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Monday, August 22, 2011

DOW: GOLD RATIO & THE SECULAR BEAR MARKET

As I have been warning investors for many months, stocks have now entered stage III of the secular bear market. Gold on the other hand is now in the final parabolic phase of a 2 1/2 year C wave advance. 

My best guess was that we would see a Dow:gold ratio of between 5-6 before this C wave ended. The ratio was at 5.71 as of today. For reasons explained in the nightly reports I think we may still have a little further to go on the downside for stocks and a little further upside in gold. So it's entirely possible that we could see a Dow gold ratio of 1:5 before the trends reverse.


However the low risk, large potential trade is now in the stock market, not playing chicken with the gold parabola (also explained in the nightly newsletter).

Cyclically the stock market is now in the middle of the timing band for an intermediate bottom. Presumably a sharp bear market rally in stocks will trigger a regression to the mean, profit-taking event in the precious metals market (the D-wave).

D-Wave's almost always test, and sometimes marginally penetrate the 200 day moving average. I've illustrated in the chart above a rough guess as to where I expect the countertrend  rally in stocks and the D-Wave correction in gold to retrace.

Keep in mind that the fundamentals for gold have not changed. A D-Wave is simply a profit-taking event triggered by an unsustainable parabolic rally. It has nothing to do with fundamentals. Once the D-Wave has run its course gold will enter a sharp snapback rally (the A-wave), after which it should consolidate for the remainder of the bear market in stocks.

Stocks on the other hand, after what should be a very convincing bear market rally, will roll over and continue down into a final four year cycle low, probably in the late summer or early fall of 2012. 

Depending on whether or not the Fed tries to fight the cleansing process stocks should either test the March 09 lows, or if Bernanke tries to stop the bear market with another round of quantitative easing, we could see the March 09 lows breached.

Either way I expect that 2012 will go down as one of the worst years in human history. Certainly in the same category as 1932 if not worse.

282 comments:

  1. Gary, you say:
    "Either way I expect that 2012 will go down as one of the worst years in human history. Certainly in the same category as 1932 if not worse".
    Could you describe what you think will happen? Thanks...

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  2. He must mean North American economic history.

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  3. We are entering a recession/depression much worse than what happened in 2008. If the Fed spikes commodity prices with another round of quantitative easing it will only intensify economic collapse.

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  4. Amazing that Dow/gold is below 6, after watching it climb for years and years to some huge value before I started to take a few positions.

    For those that worry about the silver parabola victims selling off early, there aren't that many of us. Not compared to the next C wave finale, when everybody you know will be talking gold and silver.

    I *still* have not had anybody come out of the woodwork and start talking about PMs. Just one guy who's been investing along with me for several years now.

    It will be the next C wave (assuming this one stops before 3000 anyway...) when that happens, or perhaps the one after that (if we are lucky).

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  5. Gary, my daughter had a routine gall bladder surgery last month -- total bills reached $80,000. Thanks to insurance, it was written down to about $16k. But with fewer and fewer people with insurance, we are so farked...

    Her tuition is going up 44% over the next two years. My homeowners went up 13% this year. I just had a plumber fix a plugged drain. 25 years ago, that was $39. Yesterday it was $275.

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  6. This C wave has gone much further than I originally anticipated. I suspect the next C-wave will be the final bubble phase.

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  7. Gary you are so positive in this report :-)

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  8. I have been warning everyone this was coming for months and months.

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  9. Gary,
    GDX looks ready to break out. Doesn't that look like a good play on a market bounce?

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  10. That's the million dollar question isn't it?

    Most breakouts fail, so I wouldn't put a lot of faith on a breakout leading to a sustainable rally. Look what happened when the HUI broke out above 600.

    The big question is whether miners will follow gold down or stocks up.

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  11. 2012. The end of the world. According to the Mayans anyway...

    If Gary's prediction is correct the 2012er's are really going to go wild next year. A "2012 End of the World bubble" if you like. Are there any stocks in these guys that we can buy?

    ReplyDelete
  12. RJ: What is the big deal with the FX pair AUD/JPY?

    JPY pays 0% and AUD pays 3% or more so many people borrow JPY and buys AUD for interest and any appreciation.

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  13. AUY and NGD may be giving indications of the breakout. HUI is knocking on the door too. I guess we'll see. Many of the stronger jr. miners are giving me buy signals.

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  14. Ben,
    You had to pay 16K out of pocket?

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  15. No, that's the part covered by insurance, my part was about $2k in all.

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  16. MrM, if/when I become one of the uninsured, they'll be looking for that 80 thousand. Maybe they'll give a 5% cash discount like my dentist did to my dear ol' dad.

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  17. Mike, I'd rather not spoil the myth, but the Mayans I've listened to in interviews say that 2012 stuff is a gross reinterpretation, they say nothing of a sort. But that doesn't sell movie tickets or books, does it? Hysteria sells...

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  18. Third time is a charm... Down she goes.

    Hammy's chart top intersections called for gold market top at 1900 area. Bottom of the channel is 1845, this week. He's the most outstanding TA guy out there, but trades in such short time frames, I can't track him.

    Shorted near the top and will exit probably in the next couple of hours at 1850. Will wait for the bounce and then short it again.

    As I've pointed out on the NY Pit, there are break out, exhaustion, exhaustion and yesterday, exhaustion gaps again on the daily basis. There are a lotta holes to be filled.

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  19. 2012 is gonna be just fine for equities.

    Remember the equities market was supposed to roll over and continue the secualr bear in late 2009, mid 2010, and now 2011.

    Bull markets average about 4years. We're only on the 2nd year.

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  20. Gary, after the D wave is past, for the subsequent A wave, given how you're thinking it's the mother of all gold runs, will you buy physical, or still do ETF's? Thanks.

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  21. This comment has been removed by the author.

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  22. Ben,
    By now most people realize the Mayans never said the world would end in 2012. They only said the current stage would end (and a new period of life would begin). Biblical predictions suggest this will be the final period and it could be short. Issac Newton predicted the Battle of Armageddon would take place in the year 2060 or later, but not before. So we are definitely getting close.

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  23. Slumdog, where can one locate hammy?

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  24. Deven Sharma to step down as Standard & Poor's president

    Sharma will be replaced by Douglas Peterson, a top executive at Citigroup, the company said.

    US will get its AAA status back. Just have to figure out a story that will stick. The banks are back in control

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  25. Sharma probably a Zerohedge reader.

    Makes no sense to downgrade USA before France or Spain.

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  26. Beanie, oh yes it does! The US has been living above its means for the last 35 years....

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  27. something to watch http://chartramblings.blogspot.com/2011/08/gold-death-zone-rally.html

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  28. beanie
    spain was already downgraded by all three rating agencies. they are already several ratings down from the top rating that the US had.

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  29. Bears are a spoiled lot. Is there anywhere else in the world that you would rather live than in the USA? Not a handful I bet.

    Ironic that foreigners who live here (after their ancestors have risked their lives to come here) wants America to be downgraded.

    Bear blogs doing a good number on people's brains, I'd say.

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  30. Ohhhhh, its Baghdad Beanie again!

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  31. Any new money I put in metals will go towards silver (and miners), as this article suggests. I'm not counting on it, but I would not be surprised if some of the money we expect to come out of gold just switches to silver, giving it relative strength. A gold smash will definitely bring silver lower, but it might hang in better than many think:

    http://www.zerohedge.com/news/gold-reaches-191350-%E2%80%93-smart-money-moving-silver-ubs-says-50-silver-3-months

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  32. Or, one could just buy and hold Baghdad Beano's semiconductors for the next few years until they're broke. :)

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  33. Very interesting comments from Pete Brandt - The “Dominant Fundamental Theory” Explained

    http://peterlbrandt.com/

    Anecdotally, Goldman Sachs gold report a few days ago showed chart where (lower) interest rates were very highly correlated to (higher) gold prices.

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  34. Where Will Gold Be in 5 Years?

    Gold's parabolic move. In less than two weeks, it has climbed almost $1000 an ounce. At this rate, it would gain $26,000 an ounce per year. In five years it would gain $130,000 an ounce. While no one is putting that type of target on the precious metal, demand for it is soaring.

    Where do you see the price of gold five years from now?

    Share your opinion:

    http://www.cnbc.com/id/44231587

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  35. Irene continues on its destructive path
    Turks and Caicos Islands as well as the Bahamas prepare for first hurricane of the season.

    Hey Gann, aren't you in the Turks and Caicos?

    Take care. I'll be praying for you.

    Blessings,
    Le Fou

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  36. There goes BAC into the murder hole, not good for the market...

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  37. Bonjour

    LE Fou, Ca va

    Ma Famille est moi sont a Floride,Est tout va bien ,

    Merci

    Please excuse my Spelling, it's been a while.

    But keeping a close eye on the Hurricane.

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  38. I added another 2% to my original position sizes on my silver miners this morning. Would've added 5%, but they look like they could, or want, to go lower if metals pull back.

    We'll see, but I have too much confetti and I want to put it to work over the next few weeks.

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  39. for those who might wanna see this intraday SLV Chart:

    http://screencast.com/t/PhTWPvel

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  40. I hated to load up on silver the other day but...

    I would rather suffer through a pullback that lasts 3 months than miss out on a silver blast off. The chart is impressive IMO.

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  41. Long GDXJ 85%-, DZZ 5%*, SSO 18%
    Cash 0%

    -reduced position
    *new position

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  42. Update to SLV 10Min Chart: http://screencast.com/t/BRv9gRVl9370

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  43. anybody trades ree, mcp,swc,pal ??

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  44. Oversold reading on 60m GC chart. If anyone has the balls to play chicken with the gold parabola now would be the time to step on the gas.

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  45. in investment account i have used 30% margin for past 6 weeks.

    it was a risk that paid off. on these bounces i have sold enough to be off margin and have some cash.

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  46. Talk about Fib Cycle Hitting 144

    For u Fib Fans:GOLD IS 144 Months in Time from 1999 Low/ 144 Weeks from 2008 Low and Finally ,144 Days Jan/2011 Low.All hit this week,

    Thats Crazy.

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  47. The badly beat n' up solar stocks seem to have priced in the lack of government subsidies and may now be sniffing out much higher energy prices based on QE3 dollar devaluation going forward. I wonder if the ETF: TAN wouldn't be a bad idea should the price of oil rise back above $100 longer-term. Anyone have any thoughts on the solar business models being benefited in a 1970's stagflation type environment?

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  48. today is day 4 of 2nd 33 day cycle.

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  49. /GC isn't oversold, on the hourly. I wouldn't place a lot of faith in oversold readings. IMHO, you'll get whipsawed trading like that, unless you're day trading. Look at GLD's hourly, for example, looks like it may be rolling over.

    Gold may not be correcting here, but what if it's beginning to? A brief oversold reading, alone, is not necessarily a buy signal.

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  50. Good Morning!

    Still stalking the GLD short trade at 181 or 187, whichever comes first. On the other hand it could be stalking me ;)

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  51. one thing about this blog is that you're going to get some original thinking at least. and the bonus is that it's usually right.

    i think too many people have forgotten about the dollar at this point though. i'm starting to get suspicious it's about to blow through the roof. bought a march'12 UUP 23 call for $21 just as a lotto ticket, thinking it'll tap its 1597 day MA before then which is a little above there.

    SPY and QQQ's effective volume point towards a new low here as of yesterday.. similarly the rug / constant bid in gold has yet to abate. gold puts surprisingly expensive here.

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  52. Gann,

    Je suis heureux pour vous et la sécurité de votre famille.

    Le Fou

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  53. Le Fou

    merci,
    je voulait savoir ou habitez vous

    ReplyDelete
  54. TAN is back to 2009 level...$4.63

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  55. If 64 low to high cycle still in contrl on gold this decline simply recharges the batteries----

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  56. Yes, this decline today in gold is a small profit-taking from the looks of it, I imagine many people selling because it hit 1900$ and many, many more still holding because it will go "to da mooon!".

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  57. Yeah... A whopping 0.75% decline.

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  58. The Shanghai Gold Exchange raised margins 12% starting Friday.

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  59. gary, hi. I have been a subscriber on and off, currently I am not.

    when do you recommend selling some silver that I have owned for a while, I am trying to get rid of all of my physycal inventory.

    thanks

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  60. update 10Min SLV Chart:

    http://screencast.com/t/fMpDZwxQf

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  61. Thanks for all your charts Gann.

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  62. Thx Mr M

    So far today the TA seems easy ,Fell to lower channel .pop back up to tag 20 sma, and now Maybe rolling over ?

    of course these charts are for active traders (scalpers )Glad u get a use for them.

    ReplyDelete
  63. What are your thought about the QQQ & DIA having gspped down last week? They haven't filled it yet.

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  64. Love to see another Spike Lower First ,in the Major indices ( on SPX Lower than 1102 ),and get a Positive divergence on the $NYHL INDEX ,at the same time.

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  65. Despite the assertion that Gold's move, is breaking all TA and charts, I have been finding some textbook Technical trading. Gold has hit its measured move out of its recent Bull flag, nearly a perfect Half Staff.

    http://content.screencast.com/users/augertrade/folders/Jing/media/1e799be2-95c3-45b2-8dff-6ff14a36f27b/00000578.png

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  66. Gann, thanks for all of the updates.

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  67. Gann,

    Je suis Americain, et J'habite en Amerique au Spearfish, SD.

    In May, I went to France for the first time. I called it my "bucket list" trip, because I got to check off quite a few things I wanted to do before I die. It would take too long to give details, but the moniker "Le Fou" just came to me after that trip, and it sort of fit with my philosophy of life as un jongleur de Dieu.

    http://www.cin.org/saints/jongleur.html

    Best,
    Le Fou

    ReplyDelete
  68. I was in Canne/Nice /St-tropez/Monaco and San Remo/ last October,

    We had a Great Time,Cannes was my Favorite.

    Lots of Great Food and Wine's.
    You French ,Really Have

    La joie de vivre

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  69. Forgot that Shanghai raised the gold contract margin by 12%, probably not helping an already overstretched price.

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  70. I'm now short 500 GLD @ 181.04

    stop @ 188.xx

    This is my first ever PM position

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  71. Feel,
    Keep a close eye, don't get too greedy.

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  72. Top sell order list at Fidelity: GLD, SLV.
    Top buy order list: BAC, AAPL, GE

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  73. Hack,

    Didn't you post something about Apple being on the top of the sell list yesterday?

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  74. The SPX has formed a daily swing low but not the NDX (yet.)

    In looking at the weekly swing low potential, which is a ways off, I noticed that the SPX has just kissed the underside of its 200 week MA. In April, '10, it turned down when that happened after weeks of trending up.

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  75. This one is a good one.

    http://www.businessinsider.com/metals-consultancy-gold-over-1000-isnt-sustainable-2009-10

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  76. Thanks Miyagi,

    I am watching close. This trade may not work before I get stopped.

    If it does start to work I am targeting the 1740-1780 zone.

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  77. Bought gold futures around 1855. 4x.

    We are pulling back, but I don't think gold is at high yet. This is just a congestion before we resume up. 1 or 2 more weeks of gains like we've seen lately, I think.

    buyer beware.

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  78. farrr less money in SPY now than at last friday's pop at similar levels around the 115.9 level.

    which is not to say they're not about to run a hell of a lot of stops right now..

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  79. Beanie,

    Re your comment at 4.53 AM, I am a foreigner but I don't live in the US. Hubby is American , your country is beautiful and full of wonderful people, but please admit it, you have been living above your means for too long.
    While Europeans have been tightening their belts for 30 years, you were using your credit cards up to your ears

    ReplyDelete
  80. I have a sneaky feeling that we may have a pop in the S&P this Friday, but ultimately it will be short-lived. I believe anything short of the Federal Reserve expanding its balance sheet significantly (which I believe is unlikely this Friday) will lead to a test of S&P 1000.

    ReplyDelete
  81. "Driver said...
    The SPX has formed a daily swing low but not the NDX (yet.)"

    what is the number you are looking at?? SPX & nDX

    ReplyDelete
  82. Someone must know something about Jackson Hole, so we should reveerse on the news...

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  83. man if they can't even *temporarily* juice SPY above 115.88 today the bulls are in big trouble

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  84. Despite being right a few weeks ago about us continuing higher, I was stopped out and unable to regain my gold position around 1660.

    My only gains since then have been on a moderate core position.

    It is clear to me until further evidence that we have NOT peaked yet. So my trading here is attempt to get in on a final spike higher into the top as I see it.

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  85. This comment has been removed by the author.

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  86. oa,

    SPX = 1145.49 (Monday's high)
    NDX = 2102.90 (Friday's high)

    These numbers could be off a few one-hundredths.

    The NDX has also made its daily swing low now.

    ReplyDelete
  87. aklaunch: Yes on AAPL but the buys outweighed the sells by 2:1. Here is the updated list

    Buys orders
    BAC - 4700
    AAPL - 2700
    GLD - 2100
    GE - 1100

    Sell orders
    GLD - 3600
    AAPL - 2000
    BAC - 1900
    SLV - 1600

    ReplyDelete
  88. For you gold coin collectors :-)
    You know it is getting late in the party when you see this.

    http://www.businessinsider.com/kim-kardashian-gold-coin-2011-8?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%29&utm_content=Google+International

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  89. We could be seeing Charlie Sheen's "Winning" Gold Coins, at the end of the bull. :D

    http://ll-media.tmz.com/2011/02/03/0203-charlie-sheen-tmz-credit.jpg

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  90. Someone ordered 300k shares of GLD yesterday with mismatched puts underneath. Inflow into GLD today $1B for a total of $77B. This makes it the largest ETF fund.

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  91. This comment has been removed by the author.

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  92. This comment has been removed by the author.

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  93. think the juicing/stop run is on today for SPY. target 116.37.

    gotta see how the day closes as to whether or not this sticks.. leaning on no. they'll probably use the pop to get short. and if it pukes again from here i think that will do the sufficient amount of damage to the bull psyche to get a legit rally rolling soon.

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  94. also nice earthquake today for us east coasters. one thing i miss about CA.

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  95. Increased gold futures to about 6.5x on this pullback.

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  96. Basically I think the low from earlier today will hold as we congest over a few days before going higher.

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  97. TZ(8155), I really don't think we need a running commentary on your trading minutiae

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  98. I've lived in Virginia for years and never felt an earthquake until today

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  99. TZ,

    Thanks for the posts, youve predictions in recent weeks have obviously been some of the most accurate here so the ongoing input is appreciated.

    ReplyDelete
  100. Éamonn

    By the sounds of your comment at TZ, you seem to not realize the amount of useless information you post with frequency - and no one has said a word. Respect everyone, Éamonn I for one appreciate TZ's post, all of them.

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  101. i enjoy tz's posts and find them helpful and informative

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  102. TZ, more power to you...
    Eam...ftw? Sure would like to get in on what you are thinking.

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  103. TZ,

    What makes you think that $1850 will hold without a retest and running of likely stops beneath that level?

    Postions: out of gold/silver futures, waiting for a confirmed SPY swing low.

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  104. Rob L., I'll be sure to tune in with more intensity to your nuggets of wisdom from now on

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  105. Gary

    If the fed uses or mentions the word deflation on Friday, will that be the catullus for gold to break?

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  106. Just got up from a nice long nap to see miners putting me to the test. Not adding more today as it looks like they're heading lower first.

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  107. oa,

    Those were the days each index made a recent low.

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  108. Stopped out when it went lower.

    Since we didn't get what I would call a blowoff yet (maybe I'm wrong), I've been trying to figure out and pick (with small stops) a level where gold will pull back and then start congesting (usually a channel or a triangle or something) before finally making a final move up (as I see it).

    The drop down to the previous support and congestion zone of 1850 looked like a good risk/reward bet, but didn't pan out.

    So back to watching and see how this plays out. I could be wrong about it going higher and maybe the D has begun. Unsure all around lately but that's pretty common at a parabolic peak. We are still vertical and a single day selloff like now doesn't mean this is over by any means. (But it continues to drop as I type this.)

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  109. Gold is breaking a key level, here IMO.

    http://content.screencast.com/users/augertrade/folders/Jing/media/d93377df-a0a5-4279-8863-c2526a0d30e7/00000579.png

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  110. Silver Tagged the 20SMA AND Rolled over Hard:

    http://screencast.com/t/PlnRkQWwxj

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  111. Rob L.,amen to that. Best comment of the day. TZ, I look forward to your posts, which are all too infrequent.

    As for your detractor's posts, well....

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  112. If the Fed wont help us out with a rally, mother nature sure will!

    Tony,

    I thought I was done with Earthquakes when I left Afghanistan. About one a month, usually in the 5's.

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  113. Looks like gravity is starting to hit gold.

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  114. Gold parabola finally broken? Huge volume on DZZ, nice tails on GLD and DZZ.

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  115. aklaunch - Yes I am long in AAPL, VZ, MCD, SPY and short gold...

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  116. With the impending global catastrophe looming...

    Can anyone give me any help on where to put my 401K? My options are limited to fidelity mutual funds unfortunately...or would 100% mmkt be good for a couple years.

    Thanks all, appreciate the insight in your trading methods. Good luck!

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  117. Gold reversal today on the Gann death zone cycles and Gann360's 144 time period cluster should not be ignored imo

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  118. This may be our que to jump back into the market?

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  119. I'm staying in but will batten the hatches for the D-wave is about to hit me! :)

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  120. And if this is the beginning of the D-wave, I hope I have to stones to load up a few weeks from now. lol

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  121. Aklaunch,
    It probably is. I'll go over it in tonight's report.

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  122. big SPY sells coming in but price ain't dropping. suspect these are demand tests.

    next hour could be pretty epic.

    (i know i post mostly bs but this right here is exciting! epic bull/bear cage match right now)

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  123. SF Giants fan,

    Thanks.

    I've got very manageable size so can ride it out. However, that's not to say that if charts start getting broken all over the place that it won't cloud my senses. :)

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  124. All parabolic moves always end the same in every asset. With a crash.

    It's not a matter of if, but when.
    Would anyone be surprise if we woke up with -100 gold overnight?

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  125. Earthquakes, D-waves, all sorts of sh$t happening today. LOL!

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  126. GOLD

    Ross Clark (CIBC Wood Gundy) who pretty much nailed this rise, sees a 6 to 9 day correction back to the 50 day moving average if we have two down days in a row.

    Correction will be vicious and last 6 to 9 trading days.

    The 50 day is currently at $1,616 today and rising at $5/6 per day or so.

    Ther is a huge gap at the 161-167 level in GLD. Should easily hit that and so that could be an entry point.

    Ouch!

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  127. St.D, I don't think your posts are bs, and the ev study is Gold, btw.

    http://www.youtube.com/watch?v=MWGm50p7aCQ

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  128. T-minus 2 hours before zerohedge starts blaming gold selloff on an engineered 'crmex' earthquake

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  129. So far the miners are not holding up well like I would like them to during a correction in gold. If this continues I would be more and more inclined to believe that the divergence in miners was predictive.

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  130. A single sharp down day does NOT (historically) kill a parabola. If if we get a sharp rebound tomorrow things are still in play possibly. If, however, there are multiple days down the odds get worse.

    I took a shot at a bounce point today, but it kept going. The low NOW at 1833 may be it instead. We'll know in the next 24hrs.

    If this recovers mostly then the game is still on.

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  131. The bigger miners that ran up the most are taking the brunt of today's selloff.

    Better get your buy lists ready to deploy over the next couple weeks into September.

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  132. Or maybe I'm just talking my book. :)

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  133. The big money for the time being is going to be in the stock market. Why anyone would play chicken with the gold parabola at this point is beyond me.

    Hammer/finger.

    Then if you still need more pain go ahead and keep trying to buy dips in gold.

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  134. Risk on folks, time to back up the truck...

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  135. WARNING: admittedly my attempt to try and get in to gold and score a few remaining bucks is likely prompted, in part, by missing out on much of the recent rise and just trying to make up for it.

    I THINK there might be more upside left and I MIGHT be able to catch it, but it could all just be a useless action that will result in losses. So keep that in mind for anybody using my comments to go long or hold onto things unnecessarily.

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  136. Will be adding to GLD short @ 176 and updating stop. Low confidence still...

    But I am conflicted b/c I like the gold story and what it represents.

    ReplyDelete
  137. spy 116.37 target hit.. now was this just a juicing or is a bottom in? hmmm

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  138. >Then if you still need more pain go ahead and keep trying to buy dips in gold.

    I'm down 3-4% net worth just from monday/tuesday doing exactly that. I won't keep trying, but I still think we might not have peaked yet.

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  139. isn't it refreshing to see gold going down for a change

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  140. Golds already almost down $100 from it's peak in the last 24hrs. I think odds are now that the parabola is donzo.

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  141. gold dip buyers still haven't been screwed yet. want to see a test near the highs without any big money following along.

    just bailed on my SPY daytrade, price a little ahead of itself here. of course now's when it gaps tomorrow and leaves me in the dust..

    out for today good luck everyone.

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  142. Dan and all,

    The other day I had wondered aloud at what level would gold be considered in a parabola?

    Is there consensus? Did it make up far enough to be considered parabolic?

    FWIW, using silver as an example (since everyone agreed it did go parabolic) I overlaid the GLD with SLV and compared the moves. Gold would need to move up like 20% more starting now to mimic the silver parabola...

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  143. samppa_nyman

    Right on!!!!!

    Buying opportunity when the washout is over. Gold down $250/$300 should build up some bearish sentiment numbers.

    This could be like 1978.

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  144. The last couple times this happened gold bounced off the 10 day. I have it marked around 1807 ... let's see what happens at that level.
    If it doesn't get there today tomorrow the 10 day should be around 1820.

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  145. Feel, congrats on the short GLD trade, I just don't have the sensibilities to do the same.

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  146. I'm not sure when it starts, but there will be a time when the ONLY place to hide will be miners and metal. Sitting in cash on the sidelines will be the worst of all, everything will be lost.

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  147. TZ, Congrats on squeezing more than most out of it and with less risk (to your stop-loss) - but with more sleepless nights sounds like! I did the same with the Aussie dollar in 2003 when I was younger and hungrier - tried to stay in the trend till I was dirty and bloody - it kept redefining "parabola" for me in the process - but was proud of the fortune I had made at the end.

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  148. My thought is based on the idea we are in what will be called the Greatest Depression (but only after it's passed).

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  149. Feel said...

    Dan and all,

    The other day I had wondered aloud at what level would gold be considered in a parabola?

    Is there consensus? Did it make up far enough to be considered parabolic?



    http://thetsitrader.blogspot.com/2011/08/golds-parabola-equation.html

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  150. I believe we'll hold $1800... One more move up... likely launched by Bernanke. Not sure any more if I think we'll double top or break $2000. My position will be very small. Might even short the market for one more move down.

    Sold all my positions at the open today. Had to clear my head. All my buys from July were profitable except GDXJ. I lost money on a second slv buy a couple days ago.

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  151. Hmmm. If the market could drop another 100 points seems likely gold would break $2000

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  152. Dear Shalom,

    re your post: "I'm not sure when it starts, but there will be a time when the ONLY place to hide will be miners and metal. Sitting in cash on the sidelines will be the worst of all, everything will be lost."

    Would you please elaborate a bit as simply as possible? :)

    With sincere thanks in advance and with kind regards,

    Rose

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  153. SPX & NDX have both done a 38.2% retracement up. A rather strange coincidence.

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  154. GLD #1 on BoW with other PM stocks e.g. GDX and SLW (interestingly enough) topping list as well...

    Thoughts?

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  155. rose,

    That's what happened in in the last Great Depression. Started in 1929 and the general market worked lower for 3 years before getting close to a bottom. During the same time, miners didn't go down much, but only went sideways. Three years after the start of the Depression, miners began to scream higher for the next five years.

    Cash that savers hold to be "safe" get the worst results as confidence is lost. This time we are an entirely fiat economy, which suggests it could be worse than last. We can't know when exactly, but I think technology with the instant spreading of information/news, etc could exacerbate the situation. It might normally take years to play out like it did in the 1930's, but only take 1-2 yrs this time.

    History does repeat, even if not exactly the same each time. We'll see.

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  156. Quick Daily Transport Chart:


    http://screencast.com/t/lcwr4HY50XU

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  157. Blake

    Gld#1 but little money flow #

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  158. Be careful shorting this thing you guys. Just sounds way to easy.

    Thanks.

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  159. rose,

    Even if one is not comfortable in miners, the lesson is that at some point in the future anything is better than cash.

    It isn't just my opinion, many people more knowledgeable than me agree that cash holders will get stung.

    Look into Marc Faber videos on youtube. He explains things simply.

    Good luck.

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  160. SF what do you consider at large BoW number?

    Thanks!

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  161. Once again i am eager for the COT reports. My Gold puts went up 100% today. To bad i am still deep in the red:) Lesson learned.

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  162. 60Min SLV Chart :

    http://screencast.com/t/RTS1xd1vrBD

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  163. Dear Shalom,

    Thank you - I very much appreciate the help.

    Wishing you all the best,

    Rose :)

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  164. Alex in Montana,

    Where did you find the Ross Clark interview? Howestreet doesnt seem to have it up yet, did you hear it somewhere else?

    You are correct though, Ross Clark really did nail this gold move.

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  165. You always have to ask yourself "what if i'm wrong", so a few thoughts:

    On reflection today and yesterday and all kinds of information I think I would now say the odds are 50/50 we've peaked in gold as of last night.

    One of the clues of a peak is that you are only looking in one direction (up) and keep trying to get in cause you feel emotional like you are missing something.

    Not only have I behaved that way in the last week (mostly to losses, but not horrible), but I have noticed other investors doing the same.

    I also had a target of this peaking out about a week or two from now, but I can also see a variation which allows the peak this week. Perhaps already last night.

    The volume today was very high and that itself can be a bad sign.

    There is still an argument that we are going to continue up for another $100-200 dollars, but I would say gold and silver HAVE to retake much of the losses today within the next 24hrs. If the parabola is still alive then today would just be an emotional shakeout and smart money would still jump in. If we are dead flat and dont' recover, then my odds get worse.

    I don't have any futures positions and I have lightened up my 'core' which I likewise had grown out of fear last week. I'm gonna watch for a recovery or signs of mania buying to return, but I might hunker down if not and call this a peak otherwise.

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  166. SF --

    With that new knowledge in mind,14.5 mm is indeed a rather paltry sum!

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  167. To take a look:
    http://www.etf-corner.com/markets/2011/08/slv-heckle-jeckle-.html#comments

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  168. Blake

    Monday march 9th 2009
    Total money flow on SPX was > 500 m

    That was the bottom of the 2008 collapse.

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  169. SB

    EXK and GPL made a nice bounce near the close. Any guesses?

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  170. SF Giants fan,

    I don't look too hard at the little moves. GPL was the strongest of the bunch a week ago, the weakest yesterday, weakest this morning and strongest this afternoon. :)

    The bigger picture is my focus, and I believe they'll all be worth 3x (at least) what I paid but if I can stay on for the ride. I'm determined to do this correctly, and proper sizing is the key.

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  171. Although EXK has been strong throughout all the turbulence, each and every day.

    Still, it didn't make me buy or sell EXK today, but it is the standout. I also don't know what to make of the juniors being not only stronger than the metals but the big miners too. Seems like rotation from outperforming to underperforming while maintaining a "long metals" bias. It will be interesting to see how far silver pulls back the next few days as we anticipate gold's move down.

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  172. One thing for sure, we have to own miners sometime. Either now, or try waiting until it feels safe, but that safer entry is going to cost traders in higher prices.

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  173. TZ(8155),

    Are you interested in any non-PM trades right now?

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  174. SB,

    If you dont mind, ca you tell us what is your average aquisition price on your miners ?

    Thanks

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  175. I don't want to own miners when it feels "safe".

    I want to buy them when everyone is convinced that the gold bubble has popped. I would say we are a long long way from that right now.

    Folks perma anything is bad for your portfolio and that includes gold.

    The big money now is in the stock market. I would suggest traders not let a perma-bull view on gold prevent you from seeing the opportunity that is unfolding in the stock market.

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  176. Gary,

    I'm prepared for a decline through proper sizing. The answer is not on the call of up or down, but being long the bull with size that lets you take advantage of pullbacks and get paid decently enough when correct (or lucky).

    The directional call is least important or all factors, IMO. Even you want back in eventually, and that's what bull markets are made of. After all, anything one trades can only go up, down, or sideways.

    Here's my last thought before I'm out of here for the evening. While everybody tries to sidestep another '08 disaster, they might consider that the had they stayed in miners they'd be worth more today even riding through a total collapse. If you believe in the secular bull, then know it will bail you out if wrong and pay handsomely if correct.

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  177. This comment has been removed by the author.

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  178. We can all agree that 90% of the blogs out there would laugh if I said we're gonna make new highs. And most are waiting for that plunge to 1000 and then the bounce to 1260-1330 to short into.

    When 90% of the people out there are not expecting new highs, I would gladly take the other side.

    I think that this plunge from 1370 has flipped this game upside down...we were supposed to go on a 18 month bear market...now instead, we go higher to make new highs because of the fear the media has spread

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  179. Neo,

    I've been logged out for hours, but can tell you that out of 5-6 positions, I'm up on 3.

    When I checked on my positions at 4pm, although not nearly as much had I cashed in on the most recent rally a couple weeks ago, was still in the green.

    I wasn't interested in selling back then for the same reasons I've shared here before. Trying to sidestep declines is how people lose focus from the prize.

    That doesn't mean I don't trim things that start looking vertical, I did sell 70% of my PHYS last week, but hold all my miners and a little more.

    Have a good night, see you guys tomorrow.

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  180. To Gary,

    had you bought miners at the '07 tippy top, napped all through 2008 till now, you'd have zero effort, strong hand status, and profits.

    Nice! Old Turkey.

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