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Wednesday, August 3, 2011

IS THE FED ABOUT TO MAKE THE MISTAKE OF THE DECADE?

Just as I expected, when the market failed to rally on the debt ceiling resolution, panic set in. As I have been telling people the stock market is not dropping because politicians are debating whether or not to spend more money. They have a long record of raising the debt ceiling whenever it threatened to interfere with their spending spree. So the resolution to the debt ceiling was never in question. We knew from day one that Washington would add another trillion or so to the deficit without any real attempt to cut spending. The market has been in trouble since May because it is starting to price in the next recession.

The S&P has now breached the March intermediate cycle low. In a mature bull market that is almost always a signal that a new cyclical bear market has begun.


I've been warning investors since late April that this was coming. Many were fooled by the phony manufactured rally at the end of June. I knew at the time that the Fed's pitiful attempt to manufacture a momentum move as QE2 came to an end would fail.

All that being said, the market is now moving into the timing band for a major intermediate cycle bottom. My best guess is that the reversal today will probably trigger a weak bounce up to the 200 day moving average, followed by one more leg down. That should mark a more lasting bottom and trigger a 6 to 8 week bear market rally. That rally is going to look very convincing and I'll tell you why in just a second. But just like the rally in June it is going to fail.


Folks, a recession is unavoidable at this point. The piper is going to have to be paid for printing trillions of dollars and bailing out the financial system. Unfortunately there's no way around that. The question is will Bernanke make the ultimate blunder and initiate QE3? I'll explain in a second.

Next we need to take a look at the dollar chart. It's not a pretty picture. With the market in free fall the dollar should be rallying violently. If May marked the three year cycle low like I originally thought then the dollar should be rising rapidly by now.The fact that it's not is a very ominous sign.

I'm starting to worry that Bernanke is going to initiate QE3 and he's going to add a currency crisis on top of the economy sliding back into recession.The combination of both of these at the same time will trigger a collapse much worse than what we went through in 2008.

If the market decides that QE3 is in the cards that would be the trigger for our bear market rally. Unfortunately it would also be the trigger for another spike in commodity prices at the very time that the consumer is least able to withstand them.

What Washington and the Fed don't seem to realize is that the problem isn't the size of the dose, it's that we are using the wrong medicine. We've already spent trillions to save the economy and it failed. Let's pray that the powers that be have enough sense to recognize that more trillions are not going to cure the problem, they are going to exacerbate it.

Unfortunately what no one wants to admit is that there is no cure for our problem. We can't stop it. It can't be "fixed". All we can do is make it worse. We desperately need to face reality and initiate the painful policies that are required to halt the car before it drives off the cliff. Failure to do that will mean that the market will force reality upon us as a major global economic collapse.

Before this is all over and done I fully expect the Keynesian economic model will get tossed into the trash heap where it belongs. If it wasn't for politicians desire to spend more than they can afford Keynesian policies would have been discarded decades ago.

489 comments:

  1. Gary--Great new post. Am curious, however, what impact, if any, a Fed QE 3 hintsay in early August after the FOMC meeting would do to your cycle analysis. As your charts show,last year in August started the USD decline and GC and SI were off to the races. Would that not occur this time as well?

    Thanks for your work.

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  2. This slow motion European train wreck might be giving Helicopter Ben just the opportunity he needs. Maybe he can flood money into the US economy without dropping the dollar index too precipitously, since the index mainly compares USD to Euro. A controlled descent rather than a crash.

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  3. awesome post, best ever for me, nailed it G-man

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  4. gary
    afterwhat yo said i may sell my gld too been in in sine $85 jake

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  5. If you are wondering why the dollar just went up vertically here is the reason--more intervention--some free markets we have


    Dollar Yen Surges BOJ Intervention - Ministry Of Finances Sells Just Under Y500 Billionfrom zero hedge - on a long enough timeline, the survival rate for everyone drops to zero by Tyler Durden

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  6. I can understand the comments about being distracted by other traders analysis. I've stepped away from other groups for the same reason and it's why I was hesitant to post charts when I originally signed up.

    I get more understanding from charts as I believe the fundamentals come out in the charts first so they are my way of interacting with the group. Having said that, I'm happy to step away if it's a problem.

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  7. Silverhound,
    it`s great to have you onboard and your charts are swell too!

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  8. Tekoa

    Thumbs up for organising the interviews. You can only get so much info from the written word. With the spoken word you can "hear" what people are thinking.

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  9. Thanx 86, it's a good group to be a part of.

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  10. Gary,

    While conceptually it makes sense to consider dollar movement in analyzing gold trends, I don't believe in using an index value that is so heavily-weighted towards the euro or more generally any fiat currencies. While these may not be current percentages, the dollar index is a basket of these currencies:

    Euro (EUR), 58.6% weight
    Japanese Yen (JPY) 12.6% weight
    Pound sterling (GBP), 11.9% weight
    Canadian dollar (CAD), 9.1% weight
    Swedish krona (SEK), 4.2% weight and
    Swiss franc (CHF) 3.6% weight

    Even the Economist's annual international Big Mac survey would give a more accurate value for the USD because it reflects dollar purchasing power for similar goods.

    The point is, to measure the value of one fiat currency against another (or others) may not be as relevant an indicator as measuring the value of the USD against something more tangible like a commodities basket.

    In my view, this could explain why both gold and the dollar (index) could rise together -- the market starts rejecting all fiat currencies.

    Do you agree with this logic and if so, is there any way to incorporate other dollar value metrics into your analysis?

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  11. I concur with most of what you state in you post gary, but i do still believe stocks can rise in nominal terms if Ben prints enough $$$, a la Zimbabwe.

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  12. Great post Gary, you echo my thoughts on the economy and QE exactly.

    My only concern is that QE3 is a certainty, and people will anticipate it as the economy tanks by buying gold. My fear is that on weak employment numbers, money will leave stocks and into gold.

    Gold's recent surge may indeed be purely emotional/psychological, but if Ben starts QE3 it will all become validated.

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  13. Gary new member about month. Love your post. I agree and know that QE huge driver in gold price, but wondering if dollar has to fall? As bad as fiat currencies are could hold against others even with QE3. Just a thought

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  14. I'm not bullish for anything, except this blog. sorry to see it go because it will eventually.

    I appreciate slumdog's posts re: basil. can you not just delete his/her comments when he/she posts them? eventually he/she will go away.

    there should be a blog blocker much like a call block. you know, block the ip address not just the blog account

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  15. GLD huge on BoW. Twice yesterday's SoS number...IS this all the correction we get in Gold before another push higher?

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  16. The question is will Bernanke make the ultimate blunder and initiate QE3? I'll explain in a second.

    ---

    Until Ben Bernanke changes his thesis written I recollect in '82, no view save his will be operative.

    His view is correct. In '08, the financial system was exposed as ruined. Clinton's release of the hounds and Bush the Lesser's small government gnomes, like Chris Cox, allowed the rape of the American sabines, as in we got the HPV courtesy of those governmental leaders who insisted it was not their business to oversee business practices.

    The game was over. I used to call it "bankrupt", but was then educated to the term "insolvent".

    To save the primary dealers who sell off and who buy federal paper, QE1 was launched. It was a clear attempt to save the federal govt from collapse, illiquidity. And it worked.

    In 2008, the economy was all but the playing out of the hand effectively destroyed. The value of US and EU fiat was then at great discount to what it was then carried.

    The QE efforts were manifestations of the self-serving. Paulson exemplified them; he advocated for them; he was them. The primary dealers were rescued. Thus, the federal governnment was rescued and the people, which means the economy and its trading partners' economies were rescued.

    This too is about to fail.

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  17. This comment has been removed by the author.

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  18. Gary (or anyone else who would know what to do here),

    The SMT Premium site no longer has the links on the right side of the page for the daily report, portfolio, cycles, etc.

    Are you aware of this problem?

    Is this something I can fix by doing something different when I log in?

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  19. They are still there at the bottom of the page. Gurvir just fixed the problem and put them back at the top. Clear your browser history if it's still showing at the bottom of the page instead of the top like it should.

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  20. Pima:

    The links are @ the bottom of the page instead of the right. Scroll down...

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  21. Last one out the door pls turn off the lights. ;-)

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  22. The blog is the place to discuss trading strategies and such. info from the nightly report needs to stay in the premium website.

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  23. This comment has been removed by the author.

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  24. Right thing to do. Too much giving away the farm going on this public blog. If you want to know what Gary and the rest of us are doing... Subscribe!

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  25. I believe gold will be at 1700 by no later than monday. There will likely be a correction at that point and then resumption higher for a few more weeks after that.

    I'm still long 5x gold futures and 1x silver.

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  26. Thursday maybe flat or down somewhat, but I don't see a significant pullback this week (at least below 1640 or so in gold at the worst), and Fri should be strong and close near the highs.

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  27. TZ,

    everyone is at the subscription area now posting comments

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  28. This comment has been removed by the author.

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  29. This comment has been removed by the author.

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  30. "Is there anybody out there?" - Pink Floyd, The Wall

    http://www.youtube.com/watch?v=Kpy7seH5Hc8

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  31. great improvement Gary, now you see the graphs immediately!

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  32. looks like most have abandoned ship for the premium site.

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  33. Plus the jobs we are getting rehired @ pay way lower than they did in the 90's. There is no way we can compete with China unless we become like them. $20+/hr manufacturing jobs now pay $10-14 in this area.

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  34. http://www.screencast.com/t/kLmFSwVVwi1d

    Reminder : Its a bull , they shake you off and do not hand you a saddle to let you back on.

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  35. Those early May silver longs might be getting excited already...

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  36. This comment has been removed by the author.

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  37. Italy Govt Bonds shoot up..
    Nice chart , ALex.

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  38. Well, I got my sell signal today on Gold. Usually my mind begs me to sell to protect profits in an uptrend. It often takes everything I have to ignore this impulse. But at rare times I get the feeling that I can't possibly let go of my shares b/c the good times may never end. When that thought arises, its a pretty good time for me to sell b/c I sense that my thoughts mirror those of Joe public pretty well, meaning the retail investor is likely at a point where they will be jumping in, and will get handed a gift of shares from the big money traders. So, I have an order to sell my remaining DGP at the open.

    I had opened positions yesterday in TBT and SSO as the reversal candlesticks and volume seemd convincing to me, but I have mental stops 1/2% below the lows of yesterday in case we are about to get a waterfall decline in equities and a continued rally in bonds. Whether I get stopped out or not, TBT is bright on my radar as the US Treasury has gone straight up over the past couple weeks, and is bound to come back to Earth. I suspect this will become a long term hold for me in the next several months.

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  39. yes I suspect the market will bottom either today or with the gap down on the employment report tomorrow.

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  40. I will not be able to post my buy signals on SMT anymore due to a new venture I am starting. If you would like to get them please drop me a note at dgamone@gmail.com (the address is in my profile as well)

    These are the back-tested "all-market" ones around which the new hedge fund has been based

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  41. how do put a comment on the private website please?

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  42. Sophie
    Log into the website and then scroll to the bottom of each nightly report and you will find a comments section.

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  43. Miners getting smashed..gold's flying higher..Fat Thursday

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  44. Gary-
    The longer the SPX daily cycle stretches towards 40 days, the odds turn in favor of the bounce coming out this cycle low to be very convincing. Seems like everyone's inclination is to sell the first bounce, which will probably be wrong. Thoughts?

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  45. Why won't gold correct? The dollar is certainly giving it every excuse. Is it waiting for turnaround on stocks?

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  46. the question is who is buying at this level and why

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  47. Sitting tight with what I have, but just bought a slug of GDX for a quick day trade. Let's see how that one works out...very tight stop.

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  48. SVM certainly is a turd in my punchbowl. LOL!!!

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  49. Felix,
    Yes I assume is the expectation.

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  50. Premium site very slow today. Sometimes it just sits there when I try to do something, have to close the window and log back in.

    Right now it's been sitting on the login window for a 3 or 4 minutes (after I've entered name and pw and clicked on Login), so I basically cannot login.

    I wonder whether users posting comments there is causing it to slow down to the point to where it's almost not usable?

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  51. SB,

    Don't spoil my GDX puts please!

    ;-)
    Le Fou

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  52. Le Fou,

    No problem, amigo. This trade lasts 1/2 hour to an hour. :)

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  53. Has nothing to do with my other stuff.

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  54. SB,

    So what are you going to do with that turd?

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  55. Rav,
    Money continues to panic out of stocks and into gold. But it's getting very late in both cycles. We are going to see that trend reversed soon.

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  56. wow look at that electronic painted ceiling on gold at 1678, not saying it will hold but *really?* (say it like a teenager)

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  57. pima,

    That remains to be seen. I don't feel pressured to make a decision at the moment as I'm still up nicely on it.

    I do know I'll either keep it, or sell into strength...not here for sure. :)

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  58. PC,
    I'm not having any trouble with the premium site. I think it may be your Internet connection that is slow.

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  59. Gary,

    Is the premium site down? I have tried to login for the past 10 or 15 minutes, but nothing happens.

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  60. This comment has been removed by the author.

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  61. it's up, PC, they're talking about you big fellas not being there

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  62. there is nothing wrong with my internet connection. Any other website I go to comes up within a second or two.

    I am still waiting for the SMT premium to come up.

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  63. I get "waiting for smartmoneytrackerpremium.com" at the bottom of the screen, but nothing happens. I have tried closing the window and logging in again--done that three times now.

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  64. no it's working fine. Make sure you don't have caps lock on. If you made repeated attempts to login with an incorrect username or password the system will lock you out. Send me an e-mail with your username and password and I will check.

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  65. okay, it just came up (after taking literally 3 minutes to go from login screen to the next screen). Now I am waiting for the main screen to come up, about a minute so far since I've clicked on smart money tracker premium at the top of the page...

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  66. This really does remind me of oil...oil stocks going down, while oil going up...

    People only talking about oil. The problems as I remember is that both sides got smashed...shorts for getting in too soon...and longs for getting out too late...a couple nice fakeouts, and double fakeouts along the way..

    I have little doubt this will be any different.

    If gold were going to 2000 now, I doubt that miners would be doing what they are doing...heck..oil is dropping and the metal is going up...margins are increasing on both ends.

    Anyways call me Mr.Negative, but I think this is it...and if by some market move I am wrong great, I look forward to that C-Wave top this fall...but for now sitting tight.

    I don't think gold is discounting QE3 either....gold and silver are the only items going up...all commodities are getting smacked. The only reason, that gold is going up is because it is going up, until it decides to go down...right now people are trying to rationalize all their great gains and justify gold to 2000..still waiting on the mathematical models to come out.

    In truth anything can take gold down right now, USD surge, Margin calls, Increase in margin requirements, CPI negative, doesn't matter something will take it down as the excuse for it to fall...

    Joe public is all over this now, so until Joe public gets burned the market will continue to seek people to buy and then bury them, in a choppy pig slaughter...I will most likely get back in after Joe public starts calling gold risky again. I figure we break the 150 day this time around…perfect timing…especially if Joe public starts talking about the 150.

    Further on QE3...nothing has changed in the economy...its not as if the phony new bad numbers coming out are any reason to start QE3 in earnst...things were crap before and remain crap..the numbers do provide the FED with a reason though...but their goal is to wait until the dollar surges, buy back some debt then, at that point, and then drop it back down...rince repeat...Ben is probably smart that way...bankrupt other countries first as they buy our debt.

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  67. Sound like something is slowing down your computer. I think I would try rebooting your computer.

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  68. QE3 is simply not politically feasible at this point. And why would Obama burn such a major economic card so early?. He is up for re-election next year. I think the most likely point to see QE3 unleashed will be at the FOMC meeting at the end of January. The administration will be attempting to juice the economy ahead of the election, and by coincidence, late January roughly coincides with where I expect to the the 2.5-year cycle low for commodities.

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  69. Sold EXK $10.65 and SLW $38.40 due to the action in silver. As far as the market I see support at SPX 1180, any comments?

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  70. did you say " ooops" Doctor?
    my trade is now nicely under water...going back to my kitchen

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  71. I just cannot remember what was the big figure on the Dax this morning! 6600? 6700? ...now at 6400!!

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  72. This comment has been removed by the author.

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  73. looks like everything is getting thrown out the window...

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  74. This comment has been removed by the author.

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  75. If you want to know why gold has surged over the last few days all you need to do is follow the money flows this week. Money has flowed into long-dated treasuries, the Swiss franc, precious metals, German bunds and to a lesser extent the dollar. In other words, it has been a rotation to quality/safety as a result of the recent global uncertainties and deterioration in the data.

    In terms of stimulus, I think it is possible that we could see a tax holiday on repatriated earnings on the fiscal policy side and/or some form of operation twist (without an expansion of the Fed’s balance sheet) on the monetary policy side. In the short term, an expansion of the Fed’s balance sheet may be unpalatable due to high commodity prices. Besides, right now the market is doing the work for the Fed with the flight into treasuries driving long-term yields down and the stock market holding up “reasonably” well.

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  76. Even averaging down, I'm still not even. Stocks are WEAK!

    Better turn soon of I have to clip the GDX.

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  77. Can someone comment on the BOW today in QQQ and SPY. I just started following this and have no frame of reference. Is this large buying today or relatively neutral?

    Thanks

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  78. Bill, I don't know the link but if you type on Google you will find the link

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  79. This comment has been removed by the author.

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  80. Here we go, Gold starting to go back ...

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  81. sorry Billy. I meant, if you type Buy on Weakness in Wall Street Journal

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  82. Miners were forming a bear flag. I was afraid of that. The trends are very close to reversing. It's time to go long stocks and get out of gold. For a while anyway

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  83. I was short 1 contract Copper, bought back at 428, a bit early but lock 10.5$ profit

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  84. Sold all my gold and XLI puts and am now resting in cash. Although the employment report wont be pretty tomorrow, I think we have seen enough damage for a week.

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  85. sophia, what is the best etf proxy for copper, in your opinion? thanks...

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  86. Anybpdy step into the S&P's long yet?

    I already have enough on my plate, so won't be joining in.

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  87. This certainly is a BIG whiff of deflation. :)

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  88. Just bought SSO. Market will now tank I'm sure.

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  89. Hi Gary, how to post a comment under a screen name (not username) on the premium site? Thanks.

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  90. Gary,
    Thanks for that heads up.

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  91. Sophia,

    I was looking at the BOW but I just don't have anything to relate what I am seeing to as I haven't really followed this in the past. Just wondering if anyone that does follow it can comment how the QQQ and SPY numbers compare.

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  92. copper miners taking a right blasting today

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  93. Gary, are you thinking about going long SPY or similar in the model portfolio?

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  94. It seems like everything it getting thrown out, including the baby, its mom & dad, and siblings...

    BONY is charging 16 bps to hold cash in accts above 110% avg balance, and TBill rates are at 0.0000% today.

    It's like looting a store with all the clerks frozen in time...

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  95. CCY,
    Just login and then scroll down to the bottom of the report and you will find the comment section. If you wish to change the name that appears associated with your comments you can open your profile and change your nickname.

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  96. Billy asked your question on the premium site and someone there can answer for you.

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  97. right after i close my silver shorts this thing tanks...unfreakingbelievable

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  98. FSR,
    not in the model portfolio I'm not.

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  99. Of course I'm biased as I'm long here, but anybody looking to buy stocks should be doing it in here, IMO.

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  100. If the Dow closes here we will have a confirmed Dow theory sell signal.

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  101. Razvan, always happens to me. I buy calls and the stock falls, I buy puts and the stock jumps

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  102. Got in a little early, but my SLV and EXK puts are starting to look pretty good. I think this is it for the C wave. Price target on SLV: ?? crystal ball is broken...

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  103. A sign of things to come? Bank Of NY Charging Large Depositors To Hold Cash.

    Will they eventually make it illegal to not 'invest' cash?

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  104. Hat tip to Gary for finally convincing me to get out of the miners. Good call...

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  105. Long GDXJ 100%+, EUO x
    Cash 0%

    +Increased position
    xClosed position

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  106. SPX Weekly Chart : http://screencast.com/t/w3F2SKRVSGwC

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  107. Eamonn, I did 1 future contract...

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  108. Yield on one month bill negative?

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  109. "..Gold just got SMACKED!"
    It needs a good smack - it's been VERY naughty!

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  110. Thanks for your chart Gann360

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  111. were there some news? I left my platform for 20 minutes and gold lost 22$ !

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  112. Thanks for your guidance Gary. I was out of all my positions on Tuesday. You are a genius!

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  113. gold's taking it on the chin, TZ whats happenning with your longs?

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  114. Bought SSO with fairly close stop (2%), GTC while I'm away.

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  115. Ok is it just me ...because I think someone needs to bash on gary for missing the DCL top in gold by a 1/2 day :-)

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  116. USD is King once again, just like 2008.

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  117. Wheeeee! Added swing dollar long, a small QLD purchase (for a bounce) and a small ZSL purchase today (for a daily correction).

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  118. Stopped out of silver futures for a small profit (under pressure silver is always weaker).

    Holding the gold futures with stop near 1645 to get me out with small profit (if we hit).

    This is getting a crash vibe (stocks). I don't think gold will necessarily drop as you guys are suspecting if the world financial system goes off a cliff here. But we will see.

    I'm perfectly fine taking the stop here and will come out well ahead the last month.

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  119. Gary, the "Profile" section on the premimum site shows Username (which cannot be changed), E-mail, and New paswords. There is no nickname to add/change. What did I miss?

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  120. CCY ... go to the bottom of the page as if you're agoing to comment.
    Click on your name where it says ... LOGGED IN AS: ... you can add a nickname and a display name there

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  121. Gary, are you expecting gold to drop to the bottom of the BB?

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  122. Ccy,
    Look again there is a space for nickname which will automatically default to your username. But you can change that to whatever you wish to be associated with your comments. Most people are changing it to the nickname they used to post here in the blog.

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  123. Out gold futures. Reasonable profit for last 2 days, but clearly not what I had an hour ago.

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  124. Thanks for playing, the House just got lucky tonight, hope you enjoyed the free drinks, don't forget to tip the dealer, please come again.

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  125. Into SPY @ 122.71. Was going to stay in cash after selling NUGT and wait for Gary's call. On a close over S&P 1230, I think we go straight to 1290. On a close over 1295, we go to 1325-1345. Too tempting.

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  126. Avann, thank you vey much for your help.

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  127. jeff,
    Gary sure is acting like a putz these days. Maybe we need a new Guru.LOL!! Great Call Bwana!

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  128. Sold my SPX Rental here ay 1229 for a nice profit.

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  129. Crazy crazy times..
    Any idea where will this drop in silver stop? Bought a handful of October puts at the close yesterday.

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  130. Gary, what I previously did was clicking on the "Profile" link on the top-right corner of the home page, and was then led to a profile page which was different from the one you referred to. Anyway, Avann showed me how to get to the right page. Thanks both of you.

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  131. Russell,

    which SSO did you buy?

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  132. Feeling purty darned good about my internal signals right about now. Got me out of remainder of DGP at 57.91. Now, if only I can learn to wait for that signal and hold all positions until it comes. Working on it.

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  133. IMHO I think wishing for QE3 is foolish. It isn't going to happen in this political climate. If anything we will cut the govt by 10% across the board. As we enter into a period of stagflation the market will go nowhere but gold should do well. Just look at the chart when Carter was President.

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  134. Of course, what remains to be seen is whether this drop in gold holds. There remains the possibility that gold is in a runaway move and could reverse now that it has given up 40 or so points. Really hoping not, obviously as it would be great to see dcl develop so we have a decent entry point, and a clear point of reference for the next daily cycle.

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  135. Hack, remember that QE3 comes from the Fed and government cuts are on the other side of government (Federal Government). So while cuts are likely in the Federal Government, the Fed is likely to counteract those cuts but making QE3 even bigger, to offset the additional hit to GDP. It's in their mandate. The ONLY things standing in the way of QE3 are 1) commodity inflation and 2) the market's trust in the Federal Reserve ability to control the long term effects of its actions. The market trusts the Fed far more than the Federal Government so if stimulus moves from FG to the Fed, it's probably a postive to some extent. The Fed just has to manage commodity inflation. But that means it has to allow the market to crash right here - commodities have be slaughtered in order for the Fed to have the elbow room for QE3.

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  136. Seen M2 lately?
    http://research.stlouisfed.org/fred2/series/M2
    Don't need QE3 when M2 is going vertical!

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  137. " Hack said...
    IMHO I think wishing for QE3 is foolish."

    Fed is purchasing treasury this morning, they just do n't talk about...

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  138. I think the fed will print heavy and soon. They don't want a panic situation and the European meltdown, coming asian recession, and US slowdown pretty much guarantees lower commodities. They need to print until they can get inflation to self sustain.

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  139. Interesting that gold has moved a lot in the last 30 minutes while the dollar and the euro just sat. Just profit taking?

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  140. Gotta love PM's, when a correction comes it just comes. Beautiful to watch.

    Bot ZSL yesterday with a stop at 1195. This morning it fell to 1192 and took me out before the big move.

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  141. Golds drop (IMHO) is due to margin calls/forced selling, exacerbated by price stops. This bodes very bad for money managers that held gold for protection, but got so SMACKED today that they had to raise funds. If we see more of this, prepare to see funds closing/putting up gates against investor redemptions...

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  142. Russell,

    I know, thanks. Was wondering about the vintage..strike and expiry.

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  143. Gary

    With this big move in the dollar today, is the 3 year low still behind us?

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  144. Wow..I was starting to get real nervous long gold yesterday...went short today near top, and started getting nervous there...held tight

    Gary, although I know you dont recommend it I want to give you thanks again for keeping me in my shorts.

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  145. Beanie's just got off the third shift at a 24 hour drive through place. He then called his broker from a pay-phone and checked the market. He immediately went to the corner liquor store, bought 5 Colt 45 Malt Liquor 40 oz. and is currently at home passed out after drinking them and eating a a bowl of Lucky Charms.

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  146. I warned everyone about silver. But no one wanted to believe me. If gold is starting into a full fledged daily cycle correction silver is going to get annihilated just like I said it would.

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  147. the sky is falling
    the sky is falling
    hit the *panic* button

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  148. silver is in a bloodbath. Gary was right, warning us. carnage

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  149. Nice work, Gary. People just don't appreciate how tough this game is. Your call for breaking the March SPX lows and starting the next deflationary event is right on. Maybe next time you can tell me the date of the high about---oh, I don't know---three weeks before it happens.

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  150. I went modestly long ZSL two days ago having about the collapsing parabola so often - finally a chance to recoup a tiny portion of what the parabola stole from me in the spring

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  151. Gary,

    Are you having doubts about a "full fledged" daily cycle correction?

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  152. Sold my SLV puts for a decent 1 day profit.
    Probably should have hung on longer but there's the jobs report tomorrow and heck.. I sold, done deal.

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  153. Gary ... I think most believed you ... just the odd dipshit that didn't.
    I have one regret today ... I bought HZD at 4.47 and sold at 4.67 ... it's now at 5.20!
    It was a small play anyway ... no big deal.

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  154. How is QE3 going to work? We now have a debt larger than our GDP. This means that unemployment should reach about 11-12%. Printing money and inflating the market will not help because no one will have enough money to buy into the market. This happened in the 70's and it is happening now.

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  155. WMP,
    SSO the etf as a stock, not buying this in options as I'm not sure what Friday will bring. I have a bail strategy in place.

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  156. Eamonn, JJC works for copper but like sophia I used futures for my short.

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  157. Its unreal how quick the speek changes on CNBC about gold when it sells off...yesterday Gartman was saying buy, today sell

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  158. DG,
    I have a feeling people will be pissed at me even if I missed by a half-hour LOL

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  159. Harry, thanks. If the dollar breaks out to the upside I think I will play it by buying puts on copper. I'm wary of JJC cos its an ETN, not an ETF. With this uncertain environment, you might get unlucky and the Bank underwriting JJC, which I think is Deutsche Bank, it could go bust.

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  160. Let me make a quick comment here. If you have questions about content in the premium website post it in the comments section over at the premium site.

    From now on the blog is going to be reserved for people that wish to discuss specific trading strategies and the content of my posts. Proprietary information in the nightly reports needs to stay in the premium website.

    If I see information pertaining to the nightly reports here on the blog I will probably delete it.

    I would like to keep the majority of comments here on the blog so the website doesn't get too cluttered. Just keep the conversations here reserved for things other than the premium newsletter content.

    ReplyDelete
  161. Gary, the comments section on the premium site has disappeared for me. I refreshed my page many times...

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  162. I don't see a comments section either.

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  163. I'm looking at it as I write.

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  164. Hack, nobody here said QE3 was going to work :)

    It's just the Fed's only real tool, that's all. My guess is they act very soon, but not with QE3. They will play with the maturity curve instead. As their existing bond portfolio matures, they will reinvest the funds on the long end of the curve to keep those rates down. It won't take any more money than has already been put in but they might get some bang for the buck in rates until the real QE3 is politically feasible.

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  165. SPX 30Min Channel: http://screencast.com/t/L5Q2ldXiD7q

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  166. E,
    try clearing your browser history and cookies and then restarting your browser.

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  167. Well, most of my profits from this round have been vaporized. And the day trade (one of my favorite setups with high-probability) blew out to my stop almost immediately which is typically a sign of more to come (downside).

    I'm not doing any buying today, but will keep my positions through any further pullback, unless stopped out but that is still a decent distance from here. I am tempted to exit, especially since silver is acting like more margin hikes are on the way, but I still have too many doll-hairs I'd like to put into metals so will sit tight.

    Unfortunately, I am quite sure there is more pain ahead before I see any respite. It's the way it goes, and I'll try to turn this into an opportunity sometime in the next few weeks.

    Good luck!

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  168. BB crash on S&P again today. It happened Tuesday and bounced a bit yesterday.

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  169. Sold ZSL for a good chunk, reestablished partial position awaiting further indications.

    Would anyone more experienced call gold's intraday chart a bear flag?

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  170. What I especially don't like is my strong hand status (cushion) that allowed me to ride through pullbacks is now just a sliver of what it was.

    Anyway, I'm getting out of here since I'm not selling, or putting any $ to work today.

    :)

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  171. SB,
    do you still have SVM &EXK?

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  172. a blood bath. no other word for it. just saw a kitchen sink flying out the window

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  173. I've learned from experience that when anything gets as stretched as far above the 200 day moving average as gold was you no longer have strong hand status you are at risk of suffering a violent correction.

    When anything gets that stretched I will gladly give up my strong hand status.

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  174. The vortex of doom has begun...perhaps! Like a blackhole sucking out everything until a bottom is made.

    Next move we have strong gap up's tomorrow to lure the wounded bull back in, and then the market unleashes another savage sword to its stomach...

    You know everything is red today...and bulls are so attracted to red, but the matador is there behind the red ready to strike.

    Ie don't buy silver or gold here...even buying the market may be tough...

    This is the point where the bulls and the bears get slaughtered. I hope everyone brought their puke bucket for the rollercoaster ride!

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  175. The BoW numbers are starting to build.

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