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Thursday, October 13, 2011

THE BIG PICTURE

More often than not we as investors get caught up in the day-to-day action and never take the time to step back and look at the big picture. Today I'm just going to post some long term charts with appropriate annotations.










THE LIGHT AT THE END OF THE TUNNEL.

226 comments:

  1. I'm going to make a small prediction: Gold will be below $1000 in less than a year from now.

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  2. Not a chance. I doubt gold will ever fall back below $1000 again.

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  3. So are we in a D-wave, an ordinary IT correction, or what?

    In either of these scenarios we would expect a major bottom within two weeks.

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  4. I'm referring to gold, obviously.

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  5. My guess is that gold makes a lower low before the end of October (possibly sub-$1500 to scare everyone), but that the miners bounce off their recent lows.

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  6. I think traders need to accept reality. The mining stocks have lost their momentum. The bellweather SLW has clearly put in a bull market top.

    Miners are not going to escape this bear market anymore than anything else.

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  7. @Gary

    If the stock market is heading lower than the 2009 low, then why not gold?

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  8. By bull market top do you mean an intermediate top or a final top?

    SLW and silver clearly need to consolidate their massive gains. I'm not sure the same applies to gold miners.

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  9. Just a cyclical bull market top.

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  10. M,
    Because I think governments around the world will continue to print to try and avoid a 30's style deflationary depression. Instead they will get a hyper-inflationary depression.

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  11. SLW is a strange bellwether. It's a silver royalty company, and silver is a small market relative to gold.

    GDX or even GDXJ would be more apt bellwethers, IMO, and both have been consolidating for almost a year.

    I'm not suggesting that a breakout is imminent, but it pays to keep in mind that gold sentiment and gold:XAU recently hit levels only seen in 2008. We may have a trip down to $25 on GDXJ, but I don't think a trip to $15 is in the cards.

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  12. As for biotech -- the sector tends to do well in healthy stock bull markets. I think it will have its day when the next secular bull begins, but in the meantime it will be treated like the speculative sector it is. Biotech's lifeblood is venture capital, and I would think that venture capital is about to dry up in a big way.

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  13. 9pm EST on a Thursday is a very unusual time for weakness in gold and silver...

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  14. SLW was the leading PM stock during this bull market. It rose from a little over $2 to over $40. Very similar to PCX during the energy bull.

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  15. Regarding gold, like silver, I see a perfect bear flag in progress. Using the measuring criteria, the initial drop was about 390 points. If we drop another 390ish from the bear flag highof about 1700, that puts us in the low 1300s. I agree with you on the miners, not the place to be right now. Regarding silver, like the miners, not the place ot be now, However, in the very long picture, silver is forming the handle part of a huge cup and handle starting in 1980, and once done it should go into the 100s, maybe 2 or 300 even. Silver at 20 would be a great buy, I think, though I will stick to "boring" old gold. Regarding stocks, if the orthodox low is 2012(not convinced) then it would spend years consolidating with maybe a new bull beginning either 2016 or 2020 even.

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  16. @Gary

    That will come later. But if the stock market falls to below the '09 low, so will gold.

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  17. The MACD on PMs and miners is so frikkin low it begs to be bought.

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  18. It's all about the dollar at this point. As soon as the dollar rallies out of it's cycle low everything is going to get hit again.

    Metals have shown no ability to resist that lately.

    So unless the dollar's three year cycle has already topped we should still have about a year of lower prices for stocks and at best a long consolidation for gold.

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  19. You think BBH will escape this up coming carnage?

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  20. No everything will take a hit, Biotech just like everything else. But once this breaks out in 2014 or 16 or whenever it will generate a paradigm shift in the world just like the personal computer and internet did in the 80's and 90's.

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  21. Gold vs miners

    http://www.safehaven.com/article/22904/gold-vs-miners-the-wrong-question-part-i

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  22. Gary

    Great charts, thank you for the long term perspective.

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  23. What happened to your thesis that gold would rally in the face of a bear market like 2001-2003?

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  24. The dollar was declining during the 2002 bear market.

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  25. Gary,

    What do you think about Apple and Google? I was so saddened by Steve Job's passing, but the stock is really rallying. I know you keep an eye on Apple because it does tend to move the market. Amazon is doing really well also.

    Thank you.

    Elaine

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  26. The big tech names were the last men standing during the 2008 and 2009 bear market also. But they will not escape a recession this time anymore than they were able to last time.

    When people are out of work and struggling to pay rent and buy food they don't buy iPads.

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  27. Apple is finished without Jobs...this was his company not the stockholders. Although, they will thrive for a bit, since they are so ahead of the curve...but once tech changes again, they will fall since they will no longer have the direction to go somewhere off the mark. Jobs was a brillant man, the current staff will be business as usual and will go the way of microsoft....no nothing and stay the same with a sub par product!

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  28. Those charts spoke to me, and said what is in store for us.

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  29. I don't know if Apple is finished without Jobs. He left behind a great corporate culture. Eventually it will sink into mediocrity as all corporations do, but that could take ten years. Besides, who is going to displace them? HP?

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  30. Hey Gary, nice post. I'm wondering, previously you said that sentiment and the bullish COT report is what got you long silver. What changed that made those items irrelevant? The technical picture was pretty dismal before is it just worse now?

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  31. It might take ten years, but Apple from the get go was about new ways of doing things and Jobs doing things his own way...balls of steel...heck he even got fired from his own company...my point is that yes it may take ten years, but Apple is because of Jobs..Microsoft was because of Gates...a corporation is nothing without the brain behind it....

    Would I short Apple...of course not, but I wouldn't be putting Apple in a long term buy and hold them view either.

    And maybe I am wrong, but I don't see anybody in Apple able to take risks based upon pure f-u power that Jobs did....Corporations become about the paycheck and doing what is right for that moment...Jobs was never about the paycheck rather about getting to the next level.

    If you have anybody that is not looking at salary and leaves an Ivy league school just to do his own thing, because he is a cocky SOB and he can back it up, and he is smart....name me anybody else that can do that today..

    My point is really based upon the fall of the US...we tax the shit out of inventors and small business, and basically tax risk. We are becoming a social nation that will die out soon enough...well unless government changes. Which may happen in 20 years, assuming generations are 20 years.

    This generation of 20 year olds are a bunch of lazy SOBs that have no desire to work, nor the ability due to the fact that they learned to slack off since birth.

    Exceptions noted, but as a whole a wasted generation of pus. It won't be until the next generation; either a full generation or a partial generation beyond the tards that we have now become.

    At this point government will have no choice but to bow down to the market, but until then the government will rule the poor and give to those that abuse...It's the nature of things...and this will not change...This depression we are in will not change until government gets out of the way, which won't happen until the young people are hungry...If the young people as a whole are suffice to smoke weed and live with their parents until they are 35, nothing will change.

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  32. Great comments and charts by Gary, as always. You can disagree with the man but the odds say you will probably be on the losing end of that trade.

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  33. When Asia's moon crests will goldilocks become the bearwolf?

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  34. http://www.youtube.com/watch?v=4YlTUDnsWMo

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  35. Couple things to watch today. EURUSD has been trying to push thru 1.383 (38.2 Fibo retracement from May 3rd high-Oct3rd low)for the last 3 days. Will it do it today? 2nd Nasdaq 38.2 Fibo from 2000 high to 2002 low is 2633. We are very near. Just something to watch for. GL

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  37. I watched the gold tide all night long. It crested around 5am ET and was rejected at the downtrend line around 1680 which is also the BBand midline (aka 20MA).

    Who knows what will happen. Anything is possible.

    Just say'n...

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  38. If gold can tag 1680 again, we'll have a H&S bottom that could push gold past 1700.

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  39. I admit I rarely looks at the 'minute' charts and their indicators. It seems I can't see the forest for the trees sometimes.

    Silver just went red.

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  40. flaunt,
    It just depends on what happens once the dollar puts in its daily cycle low and starts to rally. There's nothing that says COT report can get even more bullish.

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  41. The dollar is potentially putting in a narrow range day but it didn't make a slightly lower low. That keeps the parameters for forming a swing rather large as we still have to move above Wednesday's intraday high.

    Hopefully at some point today the dollar will move slightly below Wednesday's intraday pivot.

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  42. Another perspective on the big picture of gold silver and $

    http://www.bigtrends.com/technical-analysis/gold-silver-china-the-dollar-technical-analysis-sentiment/

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  43. The BB midline / 20MA is actually 1681.88 so there is still a bit of wiggle room.

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  44. Welp, so much for that. I guess today isn't the big sell off after all. waa!

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  45. Why do you have a crystal ball and know how the day is going to end? The dollar made the marginal new low that I was looking for. If the dollar starts to rally now all asset markets are likely to take a hit.

    The open is all about emotional retail traders the close is where the smart money takes positions.

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  46. One thing for sure is that the well received 30y bond auction of last night is laready 9 bps under the water...

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  47. This comment has been removed by the author.

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  48. This comment has been removed by the author.

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  49. Gary,

    At what point would you abandon your theory that 2012 will be one of the worst years in human history? What exactly are you looking for?

    S&P above the 75 week moving average?
    New lows on the dollar?
    New highs in the market?

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  50. interesting morning. moves up in /es and /gc on very tepid buying (significant divergence in /es particularly)

    but the move lower in the dollar seems real.

    answer probably lies in how fast this gap is faded, or not faded..

    i got a pivot point, the 89 day, and the 1597 day sma on /es at around 1225-30. the 233 day today is at 1267. might initiate a small loooong term short today with a stop at 1267.

    gold i learned at that double top can be a monumentally frustrating short. see nothing bullish here (yet).

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  51. If Ben can trigger a failed three year cycle in the dollar already then we could see the markets go back up. It would however trigger a massive surge in inflation which would just accelerate the downward spiral in the economy.

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  52. Gary,

    if rates start to slowly climb up, that should be good for the dollar, shouldn't it?

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  53. Gary

    this is where you said the Dollar needed to hit in order to make a slightly lower low than Wed....let's see if it closes at this level.

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  54. UUP within pennies of tagging 50MA. Support?

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  55. Just a penetration of that level doesn't guarnatee a swing. I'm just looking for a lower low along with a narrow range day that will make it easier to form the swing.

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  56. No not a bull market. I said we could even see the market move back up to tag the 200 DMA.

    In 2001 the market dipped below the 75 WMA and then fell back below it.

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  57. last two hour bars of /gc strangely ominous considering what the /dx and /es are up to.

    bought a few otm lotto 155-150 gld puts expiring next week for basically nothing.

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  58. UUP's 50MA and lower Bollinger Band are in the same place. That can equal support.

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  59. Keys - not sure where your rant on 20 year old's came from (I'm 26 by the way).

    I've watched my parents struggle their entire lives doing the right thing only to see them get screwed by corporations and government stupidity. Forgive me for not wanting to follow that path.

    If you want to blame someone, blame the old people for not being better role models. Blame the old people for continuing to kick the can down the road because they believe they are entitled to something.

    To be honest, I don't think my generation has what it takes to solve all the issues that plague this country. The odds are stacked against us.

    My generation didn't create the technology bubble, the energy bubble, or the housing bubble. Cut us some slack.

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  60. BMJ,

    well said! I am much older than you, but I feel sorry for my kids...

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  61. The odds are there will be no USA in 50 years. The end of the petrodollar will probably see to that. It may even happen a lot sooner.

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  62. Gary,

    I agree 100%...I never said MA's are the holy grail, I personally only use them as entries and exits in my trading.
    In saying that a move above the 75sma on weekly is bull territory I am only reiterating basically what you said when mentioning that the 75 week moving average had been the dividing line between bull markets and bear markets for decades.

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  63. Big Money J ... I agree with you.
    My 3 kids ... all in their 20's have full-time well paying jobs.
    They will never be able to afford a house without some help from me (in Canada where real estate still has not corrected). Nevertheless 2 of them are no longer living with me ... long before they turn 35 and none of them ever smoked weed.
    For christ sake!! I know far more 50 plus year olds who smoke weed then I do 20 year olds.

    Expecting this generation to "fix" these problems is just so off-the-wall it isn't even funny.
    Keys, maybe the 20 year olds you know are lazy, good-for-nothing, wasted pus ... but there are none where I live!

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  64. could be this a bottoming for dollar ?

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  65. Keys/BMJ,
    I believe we have to blame the current parental generation for not following their Grandparents lead and allowing progressives to take over our schools and institutions changing our countries beliefs from the inside out. Kids only know what they learned growing up, clothes, cars, education all paid by their parents or our tax dollar if you were entitled. Since you will find most schools and institutions are run by progressives it is no wonder change resulted in progressives now leading from the top. We have a President who supports unions, class warfare to push through entitlement programs so he can simply be re-elected. You can't blame the kids for wanting their fair share since they learned from the cradle they are entitled and I am afraid it will take them to their graves and kill off the parents along the way as they self medicate their failures. Best we can do is take back our schools and our rights to teach our Grandchildren that the great progressive social welfare redistribution experiment isn't working in the USA. Kids need to be taught, if you want it, you can achieve it, but you will have to work for it. It is so sad that other countries can see our demise, but most Americans can't see the forest for the trees. They just want the govt to fix things. It starts with you, if you want change, start from within.

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  66. The reality is that the 75sma on a daily has been hard resistance for gold over the last couple weeks. A break below the 10sma I would say will certainly amount to a new low, although not a guarantee like everything else. I guess we will see soon enough.

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  67. think there is a decent possibility we break through 1220. that would really scare the shorts.

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  68. wolf33 said...
    think there is a decent possibility we break through 1220. that would really scare the shorts."

    if spx closes above 1220, then 1250-1260 will come very fast.

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  69. 40 more basis points and we have a failed dollar cycle. I don't believe it will fail so I'm adding to UUP here.

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  70. I think there is too much attention being paid to the USD here lately. It's the one thing central bankers want you to focus on, as they can manipulate the index. They control all the pieces of, all paper that has been over-printed.

    I'm not saying the dollar index has zero impact b/c some investors do react to it's moves, but I highly doubt "big money" and strong hands which seem to be all that's left in PM's will dump b/c the confetti turns higher. if anything, they should continue to buy weakness.

    Don't forget many central banks are buying gold in quantity these days. Now why would they do that?

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  71. Gary,

    Why does gold need to correct further then the breakout level and not silver...or are you just saying that silver is simply not finished correcting yet?

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  72. Central banks selling foreign reserves (dollars) to facilitate the purchase of gold.

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  73. Someone said something negative about Tim K the other day.

    Just wanted to say I have witnessed Tim bow to Gary's reason.

    Tim is why I came here.

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  74. At Ease,
    Excellent!! If you run for Pres, you`ll get my vote. Did you ever think we would be here in the U.S.?

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  75. I rest easy knowing Bernanke is committed to a strong dollar policy. He said so himself on many occasions! lol

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  76. at ease,

    Well said. Standing ovation.

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  77. Aaron,
    At least I should not have to wait long to find out the answer. Good move or bad move I'll know soon.

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  78. If today is going to be a down day for Silver, it will be a black candle (because it opened higher than yesterday's close).

    I don't see any black candles that ended the day significantly lower.

    So for shorts in pain who expire today I think you are out of luck.

    Correct me if I'm wrong.

    I don't see any red candles that opened higher than a red candle the day before. So it can only be a black candle today. You're only hope is that it develops a long tail for a brief moment.

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  79. SB,
    I think the dollar index is rising because deflation is starting to take hold in the world again. There is already a shortage of dollars in Europe.

    Basic economics 101: If supply drops then price/valuation increases.

    If the value of the dollar increases, which it will in a deflation (recession), then it takes fewer dollars to buy an oz. of gold.

    I would be careful of mindlessly following one path without ever taking into account changing fundamentals. This is how people get caught at the top of secular bull markets. You already guaranteed you got caught at an intermediate top with this mentality and this could turn into a severe D-wave. If it does you are now missing your chance to exit with some of your gains intact.

    Now I obviously don't think the gold bull market is finished yet but I do believe that the global economy is rolling over into another recession. Ben is not going to be able to stop that. All he can do is intensive it if he prints more money which ultimately just intensifies the deflation.

    Now if you don't mind riding out another deflationary period then by all means just hold on and keep buying. But you should probably examine your perma bull mentality and question whether or not it will allow you to exit at the top of the bull, whenever that is.

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  80. 86,
    We grew up poor, but you know, we didn't know it. Cause we were taught if you want something, go work for it. We didn't get to do everything, we had to pick and choose, what was important to us. No one can have it all. Do you see anyone who does and is happy. Pursuit of happiness is what it is all about and that is not a given. Happiness is a state of mind, comes from within. Where there is a will, there is a way, and in America, we grew up in, it happened. Not sure our kids have the same opportunities with all the protections and restrictions we have allowed our govt to put upon us now. Let's hope we can get a leader who can make it happen. I see one who has the right idea, but will we be able to get him in position to make it happen. Change requires pain, have enough suffered yet?

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  81. Gary,

    I had no problem selling 70% of my gold near the recent highs. I think the mindlessness to be wary of is the thinking there is a shortage of dollars. Not only is there no shortage, even if there was they'll print more and more until somebody takes away the presses.

    There is now talk of the large role the US will play in bailing out Europe, not to mention our own problems here that demand more printing.

    I'm not saying the USD can't go up as measured by a rigged index, I'm just saying it does not necessarily follow that gold or miners get hammered.

    As far as permabull, if I was a short term mega bull I'd own lots more than I have. Still, pullbacks are buying in these areas.

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  82. Gary,

    If I got caught at an intermediate top, then how come I'm barely down as I type, and have been into positive territory off and on all week?

    You forget I started buying in early June. :)

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  83. Actually there is a shortage of dollars in Europe. I've talked to bankers who work the European market and they confirmed it.

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  84. Gary,

    I have ONLY bought pullbacks except for a small nibble into strength when you bought yours, I also did not get baited into purchase of the breakout over 620 on the HUI.

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  85. I'm not saying you are underwater but you gave back a lot of profit. If this turns into a D-wave you will probably give back all your profit and then some.

    It just comes down to personal preference. If you don't mind riding out corrections then by all means just ignore any and all dips.

    Personally I would prefer to avoid most intermediate degree corrections and especially a D-Wave correction. Instead of riding it out I would rather be in cash and buy close to the bottom.

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  86. Let's see how long that shortage lasts! Fed minutes already have some members crying for QE3, and now we have the whole US starting to Occupy.

    Anybody that doesn't see they'll print into oblivion while talking out the other side of their mouths just isn't paying attention, IMO.

    Not saying they come out next week and announce easing, just saying it's a definite at some point. We also see foreign gov't starting to dump treasuries, the most in history. Fed is buying=more money.

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  87. I agree Bernanke will print at some point, but with the stock market rallying I don't think we are even vaguely close to that point yet.

    Ben will start printing when it's already too late and the ball is already rolling down the hill and can't be stopped.

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  88. Gary,

    Yes, I did give back some big gains, and a D-wave from here will be nothing but drawdown as I'm slightly negative in marks at this moment.

    Anyway, just a different way of playing the bull. But make no mistake, I have no problem selling, and have done that twice this year already (took profits on miners before the silver debacle, then the PHYS late summer).

    It's been a great year, but could've been my best had miners worked the second time around.

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  89. Not to mention most of the protests are against further debasement of the currency. You aren't going to disperse the mob's by intensifying the act they are protesting.

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  90. I agree Ben uses the stock market as a major consideration, but he will be forced to print for other reasons, maybe before stocks puke, IMO.

    We'll see. Interesting discussion anyway.

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  91. Heck, they're printing right now!

    http://www.zerohedge.com/news/foreigners-dump-74-billion-treasurys-6-consecutive-weeks-biggest-sequential-outflow-history

    My point earlier really had more to do with relying too much on the dollar index to guide metals predictions more than anything else.

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  92. Gary,

    You've already marked an ICL in gold, but your comments today are somewhat out of tune with recent commentary. Are you suggesting a failed IT cycle in gold might be soon at hand?

    Thanks.

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  93. Poly --

    What's your take on $ today, are you in?

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  94. And my point was that the dollar index is rising because deflation is loose in the world again. That makes it a very good indicator to watch.

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  95. Poly,
    If gold makes a lower low and in the normal timing band for an intermediate degree bottom then I will re-phase the ICL.

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  96. Forget it. I answered my own question.

    It is impossible for metals to have a red candle today. So it is IMPOSSIBLE for metals to be down hard by day's end.

    If you are holding puts that expire today GET OUT NOW. Roll into next week with whatever you get.

    Correct me if I am wrong, but I doubt I am.

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  97. Gary,
    "If gold makes a lower low and in the normal timing band for an intermediate degree bottom then I will re-phase the ICL. "

    Is that what you mean by a "failed" intermediate cycle? If gold is lower than the previous low during the intermediate cycle, that the previous cycle is "failed" or "violated"?

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  98. A negative close would leave a solid red candle.

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  99. Intel,
    Under those conditions I would re-phase the ICL.

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  100. LOL Marc Faber is proposing the repeal of the Financial Services Modernization Act of 1999.

    It Is A Very Good Move That Banks Become Far More Conservative

    I think it is a very good move that banks become far more conservative because banks, when you think of it, your salary is probably paid into a bank account and you expect that money to be available to you at any time. So the bank has a fiduciary function, and it has a certain social function. And with your deposit, the banks should not go and speculate.

    So my proposal is basically to ring fence the depositors, and the domestic operation that is the traditional bank, and then farm out into separate entity what the bank does with money in terms of hedge fund activity. There are a lot of banks they are just like hedge funds. They take huge positions here and there, and then we have losses - as occurred for UBS in London, that basically should not be your concern as a depositor. - in Bloomberg

    http://marcfaberblog.blogspot.com/2011/10/it-is-very-good-move-that-banks-become.html

    Ya think?

    Good trading,
    Le Fou

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  101. This comment has been removed by the author.

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  102. Sure it can. It's called an outside day.

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  103. Gary, correct me again if I'm wrong but I don't think there has ever been a solid red candle who's open was higher than the previous day's red candle... but who's close was also lower than the close of the previous day's red candle.

    What begins as a black candle following a red candle... cannot turn into a red candle.

    Right / Wrong / Way off..?

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  104. Can you point to an outside day on a 1 year chart of SLV?

    I'm not trying to be difficult. I am just obviously missing something fundamental so that's a little scary.

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  105. Thank you Gary, but the red candle did not come after a previous red candle. I don't see where that has happened.

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  106. It doesn't matter what the day before was, it would still be an outside day. Outside days aren't numerous but they do happen.

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  107. DP,

    At this point the normal cycle timing looks on track and hope to see a DCL on the $ shortly. Yes I maintain a small Dollar long position.

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  108. But outside days after a red candle appear to be so extremely rare, for practical trading purposes they essentially never happen. Can I go that far?

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  109. Not unless you want to lose money.

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  110. On Sept. 20th there is a candle that moved above the prior red candle on the SPX yet still closed as a solid red candle.

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  111. An opportunity to make it happen and watch to ensure it stays as voted in: (Just click the X to avoid signing up) and watch the video:

    http://www.dickmorris.com/blog/999-the-truth-dick-morris-tv-lunch-alert/

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  112. I just can't find a red candle that OPENED higher than the open of the previous day's red candle and yet also CLOSED lower than the previous day's red candle closed.

    So we can't have a bad day today in metals. Only a flat or up day. Monday is now the earliest we can have a wicked down day.

    Our only hope today was an open that was lower than the open of yesterday's red candle or... what I was hoping for... a gap down open.

    Schwew! That made me tired.

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  113. shaping up to be a real snoozer today unless /dx wants to rally a quarter and hold that into the close.

    daily close yesterday was 77.325.

    close below 1678.2 in /gc would put a swing high on the 4 hour chart, usually good for a decent rip lower- maybe an extra special once since this one is forming a right shoulder with a neckline at 1627. who knows. i haven't been keeping track but i think gold has only used up maybe 6-7 lives thus far so it might opt to cash another one in here.

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  114. If the reversal in the dollar intensifies we certainly can have a bad day in the metals. Gold is on the verge of breaking the daily cycle trend line. If it does it could go down hard the rest of the day.

    There are no certainties in this business.

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  115. Danno,

    "it is IMPOSSIBLE for metals to be down hard by day's end."...."Correct me if I am wrong, but I doubt I am."

    When I read your posts on going long AGQ and ZSL simultaneously I just assumed your new and don't have a clue what your doing but recently some of your posts, like the one above, are just so plain silly im questioning whether or not your just a troll goofing around here.

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  116. I would tend to agree with SB. Seems everyone is waiting for the fall of '08 again. Europe may be short dollars but the FED has been readily supplying them, so we don't have a repeat of '08. The FED announced this openly with the swap lines they have with Euro CB's over a month ago. Unlike '08, the FED is in front of this situation.

    Deflation, in the enviourment we are in is simply the market trying to correct the excesses of the last 15 years. It is not going to be allowed to happen and the response by gov'ts and CB's around the world backs this claim.

    I don't know who coined this phrase but I first heard it from Gary. " When everyone is thinking the same thing, no one is thinking" Seems everyone is expecting , '08 again.

    I don't know anymore than the next person for short term moves, 1 to 3 to 6 months from now, certainly anything is possible. But to expect an event like '08 is a low probability in my opinion.

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  117. Gary,

    Thanks for your advice. Obviously I am too dumb to figure it out now, but I will save and read your comments again later.

    Dan,

    Please point to a post where you ever said anything smart or... talk to the hand.

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  118. Doubtful we get another 08 anytime soon but it's also doubtful that the dollar's three year cycle has already topped.

    Most people think the reverse but high inflation (what we just had) begets deflation. Not the other way around.

    High inflation destroys the economy. Which leads to a recession which is deflationary.

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  119. Gary,

    As you have mentioned Ben B aborted the deflation of '08, but only after the fact. Well today, the same deflation is trying to take hold, ( the desire for the economy to deflate is the same as in '08, it never went away) but this time all the CB's are in front of it. Certainly that could throw curve into a normal cycle in the dollar?

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  120. @Natanarchist

    Sometimes a cigar is just a cigar.

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  121. Dannie,

    Unlike some, I try not to post useless nonsense on this board or worst, misleading information. But for what it's worth, I was the only one here screaming that silver peaked on the monday of the week it crashed. Anyone who listened got out a couple days before Gary and sold with most of their profits in tact. Of course you wouldn't know since you just started coming here. Better entering the PM bull market 10 years late than never I suppose.

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  122. Perhaps Metusalah,

    I am not betting on deflation winning out now. At least not anytime soon. When "deflation" does finally win out, it will not lead to a rise in any Fiat, specifically the US dollar, but a collapse of fiat currencies. The paradigms shifting, we are not going back. Which is why we will most likely never see $ 1000.00 gold again.

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  123. Natanarchist - deflation will not cause rise in US dollar ? LOL

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  124. What I'm trying to say is that CB's can't get in front of it. They just tried and the only tool they have (the printing press) is what caused inflation to spike and destroyed the economy. More of the same isn't going to halt the recession it will only intensify it.

    A printing press isn't a magic wand. It can't alter the natural laws of the universe.

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  125. Dan,

    One day you will also be wrong, as I was. We all make big mistakes once in a while. If you're not hedged and you make a big mistake, you'll be screwed.

    But I was hedged. And I'm okay. I'm even well positioned.

    The only question is, "When is your big mistake coming?"

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  126. NUGT will be a 3X fund by Dec. 1st.

    FYI

    http://direxionshares.com/2xto3x

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  127. Gary or anybody - general question. As a working mule, much of our investment is in 401K. We have a chunk in IRA, brokerage accounts..etc. However, assuming that you won't switch jobs, hence sticking with the current 401K, which has limited fund choices, how do you invest along Gary? Just follow in the remaining brokerage and IRA account?

    Current company 401K wont' allow you to "roll out" into an IRA unless you quit.

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  128. I'm not sure what you are asking but I said in May that retirement accounts should now be in a money market fund until the next 4 year cycle low.

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  129. Gary - I didn't join until July. Wish I found SMT earlier.

    I am just saying I can't buy GDX or anything like that in company 401K. But yes, most of our 401K are in cash or bonds. They don't offer any precious metals funds either.

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  130. Gary said "A printing press isn't a magic wand. It can't alter the natural laws of the universe."

    totally agree. that's my point. However the CB's have been and will continue to print until they destroy the fiat currencies we use today.

    And jarek. clearly you're of the opinion that what we are experiencing is a normal recession like the last 100 years and that we will go back to the old days of US dollar hegemony..pay attention now...the US dollar or any other Fiat currency is contrary to the laws of nature and will collapse. And in the deflation of the 30's the US dollar was devalued 40 % in one day.

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  131. Made a typo on my original question..

    If today is going to be a down day for Silver, it will be a black candle (because it opened higher than yesterday's close).

    I meant to say of course...

    If today is going to be a down day for Silver, it will be a black candle (because it opened higher than yesterday's OPEN).

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  132. intelliblue2000,
    I had 401ks, however previous employee, so rolled into IRAs so I understand your question and limitations with 401ks.
    Check with your broker on how you can move funds into money market, until a trade is available to park funds into a mutual fund 30 to 90 days without penalty when you pull funds out. See if a gold or physical metals fund is available to enter into at bottom of D wave.
    I have Fidelity which has FSAGX and TGLDX. Worst case scenario take a fee hit on your withdraw from mutual funds as needed. Explain to your broker what you want to do and they should be able to tell you your options on investing with gold moves. It doesn't hurt to ask if a portion of your funds can be rolled into an IRA for trading purposes. See if this is available. They don't like to tell you all options concerning 401k unless you insist on knowing all you can. It is all what is set up with the employer plan. Rules should be made available to you in your plan summary; ie loans, etc.

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  133. Bought a few Shorts here on the SPY and OIL, the dollar needs to turn sooner or later and if it doesn't.

    I'm going to have much bigger problems then what I lose on this trade.

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  134. GOOG, QQQ and MSFT top three SoS most day.

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  135. Intelliblue, If you have any funds that you rolled over from previous employer rather than an IRA, I would ask if you can move those funds rolled over into an IRA. Doesn't hurt to ask.

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  136. At East - thanks! We have some previous 401K rolled over to an IRA in Fidelity and Schwab. So those are easier to follow Gary's trades. But mostly I just trade in the brokerage account.

    I will call the current company 401K, with Mass Mutual. They seem kind of rigid.

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  137. At Ease - didn't mean to mistype your name as "At East".

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  138. I don't assign too much significance to this observation until we are well above the 200 MA again, but will point out to those that watch these things that the $HUI is busy reclaiming the 200 MA again on the daily charts.

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  139. S&P tagged the 75dma, let's see if it returns or busts through.

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  140. Mr Miyagi, yes sold GOOG yesterday after hours, booked nice profit. Now back to filing nails, waiting...

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  141. Intelliblue2000,
    I find it incredible that corporations set up their plans to restrict employees from investing on their own, or if it's the brokers they deal with, recommend that direction. Either way, any funds rolled over are your funds to have in an IRA or 401k. I understand that an employee can have control of your funds that you contribute and they match while you work with them, however there should be some leeway on funds rolled into that 401k is what I am saying. Even if you have to take a loan from your 401k funds and trade with those and pay back your loan at a low interest rate. There should be options in the 401k summary plan outlined provided by your employer. Next job roll your funds into an IRA, as the only advantage of a 401k plan is the matched contributions from an employer, no tax advantage on funds rolled over from previous jobs.

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  142. My bad...

    I just found two examples of the red candle where the 1st red candle is within the real body of the 2nd red candle.

    It just happened twice on UUP
    Oct 6th
    Oct 11th

    So it is possible after all. I just could not find an example on an SLV chart, at lest not in the last year.

    So we could have a red candle today.

    I apologize if I screwed anyone up.

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  143. At Ease - totally agreed, the broker rigidly dictates what we can and can't do. I never roll over any previous 401k to the current employer's 401K, always into some Rollover IRA. Most 401K have limited fund choices. I may just invest in some index fund in the current 401K when Gary calls the bottom of the stock market.

    It sucks because if I like this job and don't leave, the current 401K will grow with annual contribution, but I can't actively manage it. I have to choose from their few funds.

    Borrowing from current 401K with get an early withdrawal penalty of 10%, so we have to return at least 10% before interest just to break even.

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  144. SB,
    I'm not so concerned about what the HUI does today. I want to see what happens when gold moves down into the next daily cycle low.

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  145. From John williams today on inflation, the dollar ,gold, amd deflation


    Hyperinflation Watch—Outlook Unchanged. The U.S. economy continues to falter. With the added pressures of systemic-solvency stresses, the domestic and global financial markets and financial system remain extremely unstable.

    Repeated from the prior Commentaries, there are no happy solutions available here to remedy the economic and systemic-solvency crises, only tools—devil’s choices—for the Fed and the U.S. government to buy a little extra time. From the Fed’s standpoint, keeping the banking system afloat remains its primary concern, although needs for economic growth and contained inflation will be given as the rationale behind any overt change in policy. The ultimate cost in propping the system, however, remains inflation. The economic and systemic-solvency crises and the broad inflation and economic issues detailed in the Hyperinflation Special Report (2011) and in recent Commentaries, continue to unfold with outlooks that remain unchanged.

    The root source of current global systemic instabilities largely has been the financially-dominant United States, and it is against the U.S. dollar that the global markets ultimately should turn, massively. The Fed and the U.S. Treasury likely will do whatever has to be done to prevent a euro-area crisis from triggering a systemic collapse in the United States. Accordingly, it is not from a euro-related crisis, but rather from within the U.S. financial system and financial-authority actions that an eventual U.S. systemic failure likely will be triggered, seen initially in a rapidly accelerating pace of domestic inflation—ultimately hyperinflation.

    The financial markets still are roiled by deepening crises of confidence in the U.S. dollar and in the long-term outlook for U.S. financial, economic, systemic and political stability. For those living in a U.S. dollar-denominated world, regardless of any further near-term extreme volatility in the U.S. dollar—in either direction—versus the stronger major currencies and gold, the stronger currencies and precious metals remain the fundamental hedges against what lies ahead.

    Massive, fundamental dollar dumping and dumping of dollar-denominated assets could start at anytime, with little or no further warning. With a U.S. government unwilling to balance or even to address its uncontainable fiscal condition; with the federal government and Federal Reserve standing ready to prevent a systemic collapse, so long as it is possible to print and spend whatever money is needed; and with the U.S. dollar at risk of losing its global reserve currency status; much higher inflation lies ahead, in a circumstance that rapidly could evolve into hyperinflation.



    __________

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  146. 78.6% Fib level from all time lows to highs has been resistance and the top of the range for SPX since the 8/9 low.

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  147. posted short of sso on other blog----stop out for .2 % loss. covered when spx went above 1220. Guess I said that woukld happen earlier today.

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  148. What's the fib level number WW? 1270ish?

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  149. Danno, you're scaring me, man...

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  150. I'm sorry but gold looks like one big bear flag

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  151. If you had to sell OCT 14 SLV puts today...

    11:44 ET
    "Forget it. I answered my own question." (and sold my puts)

    11:46 ET
    SLV's low

    I'm not sure you can time a call like that within a few minutes but, then again, someone just did.

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  152. bought a starter slug of SDS here. will add every 10 /es points up to 1260.

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  153. SF,

    You're not wrong!
    With an indisputable gold daily cycle that's fast getting to a top and a dollar about to hammer out a low. Watch out. Gulp......

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  154. and here's a fun fact: average buyer of /es over the last 89 days is officially back to zero.

    think they'll count their lucky stars and book it?

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  155. intelliblue,

    I've mostly kept my fund-limited retirement accounts in cash since May. I have put some back into S&P type funds, e.g. after the August plummet, but with a restriction of 30-day RT trades, it hasn't been easy to make that work. I'm all cash now, but if there's a large waterfall correction in the next few weeks similar in character but not likely intensity as '08, I would consider putting part of that back into equities for a couple months.

    It truly has sucked for everyday people to be stuck doing this sort of trading. All the funds I can choose have terrible 10-year records now.

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  156. Hey Poly curious if you have started to scale into shorts or are you waiting for your original 1250 (or perhaps now the 200 sma) as a target to scale back in? This feels like the scariest time to sell short, so perhaps it's the right time.

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  157. day 22 of US$ daily cycle? (usually 20-28 days) We should not be waiting much longer to see PMs going somewhere other than range trading.

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  158. lol @ this market

    have a nice weekend!

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  159. OOOOH My ass,

    Really wanted to close below 1220, Hopefully we get a turnaround Tuesday

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  160. Miyagi,

    1219.97 Fib 78.6%...today was the first time we closed above it since August low.

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  161. Ver,

    I have one short position on SPY, patiently waiting to add a 2nd lot.
    1,250 to the eye looks good but now that would put us well above the 75ma (week) into the area of having to confirm Oct 4th as a new IT cycle. So I doubt I would be adding up there, not if it happens in the next week or two. I would need to see a new daily cycle fail to get excited from up there.

    I agree with you otherwise, right here, with a decent stop, is not a bad "stab in the dark" seeking a high.

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  162. SF,

    This is what D-waves are made of. Take a look at the previous ones. Drop out, flag out, drop out.

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  163. At this point it looks likely that we will see a test of the 200 DMA. I wouldn't be inclined to short at least until then, but then again I'm not really inclined to short period.

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  164. I expect we will see the Q's tag the old highs too before any significant top.

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  165. Ben - thanks. I am going to slowly get out of the remaining bond funds and park in cash. The 401K fund choices I have also suck. Blah.

    I may just wait until the 4-year cycle low of the stock market and add into some index fund in stages.

    I want to puke everytime I see their investment choices.

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  166. Poly,

    You think Oct 4th wasn't the beginning of a new IC?

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  167. Kevin Depew has been out this week, but we have some developments in DeMark land on the short side coming up.
    All the major indices are converging - DJI, SPX, NDX, RUT, futures as well. They all are on Bar 7 of 9 of a DAILY SELL setup. To perfect this SELL setup, Monday or Tuesday will need to be higher than today's close. After that, expect a 1-4 DAY reaction, Wednesday to the following Monday. We are also exiting the window of the DAILY Sequential BUYs that recorded 2 weeks ago. SPX's last day of its window is on Monday, NDX on Tuesday. Given we are out of the 1-4 MONTHLY setup window now, the pullback should be a bit more shallower - 1160ish to 1170ish S&P where the 20-50 dma are hanging out.
    Also, as a note of caution for buyers, the Mclellan Oscillator is off the charts, for NYSE closing at 259.56 today. Nasdaq even more extreme reaching levels last seen at the end of the vicious rally in late June/early July. Expect some mean reversion (selling) soon. Notice AAPL - double top of the last sure trade left??? DeMark theory is showing MONTHLY/WEEKLY sells there, so we shall see if it cracks when its earnings come out on Tuesday...
    Longer-term, I am still not bearish. Maybe we will get a debt jubilee and everyone will be happy a la Occupy Wall Street...

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  168. i can see stocks playing out like the first half of '08. seems eerily similar thus far.

    double bottom (that took 40 days- as did this one exactly), rally that makes a new bounce high, bear trap, then rally to the 233/200 day.

    if this plays out again the first little sell off should commence early next week.

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  169. WW,

    No, never crossed my mind, yet :)

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  170. Poly,

    If the market rallies back to the 200 within a couple weeks and rolls over that would make Oct 4th a new left translated IC....no?

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  171. to the 200 over two more weeks will make it a new IC. Roll over from there would be a DCL. You talking about that DCL failing?

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  172. Danno,

    Many of us are experienced traders and have been doing this for a living for many years. I've been following Gary and this blog for only about 10 months and only recently have started posting when I think I have something significant, educational and helpful to share with both colleagues and those less experienced. With a few exceptions I have found our community here to be warm and inviting to beginners and I try to be the same. When Dan tried to spare you the further embarrassment of carrying on endless inane arguments on topics about which you're obviously just now learning, he was trying to do you and the rest of the board a favor. And what did you do? You attacked him repeatedly?

    Danno, I'm glad you finally apologized for your red candle/black candle silliness and how you thought it could possibly influence today's closing prices, but this is not about making mistakes. We all make them. It's about maintaining some decorum and respect for other members of the board. I'd be pleased to help you with any trading questions you may have, but I hope you'll be posting less and with more prior thought in the future.

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  173. Captain Morgan,

    Eloquently put and right on point. Thank you.

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  174. Poly,

    If we tag the 200 over the next couple of weeks and roll over oct 4th will be a new ICL, and the next DC will fail I would assume being we are now in a bear, unless we are not in a bear.

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  175. Yes, Captain Morgan, thank you for posting that polite advice to Danno.
    I hope he will take it to heart.

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  176. Anyone know what the Blees rating on gold is? Was it out today? Thanks...

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  177. Captain Morgan

    Nice. Much better than the Gary and DG show.

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  178. Poly

    Thanks for agreeing with the bear flag.

    I sensing from you that gold is approaching an event that could be ugly?

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  179. Intelliblue2000,

    I have the same problem with the 401k at my company. Not sure how big your company is, but a couple years ago I actually got them to add some sector funds so I now have a PM choice. Gary's comments about biotech are giving me some incentive to ask them again about adding one of those. Last time I wanted them to add a lot more and it was like pulling teeth. "We don't want to give too many choices and make it confusing"...arg

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  180. Gold is not in a bear flag. That's obviously a rising triangle.

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  181. did anyone else go short at the close?

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  182. Kevin,
    It is good that you can get your company to even add the investment choices in their 401K. Our company is not big enough to move the investment bank.

    I am thinking, instead of maxing out the 401K, maybe I should increase that to the regular brokerage, so I can have a higher amount to follow gary's trade. Right now I just trade in the regular brokerage + some IRA. Try to follow Gary as closely as possible.

    But if you don't quit the current job, you are kind of "married" to their 401K choices. Not fun.

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  183. Joe Lemma

    I did go short the SPY, lottery play being they are October puts. And a more significant position in November USO puts.

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