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Monday, March 19, 2012

INTRADAY POST

And intraday post has been made to the website.

189 comments:

  1. If you subscribe to a good newsletter or recommendation service that deals with the broad stock market, and you are happy about it, can you please share it with me? My email address is in the next post.

    I've been Gary's subscriber for years now, and am really happy with his interpretation of the precious metals market. I've made good money with it.

    However, to be blunt, his take on the general market has been quite wrong for a really long time now. And that has certainly impacted returns in my 401k where the choices are very limited and the amount is large percentage of savings.

    I am certainly not looking to enter the market at this moment, but I'd rather have objective advice going into the future - at the next IC low and beyond.

    So any recommendations would be appreciated. My email address is in the next post. Thanks!

    ReplyDelete
    Replies
    1. My email address is YesLetsDiscuss[at sign here]gmail.com

      Delete
    2. Gary has a good little business and a good blog. Nobody can time the market consistently over a long a period of time. Good trades can be made however trying to time the market will only end in a headache. The key is time in the market, not timing the market. The Fed will always inflate until that option doesn't work (by that time the stock market won't exist as we know it) which means asset prices will continue to rise over the long run. Your goal as an investor is to try and be as fully invested in the market with 80% to 100% of your assets allocated at all times. If you would like any help with your 401k or would like to discuss anything you can email me anytime.

      Delete
    3. You make sense, TenYear. - Time in the market, rather than market timing. Thanks.

      Even if I had held through the entire 2008/9 collapse - never selling or paying any attention to this account - I would be better off today.

      Perhaps, I should pay heed to Gary's PM calls only. Ignore the rest and go really old turkey with my 401k.

      Delete
    4. DeMark indicators did pretty good identifying the rally in the financials. We are in month 3 of 4 of upside reaction of a MONTHLY BUY Setup in BAC - pushing 70-80% return, not so bad, eh? Also, identified is the recent downside in treasuries, TLT MONTHLY SELL setup recorded in January, and we are currently on Month 2 of 4.
      Kevin Depew on his twitter feed has mentioned the possibility of a MONTHLY break out in the S&P, but we need a down month first - March or April?? SPX did record a perfected MONTHLY Sequential 13 in January, good for 12 months, but so far not much reaction. NDX is quickly reaching the end of its MONTHLY Sequential 13 SELL window in April. As I also mentioned previously, we have emerged at the end of 2011 from the SPX Sequential YEARLY SELL that recorded in 1999. Don't count out stocks as we proceed through the worst year in human history - I know the year is still young, but I just had to dig at Gary :)

      Delete
  2. We've been out of the stock market. How has that impacted your returns. You can't lose money if you are in cash. Plus if you are making money in PM then put your 401K in PM. Geez where do these people come from.

    ReplyDelete
    Replies
    1. Gary, no need to be so testy. I've been your sub for years and have benefited from your PM calls. However, as I mentioned, 401k choices are limited. No PM options - just bonds and general market.

      Since losing money in the crisis, and subsequent non participation, my larger 401k account is not growing with inflation or with the general stock market. This is a genuine issue faced by a large number of your subs as they are in the same situation and have commented several times in the past.

      Nobody is saying you can see the future. I take the entire blame for making my decisions, but I can also point out that your get out and worst year in history calls haven't helped. I am just asking if others know someone who is better versed in the general stock market.

      Delete
    2. Yes,

      A guy named Doc (thedocument.com) has had a different take on the stock market cycle. He has been saying since December (I think) that the IC would run long and bottom around late April or early May. That said, his main focus is gold cycles like Gary, but he also discusses oil and some other commodities from time to time. Other than Doc a new guy on the block is slr (smartvolume.wordpress.com) has some really complicated volume studies. I don't pretend to understand them, but his calls have been pretty good. The downside there is his turnover seems to be a bit high, so I don't know if its good for trading a 401k.

      Delete
    3. In the August crash, Doc was saying (Daily--as the market was falling dramatically) that the market was turning up. His calls at that time, would have cost you a ton of $. Just saying...

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    4. Cache,

      Agreed, but if I remember correctly, Gary was having some trouble with that period too because the IC ended up extending after putting in a convincing low. No one is going to get it right every time.

      Delete
  3. Treasuries tanking again today. I am assuming a stock correction will lift treasuries which are now oversold. Thinking about shorting them after a rally. Only problem is the Fed and the threat of interference.

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  4. YesLetsDiscuss

    If you lost money in 2007-2008 and your only 401K choices are broad stock funds, bonds or cash, you do not want to double your pain buying stocks or bonds at the top.

    Ask yourself if you would rather buy AAPL now on the happy side of its parabola or stick with Gary.

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  5. YesLetsDiscuss,
    If you have patience then wait till we get an ICL in stocks and then buy with your 401K. You haven't lost any money only an opportunity. And there will always be another opportunity. Anyone can trade in hindsight (and a lot of people here do) but in real time you haven't made any mistakes. We have played the odds exactly as they should have been played.

    ReplyDelete
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    1. This comment has been removed by the author.

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  6. More importantly we haven't given back any of the gains we made during the C-wave and we've added a nice little chunk to it. So we have more cash to invest whenever it is time to buy PM again.

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  7. TenYear, your advice to stuff 80-100% of one's cash into the S&P is pure insanity. Are you living on this planet? And it's market timing, not time in market. Just had to set all the bs straight.

    YesLetsDisuss, Gary's right that for your 401K you could have bought/held CEF or GLD or whatever, and have done fine. Stay focused on what's happening man - 20% unemployment, >$50 trillion in debt, QE1, then 2 and perhaps 3. No way out but to print or default. The S&P is a fools game. Put PM's in your 401K.

    ReplyDelete
    Replies
    1. Learn to read, Bill.

      I mentioned limited 401k choices multiple times. This is true for a large percentage of the plans.

      Delete
    2. Oh, I see. It's 4 am here in Japan so yes sorry I didn't catch that.

      Myself, I'd be in cash if my only options were S&P. I'd also consider selling some of my 401K if it were >30% of my net worth.

      Delete
  8. FYI possible H&S in $XEU - not a big one - from late Jan until now - best seen on a 3 mo 60 min chart. Are finishing the right shoulder now. Looks like it measures down to old support at 126.24 or so. That should push the $USD higher, and gold lower in the final leg down of this B leg.

    It's hard to wait for the C leg in gold to start...

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  9. thanks Bill! 1.2650 is indeed where I see it going

    ReplyDelete
  10. I did some checking on Stockcharts - here are the facts on the S&P vs. gold:

    5 yr window - SPY up 10%, GLD up 145%

    4 yr window - SPY up 17%, GLD up 80%

    3 yr window - SPY up 95%, GLD up 72% ... trading-wise, this was the opp

    2 yr window - SPY up 26%, GLD up 49%

    1 yr window - SPY up 12%, GLD up 16%

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  11. Gary,

    Yes, that is one of the more beneficial things that I've learned from you - be patient. My plan at the moment is to buy near the next IC low whenever it comes. And I will do it regardless of the larger yearly or four year cycle interpretation.

    You are right that I haven't lost any money staying out, but haven't gained any either. Since 401k is the primary retirement vehicle, I don't want to miss out on the next 50% rise. These opportunities are rare for broad funds and key to the personal and family future.

    ReplyDelete
    Replies
    1. At the end of Jan. I told my mother-in-law to put her 401K back to work in the market, my father-in-law is waiting for me to give him the green light after the next ICL....so all the "mom and pop" cash hasn't even entered the market yet.

      Delete
  12. Gary,

    Do you expect the dollar to be in a left translated three year cycle? If so, while the three year cycle low is due in 2014, the top should be in at least by fall 2012. Now, if there is concerted effort to keep the stock market at elevated levels until election time (there will be dips along the way), the dollar may not have a sustained rise even into fall.

    So perhaps, the next IC will mark the three year cycle top and lead to the start of the blow off stage in precious metals as the dollar declines into the three year cycle low in 2014. Any merit to this thought?

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  13. I don't know what to expect. I'm just playing this in real time as we go along.

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  14. WW thinking of short here on 225. Are you short or still looking for touch of 200 long? Thanks

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  15. Ya where is WW, hope hes doing alright havent seen any posts in a while.

    ReplyDelete
    Replies
    1. WW is ok. He is hanging out at www.bullbeartalk.com

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    2. Oh wow seems everyones there now, so much traffic. Thanks.

      Delete
  16. UUP down, FXE up - but on 60 min charts both are oversold/bought - I think the dollar plows higher here. Notice that GLD didn't react much to UUP's drop. GLD looks like it's tipping over on 60 min charts. Same w/SLV and esp. GDX. Have to wait and see.

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  17. $SILVER is 0.01 below $33 resistance. If that breaks and holds I think $GOLD will follow.

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  18. So net net, I'm waiting to buy gold and silver once they have bottomed. Don't see it yet. Others?

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  19. Gold 250ma and Silver 75ma are holding pretty tough....we shall see

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  20. Since your GET OUT!! call last year, the general market is up about 10%. My cash in my no-PM's-available 401k has lost about 6% to inflation since that time, using the reality-based shadowstats.com figure of 8-9% inflation since that time.

    I care about losing purchasing power. But in all honesty, my own calls before I became a member (or read your blog) were no better.

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    1. Here's the reality. I called the ICL bottom in Oct. You could have gotten in at that time if you so desired. We were focused on gold at the time.

      The dollar is up since then so you have not lost anything to inflation. I think we all know inflation isn't up 8-9%. Shock and awe stats are great to pull in readers and sell subscriptions but they have nothing to do with reality. Gasoline might be 40 cents higher than it was then.

      The correct strategy is to wait for an ICL and then put your funds to work. People keep making the mistake of assuming a missed opportunity is the same as losing money and it isn't. There will always be another opportunity. Just wait for the next ICL and when it comes then you can make some money in your 401K but be warned that the AAPL parabola is probably a sign that this bull is ending not starting.

      Delete
    2. BTW my get out cam in April right before the crash. I saved your retirement a huge drawdown. Any thanks for that?

      Delete
    3. My point is two fold: the equity 'help' has been asymmetric in frequency and in demeanor, often. And the asymmetric quality perhaps is simply a reflection of the inherent risk in manipulated markets, i.e. unpredictable effects of unprecedented QE and other prop jobs. Japan has certainly shown that propped up markets can be incredibly poor places for investing for decades at a time. I don't doubt for a second that you respond to that risk aversion. I know I have for the past 12 years.

      I went back to find the date of that particular call, and I was mistaken -- since then (March 13), the S&P is up only 3%. The Nasdaq is higher no doubt. Even if out the entire time, which I wasn't, 3% in exchange for sleeping better probably was a good place to be. I did try to infer where > 30 day opportunities presented themselves, and as a result, am slightly better off that before I sold that day (that is, slightly > 3% up). My biggest mistake was in failure to recognize the ICL late last December, and that has cost me 10% all by itself. In the 401k that is, in my tradeable accounts, it was the failure to recognize the silver parabola.

      My situation with most of my 401k assets is similar to many -- I am penalized for < 30 day holding period, often being banned from the fund I was in, too (for six months). Often, I recall commentary about 'next ICL due in 2 to 3 weeks' etc. and so that to me represented a high risk for a trade even if it would work out in a cash account.

      Anyway... the reality is that since the C-wave crested for miners well over a year ago, it's been paddling upstream.

      I'm not saying I have known any better. I get information from many sources, and I alone am responsible for my choices. I just happen to agree with others here that the general equity commentary you provide on occasion doesn't help on the whole for those who cannot trade their retirement funds on a dime. I don't know why you would care about that -- you've said over and over again that you concentrate on the bull market present at the time, and that is still precious metals.

      So I wait... the long term setup I think will occur is the high in the dollar prior to the meandering down to the 3-year low. I think this is a six to 12 month opportunity for 'cold turkey' for those 401k funds.

      Delete
    4. The general equities have been very tough to trade. The Fed is actively trying to reflate the market while the underlying forces are trying to pull it back down. This unfolds as a very difficult market. No one is going to get a "handle" on something like that. That's why I prefer not to trade it. It's going to be a coin flip for anyone, with one person getting it right one time and then another person another time. If you think you will be able to spot which one is going to be right and be able to jump back and forth as each has his day in the sun good luck.

      I really don't want anything to do with the general market for those reasons. I'll give my view based on cycles and sentiment but as we have seen the Fed can often short circuit those.

      Delete
    5. The good news for me is that one of my primary retirement accounts is opening up a 'brokerage window' which initially only will allow mutual funds but that can include a PM fund and other commodity funds. That won't be until around August, unfortunately; still, I have a chance at a year of the next C-wave, I think. And I can finally get off the general equity bandwagon, where I'd rather not be again for a number of years. Or more.

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    6. :-)

      Gary you cannot expect thanks for good deeds, only nags for less than stellar calls

      human nature: forever blame others and never give credit

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    7. I'm not blaming anybody -- can't you read?

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    8. That was not a comment about you or any one in particular, just my personal generalization of human nature based on my dealings with human beings so far -- nothing to do with you or anyone and like every generalization, there are always exceptions

      Delete
  21. They are taking the miners down to China Town.

    HUI will likely bounce hard shortly given the extreme oversold conditions, but until we hit the ICL in gold, it's anyones guess where it ends up. One target is the 2008 HUI: gold ratio of approx .2. If gold stays above the 300dma at 1599, that puts the HUI at 320. Of course gold would have to diverge from the general market in alll likelihood to stay above 1600 by its ICL.

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  22. Bill, one of my own 401k plans is going to open up a pass-through to some mutual funds (no ETFs I think, but I will push for that). Open up time is expected to be this fall, so I hope to catch a chunk of the C-wave with it finally. I hope other people get a similar escape clause added to their retirement plans.

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  23. Gary,

    You've drastically underperformed the market since the October bottom. The market is up over 30% since. I believe what keep a lot of your subscribers on the sideline was the follow up piece you wrote about 2012 as potentially being one of the WORST year for human history.

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    1. LOL That supposes that one avoided the crash and one picked the exact bottom of the market and has held through all the violate whipsaws. Since July when I started the model portfolio the market is up about 4% and you would have to have held through a massive draw down. The model portfolio is up almost 30% in that time.

      I don't deal in fantasy hindsight scenarios. Why? Because in real time they never would have happened. Shoulda, woulda, coulda just doesn't work in this business. It's a great tool for trolls to badger someone but it never made anyone any money.

      Cyclically 2012 should have been another 4 year cycle low. That is the basis for the call. However it looks like the Fed will be able to postpone the 4 year cycle just like they did during the last cycle. It came in 2009 instead of 2006 like it should have.

      I mentioned the other day that we might be seeing the 4 year cycle morph into a 6-7 year cycle because of Fed intervention.

      Delete
    2. The equities have not been hard to play, maybe hard to trade, trends are to ride not to trade

      When I was your subscriber, a number of times I asked you what if Nov low was a yearly cycle low, but you never answered the question.

      It was the yearly low and like every good yearly low , it gave a good run


      As for 4-year low, it can still happen in 2012. There are 8 apsects to cycles. One is periodicty, and another is magnitude. The ,low may still happen, but it may be at a higher low than 2011's low

      That would make a right-translated 4-yr low, but I guess, if one is very bearish, then one may try to find ways to say that righ-translated low of 2012 is not the 4-year low because it does not sit well with a perma-bearish view


      This has been a market run on liquidity first and foremost, as long as liquidity is there and accepted by the market place, bears are out of luck

      Delete
  24. Gary, there was no big crash... get over yourself... the market didn't crash as you keep saying it corrected...

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    Replies
    1. The market dropped 18% in 12 days. I think that qualifies as a crash or at least a semi crash.

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    2. BTW how are your PM positions doing, or did you magically sell them at the top? Amazing how that always seems to happen in hindsight.

      We sold them at the top except it's actually documented in real time :)

      Delete
  25. I normally just sit and listen, but I have to say that Gary made me a pile of cash in the last C-Wave (when I became a subscriber) --- I've lost a few nickels and dimes with fast turn-arounds over the last several months, but overall I'm still ahead on Gary's advice.

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  26. RE: all the talk about IRA options --- I have a rollover IRA with Fidelity that lets me buy individual stocks and ETFs --- I don't know if your IRA plan will let you move "old" money into a rollover, but it's worth investigating

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  27. No, i didn't sell my stocks.. I'm still holding them... there has been no rally so why sell... The only time i bought them was during the mini blood bath that gold and silver had in the summer... who wouldn't buy during that time?

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  28. If you can hold through this kind of draw down then I commend you. Many people claim to be able to, but when it really happens they almost always end up selling at the bottom.

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    1. Holding needs belief and resolve and one can only do that with a fractional core holding as a % weight of the bigger pool of assets

      those who lever and and go all in or more than all in and say they are in it to hold come heaven are better men than me -- all the luck to them for they will need it

      Delete
  29. MARKETS

    http://traderjoed.blogspot.com/

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  30. whats your email gary... ill send you a snap shot of my TD water house account real time with my holdings.... Im not really drawn down my friend... and I hope the miners do go lower before the mania phase.. ill sell my silver and buy more miners... Especially EDR, and AUN.....

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  31. iluvpm, I'm not gary but I know his email address. I found it up near the top on right side of this page:

    garysavage@cox.net

    ReplyDelete
  32. I bought a little more today, some PSLV and a couple of miners. These prices are low and I can hold and wait.

    BTW If it wasn't for Gary I wouldn't have most of my capital to make these purchases. Take responsibility for your own trades. You guys obviously did not follow the model portfolio.

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  33. gary,
    could the divergence between the miners and the PM's signal a possible short term bottom in the PM,s? espicially sinc eyou feel the us dx is going to go down for its icl
    thanks

    ReplyDelete
    Replies
    1. Look at the hui:gold chart. It obvioiusly hasn't gone down in a straight line, but it has been nothing but ugly for over a year. The technical indicators for the ratio are oversold. It could easily bounce for a week or more and still stay well within its downtrend.

      If this is Feb 2010, the PMs rally, if this is 2008, well...

      Delete
  34. Ben,

    I know exactly what you are going through.

    Eric,

    Yes, the worst year in history was a very drastic, bold and convincing call. Being an election year coming out of a recession, regardless of the cycles, we should have foreseen this outcome.

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    Replies
    1. The year is not over yet.

      I'm sticking to my bond market implosion call.

      Delete
    2. Do you mean the bond implosion, stock market melt up and later PMs going parabolic call?

      Well, it has to happen sometime, right? I mean the bond bull cannot continue for 30 more years.

      Delete
  35. The reality is that in an account like 401k which you probably rarely access, buy and hold period is a very beneficial strategy.

    You would be ahead even coming out of the 08 recession in spite of the nominal decrease. And you would be much more than 4% ahead since before the mini-crash labeled by Gary.

    The reason for that is you would keep contributing when the market is down. Dollar cost averaging works very well in these situations. For two years you would have bought at really low levels.

    Certainly far better than missing out on a massive rally that we've had.

    Of course, this means that you weather draw downs. It is easy to do it in a non trading account if you keep it out of sight. I did that for years.

    Unless you have very good insight or a good advisor, for such accounts, buy and hold and dollar average. It might be sound simple and beginner-like, but it is quite clear that it is a much better strategy for 401k accounts.

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  36. WW,

    Yeah, I guess inspite of being relatively young and without kids, I'm a "Mon n' Pop" 401k investor now. :)

    Let me know when you ask your parents to buy next time!

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  37. YesLetsDiscuss,

    There was a couple things that surely was missed that was discussed but thrown out like a step child. For examples, coming out of the October lows, while everyone was watching the dollar the yields on the Spanish and Italian bonds were rallying (yields dropping). Both QQQ and RTH (retail 70% of GDP) broke out to multi-year highs in December.

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  38. Lots of testosterone today. What we men need is hard exercise, so that our brains turn off and we mellow out. And what's the point in picking on others when we have plenty of things to change inside. Is anyone perfect? No.

    To gold. I still see the H&S on the $XEU, which means that gold in US$ should fall. But when I look at GLD it looks like a bottoming pattern. Same for GDX and SLV. More waiting I guess...

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  39. Aw, heck, I haven't had my bike ride yet, so let me add to the rage.

    Gary's up 29.6% since last July. That's a fact because he's an honorable man.

    That's a LOT better than my own stats. And better than probably 99% off all professional HF's out there.

    If one of you big-mouths did better, good on you. But that doesn't make Gary a bad trader.

    Criticizing others and beating your own chest actually reveals insecurity.

    Everyone's trying to be a better trader. Can't we all get along and just focus frustration and energy to learn from each other?

    And keeping facts straight would go a long ways as well. It's much better to ask a question of clarification than accusing someone of something based on an assumption. Just makes us accusers look stupid in the end.

    Anyways, seems like us men are born to fight. At least lets be polite about it.

    ReplyDelete
    Replies
    1. I am not sure how many hedge funds can claim and prove such return. Such number is truly spectacular

      Was watching season 2 of Boardwalk Empire

      One of the gangsters (Arnold Rothstein), tells another (Nucky Thompson )that he has been making most of his money via gambling and that secret to a good player is to know when there is a play and when there is not

      Gary knows how to smaell a play and how to smell a rot most times

      Delete
    2. Running a hedge fund or a newsletter service is like eating apples or oranges. Newsletter service has its own freedom and parameters when it comes to rules of investment and Gary executes his rules very well from what I can see, regardless of other participants agreeing or disagreeing.

      With a hedge fund however, investors DEMAND that you be fully invested as much time as possible, otherwise they take away your capital. Therefore Gary would have to diversify throughout asset classes and also be invested / chase performance. On top of that, with a hedge fund, investors DEMAND you make returns under pressure, otherwise they take away your capital.

      What do you think would be the performance of his fund if his calls on the Dollar / Equity markets have been more contrarian signals than anything else? It is turning out to be a great for half of the year stocks, not a massive disaster for the history books. Also, the Dollar is failing to make new highs like predicted in so many blog posts.

      Delete
  40. Gary, you are still the best. Above all the others. Keep doing what you do

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  41. GDX * Gold Miners * Weekly chart :

    http://screencast.com/t/hIRWi6RILjsj

    A close below the channel and 200 SMA , Would be Bearish !

    Gann360

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  42. GLD Weekly chart :

    http://screencast.com/t/lhLVIq3m


    Finding support at rising trendline from the 2008 Lows.

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  43. the last 2 lows in gold were around the equinoxand solstice dates.will we get another this week around 1625? (360 degree Gann vibration) Another hammer (candle) would certainly need to be respected if it transpired

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  44. I'll bet 1 United States worthless Dollar (all I have) that subscribes should prepare for another flip flop.

    I think there is a decent chance that Gary will now become bullish on PMs, at least for a trade, and drop his long Dollar stance. The DXY is about to crack its 20 & 50 day MAs, while there is now fear in the Gold market sentiment and extremely oversold breadth in the Gold Miners with McClellan Oscillator diverging too.

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    1. It's called trading in real time. I've already outlined the conditions that must be met for me to move back into the dollar bear camp. If they do then I will have no problem reversing my position 180 degrees.

      And yes it is time for the metals to bounce as the dollar works its way down into a daily cycle low. The stock market should generate a final manic buying frenzy during the next week or two. But unless you think the stock market will never correct, then the dollar should hold above the Feb. 29th low and it should rally violently when the stock market falls.

      And these runaway type moves always end in some kind of crash or semi crash that erases weeks if not months of gains in a matter of days or even minutes.

      If the dollar breaches the Feb 29th low then the runaway move in the stock market could last another 3-4 months. I don't think the odds are particularly good for this scenario as it would imply the AAPL parabola still has another 3-4 months before topping. Since AAPL is already almost 50% above the 200 day moving average it seems unlikely that this could continue for another 3-4 months.

      When the AAPL parabola breaks it should signal the end of this cyclical bull market.

      Delete
  45. Tiho, whats your view on the US dollar for the rest of the year, may I ask?

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  46. I think your objective should be to "roll over" the 401k into an IRA. Resign from your company for a day and roll them over, if that's what necessary. My understanding is that the motivation for having a 401k is the "matching funds" from an employer. The fact that you can't invest these funds freely is egregious.

    I wonder if the employers are being "lazy" or if there is a kickback mechanism with financial companies who administer these 401ks.

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  47. Gann360, thanks for sharing the charts. :)

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  48. On finance.yahoo.com are video's - Jeff Macke - "breakout" - one of the recent ones on gold - a trader named Ilczyszyn says to wait for $1525 gold (a retest of the Dec lows). Short and sweet.

    http://finance.yahoo.com/blogs/breakout/wait-gold-bottom-1525-ilczyszyn-202824187.html

    ReplyDelete
  49. Tiho,

    All very good points and credit to the significance of size and participation

    the bigger the size of capital and involvement from other people, the harder to make concentrated or targeted bets

    but, one still remembers moments like Soros betting the farm on the short side of the pound

    so, there is also a question of character and insight of the player as well



    But, I agree with you and think making 30% on a million is easier than making 30% on 100 million

    still, I think Gary's performance has been spectacular


    Have you yourself done better in the same time frame or even over longer period? If so, great job and you are on of the very few as well

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  50. babooly1 - I hate to talk about performance, because it is perceived in wrong ways. I'll just say that I have been up similar amount to Gary, but without trading or flip flopping in and out, over the last quarter. March has been a hard month for Dollar bears / PM bulls like myself, so the performance is taking a hit. I also think Gary is doing a decent job without a doubt too. I just disagree with his market views in the short or medium term, but that is no big deal. Ewe all know the real money is made in big trends and big movements as Mr Livermore himself always use to say.

    smartbullion - Tiho, whats your view on the US dollar for the rest of the year, may I ask?

    I thought at the start of the year, that when consensus predicted 2012 to be a disaster especially in Europe, it most likely won't be. I thought that the Dollar uptrend, which started in may 2011, will end. So far so good. And since this is not the prospering 90s, when you don't get a recession around the world, you usually also don't get a self sustaining Dollar rally. Credit markets claimed around December after LTRO and Dollar funding demand by the banks receded. There, in my opinion, Dollar topped in middle of January as huge Euro shorts were not justified.

    So I think the Euro shorts at record back around mid Jan '12 paint a picture where every man and his dog shorted the Euro due to printing of money. So I'd argue that we have priced in LTROs and Euro is in a recovery / short squeeze mode back above $1.40 as we wipe out the remaining 100,000 net short contracts. That might last until the fall of this year or even later until US elections. Remember, rising Euro is good for the world due to Risk On trade, good for China as Europe is the main consumer of their exports and good for US jobs as manufacturing gets a boast from the weak Dollar. Everyone including Germany wants a strong Euro.

    What happens after fall of this year or after elections? The bull market from march 2009 wil loon top, because Gross Profit Margins are at record highs. Earnings are record highs. We are going to have a mean reversion in margins and profits through a normal economic process called a recessions and it should not be a surprise because it occurs every 4 to 5 years, and we are due for one soon, either end of this year or sometime next year.

    By than I think the Dollar will have made a lower low below February, which gary claims is so critical for his own view and analysis. Majority will therefore be either short the Dollar, bearish the Dollar or not buying the Dollar. it is around that time that the Dollar will most likely bottom, Euro will top and we will enter the final phase of EU Crisis and another US / EU recession. I am certain that some countries will default during that period and the Dollar will be a safe haven. I will be a Dollar bull around that time.

    I hope that explains how I see the Dollar move in the coming year. So first it will be weak and than by September / October (bad seasonal months for stocks) or even by the end of 2012 past elections, the Dollar will put in a proper bottom prior to a global recession and mean reversion in profits.

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  51. Tiho, thank you very much for going to the trouble of such a big reply. Much appreciated, and very interesting :o)

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  52. Solid Hammer on GDX should be worth a couple of bucks here.

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    1. I made my largest buy yesterday of a few miners with solid numbers. I think there will be some sorry weak hands this summer.

      Delete
  53. Just bought 1 Silver at 32.20...for the long run...

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  55. Tiho,

    I like what you said, it sounds very resonable, and i am betting the same. (i am not your sub bwt)
    Keep posting.

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  56. Is it possible that $Usd is making an DCL ? Since we are in the 15th day, we could have a shorten DCL. If tomorrow $usd makes an higher high and an higher low from today´s quote, we could have s swing low.

    Any thoughts ?

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    1. The last cycle was short so I wold expect this one to be of normal duration.

      Delete
  57. I see no trades and am just watching.

    Next week is rollover for the gold futures contract and the upcoming month is big delivery and options month. I expect more down action in gold. Both due to that and also due to the large daily downtrend line which seems like a juicy target at around 1615 (and dropping) to pop under.

    Based on the action I'm not sure the daily low is in (but I'm not a cycles guy, just speculating.) I have a target below the daily downtrend close to 1600 where I will again buy and attempt to ride a rally.

    I again mention that if gold bottoms in here roughly and turns back higher to 1800 then we will have a HUGE reverse H&S pattern projecting well above 2000.

    Conversely I can see the argument that everything is now collapsing back down again into another liquidity crunch. I find it hard to believe with the printing in the EU, but gas/oil is up to danger levels (which crashed the economy previousl), rates are now climbing (the Fed 'twist' operation is almost exhasted. Do they start another?), etc.

    Tough call.
    But I come back to my normal argument....you ask yourself if a zone has a REASONABLE chance of holding and whether it provides a good risk reward ratio. If so you give it a try.

    I think a bit more drop in gold and we are at another one of those levels.

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  58. Clearly my approach is not a cycles approach or one gary approves of (generally) however he is currently trading in the same direction (small size) so I'm not that far out in left field.

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  59. Yes, a week or two ago I was positive and thought we were heading back up in a "79" type scenario that was ready to run into the next phase, but that didn't work out. So now the weakness is obvious and I don't see strength just yet (maybe that is a contrary indicator, but I have nothing that tells me gold should be stopping on these lows just yet now that we made it down here.)

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  60. The SnP has yesterday set up a powerful down move.

    The direction is down. If it moves up, it will be explosive to the upside, easily to 1500.

    The down direction counts on a DSI are 1335 at 3X and 1275 range on a 5X.

    The market is a low risk short, with the exit point being about 10 points above the high of 3 trading days ago.

    This setup occurs very rarely.

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  61. Tiho,
    Agree with the call of the $$$ high being put.
    Lots of resistance in that 80-82 range.
    No sustained rally in sight.In fact reading btw the lines... FED is hellbent on destroying it. When faced with all the alternatives in the form of monetary/fiscal policies...debasement to allow improved exports is last option. It is STILL a full blown currency war out there.
    Earlier this year I said that the only thing of importance to watch is the distaste for the USD in international settlement. Based on the growing need to find an alternative and with a few other developments, I feel the USD cannot make (even after a low being put) any sustainable rally. PM's are already acting like money and taking the trade away.
    I fear that USD will through ongoing devaluation continue its slippery slope.
    What other choice do the FED /Treasury/Govt have.....other than to increase rates or start WWIII.
    Just my two cents worth ;-)

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  62. Hi Slumdog: What are you noticing to call the move yesterday a Powerful move down? Just seemed more of the same to my novice eyes.

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  63. A really good way of seeing what is currently happening is the following chart here. It is between Silver and USD Index. Silver topped almost 12 months ago around $49, while the USD Index bottomed around the same time around 73 points on the index. Since than Silver has fallen dramatically in a bear market which sliced 47% at one point into late December low. After almost 12 months of rising, USD Index has so far failed to take out 81 / 82 points on the index as a main resistance.

    In the short term PMs sentiment is getting bearish, so when Gold and SIlver sell off a little more, say towards $30 for Silver, we will probably do a first HIGHER LOW and end the downtrend from May 2011. At the same time, USD Index will fail to make a new high above middle of January peak around 81.50 and will create a firstLOWER HIgh and end an uptrend.

    I've been long Silver since 29th of December at $26 and shorting the Dollar via buying Swiss Francs since 16th of Jan. As the current short term sell off runs its course, I plan to buy more Silver around $30 area (5% drop from here maybe) and add some more shorts to on the US Dollar at the same time via Japanese Yen most likely. Japanese Yen is very much beaten down and everyone is extremely negative on the currency!

    Gold Miners are also extremely oversold. Breadth is beaten down, technicals are beaten down and sentiment is beaten down. For those who do not buy PMs or short USD, the alternative would be to buy Miners as they could finally start to outperform other assets including Gold, S&P 500 and Treasury 30 Yr Long Bond.

    So to cut the story short, my personal opinion is that we are building a large bottoming base on Silver between $26 and $30; and at the same time a large top on the US Dollar between 80 and 82 on the index.

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    Replies
    1. Hey Tiho, you are on the right track!
      Keep posting, please.
      Mickette
      P.S. Mon bonjour à Carlos M.

      Delete
  64. Miners at the bottom of a huge 1.5 year down wedge formation. Tapping the lower line now.

    I would rationally say it holds and the miners go higher simply because gold is a bull market, but you never know and 'rational' stuff doesn't work too well these days. It just might break lower and then you will see one heck of a mess. We've already reached the apex of the pattern which itself indicates there isn't much strength left in either side. (But fear is always pretty powerful to the downside if it kicks in.)

    I come back to my simple, but seemingly mindnumbingly complex argument for the continuing long term buy-and-holders of the miners (not what gary is doing as much) -> what is so hard about just waiting until the mining stocks *actually* start to outperform (on a significant basis) instead of guessing?

    You MIGHT get the bounce here on that wedge and go higher.
    But if yo do NOT it's gonna feel like a bat across your head.

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  65. I will still admit again that the GDX trade LOOKS good from here.

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  67. EMINI

    http://traderjoed.blogspot.com/

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  68. Hey Gary what's up with the TVIX trade...it's down over 3 today, while VIX is up ...who the hell is doing all the selling and should we be doing the same...Man, talk about manipulation but this is ridiculous...please advise...WAP

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  69. Day One of my DSI call.. First number of bingo came up.
    These very tight setups at tops (and bottoms) are often enough very powerful, the first time around, and the second, maybe... as after that, the game's "known" and won't be playable again. Also, inside reversals, below prior highs, are very high risk trades. We're in a low risk trade. There are many who are undecided, which is good for this trade, as it should be. Shocked that the market actually is moving and still distrustful. Very good. Big drop to 1335 has now a high probability. Rarely, this could bounce back into the starting range, but too many times, it's just over the side with the anchor and those who have their legs in the way get sucked down. Currently, the longs are everywhere and they're so obvious and available to slaughter, the DSI has pulled the trigger.

    Gary, this is the same thing I saw on a monthly chart when the S&P turned back in 2008. It's rare. You called bullpucky. Ok. I vindicate myself and still admire your work and still paid you money. Next year, I'll take a free sub as what I know is worth a fortune in 2 situations and they repeat, not often, but when they do, they're lucrative. This trade has a high probability, and I posted it BEFORE the event, just as I did at Poly's the triangle trade which made money on half and broke even on half, that being a much lower probability than what's happening IMO now.

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  70. Exit at SnP 1335 on half the trade imo. That's safe enough. The rest, place a stop at break even, and let it ride. You may see 6x, a drop of 300 S&P points.

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  71. Slumdog: Sounds very promising since I am already positioned to take advantage of this. What does DSI stand for? I Will be watching closely and looking for any updates!
    Jenny

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  72. I've asked Miyagi for the numbers at bullbear. My belief Jenny is this will be a flash crash, which means one has to exit at the 3X and 6X points, below the low of Tuesday. Measure the high and low over the past 7 days (just because, not because I'm explaining more here), and subtract that in multiples up to 2.75 -3.00 and then down to 6, and those are the target areas. The guys who know cycles can identify when we're nearing a timing for a DCL. That will be the exit point. To be conservative and win assuredly, I've suggested exiting 1/2 at the 3X area and ride the rest with a stop probably at 1.5X on a gamble one can win the full 6X. After that, the pattern switches to a monthly, and there's nothing I can see that is in a monthly, not for months out.

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  73. Just don't be a pig about this trade. When it starts down, it will look like there's no floor. It's already started and the feeling is straight down. This is again a right shoulder slump and it can stretch tomorrow and Monday like nobody's business. As a trade, it's over at 6X as the max I've ever seen is 8X, and at one time, I saw all for a decade or longer.

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  74. If it starts towards 6X and doesn't make it, I'll post again about adjusting the exit protective stop so there's no risk of loss.

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  75. Slumdog,

    Read your post last night...Is your timeframe 7 Trading Days?

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  76. http://1.bp.blogspot.com/-4GpIgpeJrrI/T2uK9ACvemI/AAAAAAAAAtY/dj_3F_gHCn4/s1600/INDU%2B3-22-12.png

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    1. I think we're only on day 12 of this daily cycle in equities. That means this retracement might only be a half-cycle low. If that's the case, the TVIX trade should get even more obliterated, assuming of course this is a right-translated daily cycle. Today's reading on the SPY BoW is further evidence that it is.

      Delete
  77. Sophia, look for some MA below where we are in the SnP and exit when it comes within a few ticks or if speeding down, when it taps the MA.

    This is a DSI trade and it's started. Of course, there's an argument always in the market. It's just that this is one of the higher probability moments. When Tuesday's low in the SnP was taken out, the trade set up today. Now, it's an odds game, and the risk reward here is worth the gamble. I can't gauge MA's or DCL points; others can.

    Just remember the max risk is now at max the prior high of Monday as the stop. This should drop like a stone tomorrow. Then it's a stretch into Monday, if it falls, the panic on Monday will be final clearance day, no matter where it goes, for those trading short term. Then, bouncy bounce, and then my view has to shift from a daily pattern to something else. These are always about "remembering" the most recent past. For some reason, the market "learns" and adjusts, and after a long enough time, forgets, so at that point, the market can be traded on the same patterns again.

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  78. Thanks Slumdog for your explanation...Exciting times indeed!
    Take care

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  79. Slumdog,

    Interesting post but I am confused. So your predicting a drop to 1335 which is 4% lower. A nice drop in this current low volality market but nothing too crazy. It is just 2%/day decline if takes till Monday. Then there's also a prediction of a potential 300 point drop, this one sounds more interesting.

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  80. Gold closed at the 250sma....looking kinda bullish to me

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  81. Dan, the bigger the setup the more it can drop against that chart setup. That's all I think is high probability here. Don't hang me because I don't see more. It's based on what there is showing. That's all there can be, based on history.

    Rarely, the move sets up some other move on a different time frame which is more powerful. But I am reporting only what I believe I know. Nothing more.

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  82. GLD GOLD ETF Weekly chart:


    http://screencast.com/t/2lKntoa9uy


    Gann360

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  83. Where is WW? Wondering what's his take on the MA analysis for gold. gold a hair short of touching 275 MA and closed at 250 MA.

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  84. Pullback in SPX as expected per my last post. Just a little tweak though. SPX may only pull back to 1370-1380, then upward it may go to 1500 by early May. IMHO, SPX is the place to be while PMs zig zag, easier to make money in SPX. So far I'm 2 for 2, going for 3 !

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  85. Slumdog, correct me if I'm wrong.

    The set-up projects a drop to 1335, Monday.

    Either it stalls there as an additional 4% correction in this runaway market, or gains momentum and plunges to a 1100 ICL, right?

    Have you assigned probabilities to the two scenarios?

    Thanks in advance.

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  86. GLD tested march 14 low and closed= ,on Lighter Volume, bullish sign for Gold. GDX made HL. IMO, and for my trades, longed gold metal and miners via several vehicles....today. A test of 154 approx. may be in cards, but later, though I dont think it will happen if trend for gold is Bullish, and we accomplished a 61.8% correction in this wave 2 down. Next should be a Wave 3 up, if i am counting correctly.

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  87. Don't be too bearish guys. The leading stocks (AAPL, ISRG, PCLN, etc.) didn't pull back at all today, some even gained, that tells me it'll be a shallow pullback. I'm buying calls when SPX gets to 1370-1380.

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  88. The tell will be when XLY/RTH break.

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  89. GLD tested March 14 low on Lighter Volume and closed =. GDX made HL. Both are bullish sign for Gold. A 61.8% correction for a wave (EW) 2 down is accomplished at 158 (appprox. 275 sma). Longed several vehicles for gold metal and Miners today, before the close.If gold is on Bullish trend we should move up in Wave 3, if count is correct.

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  90. Slumdog,
    Thanks for more details and explanation to Sophia and me. I will do more of the figuring and watching. Very interesting and the possibiities are exciting.
    Jenny

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  91. Replies
    1. Yes, My husband's account, but I am the trader :-)
      Jenny

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  92. There's a profit already in the SnP. Just place your stop now at 10 clicks above the low point on Tuesday, and watch. The descending numbers are 1X, fibonnaci's of X, out to 2.75 and 2.8-3X. Those are the highest probability numbers. That's down about 150 SnP points from the Tuesday low. If you have on a position, you can strategize it any way you wish. 1/3 off at a 50 pt drop below the low (as in like it's there and goodbye and thanks for the profit), and then the rest we'll see.

    Quy, we'll see. Nikkei is down 1%, not meaningful, but not nothing either. We'll see.
    A 6X is very rare. I just want to see 3X or very close to that hit.

    Very low risk trade still, imo.

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  93. SnP: Out close of biz on Fri, Opening Mon, or at 3%, you choose. Asia's down 1% and the draft I think will drop it to the 1335 range, but my position is free money and then wait for the next very low risk trade... break even or profit. Few here can sit and do nothing for such a long time. But it's about making money with low risk. That means very few trades, and something to do with ones time while they wait for a long, long time.

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  94. Slumdog - I'm on your side. I actually bought SPY puts on Tues (you can check my last post). Originally I saw what you saw (that it would drop 5%), but when the leading stocks not pulling back Thurs, it changed my view.

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  95. Did Gary take the TVIX trade? wow...... So how is he explaining to his subscribers?

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  96. It was a small position and we were betting it was time for an IC decline. The market continued to grind higher in the runaway move so the trade didn't pay off. I don't get every trade right and every once in a while I have a big flop. This was one of those times.

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  97. Last year it was the late exit out of silver.

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  98. Gary,

    Just for the record, there was maybe a late exit on Silver, but the trade was profitable so your subds should thank you....

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  99. Yes from the time we entered we still made good money we just let a lot of the huge profits get away from us.

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  100. Update to Last weeks USO *Oil Fund * Weekly Chart

    http://screencast.com/t/hRhAh6ohL

    As long as Neckline holds Support= Bullish

    Gann360

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    1. Ditto. Also, thanks Elaine for mentioning on the private blog. - Kevin

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  101. US TSYS: Sources pointing out social media outlets chatting bout
    Israel moving its army..., again on social media, so not credible
    source, still mkt reacting to it.

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  102. I think that's it for SPX pullback, I'm going long.

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  103. Was a flashcrash in apple today. Down 9-10%!

    http://www.zerohedge.com/news/fat-finger-halts-unhalts-aapl-shares-which-hit-54280

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  104. I picked up some SLW and AXU yesterday thanks to Gary's advice to subscribers re: the miners. Today's gains have paid for an SMT sunscription for the next hundred years.

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    1. This comment has been removed by the author.

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  105. I don't know why people bash AAPL. TZ thought it was high at $520, Doc thought it was high at $530, list goes on and on. It's purely based on liquidity, fundamentals don't matter much in an up market.

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  106. Anyone feel free to chime in here,

    So where does today now put us on our count for Gold? I’m thinking this looks eerily similar to the Dec bottom with Gold and the Dollar moving up together for a few weeks until Gold kept going while the Dollar didn’t?

    I’m so confused…..ready to load up long because I believe its a bottom and we’re going ALOT higher over the next 2 months before we get a heavy correction just a little hesistant because of the dollar count(and the Gold weekly) and in need of a second opinion

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  107. I think GLD did bottom yesterday, but I'm putting all my money in SPX (a possible 10% up move through early May), don't think GLD will do as well.

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  108. EMINI

    http://traderjoed.blogspot.com/

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  109. MikeS, I refer to likesmoney.dojispace.com for any cycle explanations that I might want to try to figure out from the standpoint of what they are trying to figure out.

    The weekly cycle low is not due for 4-6 weeks, so big things are not expected from the dailly cycle low that is currently due timing bandwise.

    So no, it is not to soon to buy in anticipation of a gold pop, but I would not buy today with a gap up left to be filled.

    The alternatives are to wait for an engulfing up candlestick, or wait longer until the uptrend breaks the downside channel.

    The first alternative works best when the weekly low is due. The engulfing candlestick seems to work the best with fewer wipsaws and ealier exits. The trendline break is the traditional method that seeks to stay in longer and wait longer to get in.

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  110. I do also look to LM for guidance time to time. The only thing that throws me is the dollar count(at day 17 I believe) and Silver at day 24(yesterday) which I follow more closely and has been printing 30 day cycles give or take and 24 seems early

    man, in hindsight this all seems so easy

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  111. Check out UUP if you want to see a bad news engulfing canglestick. Usually get a better warning. Kind of looks like those two big red candles engulf about the seven previous days. Simple mathwise, that portends 7 down days ahead and a timing band for a DCL. I think LM is still waiting for a trendline break to cement in the swing high.

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  112. Thank you, Gann 360. Your charts and posts are appreciated.

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  113. DeMark analysis for GDX shows a perfected DAILY TD Sequential BUY on Monday, good for 12 trading days. This will be confirmed today with a bullish price flip (close above the close 4 days earlier) if it closes above 49.60, so should be doable.
    GDXJ also shows a perfected DAILY TD Sequential 13 BUY from 2 days ago, so good for another 10 days. It needs a close above 24.88 today to confirm the BUY which may be a little hard to get to today (24.88). The comparison gets easier over the next few days, so hopefully the next 2 weeks will be good for GDX/GDXJ.
    NEM also showing a perfected DAILY Sequential 13 from 2 days ago.
    Don't see anything with GLD/GC futures.
    SLV showing a perfected DAILY TD BUY Setup today - look for a 1-4 day upside reaction next week. Don't see this in the SI futures.
    Today's darling SLW rallying 6+% today, but has a little more downside exhaustion possible. WEEKLY BUY Sequential 13 on Bar 12 this week, but needs to go below 28.27 to perfect the BUY signal and record the 13.
    SIL ETF WEEKLY on Bar 11 of 13 - needs 2 more downside weeks and a close below 24.11 to perfect, so a little easier.
    Dollar (DX futures) on Bar 8 of a MONTHLY SELL Setup. Needs one more higher high above 82.045 to perfect in April. Euro (6E) futures are the opposite as expected - needs a low below 1.2627 in April.
    As mentioned previously ES S&P futures recorded a perfected MONTHLY 13 in January good until December. Daily recorded a SELL Setup 9 two days ago which could explain the last few days of weakness. As I keep reiterating, we emerged from a 12 YEAR reaction a Sequential SELL 13 that recorded in 1999 and the relief has been felt far and wide so far this year.
    NQ (Nasdaq-100) futures have the same DAILY SELL Setup 9 from 2 days ago. WEEKLY we recorded a SELL Setup 9 three weeks ago, but not much reaction. MONTHLY we are finishing up a Sequential 13 signal from April of last year.
    Anyway, thanks for reading and appreciate Gary's cycles insight!

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  114. Kevs, does he ever extend the life of the trade beyond 12 days? Sounds like a broker trick, but maybe a decent average timeframe to be in a trade.

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  115. The market did not "drop like a stone" today. Slumdog, you still looking for a "panic" down day on Monday?

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    1. This trade is still on, but it's no longer a sure thing, and there's no loss so far.
      This could go back up to test the high a second time and set up a double DSI which is a kiss of death to the current direction. We'd see a double top. If that happens, that's among the best possible setups on earth.

      If one is conservative, one would leave the moment the trade heads more than 10 ticks up above the low point of Tuesday. It would be a pennnies loss, and one would stand back and wait to go below the low of Tuesday yet again, very shortly.

      This trade is still valid. It now unfortunately needs time.

      To resume a position, saving a few clicks, between midway up from the high low of Monday/Tuesday, after leaving it now, is very emotionally trying. I'll wait to see what Monday brings.

      Maybe I'll speak Quy after this trade??? :-)

      Delete
  116. Does anyone else keep getting this option to stop script everytime you try to access this blog?

    Stop running this Script?
    Yes/No
    A script on this page is causing Internet Explorer to run slowly.
    If it continues to run, your compter might becom unresponsive.

    God's way of tell you...

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  117. I'm getting it, too, Speedy. Didn't used to see it.

    What do you see for next week, Slumdog?

    Has your trade been negated?

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  118. GC gold COT still showing distribution: http://snalaska.net/cot/current/charts/GC.png

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  119. Based on the charts of gold, dollar and euro, I think that gold bottoms next week, ending the B wave, and the C will begin. Will follow whatever happens though.

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    1. I'm pretty confident that gold has put in a daily cycle low. This should generate a decent bounce but it's still early in the intermediate cycle so the bounce should fail to make new highs and rollover into a lower low by late April or early May.

      That's the point where heavier positions can be taken and held for a longer duration.

      Delete
    2. Looking forward to you and Doc finally putting the pedal to the metal. March 2011 to now has been absolutely brutal for me since I more or less totally ignored your advice to reduce position size and take quick profits. I literally have back the fortune I made from silver's incredible run. I learned some harsh harsh lessons about leverage and listening to the professionals re: short run dynamics.

      There is nothing wrong with leverage, but one thing I learned was the more leverage you take on, the more certain you have to be about the outcome
      in the short run. So as the risk of a major trend reversal grows, you should scale back. I also realized that a long term investment thesis does you no good when a significant correction can force you into a margin call.

      Most of all, i learned not to ignore advice of far superior traders like you and doc and to be patient (which is absolutley critical if you are using leverage!).

      Delete
    3. That should read "gave back the fortune."

      Delete
    4. Let me warn you again. There is no such thing a "being certain" of ones position. The more certain you are the more likely everyone else sees it too and it's the wrong trade.

      Massive leverage always ends up in a blown out account. There are never any exceptions to this rule. It either happens as one or two trades that go wrong and you let them run too far to the point they get out of control or your stops are too tight and you take multiple smaller losses (with leverage there are no small losses). Eventually these add up to destroy your account.

      Many people erroneously assume that as long as they have tight stops they can leverage with impunity. Unfortunately it just doesn't work that way. The tight stops just guarantee that they get hit.

      There just isn't any way to avoid the leverage trap. If you leverage massively then at some point you are going to go through all your capital.

      They only way it works is as a one time bet and then you are satisfied and never do it again. Unfortunately that's just not how people are wired. When they win big greed jumps on them and they rationalize that was easy and they try for another home run. Soon or later the odds catch up with you and you get taken out of the game.

      Delete
    5. I totally agree Gary, but let me clarify what I meant about certainty. Of course, nothing is ever 100% certain. If we needed 100% certainty we would never "invest" in anything even slightly speculative.

      In the summer of 2010, I saw silver completing a 1.5 year consolidation. The chart was right out of a textbook. Sure, the consolidation could have broken either way, but that's where the risk part of investing comes in and having a well reasoned investment thesis is so critical. That was the point to take a huge bet. And I did.

      As silver kept climbing and climbing and as it busted through $40, I was thinking "this isn't even a parabola, its a nearly vertical straight line up!" Clearly the risk in persisting with a huge position grew greater the higher silver went in such an uncorrected manner. When the euphoria hits, its time to scale out, clear all margin debt and just let a portion of your original position "ride."

      In my case, everything went perfectly up until you decided the silver parabola was broken. I just flat ignored you and kept trying to catch a falling knife in a vain attempt to regain the ridiculous size my account had achieved. I went almost full margin on every attempt to pick the bottom and ended up giving back 100% of my enormous gains in the span of about 6 months. (Thank god I was prudent enough to save some of the profits to pay my capital gains taxes for 2010--I ended up cutting a check for capital gains in the 6 digits.)

      You were right. I was so, so wrong, and I deeply regret it. But in all honesty, if I would have *just listened to you*, I would be sitting so pretty right now.

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  120. Gary et al, as we wait for the C wave in gold to start, are you all thinking to still stick w/ETF's like GLD, IAU and maybe GLL, or are you thinking more physical like CEF, GTU, PHYS, PSLV, or are you REALLY thinking physical like actual gold bars or coins? If the blowoff top is ahead of this, and if the C wave is massive, I myself am worried that ETF's like GLD might blow up if there happens to not be gold in them. I read the prospectus, and it's not clear. Compare to CEF, which is crystal clear.

    Also is anyone worried that Schwab et al might end up like MF Global?

    Thanks.

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  121. oops, meant UGL, not GLL ;-)

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  122. I think Gold is overdue to break down from its 3 year uptrend line, after a run away move in August of 2011 - simple chart here.

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  123. Gold also tends to have bad seasonal pattern for the next quarter or so. Over the last 15 years, majority of the time Gold tends to top around April and have a correction into August at best. From September onwards, Gold tends to do very well.

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  124. I think gold probably put in a daily cycle low on Thursday. But I also think this will just be another counter trend bounce in a confirmed downtrend. We should still have 6 to 8 weeks before the intermediate cycle bottoms. So sometime in late April or early May gold should retest the December low, and if the dollar is rallying aggressively gold could even move marginally below the December bottom.

    The stock market is still overdue for an intermediate degree correction. When that arrives it should spike the dollar sharply. That is going to add downward pressure in the precious metals sector.

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  125. I actually have something to agree with you today Gary, but not everything. I also believe Gold and Silver will rally from here for awhile as well. Few days ago, when there was negative sentiment towards Gold I said we could stage a rally, but I'm sure you and many others also read SentimenTrader too. COT positions on Gold have been cut decently as well over the last few weeks, adding to that bounce probability.

    I also agree that we are slowly building a rounding top for a correction in stocks. After that we should move into a new high again, but less and less components will follow upward as this bull market is ageing since March 2009. Calls for a flash crash etc etc, are way too bearish at this point... but I guess anything could happen like in April 2010. Crashes usually occur as the breadth breaks down, and we still have 85% plus of S&P 500 stocks above 200 day MA. Also major crashes occur from oversold positions as well, like 1929, 1987 and 2008 - not from overbought positions like today.

    On the other hand, I disagree with the Dollar outlook, but that is nothing new I guess. Expecting the Dollar to do something based on the a sell off in the stock market is just "hoping" that correlations work for you. Dollar to me looks very weak as the Euro seems to be moving towards its downtrend line and getting ready for a break out. We still have 80,000 net shorts in this Euro rally, which means we will go higher as bears will be forced to buy Euros back and cover. Until all of the shorts are squeezed, the Euro should only suffer minor corrections.

    Finally, if you want to buy a currency that will spike in case of a stock market crash, buying the Dollar is not the smartest thing to do. You should be buying the Yen instead. If the market does fall hard in the next few weeks, it will be the Yen acting as a safe haven, just like it always happens when US has negative real interest rates and Japan has positive real interest rates!

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  126. p.s. I really do hope that you are right and that the Dollar does spike. That way we can all short the Dollar at much much higher prices than it currently is. A move to 88, which you are predicting, would be magnificent entry point for a longer term Dollar bears.

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    1. I'm not necessarily predicting 88. I'm just pointing out that that seems to be the Fed's line in the sand. If it gets threatened then they start printing to turn the dollar back down.

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  127. Speedy,
    Yes, I continually get asked:

    Stop running this Script?
    Yes/No
    A script on this page is causing Internet Explorer to run slowly.
    If it continues to run, your compter might becom unresponsive.
    Jenny

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  128. I never have that problem with Firefox. You might try switching.

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  129. Are you using Firefox or Internet Explorer?

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  130. Jefftheflea... use google chrome. No problems.

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  131. DOW

    http://traderjoed.blogspot.com/

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  132. Can this B / D Wave be a huge bull flag ? Interesting view.

    http://www.forum-monetaire.com/wp-content/uploads/2012/03/silver-slv.png

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  133. This comment has been removed by the author.

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  134. We have a death cross on gold, SMA 50 skicing below SMA 200.
    It looks like we are going down big time.
    If it breaks down and fails to break and hold over SMA 200 when it goes to test it, i will sell all of my PM positions.

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  135. Actually the 50 has crossed below the 200 in 04, 05 and 06. Nothing came of it. Gold was just in a consolidation phase. Most of the time a death cross isn't significant, not only in gold but in the stock market.

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