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Sunday, February 5, 2012

DANGEROUS TIMES AHEAD

Friday's big rally on the better than expected employment report has now generated the kind of euphoria that often creates intermediate degree tops. This coming week will be the 18th week of the current intermediate cycle. As you can see in the chart below the intermediate cycle runs on average 18-25 weeks from trough to trough.


The time to buy "anything" is when the stock market puts in one of these intermediate degree bottoms. It's way too late in the intermediate cycle, especially with the NASDAQ stretched 9% above its 50 day moving for anyone to be buying now. Now is the time for investors to be taking profits. And by taking profits I don't mean selling short. I mean moving to cash.


The simple fact is that selling short is a fools game designed to take money away from retail investors. The only people that will ever make any consistent long-term gains by selling short are the very elite traders of the world, or big funds with massive research departments that can ferret out and find sick or failing companies.

What most traders who try to sell short fail to understand is that markets go down differently than they go up. This fact makes it very difficult to make, and more importantly keep, any profits garnered by selling short. 

First off, tops are often a long drawn out process. They tend to whipsaw short-sellers to death before finally rolling over. I would say we have seen a very good example of that over the last four weeks.

Then even if one does manage to catch the top the intraday moves are often so violent that they  knock one out of their positions. And finally if you mistime the bottom you will give back most if not all of your meager profits during the first couple of days of the new rally.

All in all, the best position for 99% of traders is to go to cash when a correction is due. As you can see by that first chart a correction is now due. That doesn't mean that it will begin Monday morning or even this week. What it does mean is that it is now too dangerous to continue playing musical chairs with a market that is at great risk of a sharp corrective move.

The fact is that ever since the dollar put in its three year cycle low in May, trading conditions have changed. Trades had to become much shorter in duration and profits taken much quicker. 

Until the dollars major three year cycle tops that isn't going to change. As you can see in the chart below we still have no confirmation of a major trend reversal yet. The dollar is still making higher highs and higher lows. It's still holding well above a rising 200 day moving average and it hasn't even turned the 50 day moving average down yet.


Once the stock market begins moving down into its intermediate cycle low it will almost certainly force another rally in the dollar, possibly (probably) back to new 52 week highs.That should at a very minimum pressure gold to retest the December lows, and if the selling pressure from the stock market is intense enough we could see another marginal new low somewhere in the high 1400s to low $1500 level.


I should point out that gold still has not broken the pattern of lower lows and lower highs despite the powerful rally out of the December 29 bottom. Technically gold is still in a down trend. That down trend may be reconfirmed when the stock market drops down into its intermediate degree bottom.



I know we all want gold to immediately return to the days of strong trending moves, long trade durations, and easy money. It's only natural for investors to long for the good old days. It's what causes investors to chase (in vain) the last bull market. Think of all the investors that are still chasing the tech bubble of 2000, or the millions of investors still trying to pick the bottom of the housing market, or more recently energy investors struggling to figure out why solar and oil service stocks have underperformed so badly for the last three years.
 
These are bubbles that have already had their day. They are never going to see those glory days again. Living in the past never made anyone rich. The people that get rich are the ones that figure out early where the next bull market is going to be.

That being said, gold is most certainly not in a bubble yet. But the last massive C-wave obviously topped in September. That was the largest and longest C-wave of this entire secular bull market. Once something like that tops it takes months if not a year or more to consolidate those gains before the next leg up can begin.


Analysts that are predicting $2000 plus gold for this year are just kidding themselves. Gold is almost certainly going to be locked in a very choppy, extended trading range till at least the fall and probably into next spring before the next C-wave can breakout to new highs.

As distasteful as it is, investors need to accept the fact that it's going to be very hard to make money in the precious metals sector this year, and the only way to do so will continue to be with short-term trading strategies until we have confirmation that the dollars three year cycle has topped.

At the moment precious metal investors have the guillotine of the stock market hanging over them just like everyone else. Historically the selling pressure from an intermediate degree decline in the stock market will force an average decline of about 19% from peak to trough in mining stocks. Right now the mining sector is in a weakened state with the HUI holding below a declining 200 day moving average. That's not exactly the best position to weather the intense selling pressure generated by an intermediate degree decline in the stock market.

My advice for precious metals investors is the same as it is for everyone else. Go to cash and be prepared to buy when the stock market puts in an intermediate bottom in late February to mid March.

329 comments:

  1. Great :))

    I can smell the burrito bets coming.. :)

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  2. Great update.  Couldn't agree more.  

    AAPL has a big  gap to fill at about $430 and maybe $405.   

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  3. So that leaves available the only trade long the $.

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  4. Gary,
    I re-read Jan 29th blog comments and I don't understand how SOS for GLD in a timing band for a dcl brings back the D wave scenerio. Your comments on Jan 29th ...."Bernanke didn't actually confirm QE3 Wednesday afternoon, but the market obviously perceived the Fed statement as a guarantee that QE3 is in the works. That has the potential to break the dollar's rally out of its three year cycle low and derail the expected move by stocks down into a four year cycle low later this year."
    I love the ability to turn on a dime when the market tells you something different, I just question how the above changed. I think we still have ZIRP now until 2014. Is SOS all there is to this change, or is the historical nature of A waves the bulk of this change. I always felt that you did not put 100% confidence into those who argued based on historical charts.
    I guess I'm just a disappointed "old Turkey"
    BTW, I'm still impressed by the 25+ % gain. I just want more insight into your crystal ball.

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  5. Good point SF Giants. I hadn't looked at that chart recently, since the earnings announcement. That's pretty big gap.

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  7. we are also in the final 5 days of a 18 day cycle.
    http://www.coveritlive.com/index.php?option=com_altcaster&task=siteviewaltcast&altcast_code=9e68ebec87&height=750&width=650

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  8. we are also in the final 5 days of a 18 day cycle.
    http://www.coveritlive.com/index.php?option=com_altcaster&task=siteviewaltcast&altcast_code=9e68ebec87&height=750&width=650

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  9. Russell,
    We all want the Old Turkey days to return :)

    For that to happen though Ben needs to break the dollar rally. Still no sign of that yet.

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  10. Great post. One of the most straightforward ones I have read in a while.
    Market may go higher for a little while, but it always pulls back and usually sharply.

    I have very limited resources, so I do not try to short the market (My 401K and IRA do not allow me to short).

    I value average my monthly contributions. I try to make 1% a month. If account earns >1%, then I sell positions and buy whatever has lost the most.

    On 02/01/12, I moved ~5% of my stock portfolio (sold some EEM, IYM,IWM, and IYR and bought bonds).

    Thanks for the frankness of your post. Makes a lot of sense to me

    stemphos

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  11. Wow SF that's a massive #. Super huge. Somebody wants to take profit and be in cash right now. I need a list of those companies to keep an eye on. Not pleased about my fill on Friday on GDX, would rather be ahead of that big money selling curve, or at least prepared for it in my mind.

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  12. Not sure how you can keep flip flopping from a dollar breakdown to a runaway market to a consolidation... .How do you're readers ever keep up with your....

    Also, weren't you one of those analysts predicting a runaway market and gold being in the final mania phase?

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  13. Gary, I think that was one of your best posts.

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  14. ILUVPMS,
    It's possible that stocks could be in a runaway move and that gold has entered the bubble phase. For that to happen then Ben has to break the dollar's rally out of the three year cycle low.

    So far we still don't have any indication of that. It would require a lower intermediate low.

    So right now it's up in the air. Runaway moves are pretty rare though so I would prefer to bet that the stock cycle will run a normal length and begin moving down into an intermediate low pretty soon.

    I certainly wouldn't continue to stay long with stocks stretched this late in an intermediate cycle. I mean just look at the Nasdaq. When have we ever seen anything that stretched above the mean and not seen a sharp correction soon follow?

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  15. Gary.... excellent post. +1 Thx!

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  16. TrimTabs President & CEO Charles Biderman  discusses in this 
    video  why the February BLS' numbers are probably cooked because of seasonal adjustments.

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  18. Tom Demark update on Bloomberg on 1-31-2012
    video. We are very close to a top.

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  19. tony c of oew is expecting uptrend till spring of 2013 with spx testing all time high. recently terry from ttheory is becoming little bullish with his long term confidance indicator. fact remains gold increases when spx increases as both depend on falling dollar .. my only dilema is by 2014tony c is expecting gold something like 3750 which gary will agree too but where will be spx that time. I don't know 1980 scnario but i am looking if we ever had gold /mining stock rising and general stock market spx decreasing?

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  20. Go back and look at the dow jones... it ran for 5 years while supposedly overbought.... that might change your view on things...

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  21. Last post before game time.
    Foreclosures at the high end increase.  Looks like the rich can't or don't want hold on to their upside down mansions anymore in the 
    SF bay area

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  23. ILUVPMS,
    I'm not sure what 5 year period you're talking about and any five year period still has to weather intermediate cycle corrections. Like I've pointed out they occur pretty regularly about every 18-25 weeks no matter whether we are in a bull or bear market.

    I'm not really sure what you are disagreeing with. Do you think that the stock market will never suffer a profit taking correction again and that investors never have to worry about holding through a drawdown?

    Are you advocating holding or buying with the Nasdaq stretched 9% above the 50 DMA?

    Or are you just looking for something to argue about?

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  24. Im advocating hold precious metal stocks as I've been holding for a while... I've weathered the corrections but they are short lived and it beats having to time bottoms... anyways game time.

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  25. Nothing wrong with holding. By the time the bull market is over you will be up huge.

    It's just that most people end up panicking at intermediate bottoms and selling when they should be buying.

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  26. Looks like Greece is going to the same locker room as the Pats.

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  27. WW: Good Luck with your surgery! Thank you for your priceless inputs here.

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  28. Haha SF Giants. One thing I learned from my Dad, never take points off the board, and don't let the other team put them on. Sad ending to a great game.

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  29. One of my faculty advisers is Greek, I think he's probably in his early to mid 50's. He said Greece has defaulted twice in his lifetime. The only difference is that now they are part of the Euro. He says the Greeks don't really care about the default, they are used to it.

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  30. The problem this time is that they can't print their way out of it so they are going to suffer a deflationary depression.

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  31. Gary,

    I'm sure you are correct, but it's unlikely the populace really understands what will happen.

    I think they are also anxious to leave the EU so that they can control their own currency again.

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  32. And really, look how long this has dragged on. It's going on two years now.

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  33. NJ,

    Thanks alot, really appreciate it :)

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  34. Defaults wipe out the currency, or at least create hyper inflation. I'm thinking why save, maybe I should just spend my savings and enjoy life under a palm tree for a few months.

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  35. Gary

    You point out that the dollar has not broken the pattern of higher highs and higher lows. Since the dollar just had a failed daily cycle, I would expect that we will see a lower high on this dollar rally. Because the dollar had a failed daily cycle suggests that the intermediate cycle should be working towards its intermediate cycle low. The intermediate cycle is now in week 15 which leaves plenty of time for one more failed daily cycle for the dollar and that would bring the intermediate dollar cycle to week 19 or 20, the normal duration of an intermediate dollar cycle.

    B.T.W. I have not seen many large Selling on Strength numbers. Just on the 26th there was a 200 print for a BOW for the SPY and 345 BOW on the 31st.

    On Friday there was a mild 108 Selling on strength for the SPY. Shouldn't there be heavier selling on strength leading into an intermediate decline? I would think the 108 is more suggestive of a daily cycle decline.

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  36. My feed for my charts/system has crashed and am not able to generate an exact sell currently. It should be in the 1705 range approximately.

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  38. PVM,
    I think we are probably seeing a short ICL forming now.

    Above everything else I expect the stock market IC to run a normal duration. Everything else will follow from that.

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  40. Gary,


    I know that you work more on sentiment and cycle than on charts, but the fact that Gold broke 1720 this morning is not good right? Is the next picnic area at 1680?
    Thanks for guiding us last week, it was a great 180degrees turnaround!

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  41. Sophia,
    I'm pretty sure gold has begun moving down into a DCL. When the stock market starts moving down into an ICL it will add tremendously more selling pressure to everything.

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  42. Gary,

    My eyes are glittering to the propect of a nice sharp selloff that will cauterize all buyers except us, SMTs!!! Yummy yummy

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  43. I'm going all in on gdx today.

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  44. "My eyes are glittering to the propect of a nice sharp selloff that will cauterize all buyers except us, SMTs!!! Yummy yummy"

    Actually the Dollar has already topped (for those who can see it), so at best you will get a dead cat bounce rally there and a re-tracement in PMs. Next thing you know, you will be chasing something you should have bought in late December at much much higher price...

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  45. Tiho darling,

    I bought Silver at 28.88 and Gold at 1540....LOL

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  46. James,
    Why not wait till gold forms a swing. The odds are high that gold has begun the move down into a daily cycle low. It would only be day two, and those can last anywhere from 5 to 10 days.

    You can greatly decrease your odds of suffering a significant drawdown if you just have the patience to wait for a swing.

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  47. Tiho,
    I don't know if the dollar has put in a permanent top or not.

    If the stock market does move down into an intermediate cycle low over the next 4 to 6 weeks then the dollar is going to rally back to new highs, probably big new highs.

    I'm just wondering if you will disappear at that point or whether you will admit you were wrong.

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  48. Ok, that makes sense, but I'm just too trigger happy.

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  49. Sophia, my bad. I misunderstood than. Great buy, well done. I think you sound smart enough to hold onto that and not go long the Dollar. It will pay dividends, as you probably already know.

    Gary, it doesn't matter what the stock market does, the dollar has already topped. I tried to explain it already. The Dollar would have to rally 10%, 15% or even 20% to make highs against currencies like Aussie Dollar, Mexican Peso, Singapore Dollar, New Zealand Dollar, Brazilian Real, Turkish Lira, Hungarian Forint or Russian Rubble. That will not happen. The Dollar is about to stage a bounce only...

    I'll tell you where you went wrong - you just keep following the Euro, thinking you are one step ahead of the Dollar. Didn't you find it strange that the Euro kept falling while the stock market kept rising over the last couple month before the mid Janurary Euro bottom?

    That shows you that the Euro does not always correlate to the Dollar. Same happened on late 09 and early 10. Following the Euro on its own is pointless. DXY is not "US Dollar", DXY is "inverse Euro short". You need to learn how to track the Dollar instead and that means following currencies against the Dollar globally.

    And yes I will stick around no matter what happens and admit I am wrong (if it happens), coz I like reading many blogger thoughts including your own.

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  50. Tiho,
    I'm not trading a dollar cross with a specific currency. I am trading the dollar index via UUP.

    All I care about is where the dollar index goes. If it makes a new high then I will make money on my trade.

    That doesn't mean that the dollar will make a new high against any and every insignificant currency.

    I can't analyze the dollar against a specific currency with cycles. I can however use cycles analysis on the dollar index.

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  51. I forgot to say the following:

    Even if the Euro by some miracle makes a new low below $1.26, which makes the DXY make a new 52 week high, as you stated in this post, you will still not be right on the Dollar. Here is why...

    There will be NO CONFIRMATION that the Dollar has made a new high against any other global currency that doesn't fall into a money printing category like Euro, Pound and USD.

    It's almost impssoible for the Dollar to stage a new high against any Asian, Latin American or Commodity related currencies.

    The Dollar is not making higher lows against these currencies, but lower lows instead. The Dollar is below its 200 MA against these currencies alread, not above ity.

    So in other words, the Dollar has topped already and yet you are still wondering if it has more juice left. I've been saying it for over a month now. Eventually you will figure out that there is more to gagging currencies than following DXY or EUR/USD.

    That's just my 2 cents.

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  52. Congrats on the team win SF Giants Fan!

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  54. Tiho

    DOLLAR VIEW: UBS strategists Gareth Berry and Geoffrey Yu note that
    Friday's CFTC data (for positions as per Jan 31), the first seen since
    the Jan 25 Fed decision (US rates lower for longer), showed "that dollar
    longs held by speculative investors had fallen by 40% six days
    afterwards," which takes positions back to those seen in early November.
    Euro views were largely unchanged (COT data for non-commercial showed
    net short at -157,546 contracts vs record net short of -171,347
    contracts from Jan 24). "It seems no rally in EURUSD is expected and
    this chimes with our own assessment of the situation," the strategists
    say.

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  55. Sophia,
    Thank you for asking. Coming home is easier than going to London. Probably because I have a tighter schedule here and have to hit the ground running. :)
    I actually have a harder time going in London direction. Saw the snow storm hit right after I left. :)

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  56. Hopefully someone is learning something wi this constant back and forward debate about currencies.

    The reason I am following more global currencies than the DXY or Euro is because it helps us understand what is happening withal major assets. It has nothing to do with trading specific crosses like you said. Look at it this way:

    Euro weakness does not impact PMs and Equities as much as Dollar strength. When the Dollar is strong, it is deflationary and it is strong against almost all currencies and PMs and also puts pressure on equity prices as well as many commodities.

    However, when the Euro is weak, and the Dollar fails to be strong against "good currencies" which are not printed everyday, than PMs, commodities and Equities brush it off or just experience a mild correction / consolidation.

    How many times have you see the media say Dollar and Gold rallied together on some day or during some week. Well actually, they didn't.

    Further research would show Dollar was falling against majority of currencies, but was beating the Euro. So essentially Gold was rising against both Dollar and Euro

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  57. at ease,

    you were indeed lucky...but you missed a gorgeous white blanket on Sunday!! take care

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  58. At ease

    Thx but wrong sport. SF gaints is the San Francisco Giants baseball team. Maybe this year!!

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  59. Sophia,
    It's always beautiful to wake up to the soft quiet outdoors after a snowfall. Then it all begins. LOL

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  60. Just good thoughts your way SF Giants Fan, don't watch the sports myself, just don't have time. Hope your team comes through this year.

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  62. I always thought the dollar lead stocks (and everything else) not the other way around. I wouldn't count on stocks "pushing the dollar up" but would wait to see what the dollar does with its next bounce.

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  63. No swing low yet. It was close this morning but not quite.

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  64. Actually the dollar and stocks affect each other. Sometimes stocks and the dollar can move up together. This would be the case during periods of high productivity, and sometimes it can happen in the short term for technical reasons.

    However the dollar and the stock market cannot move down together unless inflation is surging out of control, like we saw in the spring and summer of 2008.

    That is obviously not the case right now so when the stock market moves down into an intermediate degree bottom it is going to force a powerful rally in the dollar.

    The only way to avoid a rally in the dollar is for the stock market to enter a runaway move. Those are pretty rare so it's hard to bet on an occurrence like that. 9 times out of 10 you will lose that bet.

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  66. Did you even read the article?

    Geez!!

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  68. A Tie Between the Fates of Greece and China

    http://247wallst.com/2012/02/06/a-tie-between-the-fates-of-greece-and-china/

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  69. Oil down, energy stocks up - how couldn't you like this market :)

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  72. buy the dips and you make money...the trend is your friend until is isn't..

    we keep getting dips to buy into..money has never been this easy to make and most are still on the sidelines

    hope everyone's making a lotta money these days..

    safe trading.

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  74. My data feed is back up and the sell stop has now moved to 1714.00. As in most cases I would expect a surge to the downside once hit, as there seems to be big money that follows similar systems to mine.

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  75. Veronica, thank you for your info. May I ask you, did your system have a buy point for the last daily cycle (beginning Dec 29)? If so, what price was the signal to buy? Thank you, as always :o)

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  76. I thought this blog was abt Smart Money Tracking...?????
    ..ie...HF's, MMM's..CT's....those are the ones controlling all markets (paper)!!

    2 ..just 2..trading options for them....

    1)USD / US T's OR
    2)Commod., Stocks, PM's
    Half the battle with any trading/ investment is to guess which way they move next. The other half is executing... The short term trade.
    Buy and hold strategy in the greatest bull market to ever be experienced is the only way to play this nightmare.
    Currency moves and stock market cycles are all part of the WHOLE BULL TREND (in PMS'). But the problem is they are being savagely distorted with duration and magnitude.
    WARNING...Balls of Steel required.
    To invest or trade are traps...so too is going to cash.

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  77. Smartbullion, it had an add on buy in low 1580's as it had been holding the original buy without a stop.I wrote on the blog the day the add on buy happened.Both of the buys will sell when the system goes to a sell.The statistics I have posted about my system do NOT include any add on buys.

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  78. Thanks Veronica for the updates. :)

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  79. Veronica, thank you. Does it ever give you a bad buy signal? seems to be very good...

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  80. It's been very good the last several years, but going back 10 years or so it is 65% winners with the profitable trades 2.2 times the size of the losers.

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  81. Gary

    I don't know how long you've lived in Vegas but take a
    Look.

    Plus it still looks like the real estate market is Dead. 

    Currently there are 6,614 properties on the market for rent.

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  82. Veronica,

    Thanks. Is that price off of spot or April GC futures?

    Thanks.

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  83. Surprises to the upside...just sayin'....

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  84. Hmmmm....g'day mate!! And many g'days ahead for AUD...

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  85. If it wasn't so late in the stock market's intermediate cycle I would be all for surprises to the upside.

    However, 18 weeks into an intermediate cycle and I'm more worried about a flash crash than I am a flash melt up.

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  86. Interesting interview with Tom McClellan today http://goo.gl/xhBYv who sees the stock market topping right now

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  87. Everyone thinks the market is topping right now....which is why it almost certainly is not.

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  88. Yes I know you were talking about gold. But an IC decline in stocks effects everything. Especially miners.

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  89. Smarbullion....
    Is that a topping or consolidating (after a small chop)..severity ????
    Interesting times ahead with plenty of opport. for those with Kahunas. USD minor rally expected. Will not be convincing or break 82.
    Gary's IC decline coincides with what the SM has forecast.
    That is unless we have a "STRIKE" or a "DEFAULT" then all bets off.

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  90. WW was stopped out of short, you think might see end of this dcl here around 10dma?

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  91. An update on what I'm thinking here:

    -I think it is a reasonable BET that gold bottomed late december.

    -I furthermore think the large surge up on the 25th for gold was a recognition move and we likely won't go below that (about 1650). Another reasonable BET I think.

    -That large move up on the 25th also broke above a downtrend line of about 5 months (daily chart) in gold. Making a drop below that difficult (at least without a bounce).

    -We have probably moved up enough (gosh I hope $250 is), including that recognition move, to suck in sufficient buyers allowing us to now correct and hurt some people.

    -The first place such a pullback should stop is above the 25th recognition day and/or the large downtrend line. This zone is 1700 give or take $10 or so. That is my first BET.

    -If that doesn't hold I suspect we could go lower to the 1600 area which was strong congestion and support/resistance. (Again, give or take maybe $20 or so.) That would be my second BET.

    If that doesn't hold then we've got problems and likely more badness to the downside. 2008 scenario or a mean D.

    Clearly (as the private blog argued over the weekend) nobody KNOWS if we are going up or down or whatever. Discussing that stuff without a plan is not helpful. So many people there just argue "it could do THIS", "no...it will do THIS".

    Sure. Both right. Meaninless cause you still have to do something NOW. You have to make a bet and do SOMETHING regardless of what MIGHT happen (and 'cash' is something also).

    My bet is currently going to be that we get a selloff to those levels and at least one of them HOLDS.

    A BET for me is going to be a risk of approx 1-2% net worth on each zone. I should be able to get 2-4x leveraged (gold futures) if things work. And If I lose you can see what I lose.

    That's what I'm thinking and how I'm looking to bet in the near future.

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  92. >-The first place such a pullback should stop is above the 25th recognition day and/or the large downtrend line. This zone is 1700 give or take $10 or so. That is my first BET.

    Correction. The first zone that should hold (the start of the 25th and the daily downtrend line) is actually about 1650 to, maybe, a bit under 1700.

    We can break the cycle uptrend line by going to 1700 only, but I think dropping below a round number like that stops out more people. I think we have to get closer to 1650 than 1700 to blow out enough stops, but I'm going to have to see the volume in real time.

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  93. There continues to be no outperformance of mining stocks (compared to 'straight metal' of 50/50 gold and silver):

    stockcharts[PUT.DOT.HERE.TO.FIX]com/h-sc/ui?s=GDX:CEF&p=W&b=3&g=0&id=p20207788931

    You can bet on 'this time it will work', but I will keep my distance till that chart curves up for a few months and clearly shows something has changed. Just personal preference.

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  94. TZ, if I may, you might consider the use of a url shorten-er in your posts. There is one available at http://goo.gl/

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  95. The RBA just killed hopes for a dollar rally, even if so temporarily.

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  96. >TZ, if I may, you might consider the use of a url shorten-er in your posts. There is one available at http://goo.gl/

    Too much extra work for me and I still have to post a single link. I can't shorten it to zero links from one link.

    Besides, I doesn't reduce any work on the readers part.

    To select an ENTIRE LINE in a browser (the entire link) just triple-click any part of the line.

    If a person is getting the posts via email instead, then the links should already be highlighted and they just click once regardless of size.

    In either case the size of the URL makes no difference I'm aware of. (Although having to remove the [PUT.DOT.HERE] is still necessary, I can't do anything about that because gary continues to use a crappy google service and they kill accounts left and right for posting any sort of URL. You then have to give them phone numbers, emails, dogs name, and just about anything else to get them to unblock it).

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  97. If you have an example of how the URL shortener benefits then I'm all ears.

    Their use works for URLs going through twitter which has a hard limit on size, however anybody getting these posts via twitter is already missing most of what everybody posts anyway. SO that doesn't make sense either.

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  98. TZ,
    Just learn how to make a link and you won't have to worry about your posts getting flagged as spam. Plus people will be much more likely to click on the link than go through all the trouble of fixing the modified links.

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  99. sold back my USD/JPY on the spike this morning....

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  100. Gary, I know how to make a link.

    You simply arent aware of how bad and tight Google's "spam" filter is since you OWN the blog and it doesn't attack you.

    The posting of ANY link counts against a person as spam (shortened or not. In fact a shortened link is worse cause often they are used to hide the ultimate location and the spam presumption is higher.)

    After a high enough count (or after a suspicious enough count) Google locks the account and ask for more personal information. Remember these counts are being made by Google's system autmatically and not the readers or the owner personally which is really the way to go.

    If a person doesn't post a clickable (or identifiable) HTTP link then it doesn't register in the system. Hence my obfuscated text in the link.

    I do what I do cause you have chosen to use Blogger and I have to go with it. I don't have a choice and have been unwilling to convice you to either move it or use Disqus for the comment section.

    I had about 3 different "TZ" account locked out before I decided I simply wan't going to keep posting URLs anymore. Sorry, but that's just how it is as long as we are on this crappy service.

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  101. TZ,
    If something gets caught just send me an email and I'll clear it.

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  102. sold back my USD/JPY on the spike this morning....

    I'd sell all Dollars before its too late and the decline accelerates. Too many dumb money investors are still bullish on the Dollar via close to record historic Euro net shorts, which are now being squeezed week by week.

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  103. The account is still locked out once flagged for spam. Nothing you do changes that. The account can be unlocked after giving google all kinds of juicy personal information including wanting my personal cell phone number. F them.

    Oh...and I don't post to ANY other blogs or any posts you haven't seen from me already in the past year.

    CLEARLY you know that I have never posted anything remotely spam related and yet google still hits me for posting a few charts or something as simple as WSJ or Bloomberg stories.

    It is simply a bad system (designed to trap people and ID them for advertising purposes) and a bad blog service that just happened to be one of the first and, thus, won't go away.

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  104. OK Tiho....

    Do you need to hate everybody? I posted when I bought, I am posting when I am selling...I am not a big geeza trader like you with views right left and center, but I am trying to give my views from time to time... Relax man, take a load off as you say in English...

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  105. This comment has been removed by the author.

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  106. Riley,

    Gold is wedged between the 10dma and the DC trendline, if the market drops out gold will breach the trendline.

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  107. I have no idea when you bought and I wasn't commenting on what you were doing. Sorry if you misunderstood. I used your comment to just comment on the Dollars direction that's all. I don't hate anything but the Dollar right now. :-)

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  108. This comment has been removed by the author.

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  109. Riley,

    DC tops are a process, not always a swift collapse and bounce out of a DCL(though possible), for example look at the last two daily cycle tops.

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  110. Below that and our stop will trigger. I would then wait for a swing to form before re-entering.

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  111. The longest time it took for AAPL to fill a gap in the last year was 12 days. Today is day 10

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  112. Ben is testifying (you can watch it on cspan)...just seems like everytime he has air time, the dollar gets scared and retreats!

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  113. I think it is rumor of a Greek deal that is moving the dollar not Ben.

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  114. I am wondering what Tom Demark is going to say...Could go up to 1370 but also down to 1260???

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  115. sophia
    demark recently said that he could see the s&p hit 1370 intraday but that the closing top should be around 1342

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  116. Poly called DCL in gold half an hour ago, and he added to agq, nugt ang ugl.

    I am in.

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  117. Maybe a DCL for gold. That still doesn't change the fact that we are 18 weeks into an IC. I'm not at all confident I will be able to pick the top of the rally and if I miss it then I would risk getting dragged down into an ICL by the stock market.

    Right now I'm more worried about that than I am about trying to catch every last penny of the rally.

    Hey but if one is good at spotting tops then by all means push the long side as long as possible.

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  118. at ease,

    Took profits on my short this morning, scalped long, but out now.

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  119. Action on Gold feels like the November 2011 top.

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  120. at ease,

    As I mentioned earlier, gold DC tops (especially A-wave tops) are a process, a move down , move back up to test the highs, then continuation lower. Although this could very well be a DCL here, the first bounce is not confirmation of a DCL, a move to a new high is. If the stock market is ready to roll over into an ICL, gold will most likely not make a new high.

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  121. Sure enough, as soon as I bought, gold drops

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  122. If gold did put in an A-wave top, they are notorious for putting in a swing low before falling out.

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  123. I think its more likely we see the stock market dip into a DCL, with another DC higher before dipping into an ICL.

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  124. Sophia

    The demark intraday 1370 call is the May 2 2011 high. Probably a ton of buying would come in and he and big money would sell or short into that.

    How close did gold come to hitting your sell stop this am?

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  125. Dollar down 0.5% and all the SnP can manage is a few points?
    I agree with Gary. There will be a big up move soon in the DX. We are stretched and we all know the snap back theory. Of course when it happens, it will be pre-market trapping the longs.

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  126. Two months ago, Dr Savage, stated that gold was going to "explode"...

    What has now changed to wait for Gold Spring 2013??

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  127. WW

    Hope the nurses are ready for you and the hospital has wi-fi. Take care, keep us posted and hope all goes well...

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  128. Two months ago, Dr Savage, stated that gold was going to "explode"...

    What has now changed to wait for Gold Spring 2013??

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  129. It has exploded. Now I'm just more nervous about an intermediate degree correction in stocks than I am trying to catch every last penny of the rally.

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  130. Miners are flat despite the nice reversal in Gold.

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  131. On 30 & 60 min charts, GLD looks like it's trying to put in a lower high. But if we get above 171 the trend resumes. The daily chart looks like the Nov top, as EricH said.

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  132. GLD's 30 min chart looks like it'll go down tomorrow ... if Mon/today's bottom of 167 holds I'll go long w/a stop just below 167. Small 10% position, 'cause the daily chart does look like a top.

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  133. My system went to a sell and immediately rocketed up. It will go back to a buy shortly if we get some more strength.

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  134. About gold, even if the cycles say it should correct, I worry about 2 things: 1) Bernanke's stmt last week, and 2) gold's price action off last July/Aug, meaning how hard it was to get on if one got on late. Mainly though it's Bernanke - to me, that means that despite cycles or anything else, he's bent on killing the dollar, so gold will go up, though choppily. Just me.

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  135. The dollar seems to be looking for some kind of bottom. The price cluster it just broke through is reminiscent of the cluster in mid October, which was followed be a final stab down before the rally began.

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  136. Your gold thesis looking a bit shhhaakkky today! will fall over soon.

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  137. I don't really have a thesis. I just know that 18 weeks into an intermediate cycle is too late to buy anything.

    Now if you are really good at spotting tops in real time then by all means push the long side as far as you can.

    I know I can't spot tops with an degree of consistency. The last time I tried silver kicked me in the teeth.

    So I am content to be on the sidelines right now.

    This is the same rational I used when gold put in the C-wave top. I knew I wouldn't be able to time the top perfectly in real time. So it was safer to be out than get caught when the crash came and it did come. The first three days saw gold drop over $200.

    I didn't catch the last surge but I also avoided the entire D-wave.

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  138. The 50dma is inches away from crossing the 200dma in gold

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  139. Tom Demark update on Bloomberg yesterday.
    I find it funny Trish Regan questioning his calls. That's why he is on TV and she is reading telliprompters.

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  140. SF Giants Fan,
    Do you watch DeMark on Bloomberg or is there somewhere else you can follow his updates/calls?

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  141. SFG Fan,

    Your DEMARK link did not go to a recent interview (??)


    Anyway, here is one on Feb 7th. - not an interview but Bloomberg talks about DEMARK - he is in CASH and he also saying $ has bottomed.....

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  142. Where is Poly posting nowadays?
    How does one see his current work?

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  143. Slumdog, he is on Twitter http://goo.gl/MKkyt

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  144. Gary's right that we've not seen serious profit taking on this recent run and time is running out.

    I'm the old turkey of old turkey's here, holding a rather huge silver position from $5-10 and watching it reach nearly $50 and drop by half.

    I just think that when coins get grabbed and taxed every which way fabricated silver and gold, the old fashioned "plate", will remain untouchable as after all, it's art, which in fact it was and is, ephemera that it may be.

    Anyone else as committed to $200 silver as am I?

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  145. Is it me or the price action of Gold and Silver is not so exciting? Relative to the dollar selloff, Gold is still 15 dollar below last week's high....

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  146. sophia:

    I think the $HUI says it all. It can't even make it over the 200 DMA after such a huge initial surge, gold continuing to rally, and even stocks melting up. It could have another "catch up" moment if everything else keeps rallying but perhaps the fast-money traders who play in the GDX sandbox sniff a wicked correction coming across risk-on assets. Another SoS day today for SPY (~$100) and QQQ (~50) too.

    Not huge numbers but we're seeing a lot of the BoW on dips and SoS on rallies. One of these days the dip will keep dipping and everyone is going to run to the exits at the same time. I think Gary may be right that we're getting into flash crash territory with this melt up.

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  147. A comparison of 3 recent gold triangles. 1 bullish and 2 bearish. In each case price returned to the apex of the triangle in 32 to 33 trading days. In the first 2 examples, after returning to the apex price, gold continued in the direction of the breakout. fwiw

    http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&b=5&g=0&id=p19544899197&a=240924113

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  148. ver,

    I agree with you... quite a telling price action indeed....

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  149. My system will go back to a buy at 1763, and these quick sell to buy patterns (if it works out that way) can be extremely powerful. Right now I see a lot of traders frozen and they will be a chasin if this scenario works out.

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  150. Thanks Veronica for posting your buy point.

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  151. At ease

    I just follow him on YouTube. Click on the link I posted at 7:42 then follow him on "marketstudies"

    @AJinsight

    Adam Johnson on Bloomberg posts updates on twitter also

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  152. I have just realised that the DAX gained 18% ( yes, 18%!!) in the last 6 weeks!!!

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  153. Thanks SF Giants Fan.
    I Understand he is always after the fact as he is already in cash. However, interested in his method. Thanks!

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  154. AAPL gaps
    $430
    $405
    $385

    How may are going to get filled?

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  155. Sometimes gold is easier to love from a distance. And I suspect now is one of those times :)

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  156. 86d4life

    Yes, it feels like the calm before the storm.

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  157. Its rare but not unusual for gold to close below the 10dma, the move back above it for a day, and then breach it again as the process of churning out a top continues.

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  158. A close below the 10dma late in a cycle almost always indicates the move into a DCL has began.

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  159. W2,

    thank you! I should have been smarter and bought back yesterday to sell back today...argh.....

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  160. W2,
    your 0815 post is,...........Golden? :)

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  161. As noted yesterday, today's action is following the November top to a tee. If this keeps up, Gold will have a nice fall next week.

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  162. thanks for your guidance ErichH

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  163. wow, it feels like they are clearing the counter!!

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  164. Eric,

    I agree,


    "Riley,

    DC tops are a process, not always a swift collapse and bounce out of a DCL(though possible), for example look at the last two daily cycle tops."

    February 7, 2012 7:31 AM

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  165. I'm no wizard, simply reporting what i noticed. Gary and a lot of the folks here have taught me a lot.

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  166. ErichH,

    yes I agree with you, this blog has taught me a lot and I am learning everyday! The most important lesson I learned was patience...I sometimes feel like a hunter....

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  167. Sophia,
    That`s pretty funny. I picture you sitting in your kitchen, cleaning your rifle, watching the computer. Lol

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  168. Day 50 of this SPX QE stretched DC.
    Previous QE2 DC's - 50 days and 56 days.

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  169. WW

    The last two Qe stretched, what were the corrections like?

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  170. 86,

    yes, the picture is pretty close to reality...I hope I won't get confused and shoot instead of launching the dishwasher !

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  171. Gold looks ready to make another assault on the DC trendline.

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  172. LOL... watching paint dry, did everyone take a long lunch today?

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  173. The dollar is at Intermediate bottom levels on the True Strength Index.

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  174. sorry William, what does that mean? That we should see a short term rebound before further selloff?

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  175. Sophia,

    We may see an intermediate bottom being put in here and a move to new highs.

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  176. William,

    That is music to my ears...Thanks for taking the time to explain ...
    Take care

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  177. To be clear, the dollar is at the same level on the True Strength index as it was at the last ICL.

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  178. WW,

    That TSI, is it an indicator from Stockcharts? Or can I find it elsewhere?

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