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Tuesday, July 19, 2011

MONEY FLOW DIVERGENCE

I often keep tabs on the weekly Chakin money flow indicator, especially when I'm expecting an intermediate degree correction. More often than not there will be a divergence in money flow at intermediate tops as smart money exits ahead of a correction.

This indicator also diverged at the last two bull market tops. It is now showing  a huge divergence that I think is probably indicative of a third cyclical bull market top forming.

900 comments:

  1. Gary:

    Congrats on the awesome performance by your team @ the tournament.

    Quick question: Does the sharp drop in COT in just one week concern you?

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  2. Gary,

    Who is "smart money," and what do they have that we don't? For instance, how are they able to keep the market going up while they exit? When I see those stock touts on CNBC telling us what to buy, it occurs to me that they are telling me to buy what they are ready to sell?

    BTW, I noticed that George Soros is 75% cash because the market looks to confusing to him without the "Bernanke Put." Gave me a chuckle.

    Best,
    Le Fou

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  3. Le Fou,

    that is a good question. I personally think that 'smart money' is an urban legend. Smart money (big money, big investors) is all over the place and often betting against each other. There is no concerted action and no back-room conspiracy of some smart money club. Nevertheless I would be keen to hear Gary's explanation too.

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  4. Gary,

    have you considered the following:

    Dollar in sideways trading range for another 2.5 months until late September (equal to 2008), but then a downward thrust of 15% (equal to exactly that same action of bouncing agains resistance and then a downward thrust in 1979) before turning around.
    That particular dollar action could then be accompanied by firstly another 2.5 months of upward action in the precious metals, followed by a blow off top in gold (and silver), then followed by a sharp D wave correction ( I still don't believe in low 20s silver though)?
    As for stocks, I think there might be more topping action for that time period as well. I don't think the markets are ready to break down yet. There is quite the cup and handle in all the US indices and I don't think that is likely to resolve to the downside. I think the market might break only in the fall and / or the winter, with more QE perhaps in the first or second quarter of 2012 instead of in the fall of 2011.
    Would love to read your thoughts on this. Thanks.

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  5. PS, correction: Was referring to similar action in the USD in 1978, not 1979.

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  6. Smart money isn't necessarily specific individual traders or funds. It just means that institutions are starting to sell stock into rallies.

    That steady selling pressure shows up on the weekly money flow chart as a divergence.

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  7. Strat81,
    Which charting system are you using for your VSA indicator (you posted a chart earlier today at 2:38pm) and what are the parameters for your VSA indicator?
    Thanks.

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  8. Basil,
    I have to admit I have no idea what the dollar is going to do at this point. If the recent daily cycle low gets penetrated though that would be an indication of a lower low to come. Possibly below the May bottom.

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  9. F.W.I.W. ( something to take notice of)-

    I'm not sure if any were looking to short the markets here? I wouldnt!

    I have been long P.M. stocks since MID JUNE...but today I saw interesting set ups in the Markets.

    Equities to keep an eye on...equities I AM WATCHING for gains ...(see a 6 month chart)

    SGY-
    AVD
    HDY

    I bought FEED at $1.10 due to high volume interest- I sold early $ 1.30ish...it hit $1.71 at the high of today (and is still looking very good)

    Today-

    PDC was a HUGE breakout I.M.H.O. on a 6 or 3 month yr chart.

    Its crazy, but the market looks to be gaining traction today??? I.M.H.O.

    AAPL looks great-

    DELL = broke out today-
    CMG = Broke out with STRONG volume today...$380 target FAST

    UA= Break out of cup/handle = $97 target fast!

    Its not that ugly for some equities...I have a HUGE list of good set ups really ...(PDC, PQ, SGY, etc etc etc ) but Time will tell

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  10. GARY

    Congrats on the good results from your coaching!! 'Pass the Torch'...'teach a man to fish'...so on. Nice work :)

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  11. TRADERLLADY

    I was away from my laptop and it 'auto' logs me into this site...(remembers my password ) so I tried to post to you from the hotel p.c., but I couldnt remember my log in! I havent needed it for about 8 months-

    Last wk I was at Siesta Key Beach, The Marina in Sarasota , Armand Circle, Anna Maria Island's SAND BAR to eat, etc etc -places you and JEFF mentioned to go to. My wife and I were wanting to meet up with you if possible for a drink or whatever...very frustrating.

    Very nice area..a bit steamy this time of year though!! How You golf in that weather is beyond me!! :)

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  12. Hi folks - was gone for a bit. I found this to share - it's Gary doing a clean and jerk.

    http://www.youtube.com/watch?v=DdpcGTr8x2E

    I keep looking for trick wires but for the life of me I don't see them yet. ;-)

    - Bill in Tokyo

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  13. anyone trading gold futures? Tz? which contract?
    thanks

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  14. Anyone thinking about shorting AAPL today? I think its pop is going to fade during the day.

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  15. I could not wait any longer. I added some GOLD at 1586.

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  16. We have a trading range between 1593 and 1583. My bet is we are going to hang around here and move higher when when 10 DMA catches up.

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  17. AFK, if you don't mind my asking, when you say you bought gold, did you buy physical, or GLD, or UGL or what? And I'd appreciate a bit on learning your reasoning, if you don't mind. Thanks much.

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  18. Bill, I use 2 ways to trade gold/silver. First i have my "Low" Risk long term account. There i use ETN with a X4 Lever (sorry i dont know the exact english word) . The ETN Follows the price of Physical gold and with that account i only trade around the big ABCD Waves.

    Next i have my high risk CFD trading account. On it i trade physical gold price with 200X Lever. In this account i trade around the Intermediate cycles but not the daily. I am (almost) never invested more then 10 % of my total trading balance. (note that my trading balance and my long term account is not the same)

    I have never cared much for miners or anything other then physical price in dollar. Why? Companies can fuck up. Gold price can not. Simple as that. I trust a metal more then a committee running a company. I also with my Lever on gold, dont need the extra potential that the miners have.

    Regarding why i bought now that is also simple. Right now i see 2 likely scenario happening. I have already told the first one were we have some sideways movement until we get the 10 DMA up. My next scenario is a panic sell off and we might get down to around 1550 in price. I doubt we will get a bounce of the 1576 top and the back up. Why not? To many people are looking at just that and if this is the last phase of the C-wave we have been talking about i doubt that trading it will be that easy.

    I made the decision to rather hold on trough a sell off that might end around 1550 rather then miss it completely. If I miss this low then the only place i can add next in my CFD account is Daily cycle swing low. And with the strength gold has been showing who know were that will be.

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  19. Side note: I still have some to add on my trading account. I normally am 10 % Invested but right now i only got 6%. The last 4 % i will add 1580 and if we dont hit that then the next Daily cycle swing low. My add on 1586 was from 2% invested to 6%.

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  20. This comment has been removed by the author.

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  21. HolyAFK, very reassuring to me to read your intelligent posts. Yesterday I loaded up my remaining cash during the late afternoon correction, knowing gold could drop lower, but afraid of it rising like the Phoenix without me. We invest differently (I am all-in with miners for this wave), but I agree that this will not be easy to trade. I am now going to hold Old Turkey.

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  22. HolyAFK,

    How do you not invest more than 10% but leverage 200x ?

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  23. holyafk and kmisak

    A question to you each.

    Why have you waited for weeks after Gary not only sent out notice to his subscribers but posted here afterwards and has been repeatedly saying he sees a low risk point of entry?

    It appears that you are waiting until the move is convincing to you.

    But that's the top of the move, short term.

    It's as if you're on a rubberband stretched and you get in, just as the rubberband is snapping back, financially hurting the latecomers.

    My apologies, but I just don't follow the logic of reading Gary's descriptions of quite highly probable outcomes and then ignoring them.

    Are you each new to "investing"? Are you each very long to act and each old turkeys?

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  24. BookGuy, this is how it works. Lets just work with one fact first, you can never go below 0 on your CFD account and if that would happen the broker would automatically terminate all your open positions.

    Now let us asume that i have 10 000 dollars in my CFD account. And lets say that i would invest all of that! I am now 100 % invested in my trading account. A simple move down of 0.5 % in gold would completely wipe out all the money on my account and all my positions would be automatically closed. (x200 remember) Now that would not be very good at all.

    Only 10% max of my current balance on my account. Now that gives us space for corrective moves down without losing my position. Of course if gold drops 5 % from my entry point i have lost everything on my account.

    That is why i currently only have invested 6 % and not 10% I am not 100 % Sure gold will not drop 5 % from here.

    I hope this answers your question. Maybe I understood you wrong. Let me know :)

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  25. Slumdog, I was camping sans internet when Gary made the initial call. As soon as I read it, I bought heavily (it was the Monday, and Gary had called the bottom on the previous Thursday). As for my actions yesterday, I was merely bringing my portfolio up to 140%, adding the final 10+% yesterday on the correction.

    As for my investing experience, I am a total novice! Took out all my stupid mutual funds after the 2008 debacle and began investing on my own; was drawn to silver in 2009; found Gary a year ago; he helped me turn my negligible gains into stellar ones. Year over year I am up 130%, despite losing bigtime in the four days it took me to exit when silver crashed.

    I am an avid reader of this blog, but comment rarely.

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  26. 200X leverage? Who do you use for trading?

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  27. Slumdog, You take make a lot of assumptions in one post. First off all let me tell you that each trader has his own way off trading. This summer i have been going under the assumption that USD had its 3 year low in may.

    When Gary made his call of a intermediate button in gold i was skeptical. But since he is who he is and i trust him enough with my money I invested 100 % in my long term low risk account. However i considered the trade high risk (my personal opinion at the time) and only entered 2 % in my trading account. Since i trade after the cycle analysis i made a plan to add more on middle daily low. How much i would add would depend on several factors. (i have gone over them in my previous posts)

    Now we are here and I decided to add 4% to my already 2% existing portfolio.

    What rubberband are you talking about? do you expect gold to drop like a rubber band from here? I dont follow the rubberband analysis.

    Also i think you hade quite the hars tone in your post. Almost like we made some sort of misstake or what not. No one can know what the market will do before hand. You need to have a strategy and follow it. Without a strategy no one will be successful in trading. I followed mine.

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  28. Aaron, its actually 0.5 margin but its the (kinda) same thing.

    I use AvaFx to trade.

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  29. Gary-
    compare 08 3-year cycle low sideways dollar action to current. Seems very similar where it traded in a 4 point range for 4 months.

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  30. check out this youtube video on possible silver manipulation:

    Once again, there was stunningly blatant paper manipulation in the silver market on Tuesday. 250 million paper ounces of silver – $10 Billion dollars worth – was sold into the market in one minute. As our friend Brother John disects the crime he notes, “The Comex is a completely and utterly corrupt market.”

    http://www.youtube.com/watch?feature=player_embedded&v=Y--jCrDOSjk

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  31. Hell if I was in silver I would have sold a couple of million myself.

    Seriously people is every drop in silver caused by manipulation? There are a lot of trapped longs that bought at the top that are nervous and going to sell on any pullback.

    I think the run this spring was proof enough that there is absolutely no manipulation in the silver market. If there was there's no way silver goes to $50.

    This manipulation nonsense is now bordering on the absurd.

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  32. Gary,

    Did you say that you were adding another 10% position on a tag of the 10sma? ;)

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  33. Dollar index analysis is a distraction, as it's a measure against other flawed paper currencies.

    Instead, focus on the gold price measured in dollars when trading gold, which is near all time highs. Comparing how the dollar is faring against the Euro or Yen is a mistake, IMO.

    Do I think the dollar could go higher against other confetti? Sure, but my only concern is that the dollar goes lower vs. gold.

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  34. ALEX, So sorry I missed you. I was looking forward to meeting you both with some great conversation. Make it
    next time when you come back with your friends. With the exception of the heat, didn't you think this a lovely area? Yes, I am fading on golf, too steamy! (thinner blood helps here)

    Thanks for your stock postings. It
    is always interesting to research.

    Kerry

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  35. Gary,

    Say we get a swing low tomorrow then friday we drop below that candle again, what would that be condsidered...hope that makes sense?

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  36. The model portfolio is fully invested. I won't go above 75% in the model portfolio any more.

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  37. I'm torn on whether to add a little more gold at the open, or see if we're still down at the close and add it all then.

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  38. silver was manipulated by the Hunts and they wanted to get it up to fifty dollars. silver is very thin market and is heavily manipulated both up and down.

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  39. I won't be buying anything on the open, possibly not even today at all. It might turn out to be the lowest price we see on the pullback, but patience is usually rewarded. :)

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  40. Looks like we could get a test of the breakout today for gold

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  41. SB: Today's not going to be the daily cycle low, for sure. The thing is, the daily cycle "low," so to speak, could be a little higher than we are this morning when it arrives.

    Somehow, that smiling visage in your avatar has a quite calming effect on me.

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  42. It is entirely possible that Beanie will not post today, so I am sticking with probabilities. Gold is almost certainly going to go higher, but it might not go much lower. It looks like we could very well touch the 10 dma quickly on gold futures. If that happens, I feel pretty certain I will get my money back if I buy here. I will be fully invested at that point. http://screencast.com/t/08OIkzjZ1eLz

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  43. KERRY

    Yes, we debated looking at property for timeshare :)

    When our friends can make it, we will be back . She lived in Sarasota for yrs and WILL move back there soon. :) Very nice area. (stayed at the Hyatt with the Marina).

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  44. Gold may stick here 1582 support, small bounce tomorrow which will pull the 10sma up, then maybe a small down day friday and bounce off the 10sma.

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  45. Duuuuuude,

    That was basically my thinking yesterday and today. I added a few calls both days and I'll be happy with that decision. Like we constantly remind each other, no one can hit the exact bottom or top.

    I also feel that it is early in the cycle so how can I lose? I would not add at all if we were anywhere close to being finished in the cycle.

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  46. HolyAFK,

    I just don't understand how you are 200x leveraged. How do you do that exactly?

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  47. I know Gary keeps posting that the stock market has topped out. I believe it has not. There have been many convincing bullish studies indicating higher prices. That said I am neither long nor short stocks. The money is to be made in PM. I am just suggesting people not short except for a trade. Your odds of success are at best very weak.

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  48. ALEX, Nice spot to visit at that Hyatt!
    I just got the Hyatt credit card that gives 2 free nights at any Hyatt in the world. I plan to stay on Clearwater Beach($319/night)free for 2 nights. Love a bargain:) Esp in metals! LOL

    K

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  49. What is the advantage of GLD over gdx and gdxj? Your % is higher in GLD, but the % gain has been better on GDX and GDXJ.

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  50. Allenupl,

    It's just the ThinkorSwim platform, with the VSA study created by "Perfect Hedges" using the default settings. It is available with a membership at:

    http://www.thinkscripter.com/

    There are some other great studies available their, worth every penny of the $75 lifetime membership IMHO.

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  51. marketing04,

    I think your risk is considered less with GLD since the miners are still and always plugged into the stock market as well.

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  52. Strat,

    Which indicator is the VSA within the list of so many, I didnt see it?? Thanks!

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  53. Gary,

    You wrote "The model portfolio is fully invested. I won't go above 75% in the model portfolio any more."

    Not sure I understand... Are you saying that even though the model portfolio is currently 100 percent invested, in the future you will not invest above 75 percent?

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  54. Gary,

    And the follow-on question would be: Why?

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  55. Pima,
    Gary mentioned that he will keep 25% "Emergency Burrito Contingency Fund" in his account.

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  56. WW,

    This particular indicator along with some other ones I use are actually found within the Pro Membership forum. There are some brilliant contributors in there. The study download can be found in this thread:

    http://www.thinkscripter.com/forum/viewtopic.php?f=19&t=1242

    Its called:

    PH_eVSA_Enhanced_Volume_Spread_Analysis_V1Rev005STUDY.ts

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  57. Strat,

    Thanks, I will check that out.

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  58. Strat,

    Do you need to be familiar with ThinkScript to use those studies? Im not familiar with using it yet.

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  59. Hi SB,

    Good to see you posting again. I hope everything is OK.

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  60. marketing04,

    You're welcome - I should add that per G the miners should be the hot sector for this intermediate cycle. I finally bought into NUGT (with DGP), both +2X ETFs. NUGT has too low a liquidity for all the millionaires on this board but is fine for small-timers like me.

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  61. WW,

    Not really, you need to be a little familiar with ThinkorSwim though. You just import the studies into the ThinkorSwim library and then add the study to your screen as you would any other native ThinkorSwim study. Of course learning to interrupt the study itself takes a little know-how. For VSA the following book is usually recommended:

    http://www.tradeguider.com/mtm_251058.pdf

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  62. Strat,

    I will get started...lol What other indicators do you use along with the VSA?

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  63. Indeed, everything is OK and getting better all the time!

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  64. So far it looks like catbird had the right idea this morning.

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  65. BTW just covered my UNG short at 11.21. A good two day trade.

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  66. Say, I didn't mean I added today; like all'o'you's I'm waiting for at least swing low, if not a drop to/thru the recommended levels to add the rest.

    However, gold's strength right now is something to see.

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  67. Wow whats the news? PMs just reversed higher.

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  68. If this pop higher holds the charts are gonna look real nice with all those tails.

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  69. I'm liking this action, strong across the board on all miners especially SLW, which I find to be the best indicator of things to come.

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  70. anyone want to provide an opinion on whether the PM correction Gary is talking about over or not?

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  71. WW,

    Another really interesting study, that parallels some of Gary's methods is the SineWaveCycles study found here :

    http://www.thinkscripter.com/forum/viewtopic.php?f=19&t=839

    You usually want other confirming criteria to act on SineWaveCycles, but is one of the few leading indicators in existence.

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  72. Eeelove8,

    I think gary's opinion was that if we break above 1600 then you can probably consider this correction over.

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  73. eeelove8, Read what Gary wrote on the report. A close above 1600 indicates strength. Anything less is shady.

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  74. This comment has been removed by the author.

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  75. This comment has been removed by the author.

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  76. Rarely does it work out this way, but after purchasing the last of my GDX calls at 10:00, they rocketed up 12% already!

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  77. It's just a half cycle low guys, we don't get greedy on a couple of bucks, a roaring bull market we buy any decent dip and wait. If you didn't buy i have no idea what you were waiting for, but to prey for another move below the lows is probably wishful thinking, IMO.

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  78. Strat,

    Yeah I noticed that indicator on your charts...do you trade futures through ThinkorSwim or is it not available yet through TD?

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  79. WW,

    Yes, futures are about the only thing I trade on ThinkorSwim. I actually want to move to a more appropriate Futures broker, but none of the "big boy" brokerages data feeds can get through my corporate firewall :)

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  80. ...just going by the recommended probabilities in last night's report, for myself, and am ok adding above 16 on confirmed swing for final positioning

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  81. Strat,

    I trade futures through Interactive Brokers, because I get a popup on ThinkorSwim saying that futures trading is not yet available on this version of the platform until the third quarter...I updated the platform and still have this problem..what version is yours??

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  82. Strat,

    I use PFGBEST for my futures account and was considering moving to ThinkorSwim just to sync my charting with my account. Why do you say they are not an "appropriate" futures broker? Is it because of the fills.

    Thanks in advance.

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  83. Strat,

    I noticed that your charts have the "buy mkt" and "sell mkt" buttons, etc. on top, where you can trade futures right from the chart...how do I set that up, if you dont mind explaining. Appreciate it!

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  84. WW,

    I have been trading futures on the platform for about a year. Are you a native ThinkorSwim customer or a TD Ameritrade customer? I have been with ToS before they were bought up by TD.

    Matt,

    No, I think the fills are not bad, the data though is filtered and not the most accurate and there is no API to write studies on the Bid/Ask Tick data (aka T&S). Its only really an issue if you are trying to write/use complex studies that require very accurate tick data. If you are just position, swing or light/casual daytrading though, it should be fine.

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  85. Start,

    Figured it out...trade tab on the right.

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  86. WW,

    You probably need to have a futures account open, but to have those buttons above the chart you simply click on the "Trade" button that is written vertically on the upper right hand portion of the chart right under the main price readout. From there you click on the wrench icon and you can add a bunch of different trade action buttons above the chart.

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  87. Start,

    I am a TD customer...I guess thats the problem huh, futures are not available yet through the TD version of ThinkorSwim I assume.

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  88. Despite the fact we are still early in gold's intermediate cycle, I would be careful about getting too aggressive. Public sentiment under gold and silver has screamed higher. For example, in only 3 weeks bullishness for silver has run from about 33% (quite bearish) to 76% (almost exuberant).

    These figures are far from a perfect timing tool, but such rapid enthusiasm tells me this ride is going to be quite volatile. Personally, I may choose to sit with smaller-than-usual positions through this cycle.

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  89. WW,

    Yes, I think that is the issue.

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  90. Used to live in Omaha - it's grown a lot since - very nice downtown riverfront park near a vibrant outdoor Old Market district, hope the G-team had a chance to enjoy. Congrats to you.

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  91. "How low would stocks have to go to bring Ben Bernanke off the sidelines?

    A 17% drop in the U.S. blue chips would probably suffice, say big fund managers surveyed this month by Bank of America Merrill Lynch.
    Bernanke

    About that wealth effect...

    The S&P 500 would have to hit 1100 to get the Fed buying more bonds to prop up domestic demand for goods and services, according to the survey of 265 managers overseeing nearly $800 billion in assets."

    http://finance.fortune.cnn.com/2011/07/20/bernankes-pain-point-a-17-stock-drop/?section=magazines_fortune

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  92. Let's see if gold can break $1600 again--and stay there into the close.

    If so I may cave and buy more. As long as we're just bouncing around in the 1590s, I see no compelling reason to add here.

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  93. thedocument,

    I share your sentiment. This has been a WAAAAY to easy ride for PM Bulls, there has to be tonnes of weak hands just ready to dive.

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  94. Doc,
    These numbers are typically good bottom timing tools, but once the cycle gets going they rocket up quickly, not sure if anything is different this time around.
    It should be expected after a run of $120. We're not going to get an extraordinary or blow off IT cycle without extreme speculative interest, we're nowhere near there yet.

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  95. Yepper. Looks like $1600 is about to be breached.

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  96. Doc, are you speaking of the daily cycle?

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  97. I highly doubt 1600 will be breached at this attempt. If it is, it would show incredible strength.

    It might need another trip down to the 1590 area at least if not the 1582 area to break out above 1600.

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  98. Gary,

    Any comments on how the sentiment on gold and silver has exploded higher significantly in just three weeks?

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  99. Doc,

    Did you mean hold smaller than usual positions through this daily cycle?

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  100. Strat81, What do you mean easy to ride? How many people in the world managed to buy when gary made the call for intermediate bottom?

    I remember all the way from around 1550 people on this very forum has been waiting for a pullback. But surely 1600 must be the point of the pullback. Ohh my god we are on our way to 1610 guess i should buy now.

    I think there was many weak hands (not necessarily on this forum) that bought over 1600 and then sold when we dipped down to 1580. Now the very same hands are waiting for a pullback to 1575 or more and guess what. They might have to chase again.

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  101. I meant the intermediate cycle, but I may change my mind as the action progresses. Keep in mind I dumped all my silver in mid-April due to exuberant sentiment and then watched silver go up another $5 before it crashed. Maybe silver still runs to $50 here. I don't know. I still own the stuff. All I'm saying is I'm not getting super aggressive.

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  102. Doc, do you have any indication of what sentiment did at previous C-wave tops? I'm just wondering if this final interim cycle (if that's what it is) is really any different... Thanks.

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  103. While its true that the sentiment is quite high, a lot of people who were unwilling to chase are still on the sidelines waiting to get in right above the breakout region. They will provide support in that region.

    If Gold does not return there, they will be forced to chase here and all the way up to the top. However, they will be weak hands and will bail out on any weakness leading to the daily cycle low. Thats not due any time soon.

    If Gold does not test the breakout level here, it may go high very fast and then lead a severe decline into the DCL.

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  104. HolyAFK,

    I agree with what you said, the "dis-belief" effect of the rally has likely kept a lot of people off than there otherwise could be. Its just the succession of consecutive up days has cleansed very few riders to this point; however, there may be enough sustained buying pressure to avert any sort of substantial correction at this point.

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  105. if debt ceiling raised, gld will go down , right?

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  106. Srat,
    Thanks for the referral to
    http://www.thinkscripter.com/

    I am looking for the VSA study under the Indicators tab ()http://www.thinkscripter.com/indicators/) but can't seem to find it there. Is it listed under a different name?

    I did find the Sinewavecycle indicator that you referred to.
    Thanks.

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  107. Strat81,
    The previous post was for you. Sorry mis-spelled your handle.

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  108. Allen,

    I believe Strat said that when you become a member you can download all the studies into ThinkorSwim and the VSA is included in there.

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  109. Yesterday gold changed character as couldn't take out the 1601-02 point of control zone from the previous day for the 1st time during this run. Today also.

    There's no absolutes - you risk missing some of the move if it gallops above 1610 waiting for better prices to add on the one hand, but, you're opening yourself up for the possibility of adding significantly bigger size at great prices with lower risk / tighter stop if can get the wholesale entry below through the breakout zone. Average risk:reward, higher than average probability of happening coming into option expiration after sentiment surge.

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  110. There went that 10 dollar correction... Didn't even have time to buy. Is buying at the moment just really stupid chasing? Of course it's a raging bull market so corrections should be temporary, but is there a good buying opportunity ahead?

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  111. samppa_nyman, I think you just said what Poly warned he didn't want to hear again yesterday! You just got a buying opportunity and now you're asking for another one? Good grief dude! Once we get an official swing-low (tomorrow?), buy it and sit tight!

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  112. sentimentrader recently did a study on "What happens when Hulbert's gold sentiment index goes from below 10% to over 67% in less than 60 days." He is the best number cruncher/analyst in the business. His conclusion was "nothing---no predictive value beyond short term dip (which we just had)---gold acts in line with random after such sentiment spikes. I highly recommend his service. See link below:

    http://i54.tinypic.com/2wd1st0.png

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  113. samppa,

    If you have no position, buy some immediately.

    If you are just looking to add, you can do that either in the 1582 area OR at a break above 1600 when the half cycle dip would probably have ended according to Gary, OR when there is a swing low (no guarantee we will get one).

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  114. Doc,

    not that I am saying it will, but if this is a C wave top in gold with a potential blow off at north of $2000, then silver might as well go above $50. Again, I am certainly not banking on that, but at this point it is everybody's guess what silver is doing. The blow off in silver might be at $60 or $70 for all we know. Then I think we could call a parabola in silver. Of course, silver might stop short of $45 or at $50, but for the remainder of the silver bull it would be a much better sign if silver ends this C wave top above the 30 year high, not beneath it.

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  115. I went AFK for a few hours and set a buy order for 1581. Guess what we got down to? 1581.1. FML...

    I'm not going to chase here. We did peak above 1600 but I think a tag of the 10 DMA will come tomorrow (or later today US time). I'll be happy to go all-in at that time, but for now I'm sticking with my three long contracts.

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  116. Hulbert posted a sell signal on gold Monday.

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  117. William: It hit 67% within the last few days

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  118. Harry,

    Same here...I eventually added at 1585. However more frustrating are my GDX options...they were so close and then just blasted off. I haven't added those.

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  119. This comment has been removed by the author.

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  120. DG,

    So this suggests we could possibly see a -3.1% correction like 09?

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  121. Thanks DG, that's good info to know.

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  122. Is Hulbert not comparing the 10-11 day run before the previous IT high to this 11 day run from the new IT low?

    "For now, though, the important thing for short-term traders to know is that excitement has grown markedly over the last couple of sessions, and now stands at close to the fever pitch that prevailed in late April. Soon after that previous crescendo of bullish enthusiasm, of course, gold encountered a stunning air pocket and fell more than $100 per ounce."

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  123. DG

    This one?
    http://www.sentimentrader.com/

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  124. We have something that Hulbert doesn't - Gary and the cycles. Knowing where we are in the cycle gives us an advantage.

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  125. Gold sentiment appears about neutral to me:

    http://stockcharts.com/h-sc/ui?s=$BPGDM&p=D&st=2009-01-01&en=%28today%29&id=p29736781862

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  126. YesLets,

    True, but anyone who just took a look at a weekly chart would have seen how stretched gold was above the 10sma at the april high. And at that point Gary was calling for a move higher into a parabolic top. So in april Hulbert would have been right in calling for a hard correction like we seen, and Gary was wrong because we weren't in the timing band for an intermediate correction. But my point is...no matter how you look at things today whether through Gary's eyes or Hulbert's, again just taking a look at a chart it seems extremely unlikely that gold would correct $100 now instead of just a regression to the 10sma, so I cant see how Hulbert could compare the move out of this IT low to the huge move preceding the previous IT top.

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  127. If we close in the 1580's today we will probably see a pullback tomorrow to the 10sma, gold tried to break above 1600 three times since 12:00, this may bring some selling pressure into the close and tomorrow.

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  128. Dear SMT Crew:

    After buying per Gary (same ETF's except I added some DGP), I put 20% DPG in my regular brokerage account, and 20% GLD in my IRA not thinking about taxes (duh). In the hope of all ending well and DGP bringing in more profits over GLD, should I swap them now (sell DGP in the regular account and immediately rebuy in the opposite account and vice versa) so that I'll have less taxes to pay in the non-IRA account? Also, could anyone confirm that DPG is taxed at the same rate as GLD, and that it's just that you may have more $ to tax if it makes more?

    With much appreciation,

    Kate

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  129. Just a footnote, not criticism given it was a whacky time, but Sentimentrader calls would have blown you up nuke-style in 2008 when he couldn't put a foot right.

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  130. Steve, when I want 1x gold, I use CEF, not GLD. CEF has some silver, backs with bullion, and is not treated as a collectible as far as I know, so better for IRAs too.

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  131. I just got back from climbing. If anybody had a question for me ask it again as I'm not going to try and browse through all of the recent comments.

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  132. Hi Gary:

    After buying per your calls (same ETF's except I added some DGP), I put 20% DPG in my regular brokerage account, and 20% GLD in my IRA not thinking about taxes (duh). In the hope of all ending well and DGP bringing in more profits over GLD, should I swap them now (sell DGP in the regular account and immediately rebuy in the opposite account and vice versa) so that I'll have less taxes to pay in the non-IRA account? Also, could anyone confirm that DPG is taxed at the same rate as GLD, and that it's just that you may have more $ to tax if it makes more?

    With much appreciation,

    Kate

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  133. For what it's worth Hulbert's sentiment poll is mostly worthless coming out of intermediate bottoms.

    Sentiment traders public opinion poll, in my opinion, is much more predictive. That is still in neutral territory.

    One more push higher into the latter part of the daily cycle timing band should push the public sentiment poll into overbought conditions triggering a normal corrective move into a daily cycle low.

    That will usually ease sentiment extremes and set gold up for the next push higher.

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  134. Kate,

    It's my understanding that derivatives, which DGP is, are taxed at a 23% rate.

    You should check with your accountant though to make sure that is correct.

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  135. I remember someone asking how you could have a leverage of x200. Google CFD, If you wanna get in to it then i recommend AvaFx as broker.

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  136. Kate:

    "When it comes to ETNs, taxes are a lot simpler. First off, ETNs are only taxed at time of sale and are subject to normal capital gains rates based on holding periods. Additionally ETNs typically do not generate interest or dividend income."

    http://etfdailynews.com/2011/03/09/how-uncle-sam-treats-etfs-and-etns-spy-uso-gld-slv/

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  137. HolyAFK,

    "CFDs are currently available in the United Kingdom, The Netherlands, Poland, Portugal, Germany, Switzerland, Italy, Singapore, South Africa, Australia, Canada, New Zealand, Sweden, Norway, France, Ireland, Japan and Spain. Some other securities markets, such as Hong Kong, have plans to issue CFDs in the near future.

    "CFDs are not permitted in the United States, due to restrictions by the U.S. Securities and Exchange Commission on over-the-counter (OTC) financial instruments."

    http://en.wikipedia.org/wiki/Contract_for_difference

    Best,
    Le Fou

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  138. Le Fou, Sucks for the U.S :( You got some strange laws.

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  139. Gary,

    Do you not see any predictive value in Jason's Rydex PM Funds flow?

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  140. on a 5min chart there is a divergence in price and volume, price heading higher from 10:00 volume dropping, volume at its lowest at the 1600 level.

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  141. I put the most weight on the public opinion poll. But the Rydex traders will tend to get over invested at tops. As you can tell those traders have a long way to go before reaching the over invested stage.

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  142. Guys dont forget it's futures and options expiry early next week. Big money will do all they can to keep this under 1600$. Also a debt ceiling announcement can't be far away with the legislative deadline this friday, look at how PMs reacted on news that we MAY we be getting closer to an agreement.

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  143. Thank you Gary & SB. Now I'm thinking if I do any swapping, maybe I should just swap the GLD for DGP and leave it - or SB, do you know of an appropriate ETN instead?

    Regards,

    Kate

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  144. This comment has been removed by the author.

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  145. This comment has been removed by the author.

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  146. Dan,

    How will futures expiration effect price?

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  147. If anyone is buying miners...

    MACH9 mentioned to me last week that he thought BAA was looking ready to break out from it's consolidation and he owned it.
    Looking at it on a 1 yr chart , I noticed a fairly reliable pattern , it had a giant inverse Head and Shoulders, so I bought it too.

    Today it broke out HUGE, but could come back and retest that break out later...so one might put this on their watch list and buy a pullback.

    http://www.screencast.com/t/CITsxyjZuLE

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  148. Dan,

    Are you talking about futures options? Gold futures first notice for contracts is on Friday.

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  149. Alex,

    Were you in XG when it dropped hard recently?

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  150. Gold, Silver Surge After John Taylor Predicts Gold To Hit $1,900 By October

    Submitted by Tyler Durden on 07/20/2011 11:29 -0400

    In the past few minutes both gold and silver have seen a dramatic rally of buying on seemingly no news. The reason for this rally are remarks from a Bloomberg TV interview with FX Concepts' John Taylor, who just predicted that Gold will extend its rally to $1,900 by October, or in three months, coupled with a rally in the Assuie and Loonie as the EU debt crisis eases. But not for long: this record price will be promptly followed by a plunge down to $1,100 following liquidations as the latest and greatest recession grips the world, which he believes will be worse than the 2008 one due to the US running out of "gimmicks" to avert a slowdown. He believes the EU will slow as well, and the euro will drop to $1.15, and may hit parity next year (not a new call for Taylor).

    CHART AND VIDEO HERE:

    http://bit.ly/okpZWb

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  151. Does anyone else get that feeling that we are just perched on the edge of a turning point and one word is going to shoot respective equities and commodities one way or the other?

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  152. miyagisan,

    Danger and opportunity opposite sides of same coin.

    Best,
    Le Fou

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  153. WILLIAM

    I actually sold it ( I sold it a bit too early). I was trading the miners for a week or two and I got out right about where it is now, so I missed all the extra upside and heart break :)

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  154. Alex,

    I remember when you got out, at first you mentioned you were looking to get out at 13 but got out earlier..if I remember correct. Then I watched it keep going up and said to myself, Alex must be grinding his teeth right now missing this upside! Then one of the members mentioned it crashing the other day and asked if anyone knew why..I said ask Alex!

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  155. anybody loadin up at the close?

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  156. You remember correctly , I was buying each dip to the 20sma & I was targeting $13 and volume started dying end of June, so I sold.

    I was trading other Miners from Mid June lows to July 1st,then
    I switched out and started 'buy and hold' positions in Ag and SVM and EXK and NG july 1st.

    Then added BAA, AAU and UXG as possible trades

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  157. Larry,
    I added a bit of GLD earlier today before I went back to bed.

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  158. Larry, added a chunk yesterday and will add a bit of leverage tomorrow, assuming we get a swing-low.

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  159. Miyagi,

    My money is banking on a further breakdown of the sovereign debt talks that are going on in Europe right now which will again spike rates sovereign paper. The situation in Europe is so extremely tenuous that risks are not being adequately priced, IMO. Of course the move in gold is reflecting this, if you really want to know what is driving the dollar index and gold.

    Why anybody wants to doubt the most impressive (10 day) rally of this entire 11 year bull market right here is beyond me. I've said all along this will explode, if I'm wrong I get stopped out for a profit. Opportunity knocks, IMO.

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  160. Poly,
    I don't think that people here are doubting here that much but it is the apprehension that it might drop like a rock that might be keeping most from investing all in.

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  161. below ~1582 tomorrow and we've got a HS that would probably take us to 1550.

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  162. GoldEra: yes, it's http://www.sentimentrader.com/

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  163. Larry,
    I added a nice chunk yesterday and have a bit more USD so added a smaller chunk earlier in the morning. I still have more cash to deploy so will wait to see if we're lower tomorrow or get a swing and add the rest.

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  164. Ben: $BPGDM is not sentiment. It's more overbought/oversold. They tend to go together, of course (overbought markets tend to have a lot of bullishness), but are different things.

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  165. Poly: Just curious...have you set your stops at the same spot as Gary or higher up?

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  166. thanks everybody that answered - I am mostly in at this point... have about 30% left over waiting for a swing

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  167. Stops are fluid (manual) and much higher than Gary's, as I'm trading with significant leverage.

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  168. Poly, Thanks for sharing your enthusiasm. It will help me sleep better.
    A

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  169. Poly,

    around 1580's ? If you care to share :)

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  170. " it is the apprehension that it might drop like a rock that might be keeping most from investing all in."

    -Miyagi

    That's not the case with me. I'm not all in due to risk-control. 100% into anything will catch one with his pants down sooner or later.

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  171. Does anyone here follow gaps in GLD and SLV? For instance, today's up could be a gap fill. And if so, what about the many gaps riddled below since July 1? Possibly implies a full backtest before powering up? I always thought GLD in particular filled gaps before proceeding upwards. Comments? Thanks.

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  172. There it is dancing at 1600 - what do you think, Catbird?

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  173. SB,
    That's why I mentioned "some".

    Bill,
    Since SLV/GLD follow global prices, the gaps, in my opinion, aren't as fillable as a stock that gets 9:30-4:00 action. Just my opinion.

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  174. Poly,

    mind to share what's your leverage % when take position? How much of your capital use to margin at most ?

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  175. Felix,

    I bought another slug of DGP at 3:59. If this wasn't the early innings of an intermediate cycle in a secular bull, I probably wouldn't have. Furthermore, I'm in "topping off" mode. I did most of my buying a week ago. If gold drops like a rock tonight, I'll shrug and probably buy a little more tomorrow a.m. : )

    Currently I hold a pile of GLD and a side portion of DGP for extra juice.

    I'm leveraging on gold instead of buying miners or silver.

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  176. Catbird - LOL, I bought my last piece at 3:59 also. I am 1/2-1/2 DGP to NUGT.

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  177. Didnt Someone say about Bull markets ( cant remember who)...?

    "When the wind blows hard enough, all turkeys fly."

    or

    "When the tide rises, even small boats will float."

    well, some small miners breaking out trying to make up for lost ground

    BAA and CDY today

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  178. Ivan, I prefer not to mention positions/trades etc. I'm fully invested though.

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  179. Poly, you saved my ass on the last cycle ... I got out just a little after you did.

    No need to post your stops because as you say they are fluid ... but it would be much appreciated if you would post when you abandon ship again.

    Please and thanks ...

    I added quite a bit today near the bottom ... even bought some HBU

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  180. *** HZU *** ... I already had enough HBU

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  181. FYI a follow-up on Le Fou's q about why StockCharts listed gold's closing price at 1601.

    Stockcharts (fyi the guy meant Gold instead of Silver below):

    "We get our futures data from the CME website. That website shows that the most actual Silver contract today was the Aug 11 contract which settled at 1601.1. Here's the link:
    http://www.cmegroup.com/trading/metals/precious/gold_quotes_settlements_futures.html

    That's the source for our $GOLD index. If you are an active silver trader, you may want to look at the individual silver contracts instead. Here's a list of the ones we track:

    http://stockcharts.com/symsearch/index.html?^GC "

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