of the trader. Never violate your gut instincts, particularly when the risk-reward ratio has shifted against you. And never fail to close out your positions at least in phases as you start to show large profits. I would have been happy to close at 49 and my gut told me to when we made a double top. I cant blame Gary for that as he is the first to confess he may not be always right. I got greedy. I looked up a few bucks from 49 instead of down from the cliff I was hanging on to, and it was easy to say: well Gary hasnt closed yet and dump off the responsibility on him. It reminds me of the last time I left a ton of dough on the table, and a friend I knew playing the stock (which had gone from 5cents to 22 bucks) was talking to his broker and his broker said SELL and he said, no its going to hit big, and the reply? It already has hit big. SELL. So these are the lessons I will take from this. And never again will I fail to lock in some profits once I have doubles and triples in the portfolio, just because I am greedy and want the quad out of it. These straight up moves are highly dangerous, and call for emergency maneuvers to avoid getting caught in the downdraft.

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  165. Steven,

    WMP beat me to the punch. I, too, would very much like to understand structurally how you have been able to build capital. If you could also outline some sample very profitable trades (without dollars of course) it would be greatly appreciated.

    I for one am always interested in understanding genius.

    Thanks

    Rodney

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  166. HotRod & WMP,

    I just stepped in for a minute, so I'll give the short answer and can elaborate more if you want.

    It was a combination of a number of things. Leverage was definitely involved. I also got involved in silver at an early point. I also had some successful day trading. There were a few other items I did as well but one of the most profitable items was to time high leverage for a few days or weeks when I thought AGQ was about to make a move (based on a number of T/A items I look at) and those worked out really well.

    So I wasn't leveraged to the max the entire time but I was leveraged to the max "at times", usually no more than a few days.

    Unfortunately one of those days was the Monday we began to crash!

    I even put in a number of HUGE sell orders on Friday (too many shares for a single order) right around the market price and then cancelled. Perhaps this is what I am most upset about but I think mostly I am upset that I didn't sell late Monday or even Tuesday when it became apparent to me that some was going awry imho. But yes, I feel no pride and much shame even though I took a few million and turned it 20x at one point. I had an even crazier ride during the tech boom (I was VERY early in that one and picked the right ponies) but that didn't end very well either.

    I can give more specifics later but I hope this helps for now.

    Question for anyone. DO you know where the futures ended at 5:15 on Friday? 35.XX?

    I'm watching it live on my platform but that doesn't show where it closed but where it is up from Friday's pit session close. Unfortunately all Kitco shows is a 20 cent range 35.62-35.82 but does anyone remember where it actually closed?

    Second question, what is the exact differential between SLV and the futures right now? It used to be 80 cents or so but I thought it had changed somewhat?

    Thanks in advance for any answers.

    SB,

    We buried our conversation. There is no need to incite. And I NEVER threatened to leave SMT over our issues. Let's please leave them be.

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  167. I have to say that creating additional portfolios for an additional premium in the advent of a few members complaining about losing their shirt is a little irksome. This is essentially a tax on the membership because a few people here cannot own their own trades.

    Having access to Gary's own portfolio helps to inform me of how I want to allocate my own capital.

    This isn't about the additional premium, but the notion that the membership will have to pay additionally for information we previously had bargained for is bothersome.

    Gary's disclaimer wholly indemnifies him from any responsibility for third party trades. People must trade at their own risk but I'd ask Gary to reconsider based on what's fair to the membership.

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  168. "Here, I'll make everyone very happy. I will do my best not to post here anymore unless it is to a specific member or absolutely necessary imo. But I'll refrain from being an active participant since this is obviously not a free speech environment."

    -Steven

    You must forget how many times you leave.

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  169. This comment has been removed by the author.

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  170. Lets not take this blog stuff to personal. We don't even know each other.

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  171. This comment has been removed by the author.

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  172. Be careful, last week's massive selloff indicates a trend change. Silver could eventually see $20-25. I'm thinking that is a likely target. That's usually the case with most stocks. Maybe silver has superpowers and does something entirely different, who knows.

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  173. Frankly, I wish silver would just barf and drop to 20$ and start the next phase as we're locked in fear at this time.

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  174. Gary
    This may be a 4 SD move in random markets, but given the size of the move in Silver and it parabolic nature, I suspect the 30 percent downdraft was mich more common than that.

    I haven't looked at any charts lately to verify what I'm about to say, but most parabolas I recall end in a very steep and deep correction.
    F

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  175. Stephen,

    I show silver closed last FRI at $35.32 at 515 pm eastern.

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  176. Gary,

    The weekend report only advised those who took the alternative strategy. As you know, some of us didn't get that message until after close Thursday and still hold AGQ/DGP.

    It's obvious silver is a pariah by the weekend report recommendations and you've left those who didn't or couldn't execute the alternative strategy out in the cold. Someone asked before if you would make an exit recommendation. If I missed it would you please repeat it?

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  177. SB,

    You are really a master at twisting people's words. I never said I was leaving just limiting my postings. And I NEVER EVER said before I was leaving. In fact I previously said people should not leave based upon our prior discussions other people may have said that but I didn't and encouraged people to stay. You just can't leave it alone can you or get in a pot shot whenever possible.

    Post whatever else you want I'm not responding.

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  178. Thanks Salty but was that the 5:15 close on Friday? I thought it was closer to 35.70ish.

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  179. FC,
    I think we all knew silver was going to crash. We just all expected it not to happen until gold topped and I'm not at all convinced gold has topped.

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  180. Gary,
    What will be the bottom line, gold going lower, no way up indicator?

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  181. The equities market is actually holding up quite well in spite of the plunge in commodities:
    http://stockcharts.com/freecharts/gallery.html?s=spx

    Semis and tech appear to be the ones on verge of breakout to take the general market higher.

    http://stockcharts.com/freecharts/gallery.html?qqq

    http://stockcharts.com/freecharts/gallery.html?s=smh

    I've said many times now (except the last few weeks when precious metals were getting a boner) that we get the last mega bull market in tech into 2016-2018 before precious metals re-emerges and the entire financial system collapses. The recent crash in pm's and commodities is what the next bull market in tech has been waiting for. It happened last week. You should see a big rally in tech this coming week.

    Pm's are weaker than I thought. I thought they would gap higher tonite and run to $40 Monday-Wednesday. But futures are down at the getgo.

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  182. Perhaps the C wave burst at top that we all expected ends up in longer width of time rather than height of it's reach. Gary said the bull would do whatever it needed too to knock as many off as possible, or Bernanke and Tim's plan is working. I prefer Bob from HI thoughts.

    Gary, I saw your post for strategy going forward. Not happy to see that. Not sure how that helps any of us.
    I was quite happy to know I was not gunning it to the floor as much as you, so felt safe knowing you were going full speed ahead and confident and I could gauge my speed to yours. Now, I don't know where I stand, looking at what you posted, has me scratching my head thinking...huh? Now, it looks like my portfolio to yours, has you coming to to a screeching halt as I flash right by you with my hair on fire!
    Please continue posting as Gary is, not as Gary wants us to do. I am sure all of us were told, if your friend jumped off a bridge, would you follow? We pay for Gary does and thinks, not for what Gary thinks we ought to do. Let us make our mistakes and learn along the way, only way to learn what's right for each of us. Plus with a position like you posted, that would make for one hell of a boring ride any way it goes.
    My 2 cents and hope you will reconsider to continue what you have been doing and telling it like Gary does so well.

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  183. WMC,
    At this point its anybodies guess. I think gold has to at least test the low before it can go back up. That probably means silver will go back down too. Will it go down a couple of percent or another 10%?

    I have no idea.

    We're kind of in the same situation as last Monday. We aren't privy to the future so it's really tough to make a decision.

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  184. Hey Gary,
    I gotta say, if the new portfolio you're posting is the version of what you think people should have rather than what you're doing, I'm feeling cheated. You clearly stated in the past that people should not take on your level of leverage unless it fit their risk tolerance.

    I've been a subscriber for appx two years now, and I want to see your portfolio, and make my decisions from there.

    You can't expect to control what people do. you know as wel as any greed and fear run markets. you can't possibly expect to control those driving forces by suggesting a conservative portfolio, and if you do, why should your more responsible subscribers lose out on knowing what your allocation is?

    Just feeling a little irked at the change.

    May I suggest that you give your allocation and next to it a more conservative one that is appx 50% invested in PMs during C-Waves.

    F

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  185. at ease,
    You know what my position is. so you know where I stand at this juncture.

    In the future you will just have to decide for yourself if you want to go heavier than the model portfolio. The analysis will remain the same. I will still call entries and exits as I see them but it will be up to you as to how aggressively you want to get with them.

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  186. FC,
    See my comment to at ease above.

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  187. Gary,

    I've never paid any attention to your positions, but now you call attention to them.

    Does the abbreviated exposure indicate you're not very confident in your current predictions ?

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  188. steven,

    looks like you are correct. Kitco shows 37 seventy ish at 515 last fri.

    my fx chart stopped recording data at 4 pm... dont know why.

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  189. Wes,
    Not at all. I've been trusting my system for several years now. Other then a Monday gap catching me it has served me very well. If it helps any you can always assume that I am going to be invested at least 30 to 70% heavier than the model portfolio.

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  190. With that said, I can easily create my own allocation based on where we are in the cycle counts.

    After all, that's what I've been doing anyway.

    i'm willing to bet that you continue to see the same percentage of subscribers misallocating based on their innate greed to make easy money fast. They will still get creamed and lose most if not all their gains when the exciting tops form and fail.

    f

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  191. Gary, your the boss, but what drew me to your site, was your approach to the market and sector. Change is hard, but feel like the smackdown last week and the smackdown you got on the blog from some is giving the rest of us a smackdown again also.
    I like Gary and his insight, would like to see it continue. I am amazed that you can take so much guff and keep on giving. It is hard, I can see that, I couldn't do what you do. Thanks for all you do and continue to do. Happy with Gary and all he does!
    thanks! :)

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