WW, your trading calls are wonderful. Poly entered in the morning and picked up the 10 jump, but you're killing this more consistently than I've seen. Well done.
Gary's conservatism at this time is very welcomed, too.
Frank, Nice discussion in that article. I'm increasingly becoming aware that selecting an individual miner is difficult. I once owned GBG at 2.62, fortunately sold at 2.55. It is now .80 as they did not meet estimates of production and costs increased. As someone said, the trades are so short in duration, the index etfs are safer.
This is a bull mkt and it only takes a few successful leveraged trades to close out the table.
It was hard enough waiting and getting this position in. Now that it is green and looks like it might hold I'm not going to sell out and lose it.
Big printing worldwide (all banks) and I think inflation is starting to surge and take hold. I think a different kind of recognition is entering the world markets (of what exactly the game is....they now GET it) and I suspect gold may now be entering it's next 'more-public' phase. My belief is gold will rally mostly straight up to 1900 and then put in a sideways triangle like it did in 1979 (without much pullback). Then break up and out higher entering the final 1.5yr bull blowoff phase.
We just had a one month congestion sideways in gold that barely moved and now we rammed higher on two spikes of 7500 contracts each.
That's pretty big and shows a large block of people got blasted out of the way.
You will recall the COT chart from fri when I said "look at what is happening here...this is weird". Well know we know that the COT in silver was a game of chicken building up and the shorts who were trying to keep a lid on it are starting to get crushed.
No thanks on an exit. I'm staying long and if I'm wrong I'll just take a break even stop and keep playing. If I'm RIGHT then the rewards will be large.
I think selling here is a mistake. (Although I think owning the mining stocks here is also a mistake and their poor performance is one of the reasons it is so difficult to hold them. Go to bed, wake up, BOOM, they suck and are down a few percent again. Why deal with that?)
Gold is 1.97% GDX up 2.78%
But if you are 2x gold then it becomes:
Gold 3.94 GDX 2.78
Higher return, less volatility, easier to hold, 24hr trading (futures), lower taxes (US citizen).
S&P are dropping as gary suspected and maybe I'm wrong to hold, but that's what makes the game I guess. Maybe I give all the profit up. We will see.
If I can answer something here I prob will, but if it is private enough to need separate email I probably wouldn't anyway. At least for now that's just how I am. Sorry.
In a way, the SPX is addressing what I wanted to talk about.
Was wondering if your analysis tells you equities are due for a nasty correction or will continue the melt-up, and, how (or if ) a correction would hurt PMs.
Perhaps more to the point, how relevant do you consider stocks to be vis a vis metals? So far the "correction" is negligible and the metals haven't even noticed.
if the explanation for the last few months is some sort of onset of a macro "inflation trade" then it's possible what we're seeing is simply rotation out of equities and into metals.
thus a severe selloff in equities may not exactly translate to the same in the metals sector(s).
as a reminder, while stocks have basically reclaimed or surpassed their highs here, silver is still some 30% below its high, GDX around 16%. gold %7-8% (thereabouts).
An intermediate degree decline in the stock market always infects the miners. I doubt this time will be any different. However we don't have any indication that an IC decline has begun yet.
I would at least want to see stocks drop back down through the early February consolidation zone before calling it.
1330 in /ES would be my guess for a correction target. IF they ever do, ha!
but meanwhile /GC looks like it's setting up for its 2nd round, highest volume of the year in /SI today, GDX looks real, real good to me above $54 and bellweather miners like SLW and RGLD all look poised to make a serious run.
The good ones don't need paid services They make $ from the market not off of it Jsinclair is.one of them .. and of course will not show his knowledge ... only at a high level
At ease no good answer on my trailing stops in futures. Not a set deal, when I am in a position I carry my smart phone with posted alerts at consolidation levels. I will move stops to just under strong levels. Like now 1/2 stop just under 1752(learned half sell from WW earlier). Other half at first spike level just under 1746. Refuse to give back all gains, that's just me. I'll always stop out earlier in futures as been doing this for 8yrs and learned to keep some profits. Only bugga boo is a large gap down. Thank goodness can afford to now. Good luck
Riley, thanks, I agree, I hate to give back gains, so was wondering if you were using an actual trailing stop, like percentage. Once I hit a certain level, I take profits and wait for it to retrace down and buy back in again and if I think we got momentum coming in, I add on another contract, if not, back out again. That is why I am always asking WW, if he has a level he likes or next resistance level. Still learning. I like to keep a chunk of run up profits for sure. Nothing worse than watching all those gains going back down again. :) Thanks for your reply! Have a good evening and lets hope we have some more room to run. :)
LOL @ James. One of the worst traders I've seen here since Mylifemytrade AKA Mylifeislame tried to short gold, silver, miners during last years epic move off the January lows!. Good luck, but I bet you are playing with a few hundred bucks so why even bother posting here.
WW you mentioned possible targets if gold moved up. May I ask what they are? You mentioned new highs. Give me good idea where to take profits if not stopped out. your flexibility amazing. I always have to have retests on levels to move. you move with the flow. Praise fromm Slumdog big deal in my opinion.
Slumdog if read this would you be willing to add to silver here(curious). I'm always afraid of silver. Wish had bought when you did, was told too but at time thought lower prices(since learned never listen to gut)
riley, the backside of the daily/weekly parabola high of 49+, was neared during the US session, today, that being in the low 35 range.
This is not to be viewed as backfill trading time, below the downslope on that backside.
Look at kitco's silver historical chart on the 2000-2012 time window as that's easily available.
It's a matter of how one sees reality.
Gary said last year silver's basically dead for at least on his time frame, a long time, as the parabola came, climaxed, and busted.
I continued to argue that looking at 1980, the first parabolic wave, there, climaxed and busted, just like Gary saw now, but that was a first wave, with the massive, extended, major ride up just about to follow on that backside.
I continue to believe this to be the truth of the 2010-11 silver (and gold) parabola.
The next wave up I think will leave people stunned, it being incomprehensible to them.
Here, there are a couple guys who see a 2nd quick rise up and then a retracement. As does Poly now.
We are flirting with the roof, the lid of the angle of descent of what to me is a redux of 1980.
What would happen, if I'm right, and I'm expecting to walk away with millions, albeit small ones, and then not worth any more than they should be based on "world buying power" (as oil screams in our faces), will be a fast sharp rise through the descending line, in the low 35's, either immediately or shortly, but at the breakpoint, right now, there's today the first hail mary pass setup, a dropback and kick event.
If this is what's happening, silver will drive straight up, that starting within the next 3 days, as in now in my timing.
And it won't look back. Strangely, that's what Poly thinks, although he sees a quick retreat and retest.
It depends on how much it runs up in a short time frame. Higher means it won't be back, and we're in the elbow of "The Greatest Parabola of Our Lives".
I think that's what's happening. I hold very little cash or near cash but for my biz working capital in my biz. I've held that position for a long time. My view is being ratified by the fact that there will be no bitter pill for the banks or the borrowers, worldwide. Amazing shades of 1922-23 Germany, but who cares. That's the way the game's being played out.
So, weirdly, this is a make/break moment when the painful decline, which will certainly occur after The Greatest Parabola of Our Lives has happened, but it certainly was not 2010's parabola, is being tested.
It's still too early for the parabola to continue in either gold or silver. Bubble phases only last a year to a year and a half. Probably a year will be pushing it for gold because it is a thin market
The next three year cycle low for the dollar isn't due until the fall of 2014. That would give us a bubble top around the spring of 2015. So the earliest the bubble could start would be early late 2013 or early 2014.
We will almost certainly get an A-wave top sometime during this intermediate cycle followed by a B-wave and then an extensive consolidation before the next breakout can occur.
Like Greenspan here, I've just held on and witnessed 49 turn to 26 and now 35. I expect $100-200. So, I'll wait for this last parabola, struggling mightily against the compulsion to take a break from the battle.
But just this week, I've had my own acid test proof that I'm right. I've a handful of rather rich friends, cash and near cash in many millions to low tens of millions (I exclude the hundred millionaire as he's sort'a immune from everything, though he does lag what's happening).
What each independently said to me was that they are still hanging on to cash. They each still refuse to diversify a cent into PM's or PM funds. They are all unhappy with what's happening to their incomes and their asset values. They each totally refuse to budge.
This is great news to me as what I believe on an historical basis is that all fiat holders get crushed. These folks are seeing their life savings diminished, and yet they stand in the sinking boat and complain that the water is about their feet, now. Even after the Concordia tilted over, they experience cognitive dissonance, just as IMO for the health of the economic system, they should so.
Don't sell, and IMO, hold at least 20% of your assets in hard money, if not more.
At the margin, and with whatever you wish to place at risk, tag along with WW, Veronica, Gary, TZ, Poly, and others here (apologies that I don't mention some very shrewd posters here, which makes this a delicious place to be), and take the trades, if wealthy enough, allocating to each of those racehorses, part of your bet, sort'a a basket of equities if I may.
Poly IMO is not reckless. He senses there to be a major breakout that will occur sooner, if not now. He trades. I am not trading. I can't handle the stress. I'm parked in protection and wish to pile on more, but my new branch of my biz requires so darned much money, I just gotta get it realized so if the USGov survives, which I assume it will, I'll just adjust the zeros on the invoices and take home profit... yes, it's like supplying tires to the army, for as long as I'm willing to play the game.
In my world, the oil price rise means product price rises, and this time, a profit boost, more confetti, as Greenspan says.
Short answer. Watch over the next few days. The money here is not over $30 or $36. It's about $100-$200, and when.
And yes, labor will "lose", but in fact, American labor wins, and thus in the mid term, the US society wins. It's not about fiat. It's about jobs at home.
And while I'm on my soapbox, this SWIFT freeze of Iran means Iran will be trading gold for stuff. That little fact is frankly major, if one cares to consider fundamentals.
Slumdog thanks for putting it on line. You hold strong hand status, me partial. If silver breaks up will buy(34.35) my first silver contract and hold. I have 2 gold futures that have held since 1100. I know I can't trade silver so have to ole turkey it. Gold I feel I can trade.
Thanks Slumdog for sharing your views with us. Gary, you managed to create such a wonderful environment where great traders and investors are sharing valuable info with common people like me, many thanks for that!
Gary, you have one of the best feels for waves I've ever seen. Hence my being a subscriber.
I'm not disagreeing at all with what you see in the 2014-2015 time frame. I'm very pleased to see that. You've stated this here in the past. I like it as it fits into the simple 5 and 10 yr parabolas visible in the gold chart which I watch via kitco.
My point is that this parabola we experienced is a first one, not an only one.
I experienced the 1980-2000 backside of that then huge parabola. I made a goodly amount of money then, hand over fist as one of the buy it sell it melters, never entering into a sell to the smelter at price to be determined on smelt date; I wasn't stupid the way most others were. I also held a hefty amount of fabricated silver (yes, some of it was guarded from destruction by this idiot) and I watched that part of my profits vanish down that parabolic backside. At $4-8, I said to myself, "self, silver's the same as fiat; SI ain't going much lower; go buy it. So, I bought a bunch of silver, and immodestly, few humans were as crazy. Then I quit and bought gold. Then I did nothing for a long time. Then I came here during the most recent front of the parabola and watched your refreshing and delightful call of the parabolic rise, and the stinging lesson you and everyone learned here for traders, and that's establish a trailing stop and live with it, raising it so one gets taken out in a panic.
That panic won't reoccur of course for a while. However, I continue to see that Spielbergian mesa and continue to focus on it as I fully expect, as do you, that the golden and silvered aliens will land there and in a fatigue after the ongoing drain of printing, the public will panic yet again into PM's driving the prices to full value and beyond. $300 SI? And at that moment, I'll take another painful step and shed all the PM's I will then hold, as at that point, it will be God's money, and I'll take some other asset instead, probably real estate in the form of an REIT which RE will then be ending its well deserved decline.
This next time, I'm quite sure you'll be seeing the top and chatting about it; so I'll be around til 2014-2015 for the exhilaration coming up. And thanks in advance for planning to stick around til that one when the money will be made straight up and on that amazing D wave, now that I've been able to experience climax and backside. The mesa is only a dream; the peak and steep drop are what will be yet again real.
Isn't it weird that we humans don't process this reality as reality, but instead, repeatedly wish to believe that this time it will be different?
I'm not big money but okay, my best friend who is big money in my opinion(8-12mil) due to inheritance is in cd's, bonds and treasuries. Will not even consider differently, even when I show him my returns. Defensive only course of action.
If I buy my silver contract will have to place in my investment profile and forget. When trading have different emotions. Might have to wait on Gary endorsement but #posted probably a long term buy. Love the statement Slumdog.
Have a feeling that new printing commitments announced at this weekend's G20 finance meeting could be bullish for PM's and give us our big push to an A-wave top, or more if really big news. Just a feeling.
$USD's handle is threatening to morph into the right shoulder of a Head & Shoulders pattern. The last H&S had mediocre performance so I would not expect a drop to more than maybe the 200 ma. This syncs with the idea that PMs may bust out of their potential Double Bottoms. Double Bottom patterns do not have super performance statistics, so the rally may be exciting, but not one to write home about. I guess this also syncs with Gary's A wave scenario. BTW that flag in $GOLD did print a long trade signal at yesterday's close. FWIW. ZSL proved once again that it has not bottomed. It just missed it's best chance in a long time to prove otherwise. IMO
OK, stand corrected James. 20 year old community college student living in the parent's basement. Sorry. (I've got lint in my belly button older than that. :) )
Regardless, I've got you down for 2 shares of ZSL @ around 10.00. Good luck son.
If you look daily gold and silver charts you can see seemingly HUGE reverse H&S formations. Or cup-and-handle instead if you want.
34.50 is the shoulder line on silver; 1765 on gold.
If these are real then breaking higher here projects LARGE LARGE gains. $240 in gold; $8.30 in silver
The very left shoulder of each pattern is actually a triangle (using the point of that triangle) instead of a clean high, but triangles can be treated as points often in tech analysis.
Just saying what I see here. It's possible that all this strength we are seeing and a massive buying panic a bit higher could make these play out if the world is catching on and if these mkts have switched character.
I noticed these a few days ago. My question is if this is the case, wouldn't another quick leg down be required to form the right shoulder? especially consider the overbought feel of the market as a whole?
This is the only thing that is keeping me from going heavy long, as I would obviously much rather get in at 5% lower(which would coincide with a healthy correction, especially in stocks)
Folks there's no need to over think this. We have a breakout above the down trend line and an obvious cycle low. Take a position and place your stop or stay on the sideline.
But waiting till you "feel good" is only going to cause you to buy at a top.
Thanks Veronica. So, best case scenario is with a top marginal personal tax rate slated to rise to 39.6% from 35% and top 15% rate on long-term capital gains slated to rise to 20%, the former 60/40 blend of 23% rises to 27.84% or a tax increase of 21.04% on futures players.
Worst case is a repeal of the 60/40 blend, which is what is being proposed in the new budget, and you get marked to market and gains taxed as regular income.
"There is no reason to treat dealers in commodities,commodities derivatives, securities, and options differently from dealers in other types of property. Dealers earn their income from their day-to-day dealer activities, and this income should be taxed at ordinary rates."
TZ is looking at the slanted "W" pattern that I mentioned last week, this D-wave is made up of two cup and handles, or a classic "W" pattern, that when the upper declining trendline is finally breached (on 1/25) it is always a technical high volume spike followed by a consolidation period which usually breaks to the upside and forms an inverse H&S pattern out of the second cup and handle (the handle then becoming the right shoulder). A measurement taken from the "W" low (Dec low) up to the declining D-wave trendline is used to forecast a move from the consolidation zone to a top, which puts gold at a test of the all time high. I have seen this pattern playout, when breaking to the upside it usually meets its target.
We also have a positive divergence in the True Strength Index on a gold daily chart. The Index is currently at +23, during the 03' A-wave it reached +49. The 03' D-wave also played out in a similar slanted "W' pattern, the A-wave was very similar to the current one (powerful stretched first daily cycle), and printed a positive divergence on the True Strength Index also.
BTW, if I wasn't clear... the 03' A-wave was the only A-wave other than the current one that printed a positive divergence over the D-wave on the True Strength Index.
Eamonn, thanks for asking. Slightly beating Gary since the summer (though not on a risk-adjusted basis, for sure). I just registered the LP today, we should be fundraising in a few weeks.
I suspect today is flat but I think by fri we will have a massive surge up in gold and silver - both of them breaking those resistance lines I mentioned earlier and setting off a buying panic in the metals.
The more I look at this thing the more I come to a few conclusions:
-The drop in gold down late december was a low volume 'hit'.
-Part of that is confirmed by how quickly and mercilously the price has climbed since. There was no break lower even though we had an 'up wedge' pattern early jan. Then we broke higher from THAT pattern (rare; denotes strength) above the large daily uptrend line and have been unable to retrace back to the daily uptrend line EITHER. (more strength)
-The speed and strength of the clime has left many people behind. Still trying to wait for dips to buy. Nobody feel comfortable buying here.
-The world is now aware of the central printing games and gold/silver. I think that recognition happened last 6months and has brought a new phase.
-The rally in gold and silver so far have completely negated the december hit - as though it didn't happen (which is what you would expect if the hit was artificial).
-Going up from here (with no real dips so far) will cause missed longs to go crazy I think.
Anyway...I think a break higher by fri is a real possibility and that will really set things off I think. (I could be wrong of course).
I'm 5x and will look to add with small stops should I see this scenario panning out.
A straight up move here from the dec lows to the old highs in metals would mirror 1979 when everybody was starting to catch on and the last phase was beginning.
There was a straight up move back to the old highs - non of this previous B wave jiggle up and down slowly going higher stuff. BOOM..almost straight up.
Then a triangle at the highs (denoting people who think it can't go higher without a pullback selling), but NO substantial pullback (other than the triangle ups and down). Then shooting higher and never looking back. Final phase.
I have seen this "W" pattern play out in two ways and both are drastic, to the upside or downside. With a break of the DC trendline (and break higher out of the consolidation zone) its a good indication that the falling fruit pattern has been negated at this point and the "W" will now form as an IHS that breaks significantly higher.
"A straight up move here from the dec lows to the old highs in metals would mirror 1979 when everybody was starting to catch on and the last phase was beginning."
Not so fast..it would mirror the 03' A-wave.
A move above the all time high may mirror the 79' move,and will put the ABCD pattern behind us as gold pushes significantly higher.
The question is what outperforms from from here? Gold, silver or PM stocks. I know we can buy double or triple ETFs for either but for discussion purposes, which asset outperforms without leverage?
If, as TZ points out, we are entering the final phase then a levereages play on gold or silver is best and miners will be a better buy AFTER gold has peaked (ie the bounce after the crash) just like in the last gold mania.
DeMark land: Seeing an interesting DAILY divergence between Gold and the miners: GC futures and GLD recorded a perfected DAILY sequential SELL 13 yesterday - good for 12 days. GDX and GDXJ are showing no such exhaustion. In fact, GDXJ is working on some DAILY BUYs that recorded last week. Let's see if the miners outperform the metal for the next couple of weeks...
Worth pointing out that this action in gold is occurring on an up day for the dollar. What happens when the bear flag on DXY breaks and heads for an intermediate bottom?
I'd like to see a historical comparison of Doody's miner picks (as an index) against GDX or HUI.
Comparing them to gold like you did isn't fair cause as we know the gold stocks outperformed till 2004 then underperformed since so it isn't a fair comparison.
The fair comparison would be his picks against the general mining ETF. I'm not so sure he's done much better, but I respect his skills and work and can believe it.
But he compares himself to XAU which is an underperforming busted SEMI gold stock index with huge copper plays. He should have used GDX or HUI. XAU is the wrong metric.
If you use the HUI compared to his same first table (2001-2010), then:
-HUI returns 1299% (40.97->573.32), vs -Doody 1360%
The difference is inconsequential unless I'm missing something.
"....A significant reason for the XAU’s poor performance is the fact that Freeport-McMoRan Copper & Gold (FCX) is the XAU’s largest component. Shares of FCX have tumbled 32.4% year-to-date as the price of copper has fallen from near $4.40 in January to its current level near $3.75 per pound.
One can also make the case that Freeport does not even belong in the XAU because it is largely a copper company with a relatively small gold business. FCX is not included in the GDX and HUI, likely because it derives only a small percentage of its revenue and profit from gold production....."
Here also is the XAU vs HUI for last 10yrs; Continuous underperformace as you would expect from an index with copper vs a pure precious metals index (in a precious metals bull mkt):
Being I trade futures, as I mentioned yesterday I never hold a full position until my stops are hit, ie. I went 80% long yesterday with a break even stop from $1740 and took off 40% at $1755, then bought back that 40% at $1765 and took the 40% back off at $1780. I will buy the 40% back above $1780 at some point and look to take it off at $1800. If I buy above $1780 now (between $1780-85 and cant initiate a break even stop I will put the stop at $1768, which if hit would make my last trade break even.
The bollinger bands pinched because of the consolidation formed over the last couple weeks, which usually leads to a pop as we have seen, the fact that gold punctured the upper band doesn't necessarily call for an immediate pullback, it could run along the upper band for several weeks with small pullbacks.
WW said: "This is what we want to see for a second gold DC higher, a complete and continuous decoupling from stocks." February 21, 2012 12:43 PM
I went into today with a 12.5% SPXU long. Today I added a 15% long position in AGQ.
So far both are profitable and I will hold both until one falls below the 10 period simple moving average on the 10 day 30 minute chart.
I am hoping to add more AGQ if PM strength persists. I would love to see equities move down as PMs move higher although this has not been the trend for quite a while.
Bill, Pinched Bollinger Bands usually means some kind of reaction is coming. Either up or down. You can never really know which way. But if gold is any indication, I'm betting the reaction will be up. Price can move outside a BBand for a bit, but usually pulls back within the bands. Even so, price can keep riding that band. Price moving outside a band does not necessarily mean price will reverse and get knocked all the way to the midline (20ma) or the opposite BBand. This stuff I learned from Ira Epstein.
Bill, check Polys last several posts on twitter. Also check out slv over the last year and a half with the bolinger bands strapped on. Perhaps that will help.
Its pretty clear the only thing holding back silver right now is the 150dma. Today's high on SLV was basically right on the 150dma. Silver needs to clear the 150dma to get a move on.
While this place is a technical watering hole, I smell Iran buying gold to pay its bills, and India/China/Japan doing the same.
When they're outted, gold will leap up and it will drag silver through what WW sees as the 150 day MA, and I see as that angle of declining tops off of the last parabola high.
When exposed, gold will get a new shine which the West won't be able to tarnish.
Gary's timing may be right, but I think we're looking at the Field? numbers way the heck up there.
And to all here, finally, and to hell with those who sit on the sidelines.
I never got an answer earlier regarding the current daily cycle so hopefully someone can fill me in.....if the actual 'low' was printed on Feb 10(albeit a small difference) as opposed to Feb 16, then wouldn't that now put us on day 7?
I made a late chasing purchase of gold futures today at 1768 and then we flatlined (slightly sloping down) into the evening where we are now.
I pondered it and that isn't a trade as per my system. I just got excited.
Sold it back purchase for some profit (1775) and will add lower if we retrace the move today (a good betm, at least temporarily before continuing higher).
If we go higher directly, I'm still 5x+ (and now with about 0.5x silver futures) and will be fine.
I'd rather stick to my system when I realize I've made emotional chasing trades than hold onto them and "hope" they work out. That's not a plan.
I should mention the silver futures. Normally, like with GDX, I still don't believe silver is outperforming gold or necessarily a good buy.
However, the reverse H&S pattern (or cup/handle, whatever) in gold is also in silver.
Gold broke above it today, but silver is lagging. I don't expect that to last very long.
The problem with silver is, generally, it is too volatile. By time a position looks safe you have already bought too late. Of course by buying early you usually get whipsawed out. Hard to win.
I'm taking a gamble on some silver futures bought earlier today (and hence the reason I didn't want to also gamble on the last gold futures buy) that what I have will hold. I put a stop near the low of wed thinking that we won't get back down there after the action today.
That would normally be a reasonable bet for most securities - not silver. But I'm not risking too much and I feel lucky.
I think that perhaps 2-3 down days are in order here. RUT and TRAN broke down further today. I'm just saying so don't bet the farm here. For those that wonder, I always talk of the S&P/DOW unless otherwise mentioned.
The week will close at the highs for gold and silver. That is pretty typical for the action we are seeing.
Periodically I have made similar predictions over the last year or so with pretty good record.
Tomorrow could well be flat or down some as people think the rally will reverse or stall. But the breakout and surge up (leaving people behind) is almost certainly real and when fri is here and people realize it they will buy into the close.
If this were a 5 day week, the days to pause would be either/or wed/thurs.
Since this is a 4 day week I'm unsure if there is enough time for a day of pause, but it would be going into the morning/noon thursday if I had to guess. By the end of thursday we will probably be flat again and then rally higher (than the highs so far) by fri close.
The overriding observation since dec low, however, is that this thing is STRONG. We are at a speed and gain rate similar to Jul/Aug when we were ENDING a massive rally and going into a blowoff top. Yet this is the START of one.
So maybe it just keeps on going (78/79 pattern) and pauses once we get to 1900. (Yes there will be a day or two here and there with down, but that pattern is mostly straight up)
The other main reason friday will close at the high (and higher than now) is that there are very many weekly trading systems.
But when you design such a system you have to decide to either wait till the fri close is marked and then act on your system. OR you anticipate the close or the odds your system will go green (long) in this case.
The first guy says "I'll decide 5 min to close."
The second guy decides "10 min before close".
The third guy says "I'm too big, I need hundreds of millions, I have to start at noon".
Etc.
Of course if you call you system green too early before the close and get it wrong, then you have made another mistake which you can't undo until monday - potentially at great risk.
So there is a balance and a bit of statistics and probability to guys doing weekly systems. It all depends.
But all-in-all we had 3-4 weeks of FLAT gold (which basically resets most indicators on most systems) and now we have a single week surging out of that congestion. Very VERY few systems will call this as a short. The vast majority will swing long - at least for a week or two - on what we are seeing.
Thus, long story short, as the fri close approaches the various systems anticipating their signals long will push things near the high ending the week.
I could always be wrong and something weird could happen, but that isn't the way to bet.
The weekly systems won't usually try to call things before fri, which is why to HUMANS the week can seem widely bullish based on what they are seeing, but can languish wed/thurs before continuing to shoot up on fri.
It's the weekly traders coming in. (And yes, some will wait till monday which also avoids weekend risk which might be beneficial)
"Gary said...
ReplyDeleteEric,
Of course it is. Maybe not secular but certainly cyclical."
Sounds good to me.
Taking off half of my gold futures long here at 1755, would like to see gold move above the 1765 highs and SPX break the 1370 highs to add again.
ReplyDeleteI didnt take the long on Friday as I was away from my PC...but agree with Gary that 13000 and 1370 seem to be difficult to break so far....
ReplyDeleteWW, your trading calls are wonderful.
ReplyDeletePoly entered in the morning and picked up the 10 jump, but you're killing this more consistently than I've seen. Well done.
Gary's conservatism at this time is very welcomed, too.
Slum,
ReplyDeleteThanks...Good to see you.
http://ciovaccocapital.com/wordpress/
ReplyDeleteFrank,
ReplyDeleteNice discussion in that article.
I'm increasingly becoming aware that selecting an individual miner is difficult. I once owned GBG at 2.62, fortunately sold at 2.55. It is now .80 as they did not meet estimates of production and costs increased. As someone said, the trades are so short in duration, the index etfs are safer.
Trying to post a link on a chart =
ReplyDeletehttp://www.freestockcharts.com?emailChartID=1367225a-762b-48d5-bba4-264306a0725f
CEF up 3.19%
ReplyDeleteGDX up 2.73%
Straight metal in a vault is beating today.
5x gold and holding. No sell.
ReplyDeleteI'll move my stops up to break even at worst.
This is a bull mkt and it only takes a few successful leveraged trades to close out the table.
It was hard enough waiting and getting this position in. Now that it is green and looks like it might hold I'm not going to sell out and lose it.
Big printing worldwide (all banks) and I think inflation is starting to surge and take hold.
I think a different kind of recognition is entering the world markets (of what exactly the game is....they now GET it) and I suspect gold may now be entering it's next 'more-public' phase. My belief is gold will rally mostly straight up to 1900 and then put in a sideways triangle like it did in 1979 (without much pullback). Then break up and out higher entering the final 1.5yr bull blowoff phase.
We just had a one month congestion sideways in gold that barely moved and now we rammed higher on two spikes of 7500 contracts each.
ReplyDeleteThat's pretty big and shows a large block of people got blasted out of the way.
You will recall the COT chart from fri when I said "look at what is happening here...this is weird". Well know we know that the COT in silver was a game of chicken building up and the shorts who were trying to keep a lid on it are starting to get crushed.
No thanks on an exit. I'm staying long and if I'm wrong I'll just take a break even stop and keep playing. If I'm RIGHT then the rewards will be large.
TZ,
ReplyDeleteDo you have an email addy I could use?
I think selling here is a mistake. (Although I think owning the mining stocks here is also a mistake and their poor performance is one of the reasons it is so difficult to hold them. Go to bed, wake up, BOOM, they suck and are down a few percent again. Why deal with that?)
ReplyDeleteGold is 1.97%
GDX up 2.78%
But if you are 2x gold then it becomes:
Gold 3.94
GDX 2.78
Higher return, less volatility, easier to hold, 24hr trading (futures), lower taxes (US citizen).
S&P are dropping as gary suspected and maybe I'm wrong to hold, but that's what makes the game I guess. Maybe I give all the profit up. We will see.
Gold is up $200+ from the lows and I'm only in it with one day's gains of about $20.
ReplyDeleteSo everybody do their own thinking and make their own calls. I don't have a crystal ball either. Those are just my opinions on the subject for now.
All that the snp is doing here is consolidating... it shall soon get its mojo back on.
ReplyDeleteCAT,
ReplyDeletegot no email. i'm a recluse.
Haggerty --
ReplyDeleteThanks for graph, I really liked both, the triangle you've seen and graphical tool itself -- the quality is amazing, it is based on SilverLight.
Is it free Ameritrade service?
CAT,
ReplyDeleteIf I can answer something here I prob will, but if it is private enough to need separate email I probably wouldn't anyway. At least for now that's just how I am. Sorry.
TZ,
ReplyDeleteNo apologies necessary...
In a way, the SPX is addressing what I wanted to talk about.
Was wondering if your analysis tells you equities are due for a nasty correction or will continue the melt-up, and, how (or if ) a correction would hurt PMs.
Perhaps more to the point, how relevant do you consider stocks to be vis a vis metals? So far the "correction" is negligible and the metals haven't even noticed.
Wow PM stocks really holding up well despite reversal in equities. Really rare to see
ReplyDeleteif the explanation for the last few months is some sort of onset of a macro "inflation trade" then it's possible what we're seeing is simply rotation out of equities and into metals.
ReplyDeletethus a severe selloff in equities may not exactly translate to the same in the metals sector(s).
as a reminder, while stocks have basically reclaimed or surpassed their highs here, silver is still some 30% below its high, GDX around 16%. gold %7-8% (thereabouts).
An intermediate degree decline in the stock market always infects the miners. I doubt this time will be any different. However we don't have any indication that an IC decline has begun yet.
ReplyDeleteI would at least want to see stocks drop back down through the early February consolidation zone before calling it.
This is what we want to see for a second gold DC higher, a complete and continuous decoupling from stocks.
ReplyDeleteDP
ReplyDeleteThat is just freestockcharts.com I believe
Looks like PMs closing at high of day despite red markets. Hopefully we see continued follow through tomorrow.
ReplyDelete1330 in /ES would be my guess for a correction target. IF they ever do, ha!
ReplyDeletebut meanwhile /GC looks like it's setting up for its 2nd round, highest volume of the year in /SI today, GDX looks real, real good to me above $54 and bellweather miners like SLW and RGLD all look poised to make a serious run.
we'll see.
Wow, AAPL at 516.10 after hours!
ReplyDeleteTom DeMark: " probability, tomorrow if market close higher than the previous close it's time to a 5 % to 6 % drop correction "
ReplyDeletehttp://www.bloomberg.com/video/86842200/
ZSL Oh the pain!! Back to single digits again. No, I do not own it.
ReplyDeleteIt's over for silver bulls.I'm going long zsl at the open
ReplyDeletetz do you use the tsi any? or anyone....
ReplyDeletelooking at gold 30 min and have a sell single. i think im going to add on the 0 crossover back up.
or better yet on the trendline break
ReplyDeleteBeautiful day:)I will have a stop established with my system Thursday no matter what POG does and will post when relevant.
ReplyDeleteVeronica,
ReplyDeleteI always appreciate your input from your system.
James,
ReplyDeleteCare to elaborate? Why would you short ?
I hope I've been of help to SMT'ers, especially when system lines up with Gary's calls.And I will not be opening a paid service anytime soon:)
ReplyDeleteLOL @ Veronica, We appreciate you letting us know your signals when they line up with what Gary is telling us. :)
ReplyDeleteThank you!
Veronica
ReplyDeleteDitto
The good ones don't need paid services
ReplyDeleteThey make $ from the market not off of it
Jsinclair is.one of them .. and of course will not show his knowledge ... only at a high level
Veronica,
ReplyDelete"I hope I've been of help to SMT'ers, especially when system lines up with Gary's calls."
Much appreciated, always helps to confirm my entries, im sure many are as grateful as I am for your posts :)
Are you kidding, both you(ww) and Veronica great for giving. Thanks much. It would be so easy not to post. Posting hard as some criticize if wrong.
ReplyDeleteThanks Veronica and WW for the posts- I am a follower!
ReplyDeleteAt ease no good answer on my trailing stops in futures. Not a set deal, when I am in a position I carry my smart phone with posted alerts at consolidation levels. I will move stops to just under strong levels. Like now 1/2 stop just under 1752(learned half sell from WW earlier). Other half at first spike level just under 1746. Refuse to give back all gains, that's just me. I'll always stop out earlier in futures as been doing this for 8yrs and learned to keep some profits. Only bugga boo is a large gap down. Thank goodness can afford to now. Good luck
ReplyDeleteRiley, thanks, I agree, I hate to give back gains, so was wondering if you were using an actual trailing stop, like percentage. Once I hit a certain level, I take profits and wait for it to retrace down and buy back in again and if I think we got momentum coming in, I add on another contract, if not, back out again. That is why I am always asking WW, if he has a level he likes or next resistance level. Still learning. I like to keep a chunk of run up profits for sure. Nothing worse than watching all those gains going back down again. :) Thanks for your reply! Have a good evening and lets hope we have some more room to run. :)
ReplyDeleteOh yeah I can place orders off my phone. That way not glue'ed to a computer
ReplyDeleteLOL @ James. One of the worst traders I've seen here since Mylifemytrade AKA Mylifeislame tried to short gold, silver, miners during last years epic move off the January lows!. Good luck, but I bet you are playing with a few hundred bucks so why even bother posting here.
ReplyDeleteWW you mentioned possible targets if gold moved up. May I ask what they are? You mentioned new highs. Give me good idea where to take profits if not stopped out. your flexibility amazing. I always have to have retests on levels to move. you move with the flow. Praise fromm Slumdog big deal in my opinion.
ReplyDeleteSlumdog if read this would you be willing to add to silver here(curious). I'm always afraid of silver. Wish had bought when you did, was told too but at time thought lower prices(since learned never listen to gut)
riley, the backside of the daily/weekly parabola high of 49+, was neared during the US session, today, that being in the low 35 range.
ReplyDeleteThis is not to be viewed as backfill trading time, below the downslope on that backside.
Look at kitco's silver historical chart on the 2000-2012 time window as that's easily available.
It's a matter of how one sees reality.
Gary said last year silver's basically dead for at least on his time frame, a long time, as the parabola came, climaxed, and busted.
I continued to argue that looking at 1980, the first parabolic wave, there, climaxed and busted, just like Gary saw now, but that was a first wave, with the massive, extended, major ride up just about to follow on that backside.
I continue to believe this to be the truth of the 2010-11 silver (and gold) parabola.
The next wave up I think will leave people stunned, it being incomprehensible to them.
Here, there are a couple guys who see a 2nd quick rise up and then a retracement. As does Poly now.
More next post
Wow Thanks Slumdog, I get it. Now will make actionable. I do like Poly and agree with what he said today.
ReplyDeleteWe are flirting with the roof, the lid of the angle of descent of what to me is a redux of 1980.
ReplyDeleteWhat would happen, if I'm right, and I'm expecting to walk away with millions, albeit small ones, and then not worth any more than they should be based on "world buying power" (as oil screams in our faces), will be a fast sharp rise through the descending line, in the low 35's, either immediately or shortly, but at the breakpoint, right now, there's today the first hail mary pass setup, a dropback and kick event.
If this is what's happening, silver will drive straight up, that starting within the next 3 days, as in now in my timing.
And it won't look back. Strangely, that's what Poly thinks, although he sees a quick retreat and retest.
It depends on how much it runs up in a short time frame. Higher means it won't be back, and we're in the elbow of "The Greatest Parabola of Our Lives".
I think that's what's happening. I hold very little cash or near cash but for my biz working capital in my biz. I've held that position for a long time. My view is being ratified by the fact that there will be no bitter pill for the banks or the borrowers, worldwide. Amazing shades of 1922-23 Germany, but who cares. That's the way the game's being played out.
So, weirdly, this is a make/break moment when the painful decline, which will certainly occur after The Greatest Parabola of Our Lives has happened, but it certainly was not 2010's parabola, is being tested.
It's still too early for the parabola to continue in either gold or silver. Bubble phases only last a year to a year and a half. Probably a year will be pushing it for gold because it is a thin market
ReplyDeleteThe next three year cycle low for the dollar isn't due until the fall of 2014. That would give us a bubble top around the spring of 2015. So the earliest the bubble could start would be early late 2013 or early 2014.
We will almost certainly get an A-wave top sometime during this intermediate cycle followed by a B-wave and then an extensive consolidation before the next breakout can occur.
Like Greenspan here, I've just held on and witnessed 49 turn to 26 and now 35. I expect $100-200. So, I'll wait for this last parabola, struggling mightily against the compulsion to take a break from the battle.
ReplyDeleteBut just this week, I've had my own acid test proof that I'm right. I've a handful of rather rich friends, cash and near cash in many millions to low tens of millions (I exclude the hundred millionaire as he's sort'a immune from everything, though he does lag what's happening).
What each independently said to me was that they are still hanging on to cash. They each still refuse to diversify a cent into PM's or PM funds. They are all unhappy with what's happening to their incomes and their asset values. They each totally refuse to budge.
This is great news to me as what I believe on an historical basis is that all fiat holders get crushed. These folks are seeing their life savings diminished, and yet they stand in the sinking boat and complain that the water is about their feet, now. Even after the Concordia tilted over, they experience cognitive dissonance, just as IMO for the health of the economic system, they should so.
Don't sell, and IMO, hold at least 20% of your assets in hard money, if not more.
At the margin, and with whatever you wish to place at risk, tag along with WW, Veronica, Gary, TZ, Poly, and others here (apologies that I don't mention some very shrewd posters here, which makes this a delicious place to be), and take the trades, if wealthy enough, allocating to each of those racehorses, part of your bet, sort'a a basket of equities if I may.
Poly IMO is not reckless. He senses there to be a major breakout that will occur sooner, if not now. He trades. I am not trading. I can't handle the stress. I'm parked in protection and wish to pile on more, but my new branch of my biz requires so darned much money, I just gotta get it realized so if the USGov survives, which I assume it will, I'll just adjust the zeros on the invoices and take home profit... yes, it's like supplying tires to the army, for as long as I'm willing to play the game.
In my world, the oil price rise means product price rises, and this time, a profit boost, more confetti, as Greenspan says.
Short answer. Watch over the next few days. The money here is not over $30 or $36. It's about $100-$200, and when.
And yes, labor will "lose", but in fact, American labor wins, and thus in the mid term, the US society wins. It's not about fiat. It's about jobs at home.
And while I'm on my soapbox, this SWIFT freeze of Iran means Iran will be trading gold for stuff. That little fact is frankly major, if one cares to consider fundamentals.
Slumdog thanks for putting it on line. You hold strong hand status, me partial. If silver breaks up will buy(34.35) my first silver contract and hold. I have 2 gold futures that have held since 1100. I know I can't trade silver so have to ole turkey it. Gold I feel I can trade.
ReplyDeleteThanks Slumdog for sharing your views with us.
ReplyDeleteGary, you managed to create such a wonderful environment where great traders and investors are sharing valuable info with common people like me, many thanks for that!
thx riley for sharing.
ReplyDeleteGary, you have one of the best feels for waves I've ever seen. Hence my being a subscriber.
I'm not disagreeing at all with what you see in the 2014-2015 time frame. I'm very pleased to see that. You've stated this here in the past. I like it as it fits into the simple 5 and 10 yr parabolas visible in the gold chart which I watch via kitco.
My point is that this parabola we experienced is a first one, not an only one.
I experienced the 1980-2000 backside of that then huge parabola. I made a goodly amount of money then, hand over fist as one of the buy it sell it melters, never entering into a sell to the smelter at price to be determined on smelt date; I wasn't stupid the way most others were. I also held a hefty amount of fabricated silver (yes, some of it was guarded from destruction by this idiot) and I watched that part of my profits vanish down that parabolic backside. At $4-8, I said to myself, "self, silver's the same as fiat; SI ain't going much lower; go buy it. So, I bought a bunch of silver, and immodestly, few humans were as crazy. Then I quit and bought gold. Then I did nothing for a long time. Then I came here during the most recent front of the parabola and watched your refreshing and delightful call of the parabolic rise, and the stinging lesson you and everyone learned here for traders, and that's establish a trailing stop and live with it, raising it so one gets taken out in a panic.
That panic won't reoccur of course for a while. However, I continue to see that Spielbergian mesa and continue to focus on it as I fully expect, as do you, that the golden and silvered aliens will land there and in a fatigue after the ongoing drain of printing, the public will panic yet again into PM's driving the prices to full value and beyond. $300 SI? And at that moment, I'll take another painful step and shed all the PM's I will then hold, as at that point, it will be God's money, and I'll take some other asset instead, probably real estate in the form of an REIT which RE will then be ending its well deserved decline.
This next time, I'm quite sure you'll be seeing the top and chatting about it; so I'll be around til 2014-2015 for the exhilaration coming up. And thanks in advance for planning to stick around til that one when the money will be made straight up and on that amazing D wave, now that I've been able to experience climax and backside. The mesa is only a dream; the peak and steep drop are what will be yet again real.
Isn't it weird that we humans don't process this reality as reality, but instead, repeatedly wish to believe that this time it will be different?
OT: Gary et al, this video might be an insight into our personal reactions to risk. It's a cliff hanger.
ReplyDeletehttp://www.liveleak.com/view?i=057_1329459128
I'm not big money but okay, my best friend who is big money in my opinion(8-12mil) due to inheritance is in cd's, bonds and treasuries. Will not even consider differently, even when I show him my returns. Defensive only course of action.
ReplyDeleteIf I buy my silver contract will have to place in my investment profile and forget. When trading have different emotions. Might have to wait on Gary endorsement but #posted probably a long term buy. Love the statement Slumdog.
Riley, how is futures handled tax wise when position is held and rolled forward from one year to next?
ReplyDeleteHey motivational speaker, you stupid moron,
ReplyDeleteI have never lost money trading zsl and I have never held it for more than 48 hours. You must have your head up your boyfriend's ass.
Have a feeling that new printing commitments announced at this weekend's G20 finance meeting could be bullish for PM's and give us our big push to an A-wave top, or more if really big news. Just a feeling.
ReplyDeletewhat is Poli`s URL ?
ReplyDeleteJust bought Silver at 34.05...I am pretty sure that it will go down now...LOL
ReplyDeleteAndybuji, futures contracts tax basis is always figured at mark to market the last trading day of year.
ReplyDelete$USD's handle is threatening to morph into the right shoulder of a Head & Shoulders pattern. The last H&S had mediocre performance so I would not expect a drop to more than maybe the 200 ma. This syncs with the idea that PMs may bust out of their potential Double Bottoms. Double Bottom patterns do not have super performance statistics, so the rally may be exciting, but not one to write home about. I guess this also syncs with Gary's A wave scenario. BTW that flag in $GOLD did print a long trade signal at yesterday's close. FWIW. ZSL proved once again that it has not bottomed. It just missed it's best chance in a long time to prove otherwise. IMO
ReplyDeleteThere is price and there are opinions
ReplyDeleteopinions are like holes, everybody has some and they are all important -- at the very least to their owners
Price is just what it is
CRB has an interesting bar, and so far, it seems like a good break through the April-Sep 2011 downtrend
More and more, it seems like Oct 2011 had a yearly cycle low for equities. If so, next yearly will likely be in the 2nd half of the year
We'll see how next IC shapes up -- I think it will maintain right-translated structure
Piazzi, Please give me your address in Canada so I can drive up and put my boot up your hole.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteHey Matt,
ReplyDeletetry dividing 40 by 2.
I bet you wear sandals with socks.
OK, stand corrected James. 20 year old community college student living in the parent's basement. Sorry. (I've got lint in my belly button older than that. :) )
ReplyDeleteRegardless, I've got you down for 2 shares of ZSL @ around 10.00. Good luck son.
If you look daily gold and silver charts you can see seemingly HUGE reverse H&S formations. Or cup-and-handle instead if you want.
ReplyDelete34.50 is the shoulder line on silver;
1765 on gold.
If these are real then breaking higher here projects LARGE LARGE gains. $240 in gold; $8.30 in silver
The very left shoulder of each pattern is actually a triangle (using the point of that triangle) instead of a clean high, but triangles can be treated as points often in tech analysis.
Just saying what I see here. It's possible that all this strength we are seeing and a massive buying panic a bit higher could make these play out if the world is catching on and if these mkts have switched character.
TZ,
ReplyDeleteI noticed these a few days ago. My question is if this is the case, wouldn't another quick leg down be required to form the right shoulder? especially consider the overbought feel of the market as a whole?
This is the only thing that is keeping me from going heavy long, as I would obviously much rather get in at 5% lower(which would coincide with a healthy correction, especially in stocks)
Please advise
JEFF,
ReplyDeleteI don't use TSI.
Folks there's no need to over think this. We have a breakout above the down trend line and an obvious cycle low. Take a position and place your stop or stay on the sideline.
ReplyDeleteBut waiting till you "feel good" is only going to cause you to buy at a top.
Gary,
ReplyDeletequestion for you....wouldn't the dcl for gold be Feb10 considering that was actually when the low was printed? That would then put us on day 7?
Considering the hesitation at 1761 would perhaps be set for its move into the next dcl?
I know I know, overthinking...humor me :)
Slumdog,
ReplyDeleteDo you have a blog or write for anyone anywhere? Regardless of what message you wish to express, your writing is always a pleasure to read.
Thanks Veronica. So, best case scenario is with a top marginal personal tax rate slated to rise to 39.6% from 35% and top 15% rate on long-term capital gains slated to rise to 20%, the former 60/40 blend of 23% rises to 27.84% or a tax increase of 21.04% on futures players.
ReplyDeleteWorst case is a repeal of the 60/40 blend, which is what is being proposed in the new budget, and you get marked to market and gains taxed as regular income.
"There is no reason to treat dealers in commodities,commodities derivatives, securities, and options differently from dealers in other types of property. Dealers earn their income from their day-to-day dealer activities, and this income should be taxed at ordinary rates."
TZ is looking at the slanted "W" pattern that I mentioned last week, this D-wave is made up of two cup and handles, or a classic "W" pattern, that when the upper declining trendline is finally breached (on 1/25) it is always a technical high volume spike followed by a consolidation period which usually breaks to the upside and forms an inverse H&S pattern out of the second cup and handle (the handle then becoming the right shoulder). A measurement taken from the "W" low (Dec low) up to the declining D-wave trendline is used to forecast a move from the consolidation zone to a top, which puts gold at a test of the all time high. I have seen this pattern playout, when breaking to the upside it usually meets its target.
ReplyDeleteA couple of days like this would be exactly what I want to see
ReplyDeleteWW, could you draw out this W pattern you've been talking about? I'm just not seeing it.
ReplyDeleteHarry, how is your fund going? I wish you well
ReplyDeleteWe also have a positive divergence in the True Strength Index on a gold daily chart. The Index is currently at +23, during the 03' A-wave it reached +49. The 03' D-wave also played out in a similar slanted "W' pattern, the A-wave was very similar to the current one (powerful stretched first daily cycle), and printed a positive divergence on the True Strength Index also.
ReplyDeleteHarry,
ReplyDeleteSept high to Sept low to Nov high to Dec low to Feb high - "W"
BTW, if I wasn't clear... the 03' A-wave was the only A-wave other than the current one that printed a positive divergence over the D-wave on the True Strength Index.
ReplyDeleteEamonn, thanks for asking. Slightly beating Gary since the summer (though not on a risk-adjusted basis, for sure). I just registered the LP today, we should be fundraising in a few weeks.
ReplyDeletegood luck Harry. Never easy starting out fresh
ReplyDeleteI suspect today is flat but I think by fri we will have a massive surge up in gold and silver - both of them breaking those resistance lines I mentioned earlier and setting off a buying panic in the metals.
ReplyDeleteWW/TZ, I see the W and I see how you got the target of the all-time high but I'm still not sure about the IHS of which you speak.
ReplyDeleteSilver is limping like a wounded animal.
ReplyDeleteCould be a puullback in the near term before we go higher..
Or as they say the right shoulder will form of this inverse head-and-shoulder pattern
The more I look at this thing the more I come to a few conclusions:
ReplyDelete-The drop in gold down late december was a low volume 'hit'.
-Part of that is confirmed by how quickly and mercilously the price has climbed since. There was no break lower even though we had an 'up wedge' pattern early jan. Then we broke higher from THAT pattern (rare; denotes strength) above the large daily uptrend line and have been unable to retrace back to the daily uptrend line EITHER. (more strength)
-The speed and strength of the clime has left many people behind. Still trying to wait for dips to buy. Nobody feel comfortable buying here.
-The world is now aware of the central printing games and gold/silver. I think that recognition happened last 6months and has brought a new phase.
-The rally in gold and silver so far have completely negated the december hit - as though it didn't happen (which is what you would expect if the hit was artificial).
-Going up from here (with no real dips so far) will cause missed longs to go crazy I think.
Anyway...I think a break higher by fri is a real possibility and that will really set things off I think. (I could be wrong of course).
I'm 5x and will look to add with small stops should I see this scenario panning out.
Harry,
ReplyDeleteThis recent pullback/consolidation as it breaks higher will form the right shoulder of the inverse H&S.
$1804 to $1667 to $1767 to $1523 to $1765 to $1706 to $1761 - IHS
A straight up move here from the dec lows to the old highs in metals would mirror 1979 when everybody was starting to catch on and the last phase was beginning.
ReplyDeleteThere was a straight up move back to the old highs - non of this previous B wave jiggle up and down slowly going higher stuff. BOOM..almost straight up.
Then a triangle at the highs (denoting people who think it can't go higher without a pullback selling), but NO substantial pullback (other than the triangle ups and down). Then shooting higher and never looking back. Final phase.
WW, thanks, got it.
ReplyDeleteI have seen this "W" pattern play out in two ways and both are drastic, to the upside or downside. With a break of the DC trendline (and break higher out of the consolidation zone) its a good indication that the falling fruit pattern has been negated at this point and the "W" will now form as an IHS that breaks significantly higher.
ReplyDeleteThe time period i'm talking about is roughly:
ReplyDeleteNov 78 (selloff low)
Dec78-Jan79 slight pause/sideways
Feb 79 up to the highs
March-April 79 sideways triangle (NOT much decline from the highs)
May onward -
up and up final gold phase.
Notice how what I just gave you had a 1-2 months PAUSE in the middle from the low up to the high.
ReplyDeleteWe just had that pause and started out of it yesterday I think.
SPEAK AND YE SHALL HAVE!!
ReplyDeleteYou guys are welcome
:-)
TZ, well done. I'm 6x GC so I'm ahead of you for the day ;)
ReplyDelete$1765.9 breached, confirmed new daily cycle in gold
ReplyDeleteTZ said:
ReplyDelete"A straight up move here from the dec lows to the old highs in metals would mirror 1979 when everybody was starting to catch on and the last phase was beginning."
Not so fast..it would mirror the 03' A-wave.
A move above the all time high may mirror the 79' move,and will put the ABCD pattern behind us as gold pushes significantly higher.
I didn't expect a break higher until thurs/fri. Again the strength is giving this away.
ReplyDelete6x+ added silver and gold with small stops
ReplyDeleteIts on :)
ReplyDeleteSilver is likely about to explode higher.
ReplyDeleteWW,
ReplyDeleteWhohoo!!! Just let us know when this bull ride is ready to stop!
So glad you are here with us this week! :)
34.50 in silver and it will be GONE!
ReplyDeleteTz/WW or anyone else,
ReplyDeleteThe question is what outperforms from from here? Gold, silver or PM stocks. I know we can buy double or triple ETFs for either but for discussion purposes, which asset outperforms without leverage?
If, as TZ points out, we are entering the final phase then a levereages play on gold or silver is best and miners will be a better buy AFTER gold has peaked (ie the bounce after the crash) just like in the last gold mania.
Gold needs to take out the $1800 handle and the C-wave channel upper trendline (breached when gold went parabolic).
ReplyDeleteTZ
ReplyDeleteI'll believe it when I see it
Dan,
ReplyDeleteI trade gold only. The only miner I buy is RGLD.
at ease,
ReplyDeleteGlad to be with you all too :)
You will hear from me from my hospital bed.
pressure cooker bout to explode ....
ReplyDeleteToo much strength here.
ReplyDeleteEverybody thinking it will dip and they can buy lower.
I didn't even think this would happen until later in the week.
In markets, most people think the same thing at the same time.
WW, good luck w/ your procedure. Everyone here will be pulling for you.
ReplyDeleteI see GLD running until the dollar's ICL, ~ March 9. Does that align w/ your thinking?
WW,
ReplyDeleteWhat is it about RGLD that you like about it over others?
WW,
ReplyDeleteAny thoughts on if this rise in futures will continue through the Asian and European markets as they went lower last night.
First daily cycle of the A-wave launched off the 300dma, Second daily cycle launched off the 150dma...need I say more about MA's?
ReplyDeleteHeads up,
ReplyDeleteThanks :)
I have to see how things go in realtime as always.
at ease,
RGLD is a royalty earner, the King in the mining world IMO. When gold goes psycho RGLD alone will breed millionaires.
WW, Gotcha on RGLD. thanks
ReplyDeleteat ease,
ReplyDeleteWe may continue to see some profit taking at the Eurex open and the European markets open, but thats all it is.
So much for the pullback !
ReplyDeleteVeronica,
ReplyDeleteThose buy signals are working great, thanks for sharing!
interesting to see what happens at close
ReplyDeleteThanks WW,
ReplyDeleteJust want to be ready to take profits and then reenter on those pullbacks.
For all it's promise, RGLD has been worthless mostly so far. No special reason to buy it.
ReplyDeleteI don't believe in investing based on what I THINK will happen in the future. Or investing based how great a story sounds.
RGLD's story has been the same over the entire bull mkt and the performance has been zilch.
Talking yourself into a good story isnt' the same as seeing the performance.
If RGLD is a good company, then it will begin to outperform and then the outperformance will grow and grow over time for years.
It will be visible clearly on a chart (and like gary says, If you can't see it easily from across the room then why buy?)
There will be plenty of time to buy if that visibility appears.
That's how I see it.
Yes, I used to buy and hold RGLD for that very same 'it's got a great story reason!' before.
I also traded BGO, GSS, DROOY and all the other gogo stocks over the years.
I think I learned better.
RGLD to CEF (50/50 gold and silver)
ReplyDeletewww.barchart[PUT.DOT.HERE.TO.FIX]com/chart.php?ss=1&spread=rgld%2Fcef&p=MO&d=M&sd=01%2F01%2F2000&ed=12%2F28%2F2011&size=M&log=0&t=LINE&g=1&sh=100&indicators=&addindicator=#jump
What is the point in owning it.
I is rallying less and LESS with each major blowoff top in the metals. Not more.
The stock is actually getting more badder and more badder
:-)
And for this steller underperformance you get a 0.84% div (which doesn't change the chart) and company specific risk.
TZ, so you recommend CEF over RGLD?
ReplyDeleteDeMark land:
ReplyDeleteSeeing an interesting DAILY divergence between Gold and the miners:
GC futures and GLD recorded a perfected DAILY sequential SELL 13 yesterday - good for 12 days. GDX and GDXJ are showing no such exhaustion. In fact, GDXJ is working on some DAILY BUYs that recorded last week. Let's see if the miners outperform the metal for the next couple of weeks...
HAGGERTY,
ReplyDelete>I'll believe it when I see it [silver 34.50]
yoo can believe me now or yoo can believe me later, but yoo will believe me.
[arnold schwarzenegger voice]
:-)
TZ,
ReplyDeleteIm not comparing RGLD with gold.
CEF up .90% today, RGLD up 1.13%
ReplyDeleteWW,
ReplyDeleteSomebody said this:
>RGLD is a royalty earner, the King in the mining world IMO. When gold goes psycho RGLD alone will breed millionaires.
I was just giving my take that there is nothing special about RGLD, imo. Nothing personal.
Hi WW what kind of trailing stop do you put in place. Is it percent wise or the previous days low...or?
ReplyDelete"TZ said,
ReplyDeleteRe: RGLD
"It will be visible clearly on a chart (and like gary says, If you can't see it easily from across the room then why buy?)"
Looks visible to me from close up, dont need to look from across the room.
OK. Sorry I brought it up.
ReplyDeleteThis daily cycle should technically be able to make it near 1900ish
ReplyDeleteIf your looking to buy and hold a basket of miners, I recommend John Doody's top 10...
ReplyDeleteover 10 years
Top 10 - +1032.6%
Gold - 465.4%
Long AGQ. There is clearly something significant going on here, at least short term.
ReplyDeleteWorth pointing out that this action in gold is occurring on an up day for the dollar. What happens when the bear flag on DXY breaks and heads for an intermediate bottom?
ReplyDeleteRGLD bottomed in Oct and never made a lower low.
ReplyDeleteDan,
ReplyDeleteMy trailing stops are always mental stops.
ww,
ReplyDeletewhat are the 10 stocks on john doody's list or does he rotate them.
Mike,
ReplyDeleteWhat's your email, I will send you a report?
I'd like to see a historical comparison of Doody's miner picks (as an index) against GDX or HUI.
ReplyDeleteComparing them to gold like you did isn't fair cause as we know the gold stocks outperformed till 2004 then underperformed since so it isn't a fair comparison.
The fair comparison would be his picks against the general mining ETF. I'm not so sure he's done much better, but I respect his skills and work and can believe it.
TZ,
ReplyDeleteIf you had an email I would send you a report too :)
Silver miners are acting better than Silver itself, realy hope there is a breakout coming
ReplyDeleteLook how tight the Bollinger Bands are on SLV.
ReplyDelete10 years.
ReplyDeleteTop 10 - 1032.6%
HUI - 664.9%
Gold - 465.4%
XAU - 23.1%
SPX - 9.5%
GDXJ - (-2.9%)
Doody's top ten portfolio returns:
ReplyDeletehttp://www.goldstockanalyst.com/audit.lasso
But he compares himself to XAU which is an underperforming busted SEMI gold stock index with huge copper plays. He should have used GDX or HUI. XAU is the wrong metric.
If you use the HUI compared to his same first table (2001-2010), then:
-HUI returns 1299% (40.97->573.32), vs
-Doody 1360%
The difference is inconsequential unless I'm missing something.
WW,
ReplyDelete>If you had an email I would send you a report too :)
Thanks...don't need it
:-)
"....A significant reason for the XAU’s poor performance is the fact that Freeport-McMoRan Copper & Gold (FCX) is the XAU’s largest component. Shares of FCX have tumbled 32.4% year-to-date as the price of copper has fallen from near $4.40 in January to its current level near $3.75 per pound.
ReplyDeleteOne can also make the case that Freeport does not even belong in the XAU because it is largely a copper company with a relatively small gold business. FCX is not included in the GDX and HUI, likely because it derives only a small percentage of its revenue and profit from gold production....."
www.goldalert[PUT.DOT.HERE.TO.FIX]com/2011/09/gold-shares-rally-gap-will-close-with-yellow-metal/
Here also is the XAU vs HUI for last 10yrs; Continuous underperformace as you would expect from an index with copper vs a pure precious metals index (in a precious metals bull mkt):
www.barchart[PUT.DOT.HERE.TO.FIX]com/chart.php?ss=1&spread=%24xau%2F%24hui&p=MO&d=M&sd=01%2F01%2F2000&ed=12%2F28%2F2011&size=M&log=0&t=LINE&g=1&sh=100&indicators=&addindicator=#jump
In my opinion, nobody should use $XAU for comparisons of anything in this precious metal bull mkt.
ReplyDeletePeople still do and then make decisions on it, but you won't catch me in that group.
FCX is a 42 BILLION dollar company that makes 6% (!!!) of its revenues from gold production (2007 figures. I can't find more recent).
ReplyDeleteIt is the 2nd largest component of the XAU (Barrick is 49 billion). So it is almost a tie.
Why would anybody use that index as a metric to make precious metals decisions? If you do you are measuring the wrong things.
"In my opinion, nobody should use $XAU for comparisons of anything in this precious metal bull mkt.
ReplyDeletePeople still do and then make decisions on it, but you won't catch me in that group."
Im with you.
One more leg up of gold and silver into the close would be a very nice indication of the strength I think is in this thing.
ReplyDeleteTZ:
ReplyDeleteIndeed. It'd be nice to see silver punch through the 150 DMA, that'd be one hell of statement going into the close.
WW My trailing stops are always mental stops.
ReplyDeleteOk what criteria do you use for your mental stops?
Thanks
Danno, good find (on the BB's and SLV). As you see, it's at the top band now - does this mean it will go down next?
ReplyDeleteAlso noticed that GLD is sticking outside the BB's upper band today. This makes me think a pullback is next. Your thoughts?
Dan,
ReplyDeletePrevious resistance, ie. $1760 now.
TZ,
ReplyDeleteI'm not sure I understand why you only trade metal and not miners. Could you go over it again?
:)
I'll wait for silver to punch thru top band and 150ma...something doesn't feel right
ReplyDeleteDan,
ReplyDeleteBeing I trade futures, as I mentioned yesterday I never hold a full position until my stops are hit, ie. I went 80% long yesterday with a break even stop from $1740 and took off 40% at $1755, then bought back that 40% at $1765 and took the 40% back off at $1780. I will buy the 40% back above $1780 at some point and look to take it off at $1800. If I buy above $1780 now (between $1780-85 and cant initiate a break even stop I will put the stop at $1768, which if hit would make my last trade break even.
>I'm not sure I understand why you only trade metal and not miners. Could you go over it again?
ReplyDeleteCause the voices from my toaster told me to. Luckily my toothbrush agrees with the decision or I would have to let them fight it out first.
Bill,
ReplyDeleteThe bollinger bands pinched because of the consolidation formed over the last couple weeks, which usually leads to a pop as we have seen, the fact that gold punctured the upper band doesn't necessarily call for an immediate pullback, it could run along the upper band for several weeks with small pullbacks.
Thanks WW.
ReplyDeleteWhy hasn't SLV broken out yet (vs. GLD)?
Because silver is not gold :)
ReplyDeleteLOL, good one WW. Nothing as pretty as gold. :)
ReplyDeleteOK, OK.
ReplyDeleteThat answer may work for Zen priests, but how about for the rest of us? I think this is suspicious.
Also, why hasn't RGLD broken out, if it's a royalty company it should mimic GLD's rise.
Bill,
ReplyDeleteRGLD is up 1.30% today.
WW, you goofball, RGLD hasn't broken out yet. 72.12 is the last recent high.
ReplyDeleteI've also noticed that while SLV hasn't broken out either, that SLW has. That also has me wondering.
Thanks for nothing man! ;-)
Bill,
ReplyDeleteThats like me asking why doesn't Silver and miners trade in an ABCD pattern identical to gold...lol!
So your answer probably is, they are not correlated. OK. Many think they are correlated, like GDX leading GLD, GLD leading SLV, etc. I'm done here.
ReplyDeleteBill,
ReplyDelete"So your answer probably is, they are not correlated. OK. Many think they are correlated, like GDX leading GLD"
You see GDX leading GLD, especially on a daily basis?
Be careful basing trading decisions on correlations.
ReplyDeleteBoth Silver futures and SLV are fighting to push above thier 150dma's.
ReplyDeleteBill maybe that answers your question.
WW said:
ReplyDelete"This is what we want to see for a second gold DC higher, a complete and continuous decoupling from stocks." February 21, 2012 12:43 PM
I went into today with a 12.5% SPXU long. Today I added a 15% long position in AGQ.
So far both are profitable and I will hold both until one falls below the 10 period simple moving average on the 10 day 30 minute chart.
I am hoping to add more AGQ if PM strength persists. I would love to see equities move down as PMs move higher although this has not been the trend for quite a while.
Bill, Pinched Bollinger Bands usually means some kind of reaction is coming. Either up or down. You can never really know which way. But if gold is any indication, I'm betting the reaction will be up. Price can move outside a BBand for a bit, but usually pulls back within the bands. Even so, price can keep riding that band. Price moving outside a band does not necessarily mean price will reverse and get knocked all the way to the midline (20ma) or the opposite BBand. This stuff I learned from Ira Epstein.
ReplyDeleteBill,
ReplyDeletecheck Polys last several posts on twitter. Also check out slv over the last year and a half with the bolinger bands strapped on. Perhaps that will help.
Its pretty clear the only thing holding back silver right now is the 150dma. Today's high on SLV was basically right on the 150dma. Silver needs to clear the 150dma to get a move on.
ReplyDelete>Bill, Pinched Bollinger Bands usually means some kind of reaction is coming. Either up or down.
ReplyDeleteYeah, that happened to me after breakfast. It was down.
While this place is a technical watering hole, I smell Iran buying gold to pay its bills, and India/China/Japan doing the same.
ReplyDeleteWhen they're outted, gold will leap up and it will drag silver through what WW sees as the 150 day MA, and I see as that angle of declining tops off of the last parabola high.
When exposed, gold will get a new shine which the West won't be able to tarnish.
Gary's timing may be right, but I think we're looking at the Field? numbers way the heck up there.
And to all here, finally, and to hell with those who sit on the sidelines.
I never got an answer earlier regarding the current daily cycle so hopefully someone can fill me in.....if the actual 'low' was printed on Feb 10(albeit a small difference) as opposed to Feb 16, then wouldn't that now put us on day 7?
ReplyDeleteMy pivot system for gold futures went long today, the first time it has since the sell on 9/15/11.
ReplyDeleteMy thoughts on the metals
ReplyDeletehttp://arum-geld-gold.blogspot.com/
Veronica,
ReplyDeleteThanks! That's good news!
Fearless Prediction: On March 20, Greece WILL Default
ReplyDeleteDanno - what happened to your head & shoulders top prediction on CRB last week?
ReplyDeleteNow the hilarious thing is, one week later, I noticed you got a head & shoulders top on US Dollar this week.
You are all over the place.
Bob,
ReplyDeleteWhat are your thoughts on timing for your GLD target?
TIA
Hi WW:
ReplyDeleteIs the True Strength Indicator you mentioned available on TOS? What settngs are you using on the daily charts?
Sell all the gold you have its going to crash.
ReplyDeleteI made a late chasing purchase of gold futures today at 1768 and then we flatlined (slightly sloping down) into the evening where we are now.
ReplyDeleteI pondered it and that isn't a trade as per my system. I just got excited.
Sold it back purchase for some profit (1775) and will add lower if we retrace the move today (a good betm, at least temporarily before continuing higher).
If we go higher directly, I'm still 5x+ (and now with about 0.5x silver futures) and will be fine.
I'd rather stick to my system when I realize I've made emotional chasing trades than hold onto them and "hope" they work out. That's not a plan.
.
ReplyDeleteI should mention the silver futures. Normally, like with GDX, I still don't believe silver is outperforming gold or necessarily a good buy.
ReplyDeleteHowever, the reverse H&S pattern (or cup/handle, whatever) in gold is also in silver.
Gold broke above it today, but silver is lagging. I don't expect that to last very long.
The problem with silver is, generally, it is too volatile. By time a position looks safe you have already bought too late. Of course by buying early you usually get whipsawed out. Hard to win.
I'm taking a gamble on some silver futures bought earlier today (and hence the reason I didn't want to also gamble on the last gold futures buy) that what I have will hold. I put a stop near the low of wed thinking that we won't get back down there after the action today.
That would normally be a reasonable bet for most securities - not silver. But I'm not risking too much and I feel lucky.
I think that perhaps 2-3 down days are in order here. RUT and TRAN broke down further today.
ReplyDeleteI'm just saying so don't bet the farm here.
For those that wonder, I always talk of the S&P/DOW unless otherwise mentioned.
The week will close at the highs for gold and silver. That is pretty typical for the action we are seeing.
ReplyDeletePeriodically I have made similar predictions over the last year or so with pretty good record.
Tomorrow could well be flat or down some as people think the rally will reverse or stall. But the breakout and surge up (leaving people behind) is almost certainly real and when fri is here and people realize it they will buy into the close.
.
ReplyDeleteIf this were a 5 day week, the days to pause would be either/or wed/thurs.
ReplyDeleteSince this is a 4 day week I'm unsure if there is enough time for a day of pause, but it would be going into the morning/noon thursday if I had to guess. By the end of thursday we will probably be flat again and then rally higher (than the highs so far) by fri close.
The overriding observation since dec low, however, is that this thing is STRONG. We are at a speed and gain rate similar to Jul/Aug when we were ENDING a massive rally and going into a blowoff top. Yet this is the START of one.
So maybe it just keeps on going (78/79 pattern) and pauses once we get to 1900. (Yes there will be a day or two here and there with down, but that pattern is mostly straight up)
The other main reason friday will close at the high (and higher than now) is that there are very many weekly trading systems.
ReplyDeleteBut when you design such a system you have to decide to either wait till the fri close is marked and then act on your system. OR you anticipate the close or the odds your system will go green (long) in this case.
The first guy says "I'll decide 5 min to close."
The second guy decides "10 min before close".
The third guy says "I'm too big, I need hundreds of millions, I have to start at noon".
Etc.
Of course if you call you system green too early before the close and get it wrong, then you have made another mistake which you can't undo until monday - potentially at great risk.
So there is a balance and a bit of statistics and probability to guys doing weekly systems. It all depends.
But all-in-all we had 3-4 weeks of FLAT gold (which basically resets most indicators on most systems) and now we have a single week surging out of that congestion. Very VERY few systems will call this as a short. The vast majority will swing long - at least for a week or two - on what we are seeing.
Thus, long story short, as the fri close approaches the various systems anticipating their signals long will push things near the high ending the week.
I could always be wrong and something weird could happen, but that isn't the way to bet.
The weekly systems won't usually try to call things before fri, which is why to HUMANS the week can seem widely bullish based on what they are seeing, but can languish wed/thurs before continuing to shoot up on fri.
ReplyDeleteIt's the weekly traders coming in.
(And yes, some will wait till monday which also avoids weekend risk which might be beneficial)