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Sunday, July 3, 2011

LOOKING FOR A BREAK

We've been waiting patiently for gold to move down into its intermediate degree correction. Now that the last daily cycle low has been breached we have confirmation that that correction is underway.

I've noted previously that bottoms tend to occur when smart money drives gold below a key technical level triggering stops. Big money needs liquidity to enter large positions. They achieve that by taking out the technical traders stops below a key technical level.

As this progresses over the next couple of weeks I'm fairly confident that the May $1462 pivot will be breached. I expect gold will at least retrace 50% of the recent rally back to the 150 day moving average.  

  Click on chart to enlarge

The 150 has contained the last seven pullbacks. It's probably about time that quits working though. What I would really like to see is a test of the winter consolidation zone at around $1425.

This pullback should be the single best buying opportunity for the rest of the bull market as it is highly unlikely this intermediate cycle low will be violated again before the final blow off top later this decade.

155 comments:

  1. Hidden treasure found in indian temple...estimated to be worth of 20b+

    http://timesofindia.indiatimes.com/city/thiruvananthapuram/Rs50k-cr-worth-treasure-in-Kerala-temple/articleshow/9069757.cms

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  2. well gary

    you don't need to give any justification so as me to change my opnion about your market analysis...you are a good gold analyst but equally poor market analyst..its my opinon after reading your analysis for last 1 yrs or so..

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  3. The stock market follows cycles just like everything else. However the continual QE and market intervention has been stretching some of those cycles making it very hard to call exact turns in the market.

    I did warn the bears last summer that the bull was probably still alive. I did warn people in May to get out.

    I did not foresee a manufactured rally in front of the end of QE and a very shortened intermediate cycle.

    If analyzing the markets means I'm required to read Bernanke's mind I must admit I'm going to have trouble, but I can usually get people out pretty close to the top and back in pretty close to the bottoms as long as the cycle isn't extremely warped.

    However after two years and over 100% it's too dangerous to continue playing the long side unless you are a short-term trader. The average 401(k) holder should be out of the market now.

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  4. "I'm fairly confident that the May $1462 pivot will be breached"

    Isn't this a nice opportunity to buy some at-the-money August puts, especially if we see gold reverse Friday's losses early this week?

    While speculation may lead some to conclude QE3 is right around the corner, I think we are weeks or even months away from anything substantial coming out, even with a few negative economic indicators being released.

    Dollar positive, gold negative through this next cycle, and good opportunity for those who don't mind shorting the gold bull for a few weeks.

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  5. Here is the problem with looking at the market. Ben knows, beyond anything else that the market is the gauge for the health in the economy. Market goes up, lies about the economy can be held.

    How anyone can time that is beyond me...the only way is to be perpetually bullish, which turns out to be really wrong to the tune of 50% loss two times in the last decade.

    Keep up the great work Gary!

    If anyone one went long with 100% calls on the weekly SPY's please let me know; I would love to hear about your rationale, because that would have been an exceptional call.

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  6. Gary,

    The 1425 level is a retracement to the 61.8% level on the fib, top to bottom of this c-wave

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  7. Not even close. The C wave began at $860 in April of 09.

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  8. Gary,

    That's where I started the fib retracement at the 860 level, up to the 1577 top. Do you not see 1425 sitting at the 61.8% level?

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  9. Gary,

    it would be nice if Gold would oblige and fall below 1462, to $1425; but with the stock market aborting its date with destiny (breaching the march lows), don't you think the same may happen for gold; that it may not breach 1462 or perhaps not even touch it?

    Oil never made it to $80-85, I think we must be on alert that Gold may not 'fully' correct either, no?

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  10. A 38.2% retracement from the 1577 top puts gold right on the winter consolidation zone at 1425.

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  11. William,
    You have your Fibonacci tool upside down. The retracement levels should run from smallest to largest as you move back towards $860.

    The 38.2% retracement comes in at just about $1300. Gold should not decline that far as it would penetrate the prior intermediate cycle low, and that shouldn't happen in a bull market except during an eight year cycle decline.

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  12. Bruce,

    Don't be so quick to think that the market will not drop further from here within the next two weeks, oil and gold also.

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  13. Bruce,
    I really doubt there's going to be a manufactured rally in the gold or the oil market seeing as how the administration is trying to intervene in high commodity prices.

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  14. The key for commodities is the impending bounce out of the daily cycle low for the dollar. That should drive gold and oil down into their intermediate bottoms and it may force a correction in the stock market or a sideways consolidation.

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  15. Gary,

    You misunderstood me, I will say it again. The 61.8% level on the fib is at 1425, that is a 32.8% retracement from the 1577 price level.

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  16. How can the 61.2% level also be the 32.8% level?

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  17. Correction, I meant 38.2% retracement

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  18. Gary,

    The 61.8% level on the fib is a 38.2% drop from the 1577 price.

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  19. Gary,

    I have it drawn from top to bottom, the opposite of yours.

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  20. It doesn't matter if you have it upside down, the 61.8% retracement will still come in slightly under the prior intermediate low at 1308.

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  21. I did it that way to see where the levels would land, to see if they would land on any moving averages. So if you draw yours upside down you will see that the 1425 level is on the 61.8% level

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  22. Gary,

    Im sorry, forgive me, its the 78.6%level I was looking at the 1425, your correct the 61.8% level is 1305. I was not near my computer I was going off the top of my head. Sorry :)

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  23. Nope still comes in at about 1300 if you draw the upside down.

    You are using 1150 as the start of the C wave when it actually started at 860.

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  24. $865.60 was the bottom of the B-wave

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  25. BTW, im using the /GC gold futures chart in ThinkorSwim, the low was $865.60

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  26. So, on the GLD chart we are looking for the 200 ma to hold?

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  27. W2 and Gary,
    It`s kind of funny listening to you both go back and forth because I understand what each of you is saying. I is simply the inverse of the other. I personally will do it either way, whichever will connect the most points.

    Also I agree with Gary on the dollar being the key to this whole issue regarding gold but I think it premature to say the drop in gold can`t be cut short. Not that the banana republic regime will manufacture a gold and oil rally, but if the general market moves high enough, atsome point the rest will have to follow. IMO.

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  28. Any tag of the 200 a moving average has been a pretty good buy spot for this entire bull market except during the eight year cycle low.

    Since gold never really stretched very far above the 200 day moving average it seems unlikely that it would dip much below it.

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  29. 86,

    Gold pretty much dances to its own drummer. The stock market is usually irrelevant.

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  30. Gary,
    Agreed, but still.

    So how about this; I`ve been hearing major rumblings that the Iraqi Dinar is/has revalued. Of course Joe 6 pack will be the last to get his dianr RVd, but if we inserted this as a truth, it would make a lot of the pieces of the puzzle fit.

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  31. The fundamental driver of the gold bull market is the debasement of the US dollar.

    Almost every major leg up in gold is also associated with a major leg down in the dollar. There have been a few exceptions but they are typically associated with the EU debasing the euro. So in reality the dollar didn't gain it's just the euro fell.

    If the dollar is still moving down into a three year cycle low then gold should have one more large leg up.

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  32. Gary

    So if the dollar breaks the prior low, then go long gold
    Is that "THE" signal

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  33. We should be long gold way before that happens. But if it does that would be the signal that the C wave is still in progress and another major leg up should be in front of us

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  34. Hey Gary, I'd like to get your opinion regarding a plan I'm thinking of implementing. I'm certainly going to follow your portfolio and structure a portion of my purchases around what you'll be doing, but I'm also considering buying some long dated calls on some of the choice gold miners like AEM and GG. Specifically January 2013 calls.
    Any input for me regarding doing this? I figure those call will soar once the gold bull starts to gallop and the miners see a big influx of investment capital.

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  35. It would be safer to buy calls on GDX.

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  36. Yeah, and calls on the GDXJ I'm sure. I'll probably buy some January 2013 calls on AEM and NGD (my favorite junior) for the hell of it. Not much, maybe a couple thousand $$ worth of calls just to see if I can hit a homerun.
    Are there any juniors you like in particular, Gary?

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  37. Excellent weekend report Gary. This answers my previous question on what the price of gold will be at the lower end of the tolerance band.

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  38. gary

    i thought we/you were of the mind that the dollar could be breaking down in the next few days

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  39. Jeff,
    The dollar is 18 days into its daily cycle, it should be finding a bottom anytime now.

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  40. Calls on GDXJ are very illiquid. Which means the spreads will be large.

    Stick with GDX if you are going to buy options.

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  41. Gary,

    Great weekend report and great job in calling the markets as you see them. You have done an excellent job in providing your educated and experience opinion about what you anticipate for the stock and gold markets and many people have benefited.

    Please do not let the odd individuals who make negative posts here bother you. I am sure you do not or you would have told them all to go to hell a long time ago. It is one thing to express an opinion on the blog, it is another to criticize and make negative judgments.

    It is unfortunate that we have to put up with negative people in the blog (and the world).

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  42. Gary,

    I agree that alot hinges on the movement of the US dollar in the coming week(s). In your opinion, is a violation of the June cycle low sufficient indication that the 3 yr cylce low is not in for the dollar or would you wait for a violation of the May low?

    thx

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  43. I don't know if we are going to get a violation of the June low since it is getting late in this daily cycle.

    If I had to guess I would say the dollar bounces off the trend line of the triangle consolidation, rolls over quickly, and then breaks the cycle low at the trend line signaling a failed daily cycle and raising the odds tremendously of a left translated intermediate cycle.

    If that happens then the three year cycle low should form sometime later this fall. The norm seems to be in late November. That would also suggest a rather stretched intermediate dollar cycle.

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  44. I think any mention of the dollar 3 year low not being in is pure Nervous Nellyness by those short

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  45. Gary,

    Under the scenario you describe for the dollar, would that change your opinion on when the oil cycle will bottom? (Previously you mentioned you thought it would bottom in August.)

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  46. Gary, why would the dollar break the trendline? QE2 has ended as far as we know.

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  47. Michael, I agree with you. It also amuses me the people who come to Gary's blog and "gloat" of their winnings that they achieve by going against Gary's recommendations.

    Gary, I think most of us on here respect your investment knowledge and cycle theory and highly value SMT!

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  48. Eamonn,
    That was pretty good, Nervous Nellyness. I tried to say that 5 times fast and had to get out my Leatherman to untie my tongue!

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  49. Michael,
    Oils cycle should bottom somewhere between 50 and 70 days. When the dollar bounces out of the impending daily cycle low it should drive gold oil in the CRB down into a final intermediate cycle bottom.

    It should also force either a correction to test the low or a consolidation in the stock market.

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  50. stor,
    I can't figure that one out either unless quantitative easing is not really ending.

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  51. Thursday, June 30, 2011 20:40
    (Dow Jones) Not every market watcher is impressed with this week's stock-market rally. NYSE volume during this week's first three big up days was below both the 50-day and 200-day moving averages, writes S&P technician Mark Arbeter. "We would be more encouraged if it were a bit heavier," he writes. More broadly, Arbeter sees chance for stocks to turn lower again. "We continue to believe that once this short-term rally runs its course, both stocks and commodities will begin another leg to the downside, eclipsing their recent lows." Arbeter says he wouldn't commit "a lot of capital on the upside at this point."

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  52. TL,
    Yes I understand that no matter how many good calls one makes there will always be somebody waiting in the wings to gloat, as you say, when one misses a call.

    Although no one lost any money since I've been stressing not to short the market. On the contrary we made money on the short side and exited at almost the exact bottom.

    Some people just naturally focus on negatives and manage to overlook all of the positives.

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  53. SP-500 Observation Chart Using Gann Fan from the All time High 1576 and the 666 Low:

    http://screencast.com/t/sZjAjIa6s

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  54. Gary,

    Your adaptability is appreciated. There were some cues in your earlier letters this week that you were considering this Plan B analysis and I am glad we will be ready to play it if it pans out. I'm sure that that "What if?" was at the back of many minds watching this QE insanity wreak havoc on market and dollar alike and I feel better knowing you're on top of it. Thank you.

    K'Plakh!

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  55. Gann360, your charts are beautiful

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  56. Gann, Have to agree with Eamonn, works of art. Thanks for sharing.

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  57. Thank You... I love Digging for Clues.

    Lots of Vibrations in Time Hitting Mid July ish...Should mean Something

    Goodluck All

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  58. Gann - Is there an explanation or theory for why this works? Just curious, and thank you.

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  59. This one's for you WW. You must have drove right past this Capital One on your way to Montauk.

    BTW, it appears Capital One will not be going under anytime soon...

    http://consumerist.com/2011/07/whose-100-million-atm-receipt.html

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  60. Gary, have you ever considered the cyclical correlation of sun spots and the business cycle?

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  61. eamonn

    also astrology and wolly worms for fall trading

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  62. I kid you not: http://www.dailymarkets.com/stock/2011/06/20/why-we-are-fans-of-felix-zulauf/

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  63. sorry
    i should not have mocked. thought you were kidding

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  64. Jeffthe Flea: no sweat. i aint gonna shoot ya :o)

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  65. IES,

    Thats a great photo you found, would never guess you still have to pay ATM fees if you have that much money sitting around.

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  66. just dont shoot my bull. im gonna ride this baby till it gets put to pasture..
    on the other hand this dollar is driving me nuts

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  67. Hey Felix

    Vibrations in Time n Price is spoken about in all of Gann's Books.

    But the Criss Cross from a High Pivot and a Low Pivot ,is something i came across.

    As you see on this chart, each Gann Fan line ,did act as Resistance or Support at one Point.


    And like a Trendline or a Channel, or MA or Fib /or a Cycle Pivot, at 1 point,it will Fail to Support or act like resistance..And a New channel/Vibration will start.

    So it's a Heads up ,to be Careful of a Possible Pivot in Time, But i have other Charts with a Degree Cycle that Hit Mid July as well..So it will be interesting to see if Mid -Late july does put in a Major High or Not !

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  68. This comment has been removed by the author.

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  69. Eaten Silver,

    Actually I go in that Capital One on my way to Montauk, thats my receipt...dont listen to JEFFtheFLEA its my receipt not his, flea's dont roll big like that.

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  70. 86,

    I was looking at the nymo and I see what your saying.

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  71. The move that would mess me up the most is a slight break of the current three year low on the dollar, followed by a crisis in one of the remaining PIIGS, etc. We would all go long PMs/Miners and then the dollar would bottom and force a true D Wave in gold/miners/indices. It would take major discipline to bail on all long positions at that point after waiting all this time. Not saying it's going to happen, but that would be a nightmare for everybody in the market no matter what your outlook.

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  72. Dollar futures are below the lower trendline right now.

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  73. IMO, which really means crap...I think the dollar is going to consolidate and gold is going to continue down into a D-wave, like in May '06.

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  74. GANN

    Did you see this, I thought it was a good read.

    http://www.safehaven.com/article/21557/what-wyckoff-failed-to-take-from-william-gann-tool-chest


    Thought of you, and thanks for the FAN chart.

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  75. Cory

    That would be the ultimate curve ball we hope doesn't get thrown.

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  76. Actually that's how bear markets typically work. They breakdown to marginal new lows and then reverse in a vicious bear market rally.

    If the March 08 low is taken out it probably won't be by much before a major rally begins.

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  77. IMO, which really means crap...I think the dollar is going to consolidate and gold is going to continue down into a D-wave, like in May '06.

    And like in '06 gold bounced off the 200sma, so will it this time around again. $1420 here we come.

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  78. Don

    No point picking on Gary for his bad calls - if you must follow advice go for gurus that have capital staked on the outcome. For example the most recent posts on "left cycles are bad news" and "striking similarities" are a market call that equities will tank - but Gary has said not to short it, and further there is no capital staked on it on the outcome. They are just opinions - no doubt reasoned with the best intent, but just opinion. BTW DXY is now trading at 74.13 - a break through 73.50 - this is final piece of the bullish case. All the other indicators, credit, swaps, and bonds have demonstrated a risk on stance. And that is just an opinion....

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  79. Also for gold, my take is if you think the price will be $2000 plus there is no point in trying to "time" your entry level at $1462 or the 150 day MVA. If DXY does indeed roll over below 73.5 then you will have missed the upside. Again just an opinion.

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  80. I know gold can rally from its 150/200DMA in the face of a rising dollar after its intermediate bottom, even if the dollar breaks to new lows. But it will sure be tough to buy miners if equities are rolling over around what is shaping up to be an interesting 3rd/4th week of July. It would be so much easier if the dollar made a higher high and confirmed the 3 year low like we were waiting for, but the market rarely gives a cookie. This will be a challenging one to navigate and get into Old Turkey mode again where we belong.

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  81. maybe if we all clap hands together & sing a song the dollar might rise

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  82. Gann - Thank you, sorry so late, I was away! Very interesting.

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  83. I think the fact that gold in euro terms is now touching the 200dma, whereas in dollars has a long way to go, suggests strongly to me that the anticipated dollar bounce will take the north direction strongly ... thereby breaching triangle resistance.

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  84. I can't see why the plunge protection team would want to manufacture a rally just now - before they can really feel they are answering the united pleas from bulls in pain.

    I think this could be a fake rally.

    We have to have a deflation scare and I don't think the recent low in the stock market counts as that.

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  85. i appreciate people when they are right..i give them a candid feedback when they are not right...i appreciated gary's gold analysis but sorry i can not appreciate his market analysis ..micheal and traderlady, you have no business in critisizing other people's behaviour and location..better you be focused on the cause of being on this blog....people like you are spoiling gary ;-)

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  86. http://www.zerohedge.com/article/guest-post-how-credit-market-prices-economic-recession

    comparison of topping patterns between 2007 & 2011 with graphs of SPX and 10-year Treasury.

    shows how 2007 also had explosive rallies that led to further declines...

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  87. Here's my thoughts: I'm positive that there is no more QE for now. Official inflation is over 3.5%. The FED has always stepped of the gas when official inflation goes too high. Of cource there is no garantee the dollar doesn't continue to drop for a while regardless. But the dollar will rise before the FED starts anything new. This whole thing is very easy. Look at offical inflation, that is what the FED makes it's decisions from. When the FED prints money or is easing it's time to be a bull, when they stop printing money or start tightening it's time to be a bear. Monetary inflation must continue in order to avoid deflation in assets. If left unchanged assets will start to deflate. Now the FEDs gas pedal recently has been printing money that has made it's way directly to the markets. The lag time from stopping that should be considerably shorter than if the FEDs gas pedal had been only a low rate.

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  88. Don said,

    "..micheal and traderlady, you have no business in critisizing other people's behaviour and location.."

    If that is not the pot calling the kettle black then I don't know what is!

    Don, take your negativity elsewhere, it is not wanted nor welcomed here...

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  89. Cory

    I agree with you..Feels like Gold will tag the 150 or 200 Dma..Maybe there will be a rally from there..But..! If we dont ge a correction in the stockmarket in july..When will it come..Feels like the only thing that follow the analysis for now is gold..

    If feels like we bought some time when we saved Greece..But Portugal, Spain or Ireland is next..Probably soon..

    So if we buy gold when it tag the 150 or 200 in middle or in the end of july and then we get a big correction in the stockmarket we might have some problem..

    Maybe its to early to say that the dollar is in a left translated cycle..QE2 is ending now and Garys analysis about a big market correction might still be valid..

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  90. don,
    how about this; since Gary is obviously mortal and can`t seem to know the unknowable, why don`t you step in and take over. Of course you might have to change the name to like `Dons Superhuman Gold and Market Analysis Newsletter`.

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  91. The move down into the dollar's intermediate cycle low was always going to drive a rally whether it be a C wave or an A wave.

    The determining factor was whether the dollar cycle is left or right translated. Unless the next daily cycle can rally to new highs the dollar is potentially in a left translated intermediate cycle.

    If that continues and the dollar breaks lower then we will have a continuation of the C wave and stocks should make at least marginal new highs. Oil should also make new highs putting even more pressure on a fragile economy.

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  92. What if last week's stock rally was a bunch of algorithms moving money from bonds to stocks on debt ceiling default and end of QE fears?

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  93. One could always think up reasons for why the rally was bogus and will fail but it's been my experience that rallies this powerful, even if they come on a low volume preholiday week, rarely fail easy.

    The trend has been reversed and trend followers will now start buying dips.

    In order for this rally to fail the dollar needs to rally to new highs with follow through.

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  94. Is there any way to be sure that the dollar is the cause and the stock indexes the effect rather than the other way around?

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  95. They both affect each other on a daily basis. But each will run in its own respective cycle.

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  96. Gary,

    If the dollar fails to rally here can we still expect gold to hit it's 150 or even the 2002 dma?

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  97. The dollar will rally, it's in the timing band for a daily cycle low.

    Gold would finish its intermediate decline anyway. It does so whether the dollar is rising or falling.

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  98. Gary

    FSR is probably right, the dollar takes its cues from equities/credit, not the other way round. My simple basic observation is analysis of equities and credit require more brainpower to process than FX. The correlations (risk on/dollar down or risk off/dollar up) are inverted but weaker currently. I am watching DXY for the break below 73.50 - my opinion for all is forget the cycle stuff and buy gold for the rally now (if you think gold will go higher). If DXY tags 73.50 then stronger conviction. Last point the S&P news on greece did very little to dent the eur rally this morning, this tells me the euro story is priced in.

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  99. Apropos of July 4, any thoughts on the moving of wealth and person out of the US, since at any time in response to a "crisis" the government could decree that half of all brokerage account funds be in zero coupon long treasuries?

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  100. I don't think you have to worry about that. No politician in the world is going to vote for that, and if he did he would not be reelected.

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  101. white,
    Why would I want to throw away one of my best timing tools? While it's not perfect it has allowed me to make many very good calls in the past.

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  102. http://www.thedailybell.com/2579/Ron-Holland-Where-Will-You-Go-When-the-Sovereign-Debt-Volcano-Blows

    And the topic of "financial repression" is current.

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  103. Gary

    No disrespect, there is value in what you post, but when a trader makes a claim like that there is usually an audited track record posted on site to validate. That's all that separates opionion from fact.

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  104. Heck that's easy, just ask long-term subscribers how much money they've made this year.

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  105. gary
    You cant one day say the bear is back, and there is no way QE3 at this time, now you saying the markets might be rallying to new highs because of QE3

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  106. sometimes i wonder if Gary is one day going to say "to hell with this, let them fend for themselves, i'm closing the blog & premium service and looking out for myself".
    and then the critics would become akin to the politicians that call for more QEIII when the recession returns..."no, no gary come back".

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  107. Sure I can. If The market does something different than what I expect then I change my expectations. Not doing so would just be stupid.

    When I was younger I used to fight the market. Eventually after I had lost enough money I figured out that the market would always win that battle.

    My assumption was that the dollar put in its three-year cycle low in May. If that assumption is wrong and the three-year cycle low is still ahead of us then we are certainly not going to have a deflationary period with the dollar collapsing.

    The bear will certainly come back but it's not going to be until the dollar puts in its final three-year cycle low.

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  108. http://arum-geld-gold.blogspot.com/2011/07/miner-review-ag.html

    I am readying my shopping list for the miners. Caution I use options, and I respect Gary's rules for the majority of traders.

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  109. Bob loves Hawaii, thanks for that. What are your feelings about the dollar, if you don't mind me asking you? I value your opinion & experience

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  110. if gary closes his service, i might ask him to come back for gold but never for markets ;-)

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  111. > Gary, why would the dollar
    > break the trendline? QE2
    > has ended as far as we know.

    The most important factor in the relative value of currencies is the interest rate spread between them. Thus, it is hard to imagine any significant rally in the dollar (as long as Europe doesn't blow up completely) until there is some visibility as far as a narrowing of interest rate differentials between the United States and the rest of the world, something not likely to happen for several months.

    The key event to watch in the short term is what JCT says after the ECB meeting on Thursday, the 7th (and the markets interpretation of what he says). Basically, if the consensus believes that additional rate hikes in the Euro zone are forthcoming, the dollar will continue to slide toward oblivion, and possibly break to new lows relatively soon.

    On the other hand, if there is some indication that the rate hikes have ended for now, then the Euro could drift lower against the dollar for the next several months, which would support the dollar.

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  112. I've been trying to ride the bull for 3years
    Gary has got me on at the right time and kept me on longer than I could or my brokers could

    Thankyou Gary !!!!!

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  113. anyways
    talking about dollar, my two concerns are current daily cycle is already left translated (i hope it will not fail and left translation is just because of consolidation). My biggest concern since march is that the last seasonal cycle on dollar was too short (and due to which i was always fearful on another leg down in dollar and equity bounce due to extreme negative sentiment)..if dollar forms 3 yr cycle low in sep-nov then last seasonal cycle will fall under normal duration...

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  114. Let me ask all your opinions about this. if i had cash, would it be wise to just payoff mortgage or wait for the currency to blow over? i know currency scenario is over the top but you never know what happens.

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  115. Eamonn, I look at UUP, and it is at the bottom of a rising channel stochastics and MACD are rising. After the ECB meeting I expect the UUP to hit 21.60 from 21.20. From there I am uncertain.

    The ECB is insolvent, and raising interest rates into that environment is going to crush European economies and their Central Bank.

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  116. E,

    Chew on this for a while:

    http://www.zerohedge.com/article/banks-commence-wholesale-unsolicited-mortgage-forgiveness

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  117. Driver, I read that and it boils my blood and how can people get away with all that.

    On the another note, how I do get free principal reduction, any ideas ;)

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  118. Bob loves Hawaii, thanks for that comment

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  119. Gary,

    Your long term subscribers may be achieving the results with or without your input - attribution bias - thats why posting your long term track record would validate your analysis of cycles. You might be right but we will never know if it works. You would probably get more subscribers - since you are marketing this service anyway?.
    JJ - Gary or anyone else can change their mind all the time, the more frequently one does it the less valuable the advice, again my opinion.
    Don - these blog posts are just opinions - all traders have them, you are not meant to rely on it - Gary clearly has a following here - well done - so there is some value there. The better traders have the audited track records and are easier to pin down.

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  120. No idea. I've been kicking in extra money on each mortgage payment, but I'm thinking of stopping that.

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  121. troll,
    Obviously the rationale for a strong dollar is the end of QE2. When QE1 ended last year we suffered a brief deflationary. And the dollar rallied.

    We have the exact same circumstances this year. I don't see any reason not to expect the same outcome.

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  122. Just catching up here a bit...

    Blogger Gary said...

    white,
    Why would I want to throw away one of my best timing tools? While it's not perfect it has allowed me to make many very good calls in the past.

    I agree with that...if you know when you are at the Bottom of a Gold IT low...you really do have a lot of confidence at THAT point in time to go heavy and make good money for weeks/months. You can TRADE less at those points too.
    IF at other times (or in other markets) it isnt as clear, you can choose to proceed with caution and a flexible plan--using other tools along with it..or stay clear until the next Gold IT low.

    I wouldnt throw it away now though...it will, again and again...be valuable.

    As for what Dons saying..sometimes it works with the SPX ( not seemingly so lately) but it does consistently act as a great guide in Gold and the Dollar..so just use it there. If you know T.A., I use both together to try to get an idea of market direction. But lately, its been all trading for me.I was long, then short, then long & short the past 2 weeks...made good money, but lost a few trades also...

    It's not been an easy trading market by any means, for anyone really.You need many tools in your trading toolbox for this devious market :)

    Cya all tomorrow :)

    and remember; There's ALWAYS another GREAT trade sooner or later !

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  123. Don,
    Yes a seasonal cycle low in October or November would land in the normal timing band however it would stretch the three-year cycle outside of its timing band. Usually the larger cycle is dominant.

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  124. http://arum-geld-gold.blogspot.com/2011/07/gpl-panther-is-stalking.html

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  125. I'll hire Gary as an analyst with generous climbing privileges. I pay well.

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  126. Don,
    Any cycle that is stretched far beyond the normal timing band or extremely short is going to catch me. The simple fact is it's impossible to tell when a cycle is going to deviate.

    Look back over the last 10 years and see how often we have had an intermediate cycle in the stock market that was only 13 weeks long.

    That doesn't mean the tool is worthless it just means that like every tool there is a percentage of the time where it doesn't work. QE and continued Fed interventions in the market are making it very tough to time the stock market.

    I certainly didn't see you on here last week predicting a 5.6% rally. As a matter fact I don't recall anybody predicting a 5.6% rally. As far as I can tell your system doesn't work any better than mine at predicting stock market movements.

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  127. but then according to tim woods quatitative analysis, dollar cycle average something like 48 months (if i remember correctly)

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  128. gary
    yes you can change your mind, but last week you was saying there is no chance of QE3 at this time.

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  129. JJ,
    I'm taking Bernanke at his word, no QE3. However Obama came out last week calling for more job stimulus. That has to be paid for somehow. If that means the government keeps issuing bonds and the Fed keeps buying them then QE doesn't actually end.

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  130. R4,
    Heading out to the mountains now :)

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  131. Good for you.

    I'm heading to he mountains too, (Wind Rivers), except I'm going to work.

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  132. What we trade here is secular bull markets because cycles, sentiment, and TA are more "predictable" in an Old Turkey environment. When something is a secular bear, cyclical bull, or in the aftermath of an exogenous event/parabolic breakdown, it is ridiculous to attack somebody over small wiggles in the market because nobody knows what is going to happen, especially when they invest the time and energy Gary does. I bought millions worth of AGQ in early 2009 because of Gary's conviction in cycles. And right now I'm up 28% on 7000 DITM SLV puts because of Gary's read on the markets and my own discernment and risk. Im not bragging, just pointing out one example of somebody that had been in it for the long run with him and been disciplined. The fact that some random people show up from time to time and assault him is ridiculous because we are not even trading the indices right now, and anyone that has followed him diligently for years is up more than the best hedge funds in the world. I'm only here to contribute and promote the education of everyone as investors, and I acknowledge we will never be fully insulated from trolls, but there are great websites out there to troll if that's your thing. Let's improve as investors and make some money for our families and organizations we support. God bless all.

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  133. Don
    You are correct on 48 month dollar cycle by Tim Wood. That suggests a low in the dollar in early 2012 possibly taking out the 2008 low.

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  134. The problem with Tim Wood's 48 month cycle is that the data doesn't support it. Historically the cycle runs about 39 months on average.

    I know he likes to call it a four year cycle but it's actually closer to a 3 year and 3 month cycle. that's why I call it a three-year cycle low.

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  135. It appears that Tim is using Walter Bressert's cycle analysis. However those cycles are evolving.

    In the 60s when Bressert developed his cycle analysis perhaps the dollar cycle did run 48 weeks. During that time the stock market cycle ran 22 weeks and the daily cycle 35 to 40 days.

    However since quantitative easing and the advent of the secular bear market in 2000 cycles have evolved as they have been influenced by the government and the Fed's massive attempts to intervene in the markets.

    A 48 month dollar cycle is no longer valid and many stock market cycles are stretching.

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  136. If the Fed's massive attempts to intervene in the markets ends with QE 2, is it possible to revert, trend, adjust back to the 48 month dollar cycle? Either way time will tell and I (we) hope to be on the right side of the trade.

    Thanks Gary.

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  137. E,

    I am working on the same case with several of my mortgages that I am trying to reduce due to being upside down yet cash flowing.

    IMO Cash is King and if invested properly (commodities, PM) during an inflationary period your position becomes more powerful to pay your mortgage off at that time (if you desire). I also believe that real estate will not go up at the same rate or very little as other commodities during an inflationary period. Thus, putting your cash to work in certain hard assests is your better choice opposed to paying back money which is charging you a minimal rate. You also can't just go and get that cash right back if needed unless it is an equity line. Leaving your cash as liquid cash during an inflationary time will just eat at its value or purchasing power. Now, on the flip side. If you have the cash to pay off the mortgage you now have your home free and clear which would give you a piece of mind knowing you primary home is paid in full. What is that worth?? (Everyone is different). Investment properties I would go with door #1. I persnonally am going with door #1 on my investment properties that are dogs.

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  138. Cory,

    Very well said and I could not agree more. "Trolls" is a good word to describe those that come to a blog and criticize the founder. I find it the height of disrespect to come here and tell Gary to publish his trading record in order to "separate fact from opinion". Up until very recently Gary published his portfolio in real time, you cannot get any better a trading record than that. However, it was because of ignorance and inexperience from some subscribers that Gary chose not to publish it.

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