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Sunday, September 18, 2011


The stops and trade trigger link has been updated.


  1. Most of the King World News folks are PM cheerleaders.

    But I am impressed with Robin Griffith. He talks of "cyclical" stock market, US dollar rising and how gold *may* still go down as 1600$ (but do not short he says)


  2. we had a very nice visit with gary and smt members in New Paltz. Thanks all

  3. Gary,

    Wow! Your call is truely amazing! The DX is cruising tonight! Well done on your call!

  4. Eamonn...I'm missin' the "beep"

  5. JJC Copper ETF:


    $SOX Daily:


    AAPL Wekkly:


  6. Nikkei closed Monday (Respect Old Fossils or something like that), Hang Seng open and already down 2%, Singapore down a bit, futures down, looks like we may be headed down before the puppets and their masters speak this week.

    I'm wondering if they might instill QE3 while the markets are up, no one would be expecting that. But perhaps Benny might think "upwards momentum, let's keep going". Who knows? Something to consider.

  7. VERY Interesting Sunday post by Jesse Cafe.

    He predicts gold will break out to 2100 barring central bank manipulation and liquidation selloff.

    His gold "cup and handle" charting earlier this year was spot on.

    This guy has a good record - I'm almost tempted to take some profits from the long dollar play in 1-2 weeks and join some of the other SMTers for gold after the DCL.


  8. I don't think anyone can call this market. I'm long miners since 2009
    so what to do. Im scared of the possible D wave. So quit trading futures for few mos. Hold auy, gg.
    looks like Martin armstrong gives typical price targets of waves, but not put neck on line like gary and pull trigger. Bought dx thursday, monday will buy uup per Miaggi

  9. With $ so strong, it is going to be quite interesting to see how PMs are behaving....

  10. Beksachi,

    Thanks for the heads-up on Jesse. I was reading his pieces all weekend, this one surely is hot off the press.

    I would agree, Jesse is highly believable. This post gives some argument to going old turkey here even at these high levels. As Gary would say, buy and hold your nose and ignore the wiggles.

    At the same time, Jesse does give the disclaimer statement "Barring a major intervention by the central banks, or a liquidation selloff..." Of course this is the major risk. Who else would be wanting or able to just indiscriminantly (spelling?) dump large amounts of contracts on the open market?

    I like his chart lines here. I cleared out my optionsexpress GCZ11 lines and redrew them in similar fashion. After doing this, I see some other important levels to watch. (Bear in mind I really have no idea what I am doing)

    I drew a resistance trendline down from the 9/6 to 9/16 periods. Tonight's up action is broken completely above that resistance. That support is in the 1810 zone. Ideally I would like to see that level hold or at least a close above there tomorrow.

    I drew another horizontal support line from the 8/11 top at the 1817 level. I suspect this would be bullish as well if this level held on trade or at least on close.

    The bottom of the symmetric triangle for the next couple of days is in the 1770 to 1780 area. All in all, this could be a very good stop out point if one were to be on board with Jesse's thesis. A breakdown close below there would really negate this and do some chart damage.

    Here is a quick and dirty version in StockCharts. THe circle is where we are trading tonight. I just noticed positive divergence in the RSI, PPO and WM.


    This post will self destruct in T minus 10 seconds...

  11. RJ,

    I know Jesse is also a subscriber on iTulip and iTulip's Eric has been saying that recently gold may have entered a new phase (i.e. Central Banks buying under the radar)

    Here is a new post from James Turk (although I view him as a permabull)- he is highlighting recent strange developments in gold market....I don't quite understand what "gold interest rate" are.

    Point is, I want to be part of any upside explosive GOLD action short term.....heck 2100$ with DGP is a >20% return! I may also do a GDX.

    If gold dips to $1780-1800 again for DCL, I am going in some portion.


  12. I remember someone (people?) saying a while back that they expected Gold to slow down in second half of Sept and consolidate then head higher into the traditional fall season of Oct/Nov before potential D wave.

    Is that what's happening here?

  13. Can anyone help me to get a handle on the impact of these events ...

    How would another Greece bailout be viewed by the markets?

    How would a Greece Bankruptcy be view by the markets?

    How would some sort of Greece easing ... perhaps not total bankruptcy ... but say a moratorium for Greece be viewed?

    Personally, I view any of the above as negative (markets down) but get mixed signals depending on what I read.
    Does anyone really know ...??

  14. Instead of trying to guess at unknowable events just follow the dollar cycle. The markets have shown very little ability to fight a rising dollar because there is no true productivity increases in the US economy.

    So as long as the dollar continues to rally out of the three year cycle low it's unlikely that stocks will rise significantly.

    The normal duration of the rally out of a three year cycle low is usually about 9 months to a year.

    Bear markets in stocks tend to run about 18-24 months. We are already 5 1/2 months into the bear market. It should have about another year to go.

  15. Gary ... I wish I could and am certainly trying but being in Canadian dollars puts me 1 step away from this trade.
    I do have a Canadian ETF that will hopefully work in my favour but for the last few days the Canadian$ has been up or flat against the US$.
    Today looks like it may finally start to go in the right direction (down).

  16. "I messed up," Netflix CEO says


    That should fix everything...

  17. Hi Gary

    You mentioned that we are 5 1/2 months into the bear market. At which point are you measuring the bear market from (the March low?)

  18. Crude and SPY regression is 0.91

    How intertwined are they? Also CORN and CRB index charts


  19. Gold has clearly bounced off the 34day sma which provided support two times already this year.

    Gold has been following the 1979/1980 pattern tick by tick. If it keeps going like this, we will have another two weeks of sideways consolidation, followed by a swift ascent to $3400 (yes, $3400). The divergence between silver and gold is troubling though.

    The catalyst for gold's meteoric rise? Israel bombing Iran ahead of the elections.

  20. i am a buyer of /es around 1170.

    /dx looks ready but need to see some buying kick in. seems obvious right? but it hasn't happened yet.

  21. St Deluise,

    I followed you and sold my Nasdaq on Friday at 2300...
    Sold DAX then and bought back this morning 2.3% cheaper...now keeping a small short Gold ( I hope to be out before we touch 3400!!)
    Will buy Nasdaq again most probably tomorrow or fRiday depending of what is going on as this week could be a nice turning point...

  22. There's no way this week is a turning point barring CB intervention. The dollar wants to go much, much higher. BAC capital increase/bankruptcy could be the next shoe to drop.

  23. My crystal ball is seeing pain ahead for gold shorts.

  24. Joseph,

    If the dolkar rallies like a maniac and if the market is already discounting that Greece is bankrupt, then all the gold that was to buy has been bought....and Silver doesn't trade well...IMHO

  25. Sophia,

    Gold has been following the 1979 pattern tick by tick. I wouldn't trade against that. If we were to enter a D-wave, it should have started by now.

    And I don't think everything has been discounted:

    USA carrier movements in the middle East
    Israel clearly getting ready to kick some butt

    The extent to which writers of CDSs on Euro debt will get destroyed

    AND the big six sigma event:

    rapid increase in money velocity that would trigger the destruction of fiat and possibly a world war

  26. good luck to us both then sophia! would keep equitiy positions very light. scary to be long anything these days imho. the dollar buying is kicking in now though..

    coded up something that calculates the average p/l weighted by volume at certain prices.

    over the last 610 hours (about mid august, including globex) the average buyer of

    /es is up 1.45%
    /dx is up 3.63%
    /gc is down .3%

    thus my takeaway is that /es holders will have a lot stronger hands than say, /gc longs who i assume are a little confused to be seeing any red on their screen.

  27. Deluise,

    why do you hate gold so much?

    Did you get hit in the head by a bar when you were a kid?

  28. Joseph,

    I take no pride of making predictions...just trying to be emotionless....so we will see, I have my stops and I am monitoring my positions....

  29. one day i was like, "what's up gold??" and tried to hi-five it but it just stared me down and scoffed--totally left me hanging. not cool.

    ever since then i hated it.

    oh and like, looking at its chart and volume and stuff.

  30. Buckle up miners longs, rough waters ahead. :)

    I won't add today, but will sit patiently with everything I have, looking to get through the next few weeks intact and picking a few spots here and there to acquire more shares.

    I'm outta here for the day, so good luck!

  31. Ouch there goes gold.

    We're all "watching and learning" Joseph.

  32. Joseph,

    Gold shorts are feeling your pain today, not their own.

  33. Nasdaq is locked in a perfect upward channel,friday hit the upper trendline, a break of the lower trendline will dash any chance at a bounce to the 200sma I would assume. Lets see how strong the 10 and 20sma support will be.

  34. William,

    The miners aren't confirming the weakness in gold.

  35. Ok guys let's take it easy on Joseph, we are all in the same boat...I
    I am happy to be right this morning, trading from my kitchen so as I said before if I can be right when the big guys are wrong, that is already a nice satisfaction!
    Nice monday everybody, well done W2 on short short Nasdaq!

  36. SB,

    I feel like im in groundhog day reading your posts....lol

  37. Joseph,

    If you havent noticed miners are below where they were at in april...since then gold hit the moon. The only thing I see them not confirming at this point is gold 3400 anytime soon.

  38. Wallace,

    That's interesting, but most miners suffer from chronic cash flow problems, hence their underperformance.

  39. /dx still needs a new breakout high here.. not yet but seems probable. it has definitely confirmed its gap up last night.

    might be a moment of panic in both /es and /gc. will be eyeing a SPY call or two once i see it normalize.

  40. Upward channels tend to break to the downside, I would like to think that stocks bear market rally back to the 200sma has evaporated so that I can just get comfortable in my shorts :)

  41. W2,
    Are your beaver shorts uncomfortable?

  42. Gold isn't down in euros.

  43. Bought more SLW...

  44. "Two weeks of consolidation before a huge move up"

    Yup, I'm betting on it.

    Everyone and their mother are short the double top in gold and not properly hedged for a six sigma event.

  45. Joseph,
    What is a six sigma event? thanks.

  46. A six sigma event is an event whose prob lies six standard deviations from the mean given a normal distribution. Extremely rare events such as a world war, sudden hyperinflation,...

  47. It is very gratifying to have B.O. on the idiot box with the volume at zero.

  48. Re: six sigma

    However, they're no longer as rare as we would expect. 87 crash, Peso Crisis, Russian Default, Tech Crash, 2008. There shouldn't be one every 4 years. And those are just off the top of my head.

  49. i am now considering a long position in straws because i'm starting to see a lot of people desperately grasping at them.

  50. Joseph ... I would think that even 5% of my assets should be plenty for such an event. I'm comfortable there just with my physical.

  51. Joseph,
    Why do you think we`re lined up for a six sigma event?

  52. Deluise, that's the second funniest thing I've read all day.
    This is the first one:


    ...and GDX is in the green.

  53. What site is everyone using to track the dollar index?

    I know finviz.com has it and so does bigcharts.com but both have different highs for the day and also different quotes.

    What is everyone else going by?

  54. D - try this for real-time data:

  55. Thanks hamvestor, appreciate the help =D

  56. D,
    I use Fxstreet's chart for US$ index, it has some pretty good timeframe options.

  57. D... I use netdania for spot gold & spot silver & USD

  58. now less money in /gc than the friday low at 1765.4. should be a quick trip down.

    curious to see what it does there. i imagine there are a whole lot of buy stops to run first.

  59. Wompouf....here Silver going down!

  60. As I mentioned last week...gold would most likely breakdown after Friday's bounce off the 40sma, were seeing that today.

  61. Miyagi,

    What do you think sensei...this bear market rally already ran its course or no?

  62. Trying a small long DAX here...closed my shorts GOLD and Silver here as well...it was fun for a Monday

  63. Miyagi,

    Would you mind if I dropped you an email sometime this week or next...I want to install a seperate panel with a few circuits for entertainment center like you did, maybe you can give me a run down of whats needed?

  64. Sophia,

    What are you using to short Gold..DZZ, GLL?

  65. careful with the euro stocks sophia. completely different animal than the US ones.

    anyway i'm done for the day, will look to get long the SPY tomorrow morning perhaps.

  66. Although happy to see the declines today, must say I am impressed with relative strength of PM stocks today. If action like today holds up, it is very bullish for any run into the new year and would confirm that PM stocks are the place to be.

  67. Thanks for the advice St Deluise!
    I have my stops, but for me DAX has lost 33% in 2 months and I am not sure that the German economy is done for the year...and I think that Europe is going to get out of its hole... Slow growth but not 2008 again....
    I really think that Gary nailed it few weeks ago...at one point undervalued assets will be bought while overvalued will be sold...

  68. Sudden panicking thoughts - does anybody know if Gary will retire soon? He probably will before I do...

  69. $1680 gold will set off the fund managers buy triggers...

  70. WW,
    I am weary of the fed's blabbing this week, they can pump up the market with doublespeak pretty fast.
    Otherwise, bear market, maybe down to 1100-ish levels. AAPL looks to be ready for a good fall if we hit a downturn. Casinos still neutral-ish today, would like to see a downturn there too.
    You can email me anytime, Willam-san, you still have my email?

  71. Ty miyagi n chrisb, gonna mess around with all these.

  72. Miyagi,

    Ofcourse I still have your email.

  73. interesting that some of you guys are still buying miners

    despite they are equities and tied to credit market. don't
    trade like pure bullion.

    they have diverged for a reason.

  74. WW,
    Let me know in as much detail as you care about what you want to do, I will try to help as much as your budget (and your wife) allows!

  75. Miyagi,

    Your thinking a drop to the 1100ish level and then a bear market rally above this level, or lower highs from here until a 4 year low?

  76. Miyagi,


    You let me know exactly what I need to do exactly what you did, you mentioned 5 circuits in a seperate panel. I just basically need to know what size wire and breakers, and how you installed your outlet layout from each circuit ( ie. 2-3 outlets in a gang box or whatever)

  77. Why not buy miners...I'm up 1% today on SLW while the market is down 1.6%...

  78. WW,
    I'm thinking a drop to the 1140-1100 area IF IF IF the feds don't twist it all around tomorrow. Excuse the crappy graphics.

  79. MrMiyagi, I think the Fed will be tepid at first, followed by a big stock market low in October. Only then will the printers start humming 100%

  80. Eamonn,
    A lot of us are thinking that, maybe even all of us. Need to think the other side of the fence, the dark side.

  81. Took a small bite of DGP based on Jesse charting just now.

  82. This comment has been removed by the author.

  83. intelliblue2000,

    Gary has stated that he will retire when the gold bull market comes to an end.

  84. Does anyone know what would b considered a swing low for the index? I'd like to eventually add to positions because I didn't go 100

  85. still think at oex silver will be 40-41 gold 1750-1795.

    on silver if it gets away well above 41 da boyz lost control,.

    anyone know anything about AUMN- i d0 nor---technical screen

  86. D,
    I believe we got the swing low today at 77.06, but maybe someone else can verify also.

  87. def swing low on the daily /dx. closed higher than thursday's open.

    but the buy volume was pretty crummy today.

  88. The gold action is rather choppy and inconsistent, which could be interpreted in SO MANY ways here. Most likely your view represents your current positions. A few people here seemed married to one specific outcome, which in this setup could be dangerous. Especially as over-confidence often is associated with over leverage.

    We've seen a massive run up and are smack in the middle of the daily and weekly cycles. So even though my personal bias is for a powerful daily cycle still to come, (launch over $2,000) I'm still very prepared to see a cycle failure and move to the $1,600's unfold. Not much would surprise here and both would fit the models.
    I'm fairly certain much of this IT cycle eventual track will be revealed with the upcoming FOMC announcement.

  89. It's been a wild ride on DX today...

  90. Commodities ($CCI), gold and silver all hitting oversold on the stochastics.

    I just don't see a crash from these levels without a bounce first, which makes this Wednesday's FOMC meeting all the more interesting.

    If the Fed does not expand its balance sheet, which it seems is the conventional wisdom now, I think we may get a bounce in commodities and PMs to relieve the oversold conditions and then a massive crash.

    Crazy stuff.

  91. Gary, When is Silver going back into the $20's as you've predicted in the past? - Do you have a timeline for that?

  92. Gold's 50dma ($1732) and silver's 20 week ma ($38.34) seem like decent downside targets within the current oversold conditions.

  93. Silver is only going back to the
    20s if gold enters a D-wave decline, which will not happen.

  94. At the bottom of the next D-wave, which may or may not have already started.

  95. 60% miners
    20% gld
    5% slv

    I will be holding for a break and hold below $1680, or on an approach to $2000 I will probably do some trimming and shifting. Note though, I have been holding a gold position since July and afford to take considerable risk.

  96. fun fact: average buyer of /gc from the first crash low (avoiding that first plunge altogether) on 8/25 is now down ~2.4%

    GLD, -2%
    DGP, -4.1%

    same timeframe but market hours only:

    UUP, .8%
    SLV, -3.3%
    GDX, -.5%
    SPY, 1.2%
    QQQ, 4.3%
    AAPL, 6.7%

    ala calculating the average purchase price over the given period by the sum of (volume*close) of each bar divided by the aggregate volume.

    sound like a C wave? i don't know. however i have it on high authority that a D-wave "will not happen" by one of the more respected analysts on this blog, so there's that.

  97. Jesse's symmetric triangle is hanging by a thread.


    Only other good news is the positive divergence is continuing.

  98. Silver will not go to 21 and Gold will not go to 1300 unless Obama quits and the Europeans magically discover $1T hidden by Hitler in a vault. But none of these events will happen. If gold hits anywhere below 1700 it will be bought with a vengeance. Silver below 30 just won't happen. And I am not a gold bull by any stretch of the imagination. I just go where there is profit to be made...

  99. Gary and others

    Here is my thinking and tell me if I'm wrong.

    I should stop contributing (in excess of company matching) to my 401k because the tax rates when I retire (20 years) will be higher.

  100. SF Giants Fan, If you can contribute to a Roth plan, it would help you as you would be taxed now, not later.

  101. Here is my thinking and tell me if I'm wrong.

    I should stop contributing (in excess of company matching) to my 401k because the tax rates when I retire (20 years) will be higher.

    September 19, 2011 4:37 PM

    exactly what i am facing. if counting towards retirement--use 50%

    after i talk to accountant---likely take large withdrawl this year and just pay the piper now. at least think i know now---have no idea in the future.


  102. SF, if you don't exceed the taxable income limits, use a ROTH IRA. You can invest in the PM bull with impunity and no further taxation. I switched my wife over a few years ago and it's quite a chunk now, tax free on withdrawal.

  103. Thanks all

    I Did forget to mention that income limits and SMT profits (thanks Gary) prevent me from contributing to a Roth. I have contributed to a Roth in the past so I do have a chunk already.

    So I guess I'm back to square one.

    I'm thinking this will be the last year I will max out my 401k and scale down in 2012. I will tell you this, I dont see washington lowering tax rates any time soon.

  104. There isn't a magic number that brings in buyers. The D-wave when it happens will continue until it moves into the timing band for a bottom. Plus a stretch of this magnitude should trigger a profit taking event back to or below the 200 DMA.

  105. WW,
    I will write down in detail what I went with and why for the electrical setup, just a wee bit busy tonight, I will do it tomorrow.
    Just let me know how many components, if your gear is separates, turntable, whatever you have and I'll configure something from basic to Miyagi-crazy.

  106. Miyagi,

    Yeah don't worry about it right now, I will email you later in the week and when you get a chance you let me know how to go miyagi wild. I still have a couple weeks before I start so no rush.

  107. Ron Paul is useless if he can't help electrify our cars.

    A Tesla Model S costs as much as to own as a Ford Taurus.

    An eyeopener:

    BMW 328 vs Tesla Model S

    Let's do the numbers, shall we? According to Edmunds.com, for a 10 year period, the total cost of maintence/repair is actually at least $40,000.

    It costs about $4 to recharge and run the Tesla for 300 miles ($2 for 150 miles). A full tank of gasoline runs about 250-300 miles. So the energy cost comparison is $4 for Tesla and $50 for gasoline car. I generally fill my current gasoline car about 6 times a month. That's $300 per month, $3600 per year, $36000 for 10 years. That's $72,000 for 20 years.

    -BMW 328: $34,000

    -gas for 10 years: $36,000 (for 20 years: $72,000)

    - maintenance/repair: $40,000 (10 years), $80,000 (20 years)


    Total = $110,000 for 10 years, $186,000 for 20 years ownership

    Tesla Model S:

    - cost: $50,000 ($57,000 minus $7,000 rebate) --- this model runs 160 miles per charge

    - electricity for 10 years: no more than $3,000. 20 yrs would cost $6,000

    - repair/maintenance: $1000* per year (I feel sorry for the BMW so let's put a number here, though reality is less than this), $12,000 (10 years), $24,000 (20 years)

    - quick battery charger for home: $2,000 . $4,000 if replacement after 10 years

    - extra battery: $12,000 is bought up front. Note that the latest Panasonic batteries can last 150,000 miles. We add this battery for after the 10th year or 100k-150k miles.

    Total for Tesla Model S: $67,000 (10 years), $96,000 (for 20 years ownership)

  108. You suckers think that the solution is the gold standard, but it isn't. The solution is the electrification of our cars.

    The solution is not Ron Paul. The solution is the massive adoption of green energy, starting with the electrification of vehicles. http://www.youtube.com/watch?v=XrtXXrRa5OI

    It really is. Green energy displacing oil will pay ALL of America's debts and bring unheard of prosperity to every single American.

    Tesla is not your father's electric car: http://www.youtube.com/watch?v=w5mhwd1B6h0&feature=related

  109. Beanie,

    We're all adults here, you don't have to put spin on thing and be arrogant to discus a point.

    I agree alternative energy is huge for our future. I don't know enough to debate from either side but I do agree our government needs to spend money on the right things and as Gary says we need a new industry to break through.

    I just don't have confidence that the USA is ahead o the world that drastically on the science front due to the bad decisions and spending here over some time.

  110. RJ,

    Ron Paul will probably make the worst president if he doesn't support green energy in a big way. It looks like the first thing he'll probably do as President would be to peg the dollar to gold and cut most spending, with green energy likely being the first on the chopping block. Foolhardy approach, if you ask me.

    Any president who don't make the electrification of vehicles a top priority, especially when the technology is already here today, will be totally ineffective and useless. In that case, even Oprah will do a much better job.

  111. Beanie, be careful with totalities. From what I understand, electric vehicles are already on the market. Consumers drive market decisions. The government should not dictate what anyone should drive. Our current president has tried his hand at supporting 'green' technology and hasn't been too successful. With 600 million cars in the world I'm a bit concerned where all of the resources for batteries are going to come from, and supply us into the future. Solar, wind, hydrogen fuel cell will have their time, as the market dictates.

  112. aljiowa,

    Not to worry. Lithium is finite but is recyclable. Oil is finite but not recyclable.

    We have enough lithium for everybody in the world. However, it is not expected many in 3rd world countries will ever get a car, leaving leftover lithium.

    Oil has too much financial costs, associated with health, environment, wars, carbon emissions.

  113. I have never seen anyone project the cost of a car for 10 let alone 20 years. We both know those estimates are just that. Estimates. Way to many variables to project that far out.

    The power grid is years away from handling the load of EV's. Just Google it.

  114. He's back.

    Let the market determine what is right not G handouts. Solar likely not for long time. Unless you ask pie in face BO. Solerama---if that is correct spelling---was an absolute crooked mess.

    Ron Paul polling 13%---for you socialist the bean.

    and there are a lot of boots on the ground. these yougins never get polled. Conservatives have only cell phones so i think right number might be 15 to 18 %. i will stick with rp instead of mostly crooks we have now. not all.
    get rid of crooked ones.

    beanball no use answering as i will not see anyway. goodnight. keep forgetting your handle but must be close.

    give rp a few of your dollars.

  115. Beanie, regardless of lithium recycling which is another topic on it's own, the US Government does not just snap it's fingers and make things happen. EV's were born from the MARKET. EV's have many challenges which will be measured over time, and the MARKET will react and dictate accordingly.

  116. Beanie, you fill your car 6 times per month? Assuming 500km on a tank that comes out to 36,000km (over 22,000 mi) per year. Sounds a bit high.

    My Mazda gets 31mpg (highway). He hasn't gotten any fuel in him for nearly three weeks now!

  117. Beanie,
    How long does it take to fully recharge this damn Tesla? Can it be plugged in anywhere like a Taco Bell while I get some 79 cent tacos?
    If the wife and I are on a road trip, do we have to stop every three hours and charge the frikkin' battery up for five hours?

    Not practical at this time....

  118. In comparison, my 1996 Geo Metro had a 10 gallon tank, 55MPG average, let's say 48MPG in the Rockies.
    That is 7-8 hours driving time.
    This car used to sell brand new for 11000$ loaded. I got mine for 400$. Unfortunately it met its end this year, actually I could have fixed the transmission but we don't need two cars.

    What we need are lightweight cars like those, not the pigs on the market today. Ford is headed in the right direction with the Fiesta and Focus.

  119. There are lightweight cars Mr. M..just that most folks don't want them. A car like your talking about wouldn't work for our family. If you live and spend most of your time in city/suburbs and don't travel far by car and don't have kids..yeah the small lightweight cars are fine..unless you run into my Yukon XL. haha.

    Well folks there ya have it, beannie begging for a God, King, Emperor, Sultan, Caliphate, Fuher, Czar to save him. just like millions of other Americans,begging for a "President" to save them. This is the anti-thesis of what an American is of course. However, its been turned on its head and being "American" today means surrendering all your liberties to the "President". All done by design and folks like Beannie are the result.

    For those in IRA/roth 401k...what if in 20 years our monetary system is significantly different than it is today?

    My two cents for what it is worth. 401ks and ira's and other retirement plans are going to be the Gold of the 1930's. The government..er president, god, king, emperor is going to find a way to get its hands on 40% Minimum of that wealth. And Beannie will love it.

  120. Monday morning at the open I adjusted my silver hedge from:

    AGQ 200
    ZSL 600


    AGQ 200
    ZSL 1500

    The goal is to take advantage of any breakdown in silver (which is looking very possible if not probable) while keeping a healthy long position just in case silver unexpectedly explodes to the upside. It may not be a perfect plan, but I'm comfortable with it.

    Good luck all.

  121. Yup, this could be considered a six sigma event:


    We all know what follows the trade wars.

  122. Gold bears should be feeling pretty nervous here.

    Gotta go to class now.

  123. Poly, since you mostly play intermediate cycles with options (hold time in weeks), I was wondering how you handle large vega values during high volatility times. It appears to me that option position can be a loser if one gets the direction right but volatility drop would result in option price drop. Thus cancelling any effect of price change of underlying. Thanks

  124. Joseph Lemma Said:

    "Thank you for your advice Gary.
    I did over 300 trades last week and it exhausted me. I'm a young guy. I'm very tempted to go cold turkey here with GLD and wait for the big top."

    Based upon my calculations, that is approximately 60 trades a day/10 trades and hour. No offense Joseph, but for someone who has so much conviction on the blog, you do not demonstrate this in your trading. Since some people on this blog help influence my short term decisions, I too would appreciate some information on your background and trading style.

    I used to over-trade when I was younger too and all I did was blow out my account three times.

  125. joseph, have you checked out zerohedge.com?

    seems up your alley.

  126. also it is a bummer stocks couldn't hold their weakness into the open for me to scarf them up.

    i'll wait. looking for es/ 1177 now. target still 1245.

  127. best interals on pm stocks i ss---nem---ric---aumn

    have no irea whether this rallyin pm stks sustanable

  128. Bought more GDX and SLW...

  129. Joseph - did you invest during the dot bomb from 1999 to 2000? Or the real estate bomb from 2007 to 2008?

  130. Matt,

    That was a one-off week. Since then I've only done 5 trades and none this week. 100% long gold for a double in a few months.

  131. Intelliblue,

    I was 10 yo at the height of the tech boom and didn't care for any of this. In 2006 I was up almost 200% from August to December by trading nikkei 225 valls and puts and gave most of it back in the following months.
    In August 2007 I felt I had lost my mojo and I got back to trading gold a year ago. I want to ride this bull all the way to the big parabolic top.

  132. You guys can criticize all you want, but that's what the chart is saying, not what I want to happen.

    If the chart is talking, you've got to listen.

  133. Hack - you added GDX to your original positions? Or have you already exited and are re-entering? Just curious. I still have a small position and will take some profits. Makes me nervous holding something without Gary's endorsement.

  134. Joseph - thanks for sharing some of your background with us. By my calculation, you are about 21-22 right?

  135. Somebody wants the miners, including me. If you like money, hang onto what you have. Selling here is a mistake, IMO.

  136. Shalom Bernanke - thanks for your input. I thought you were trying to buy GDX last week? Perhaps it didn't drop low enough? I can't remember if you have already purchased or was just waiting.

    I think you believe that miners still have a little bit higher to go? Thanks!

  137. intelli - I am adding. EXK is at all time highs which means that risk is back on for the miners, this fact cannot be ignored. Plus I don't see much selling. If anyone agrees or disagrees please comment...

  138. why can not Greek government sell their land and other assets to avoid default?

  139. Miners have a lot more to go, although it won't likely be in a straight line. I did add an incremental amount when $HUI went below 590, but would've liked to add several % to my total overall risk.

    Didn't get the chance, probably b/c the rats at the Fed have everybody on hold.

    That said, I won't be surprised if miners pull back into tomorrow's announcement, but if you have good marks it's time to push, IMO.

    Good luck. Again, I'm outta here for the day. Just wanted to see how they traded from the open, and it's probable things cool off the rest of the day into tomorrow, but I'm not selling a strong hand. :)

  140. the dollar certainly isn't behaving like it's breaking out here. persistently weak buy volume since sunday. moving stops up to the globex lows at 77.3.

    gold obviously smells blood right now and stocks have been ignoring the whole rally- they don't look like they're going to give me my fantasy entry either.

    i wish i knew what was going to happen.. alas, confined to the mere mortal strategy of statistics.

  141. oa920000,
    and what would they do next time they owe money? They have a constant deficit (which would of course grow if they get rid of revenue-generating assets) and this is what needs to be fixed, not selling itself to pay current interest.

  142. sorry about long post but thse trends seem to last.

    This divergence between the share prices of miners and the gold price has opened up what is rapidly becoming one of the hottest trades among hedge funds and other asset managers.
    Increasing numbers are betting that the underperformance of the gold mining sector is unsustainable, making equities ripe for a rapid rally.
    "It's something that everybody is thinking about at the moment," Evy Hambro, manager of BlackRock's Gold & General fund, one of the largest gold funds, tells FT.com in a video interview.
    "A lot of our clients are switching out of the gold ETF [exchange traded fund] into gold equities and gold equity funds to take advantage of the opportunity."
    The disconnect between equities and bullion is a central point of debate at the gold industry's two largest annual gatherings, both taking place this week--the London Bullion Market Association conference in Montreal, and the Denver Gold Forum.
    Mr. Hambro's views have been echoed by other large investors, analysts, and mining executives.
    One argument why gold equities should rebound is historical.
    Gold mining stocks have enjoyed a strong correlation with the gold price in the past.
    The current disparity, by this reasoning, is the result of an indiscriminate sell-off across equity markets, and should soon reverse.
    "At some point it has to turn," says Nick Holland, chief executive of Gold Fields, the fourth-largest gold miner.
    "We're just at a strange point in the cycle."
    "We're confident the gap will close," adds Mr. Hambro: "It has always closed in the past.
    This is an abnormally long one and an abnormally large one."
    --Jack Farchy, "Investors Bet Miners Will Follow Gold's Gains", www.FT.com, September 19, 2011.

  143. When will people understand that most gold miners (especially juniors) make barely any money, even at these levels. Gold mining is one of the most capital-intensive businesses on earth. Do you guys really think that those huge tarmills and potential downtime are covered by insurance?

    Take a look at Kinross. Their Tasiast project will most probably turn out to be a fiasco and send the stock price into a tailspin.

    Even Hecla silver, which today announced its first dividend is making barely any money. Gimme a break.

  144. Tajir,

    That's an excellent question.

    The beauty of buying the IT cycle low is that you are buying the delta AND the expected increase in volatility as the cycle picks up steam. It's the reason why I look for "at or just out of the money" (instead of DITM) at the IT cycle low, as I'm interested in the sharp premium increase as speculation picks up.

    The key (and real money maker) is knowing when the volatility has likely peaked within an IT cycle (often peaks well before price) and begin to transition (profit) out of these and into instruments that are primarily intrinsic valued, whether that is straight shares, leveraged ETF's or front DITM calls. This allows you to profit from the remainder of the cycle.
    My experience has shown that the first half of the IT cycle is where the least risk and best opportunity lies. It's the low hanging fruit.

  145. I am still of the belief that we are in a consolidation phase...Gold is acting correctly and the Miners are acting extremely bullish. They are under accumulation ( remember that the big funds cant dive in all at once, they have too much $$...so they have to accumulate on the dips)Remember that channel? Buy the dips.

    I am still looking at this Gold movement ( and GLD) as gorgeous.

    Retest of previous sell off was 1/4 the volume of the last sell off down here. last wks chart, but yesterday was 20 million.


    This is the C.O.T. AS OF LAST TUESDAY when Gold was over $1800-
    those "in the know big boys" are cutting back shorts on gold to levels that equal where they have been prior to GOLD running up. ( and I would imagine they cut their shorts more since last Tuesday)


    and yesterday Miners awere being pushed down and accumulated

    GOLD was down $50
    SILVER down over a Buck
    GDX down Less Than 1%

  146. Help me here!!

    According to law, does Greek government have to include their land into the asset pool that would be used to pay off the debt?

  147. Poly & Alex: great posts. Thank you

  148. Joeseph

    I know you think you have great advice about miners, but we invest to make money. READ A CHART bro

    Ric is almost double from its june lows. as is EXK, etc

    I invest to make money, and the miners have been paying off big time

  149. Its this sideways grinding,consolidation phase that makes people nervous, shaky, and abandon positions (right before a breakout).

    What I am trying to figure out is...Do we have our normal rally into OCT-
    and then semi-crash during parts of OCT-
    only to rocket into yr end?
    That does happen often...we have a true 'shake out' October.

  150. gone flat here. out of gold puts, dollar calls. too much fog. i definitely don't like how the dollar is acting.

    lord knows what the great bearded one will say tomorrow.

    joey, would suggest you sign up for a course in basic civility and respect as well. that seems to always be a huge issue with young MBA undergrads and you don't appear to be an exception.

    good day and luck to everyone else.

  151. "St. Deluise said...

    lord knows what the great bearded one will say tomorrow."

    But Deluise, I don't have a beard...

  152. I know that Gary dont expect QE3 but I think he will be wrong about that..I also know that there are dissenters in the board..I think its 2 or 3 members in the board that dont want any more QE.

    There will be a operation twist but I think Bernanke will surprice us all with more! Be ready!

    "If he doesn't, then expect a big selloff.

    In stocks, gold, silver..Everything..And the dollar will rally hard!!

    Im still long the stockmarket and gold..Actually sold my dollar long position today..

    Bernanke is aggressive and the stockmarket is important for him..

    "This is someone who clearly sees the stock market as a transmission mechanism from Fed policy to the rest of the economy" / Rosenberg

  153. ST Deluise

    "lord knows what the great bearded one will say tomorrow"


    Also sold my dollar long position today..:-)

  154. Dallas Fed Pres. Richard Fisher made it very clear in his speech that the Fed would not be doing any more quantitative easing in the near future.

    Bernanke has had two chances to initiate QE3 with the market and economic outlook at much direr levels and he refused to pull the trigger. Instead he kicked the ball over to Congress to do something fiscally.

    Now with the market higher and economic prospects at least the same, it seems very improbable that the Fed would all of a sudden reverse position.

    Tomorrow will be the 30th day of the stock markets daily cycle. Now that we are in a bear market stocks should begin the trip down into that cycle low at any time and that will almost certainly drive a dollar rally.

    Gold is also still early in its daily cycle and should have one more dip lower. How markets react as they move into these cycle lows should give us a clue of what to expect over the next month or two.

  155. Alex

    Its a bumpy ride in gold but Im still long and holding strong here..:-)

  156. Alex, Hack, SB - how long do you guys plan on holding the GDX or miner stocks? Few weeks? Few months? I don't know when to exit.

  157. Gary

    I hear you and i sold 30% of my long position last week in spx and also my gold position is small so i can take a hit here..


  158. Interesting this year isn't it Alex? Usually September is a positive month for Gold. Not so this year..so far. And July and August also traditionally down, were up..so October will be ???

    Alex, As for the miner trades..well it just sucks to make money. haha. I doubt anyone on this blog is following Joseph's advice.

  159. This all feels like a set up for the Greek default which is 99% assured now and could officially happen within 1 month. The event is not priced into US markets yet and could trigger a panic. S&P 1000 or lower would not be a surprise. The smack down would probably injure PMs as well (even if only temporarily).

    ALL eyes are on Greece, as it represents just the 1st of a series of potential defaults.

    Of course this would be news following the markets again. The markets are saying something ugly is coming. At least IMO. I could be wrong.

  160. Natanarchist,

    I myself used to trade in and out of GDX. I see nothing wrong with that.

    It's just that from a fundamental point of view, miners aren't undervalued.

    Name one South-African centred miner that's making non-pro-forma profits. I can't and neither can you.

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  162. Intelliblue2000

    Thats a tough question for me, because I trade in and out also. I have been using various methods to do that, one being that channel that I drew for GDX and posted - I sold 1/2 my positions here


    and rebought here


    But I take things one step at a time. Mostly I watch volumes...big volume on the way up = Accumulating/buyers. And lighter at the bottoms is what I want to see, It means to me that there are less sellers and more accumulating on the dips.

    and as I posted ...GLD and GOLD I look for this on sell offs...


    see that Pattern May to July? Heavy sell may, retest through July then take off UP? We could be doing that here too...retest in Oct , take off to $2150 to $2300 I.N.H.O.

    But that isnt etched in stone at all :)

  163. Trendfriend,

    that's interesting but only right from a phylosophical point of view. Gold in the ground, contrary to gold in you hands, has counterparty risk. And do you have any idea how much capital it takes to actually mine the stuff?

  164. Blogger Natanarchist said...

    Interesting this year isn't it Alex? Usually September is a positive month for Gold. Not so this year..so far. And July and August also traditionally down, were up..so October will be ???

    Good point- we were a little early out of the gate this yr with Gold lows in July. So I will play it as it comes along, but Oct still keeps me cautious for safety sake :)

    ( and Sept isnt over yet, we could make new highs really fast I imagine-if the Fed tips his hand a certain way)

    And like Garys last post said...
    "...Gold is also still early in its daily cycle and should have one more dip lower. How markets react as they move into these cycle lows should give us a clue of what to expect over the next month or two."

    September 20, 2011 8:34 AM

  165. This comment has been removed by the author.

  166. Even a fat, ignorant Eurocrat knows Greece will default.
    This is just a horrible "deer in headlights" contagion strategy IMO.
    If they keep Greece out front, they get to shield the rest for longer.
    The only problem they keep facing is, how the hell do they solve the Club Med sovereign issues, as Greece is already foregone .....Gulp.

    There may be dissenters on the FED board, but the stresses building in the global system are real. I do not for a second under estimate Bernanke's ability to use the nuclear option tomorrow.

  167. Trendfriend,

    that's true but unrealistic. Most gold is mined in banana republics (that includes the US) and the locals want their royalties. If it isn't mined, the licenses are most probably revoked and sold to someone else.

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  169. coming into yesterday strongest interals on motley crew were--used very high threshold.

    aumn---posted yesterday if any one knew---glad they did not.

    nem---New all time highs rising dividends


  170. Are you guys taking some GDX off table, or gonna ride it more?

  171. Trendfriend,

    nationalisation = loss of equity

  172. This comment has been removed by the author.

  173. This comment has been removed by the author.

  174. Joseph..I do not invest in individual miners outside of Canada..so I don't care what the SA mines are doing. SA is no longer the largest producer anyway..China is no.1. And I don't invest in Chinese companies either.

  175. Anybody explains to me why $gold =255 @ 2001 ???

    Has the world changed?

  176. Gary-
    What are your thoughts if this SPX move into its daily cycle low fails to break the August lows of 1080? Shouldn't all left translated cycles in a bear market break the previous daily cycle low?


  177. There are plenty of miners in US, UK, Australia and Canada making huge positive free cash flow!

    But that makes little difference. The historical numbers are irrelevant. Unless you forecasting forward properly, at an average 2012 onward gold price, you are completely missing the point. They will be priced by institutions on the basis of forward earnings via multiples and discounted cash flows. Repeat: on a forward-looking basis using 2012 onward forecasts. The repricing in the sector is occurring gradually. It wasn't too long ago that 1000-1200 was used many forecasts, now they appear to be starting to factor in 1500+.

    The other key dynamics which is hard to forecast in the sector are pending takeovers and development of new previously uneconomic projects by anyone with access to bank, investment banker or fund financing bigger players. It's a tight market for bankers who are sniffing the miners offering debt and equity money etc. This is a virtuous cycle once it gets going.

  178. "oa92000 said...
    what's up with MCP??"

    Haven't you heard?

    It's severely overvalued. This is a10 buck stock at best.

  179. Free cash flow?

    Pets.com and the hundred of other worthless dot com's were priced at thousands of times sales at the peak. Many made their fortunes there, not chump change, fortunes!

    It doesn't take Einstein or Sherlock to understand that in a secular bull market, that will likely eventually end in a massive bubble, all miners and especially micro and juniors will reach valuations that textbooks and MBA courses will not allow you to see or understand.

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  181. Demark update from Kevin Depew at Minyanville:
    TLT - DAILY has active TD Combo 13 sell signal in place and are through Bar 11 of 13 of a Sequential sell signal.
    WEEKLY - We have a 9 sell setup in place this week, so expect 1-4 weeks of reaction into October.
    MONTHLY - TD Sequential 13 recorded in August, but still waiting bearish price flip (close below the lows four bars (months) earlier). So, TLT in DeMark land is indicating lower prices -> higher rates

    Banks: MS - daily sequential BUY today - good for 12 days - needs bullish price flip. WEEKLY - active TD Combo 13 BUY is active, awaiting a bullish price flip, while TD Sequential is on Bar 11 of 13 BUY signal.
    GS and JPM - WEEKLY TD Combo 13 and 9 BUY setups this week - 9's good for 4 weeks, 13's good for 12 weeks. DAILY on Bar 12 of a potential TD Sequential 13 BUY for both
    BAC - WEEKLY TD Sequential 13 BUY already in place, awaiting bullish price flip. DAILY TD Sequential 13 BUY today
    So, it looks like the financials/banks are lining up for a pretty big rally after being dead for most of the year.

    General market: German DAX had recorded both a TD Combo 13 and TD Sequential 13 DAILY BUYs last week, confirmed by a bullish price flip. But as noted, it did qualify a WEEKLY down level, which is a change in trend, so probabilities lie in more weakness after this bounce.
    S&P: Still hasn't proceeded through its counts yet - currently on bar 8 of a pending TD Sequential BUY. However, and Depew doesn't go into detail, there has been improvement technically in the WEEKLY count, so the probabilities of a new LOW in S&P is not a certainty. Another point: we are emerging from the 4 month MONTHLY SELL window from June-September - I think DeMark theory did a pretty good job identifying that one don't you think.
    One final word from Depew: "For longer term investors, this is an ideal market with individual stock opportunities galore while bearish near-term bets are struggling to pay off, similar to the low in March 2009. Even though probabilities still slightly favor a new low in the indexes before the end of the month this is no longer a time to be bearish, but a time to be preparing for what follows the possible new low"

  182. POLY

    True Dat! I missed that bubble..not missing this one :)

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  184. oa92000, MCP was downgraded by JP Morgan.

    Joseph Lemma, please give it a rest. Your incessant posting adds little and is really getting tedious.


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