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Tuesday, April 24, 2012

B-WAVE BOTTOM

Over the last several days volatility in the gold market has collapsed forming what is known as a coil.



I think the Fed announcement tomorrow will probably break gold out of this holding pattern. But contrary to popular belief about 70% of the time the initial move out of a coil ends up being a false move that is reversed by a more powerful and durable move in the opposite direction.

In this case if gold breaks lower out of the coil it is late enough in the intermediate cycle that the move would be unlikely to last more than a few days before forming what would presumably be an intermediate cycle and B-Wave bottom.



I suspect many gold bugs are going to get knocked out of their position if this scenario plays out tomorrow. However if this does turn out to be a B-Wave bottom like I think it will, the next couple of days are going to be the single best buying opportunity for the rest of this secular bull market.

That doesn't mean that gold will reverse and head straight up immediately. I expect we will probably see a volatile consolidation with several tests of the all-time highs above $1900 but no breakout for the rest of the summer. 



Traders are going to be looking for the next trend once the stock market bottoms. I doubt that tech stocks are going to resume the leading role that they've enjoyed since last October. More likely liquidity will find its way into a beaten up sector. 

Like I always say, liquidity will eventually flow into undervalued assets. There is no sector as undervalued and as unloved as the mining stocks right now.

 Sentiment in this sector has reached levels of pessimism capable of generating triple digit returns over the next couple of years, and I wouldn't even be surprised to see a 25 - 50% gain during the next intermediate cycle alone.

I think the next momentum move is about to begin in the sector most overlooked and least expected by investors, the mining stocks.

117 comments:

  1. Great post! Thanks Gary, your calm is an example for all of us!

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  2. Maybe the miners hold their own as the price of gold drops in the coming few days.

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  3. Anyone care to comment on those 2 mysterious black candles in $USD..? I went back as far as StockCharts would take me and I could not find another example. Not even close. What do you think it means?

    http://stockcharts.com/h-sc/ui?s=$USD&p=D&yr=0&mn=11&dy=15&id=p09266244497&a=247075699

    ReplyDelete
    Replies
    1. Hi Danno. I noticed that, too. My 1st thought was manipulation. But after reading Gary's blog here I'm now thinking of it as his volatility coil in gold.

      I'll say one thing: the $USD tried 2x to go higher, and could not. Dollar strength was decisively sold. We haven't had a break up in the dollar for 5 days now, always rejecting at/before 79.86.

      This makes me think that Gary's correct about gold bottoming in it's B wave soon. If gold turns up here on a daily chart, it would be a higher low, the 1st one after the Dec lows.

      Delete
    2. It's definitely odd. Like something is about to happen. This is the only thing I have found so far... http://www.investopedia.com/terms/b/bullishhomingpigeon.asp#axzz1t2Qt8vbX

      Delete
    3. It's also odd (to me anyways) that the $XEU doesn't have a matching pair of hollow red candles.

      Delete
  4. I've been looking at weekly charts, and stuff like $COPPER, $WTIC, $CRB and $SILVER all look to be turning over and down here, momentum (MACD) wise. Same for $NDX, $SPX, etc. they all look peaking and about to go down.

    The $USD looks like it's in a triangle, on it's way up. Might even test 81.78.

    If the dollar does go up, gold could plummet, bringing the HUI/Gold ratio closer to the norm.

    I'm thinking Gary's right that the dollar will go up after Ben's speech, but it may last for a while.

    Also, the correction we have in gold now is pretty small %-wise, compared w/the one in 2008. And we went up from 681 to 1920 in just 3 yrs, w/out a significant correction. To me, gold putting in a B wave bottom here is too easy. What we really need is a HUGE correction in gold, back down to 1000 or so, marking the true end of the D wave.

    I'm not predicting this, but I wouldn't be surprised either way is what I'm sayin'.

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  5. Gold futures system now has stop moving up to 1620 for today.

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  6. Danno,

    Black Candles are not a good sign, they actually portend to the stock starting out higher but finishing lower.... usually when you get a black candle it signals a trend reversal. This is what i got from reading moriss hubbarts letters. He's pointed out black candles a few times in the USD. They don't always play out. HOWEVER< I've never seen two in a row. That is really Bearish.

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    Replies
    1. I'm not sure two black candles in a row is always bearish. It appears that sometimes it can be bullish. I'm not making a prediction. I guess we'll have to wait and see. There is no question that this particular formation is extremely rare in $USD. I could find no other instance, going all the way back to early 2004.

      Delete
  7. Bill,

    A correction to 1000 won't happen. Everyone is thinking that gold should correct to 1000 before its next parabolic run higher because they are looking at 1979 as a reference. During that time frame gold lost 50% of value from 200 to 100 and then rallied to 800ish. We need to look at gold as a currency not as a commodity or a tech stock... that is why i don't see it going that low. The ONLY THINK THAT could cause a crash to 1000 is a liquidity event, but i don't think europe or china or the world, will allow that again. They can't afford to lose control. IMO.

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  8. "I am projecting gold at $2000 by the end of 2011 or early January, 2012." - morris hubbartt

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  9. Making projections is one thing.. discussing black candles is another. I believe Hubbart to be a flake but black candles are still not a good sign....

    ReplyDelete
  10. Hey Danno,

    I pulled some information for you on black candles... google is your friend :)

    http://www.candlestickforum.com/PPF/Parameters/16_515_/candlestick.asp

    http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:introduction_to_candlesticks

    Hope this helps buddy

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  11. Yesterday wasn't actually an exhaustion candle. Stockcharts has an error on the dollar chart. It should be a solid red candle as the dollar closed lower than the day before. The only time a black candle really has odds of being significant and signaling exhaustion is after a long rally.

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    Replies
    1. I wonder if StockCharts corrects these errors eventually.

      Delete
  12. Great post... let's hope our patience is rewarded... whoohooo!

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  13. I cannot believe I am saying this, but I agree with everything stated here. Majority of the Gold traders on all the popular forums and blow expect this. So.... since I do agree with Gary and the majority, we will all probably end up being wrong! You better of being a contrarian, otherwise you get fleeced and we are all about to get fleeced! *cheeky smile*

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    Replies
    1. Gold sentiment and especially mining stock sentiment is about as pessimistic as it ever gets. We are in the very slim minority. We are the contrarians.

      You are reading a few select smart money blogs that understand sentiment and know when to lean against the crowd.

      Delete
    2. Yeah I know what the sentiment is, but I don't buy the notion that these blogs, including this one, is smart money. No offense by the way, it is just my opinion.

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    3. That's why you should judge sentiment from a handful of blogs. Sentimentrader can give you real sentiment levels instead of just guessing.

      Delete
    4. Gary, I have sentiment trader subscription so I understand what you are talking about regarding Gold, Silver and Platinum. However, you and a few other bloggers I track have gotten pretty much almost everything wrong in the last few months including a bearish stock outlook and a bullish dollar outlook. I think the is only a handful of guys out there that actually do know what they are on about. But regardless of my opinion I wish you good luck with investing in PMs sector n coming days. I do agree with everything you have said here and hopefully t works for all of us.

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    5. I beg to differ. I didn't get anything wrong. I simply can't buy stocks more than 20 weeks into an intermediate cycle. period. I'm never going to do it. Why because 90% of the time one would get caught in an intermediate decline. Let me ask you a question. If the odds of something happening are 70% do you take the trade? Of course you do.

      If the trade doesn't work out, was it the wrong trade? No of course not. 70% is always the correct trade no matter what the outcome.

      It's not like we were trying to short the market. I've been very clear on that one and you know it. I've been waiting in cash for something to put in an intermediate bottom. We are building a position in mining stocks. We may add the last portion later today. If it doesn't work out is it the wrong trade? Of course not. Why? Because gold is deep in the timing band for an intermediate low. Its broken it's intermediate trend line. Sentiment is extremely bearish and the bullish percent on the mining sector went to 10% and turned up. That's better than 70%. I have to take that trade.

      Delete
    6. What do you mean you didn't get anything wrong?

      - Wasn't the dollar meant to spike into a new high by April of 2012?
      - Wasn't the Euro meant to be putting in a head & shoulders top and going lower?
      - Wasn't the S&P 500 meant to "flash crash" from a runaway move into at least 1,250?
      - Wasn't Gold meant to be dragged down by the S&P 500 correction and make a lower low?

      Maybe you didn't trade any of these, but they are all your "calls" in "real time" from previous blog posts. I didn't make them up, the charts and write ups are there for all to see and read.

      Delete
    7. My expectation was for the dollar to continue to rise forcing the stock market into an intermediate degree correction. I didn't trade that expectation with either a long dollar position or a short position on the stock market. The reason being that the world is embroiled in an ongoing currency war and I'm not confident cycles will play out naturally.

      Never heard of any head and shoulders pattern on the Euro. That must have been someone else.

      Most runaway moves do end in some kind of crash or semi crash type event. Of course that would have to be accompanied by a rising dollar. If the currency is manipulated lower then apparently that ending type move will be taken off the table. Again I had no intention of trading that expectation.

      Just like everything else a further decline in gold would need a corresponding rise in the dollar. As long as the dollar was falling gold would be unable to generate much downside momentum.

      Like I said we've been mostly waiting in cash for an intermediate bottom. We started buying miners a little bit early on April 12th and finished buying today. Despite being a little early on the initial buy I think the trade has great odds of turning a nice profit.

      That is the name of the game isn't it? To make money?

      Delete
    8. Regarding your early purchase in miners, I'm not the one to judge that, I actually think you did great there. Who cares if you are off by a few days and a few dollars. You nailed that (if it rallies from here that is).

      And you are definitely right about the name of the game - making money - and as long as you get yours, you are doing fine!

      Delete
  14. DOLLAR INDEX: CitiFX issue a Tech Express note, eyeing the dollar index
    and its recent pullback on a 76.4% Fibo retracement, the second such
    pullback. They write that; "The low so far today is 79.04 with the 76.4%
    pullback level at 79.02 This set up suggests that we may be about to see
    a "pop" in the USD-index. In addition rising trend line support stands
    at 79.04," they say. USD stands at 79.14 and the analysts peg resistance
    at 80.18, suggesting that the time for a period of dollar strength may
    be at hand.

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  15. Tech is up 50% just during the last intermediate bottom. The odds are smallof that kind of out performance again.

    Smart money doesn't jump right back into the same thing that led the last cycle. Why? Because it's already gone up huge. The odds of it going up huge twice are small.

    Smart money finds a sector that is beaten up but with improving fundamentals. Those are the sectors primed for the next big move. The little guys never get on board during the buying opportunity because their emotions prevent them from buying something that has underperformed. They can't grasp the concept of the "next big thing" so they run right back to what they perceive as the safe bet. In the mean time big money is positioning for the new momentum sector.

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    1. Gary I agree that miners are a good risk/reward trade though some people are cautious because miners based on sentiment/underperformance didn't work last October nor during Q1/Q2. Eventually miners will have there day - maybe even now.

      Also Nat Gas is much more battered and much more hated then miners/gold and nothing is stopping liquidity moving into that segment.

      Delete
    2. There are an awful lot of miners which have given back 100% of their run from the last C wave, yet gold stands 100% higher and many are making a lot of money now, even some juniors I own. Sentiment has stayed in the toilet long enough to have dropped a lot of people off, and the last big up move was not nearly long enough to capture the attention of the vast majority of investors. I have yet to be asked a single question about precious metals (versus 1998 to 2000 when stock tips from friends became very commonplace, and 2002-2006 when the delusion about housing grew unabated).

      Delete
  16. Gary's right on the odds, and the sentiment. The question is, is GDX done going down? To me, the daily and 60 min charts still look like a relentless down. Feels like UNG.

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  17. TY AtEase:) My system came very close again to selling, and the rebound in the afternoon again ran into the 9 day displaced average.

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    1. Hi Veronica, your system had the same stop or selling price of 1620 from the precius post?
      and displaced average it's the same of Daily Moving Avarage ?

      Tx

      Delete
  18. Agree the mining stocks are undervalued but remember where they came from.
    Most will trade sideways in the next re-assessment. Momentum may very well come from a different driver and not necessarily from the same money that chased it last time.
    Some miners do present as being undervalued. Others are there for a reason, so the perception has applied to all participants. It will be lucrative for those that can select where the true value lies (those that have been categorised and thrown out with the bath water without reason).

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  19. I always stick with ETF's so as to avoid company specific risk.

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  20. BB, the stop is updated daily, and has stayed at 1620 for tonight/tomorrow. The 9 day displaced is 9 day simple moving average moved forward in time 9 days.

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  21. If $USD closes below the lower trendline if its Symmetrical Triangle, it would trigger a short trade with a target around the 200 ma. A person could pick a worse moment to go long PMs. Very short term the odds seem to be against the dollar.

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  22. I'm long almost 6x gold futures bought from about an hour ago risking about 2% on the trade.

    We look to be moving higher out of 1-2 month triangle which will also complete a 2 month reverse H&S pattern if we break over 1660 (the top of triangle). That pattern projects $70 higher to 1730 if it works.

    THEN...THAT $70 move up would tend to put the LARGER 7-8 month reverse H&S pattern into play.
    The larger reverse H&S means we move up to $1800 very quickly (the shoulder).
    IF we then break that shoulder the projects about $175 higher from there. Again...all reasonably quickly.

    That's a lot of positive waves, man. I know.
    And I do NOT feel confident about the trade (actually a sign it could work).
    But I'm giving it a go for now.
    Good luck everybody.

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  23. GG's earnings miss are saying...
    The miners aren't 'BARGAINS' and this move down over the past few months are justified.

    http://finance.yahoo.com/q?s=gg&ql=1

    Down 7% today.

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  24. Ahh but the gold:XAU ratio and bullish percentage chart are saying miners are bargains.

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    1. I agree with Gary. Smart investors do not follow this quarters earnings, but try and anticipate what will happen in the future. Watching today's quarterly reports and making decisions from that is like driving a car with a rear view mirror. Sure... one or two companies might still have downside without a doubt, but as a whole - Gold Miners - have been in a bear market since August of 2011, discounting and pricing in bad earnings and how a fall in Gold price pushes down their margins while Oil rises.

      I'd argue that we have discounted majority of the bad news already - that is why sentiment is so negative and that is why breadth is so oversold and that is why relative strength vs SPX or GLD is so awful.

      Therefore, if we were to look into the future months or quarters, we could argue that there is a chance that Gold prices will now rise from here due to negative sentiment and therefore earnings in the Gold Mining stocks should improving going forward, even if it is slightly.So the market price should now start pricing that outcome for the next quarter in front of us.

      In other words, prices should rise now and than when good news comes out next quarter, that news will be priced in by the market. Forget about todays reports, they have already been priced in, hence the crash of 24% in the GDX over the last two months.

      Delete
  25. thanks TZ. your insight is always appreciated

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  26. Gary,

    But the equation isn't really that simple. GG's earnings miss 'might' have been the result of higher energy cost. We might want to look at the models that factor energy into the GOLD:XAU ratios.

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  27. Despite a 30% average increase in gold prices from 2011 to 2012, GG's margins were...

    "For the quarter, gross margin was 58.6%, 430 basis points worse than the prior-year quarter. Operating margin was 40.1%, 170 basis points better than the prior-year quarter. Net margin was 35.5%, 1,800 basis points worse than the prior-year quarter."

    http://www.fool.com/investing/general/2012/04/26/goldcorp-increases-sales-but-misses-estimates-on-.aspx

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  28. energy isn't as high as it was in 08. Even if oil was again at $150 it still doesn't warrant a gold:XAU ration of 10. That is a sign of extreme human emotion. It will eventually be reversed just like it was from 2008-2011.

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  29. Gary, that statement was simply false.
    Gas prices in 2008 & 2009 was the lowest in the past decade.

    http://www.randomuseless.info/gasprice/gasprice.html

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  30. Gas and Miners bottomed together in late 2008 and early 2009.

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  31. Yes they bottomed in the middle of the recession. What does that have to do with anything?

    You seem to be implying that energy costs are a justification for a gold:XAU ratio of 10. I'm simply pointing out that with oil at $147 dollars miners were priced much higher. When energy peaked the gold:XAU ratio was at 4.6.

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  32. The large cap gold miners, as I have pointed out many times, are like the large cap oil companies. The latter eventually went out and bought natural gas assets, as they could no longer grow their reserves of oil. COP did it. XOM did it. And RDS was early to the trend, moving towards natural gas years ago. Today's report from GG simply confirms the large cap gold miners are in liquidation. Ore grades continue to decline, costs rise, and production at best remains flat.

    Accordingly, this is super bullish for gold itself, which is at best only growing at 1+% in supply each year, if that. In truth, gold production declined for much of last decade, before a brief production bounce the last couple of years. But that won't last.

    So, in this space, it's either GDXJ or gold itself. The HUI, beyond a short term trade is toast, just like the XAU before it.

    Best to all, G

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    1. This comment has been removed by the author.

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    2. Sounds right to me. How about silver? Due to super supply limitations, isn't this even more profitable and safer than GLD or GDXJ? Why or why not? Thanks.

      Delete
  33. TZ,

    What are your stop prices for that 6x gold position?

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  34. Gold broke through the 9 day displaced average and my system will be generating another add on buy with a bit more strength in gold.

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  35. Sold my gold futures position approx 3pm an hour before market close.
    Essentially break even.

    I bought it expecting a launch OUT of this congestion triangle. That didn't happen - we only stopped inside the triangle under the top line.

    It doesn't mean I'm not bullish on gold and it doesn't mean we don't shoot higher fri or next week (or tonight?). But without any profit buffer I generally don't hold a large position like that overnight in thin trading (where the drift usually hits your stops).

    Without the triangle break, it also means we could zig zag inside a few more times as well. It is a $35 zig zag zone which is a lot for the way I trade.

    So my trading position is back to cash until I see another leveragable entry. May only be a few hours away tomorrow morning. Remember I'm trading a bit different from you guys who just go 1x and are able to sit out declines.

    ReplyDelete
  36. For who asked, my stop(s) were only a few dollars on the position. That's all I could afford with large leverage so clearly I can't sit overnight in thin trading and hope they don't get hit.

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  37. GDX looks good and may have bottomed. It will likely outperform at least initially in any rally, but whether it is now on a continuous outperformance basis is still unknown. The charts don't show it is.

    I'll continue to stick to gold futures at this time (and silver too) if and until the stocks show serious outperformance that makes me want them.

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  38. By the way, my trade today was a gunslinger chasing buy and NOT my normal method of trying to buy a pullback, so I was already freewheeling it and things could have turned out much worse than breakeven.

    It felt right and was worth a shot, but I knew I was a weak hand and needed to exit afternoon when I didn't get the manic break higher I was looking for.

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  39. Gold won't zig zag too much again. Gold tape is bullish and you should be holding long for a break out. Consider the following:

    - We refused to go down when Bernanke said no QE3 and did a strong hammer. Why would we sell off again? From my experience, I have learned that when the asset price refuses to go lower on the back of unfavourable news (Fed said no QE3), than we have already priced in or discounted that news. The Gold market just refused to go down on bad no QE3 news, which is super bullish!

    - The triangle resistance line is around $1,660. So we now paused on that line and will consolidate, waiting for some type of a catalyst to break out. Over the next 24 to 48 hours you can have a slight pullback of a few dollars, but not a zig zag down to the bottom of the triangle towards $1630 again. Break out is coming up.

    - If we do go down back towards $1,630, that would be a bearish reversal on top of a bullish reversal two days ago. That cancels the bullish trade automatically due to basic price action refusing to go up. Than bullish bets are automatically off the table, until we go lower, wash out and find more buyers need to push prices higher. Current tape reads that we will not have this occur.

    In markets anything does, can and will happen. That is why it needs constant effort and hard work to follow what is going on day by day, week by week, month by month, year by year!

    ReplyDelete
    Replies
    1. Your general market view is useful, but you don't have a concept of how to trade a high leverage position.

      You are welcome to go 6x on gold and try to hold it overnight with a 2% loss limitation. Post your trade here in real time.

      You MIGHT make it, but the odds are much against you - no matter how bullish you think things are. I don't think you realize how small a stop you need in this scenario.

      Oh..and as of this evening my exit was proven correct. You would be stopped out with a loss having held.

      There is always another trade and I will get an entry at the appropriate time. But I won't "hold and hope" on a trade which isn't reasonable. (Yes, I could also reduce the leverage. But in the case of today the inability to break the top line meant I didn't want to hold ANY position going into the evening. I disagree with you that a pullback towards the lower line again isn't possible or is a bad sign. From my view it would be perfectly normal in a bull mkt.

      Delete
    2. >Over the next 24 to 48 hours you can have a slight pullback of a few dollars, but not a zig zag down to the bottom of the triangle towards $1630 again. Break out is coming up.

      I would phrase as follows:
      -yes I think we are heading up;
      -your 'slight pullback' possible could easly be $20 and not mess things up. that isn't a 'few dollars' by my view.
      -no, I don't think we will hit the lower line again, but (again, as a trader) I have to recognize that anything is possible.

      All in all I didn't want to hold leverage overnight without the breakout and with a $20+ swing easily possible (we have already had $10 tonight).

      Delete
    3. These are not concerns of GDX/GDXJ people (then can't do anything overnight anyway) and they are not concerns of 1x or 2x people. I simply have a different style and it requires more exacting entries and stops.

      Delete
    4. Yeah... you are right. I don't have a concept of how to trade a high leverage position.

      /end sarcasm

      Delete
    5. I guess you missed the part where I said FACTUALLY that you would have been STOPPED OUT with a 2% lose based on your suggestion to hold overnight.

      Delete
  40. As for Silver, the tape is also quite bullish right now. There is a major physiological support at $30. We sold off to $30 during Fed statement and touched it for about a three seconds and than bounced off hard from it. That shows strong buyer interest willing to push price sigher anytime it comes close to a $29 handle.

    Silver also failed to rally and hold above $31 handle on the 24th of April and than again on 25th of April. That is a short term resistance, until we broke above it yesterday. If $31 can now hold, that is a very bullish short term signal telling us that we won't go down, but rather want to go up instead.

    ReplyDelete
    Replies
    1. stockcharts[PUT.DOT.HERE.TO.FIX]com/h-sc/ui?s=$SILVER:$GOLD&p=W&yr=3&mn=0&dy=0&id=p10656686757

      Silver shows no indication of being an outperformer or warranting attention to trade. Gold will suffice perfectly well for now and allows easier trading with less risk.

      Just like in 2010 on that chart, there was plenty of time to let silver 'show you' the outperformance and then jump on the train without getting run over multiple times thinking 'this time is is'.

      GRANTED...I have and do, at times, make a freestyle trade on silver THINKING I'm getting a good buy or that it is ABOUT to outperform, but I try to temper those actions to what is demonstratable on a chart.

      Delete
    2. Remember my repeat comments as well:

      Let's say silver performs 1.5x relative to gold.
      All I have to do to beat silver is go 1.6x leverage on gold.

      Since gold is more liquid, more predictable, less volatile and with lower margin, I win all around with a better position at less risk.

      Delete
    3. http://stockcharts.com/h-sc/ui?s=$USD&p=D&yr=0&mn=11&dy=15&id=p71686369278&a=247075699

      Delete
  41. Danno,

    Where does the 48% of the triangle range price target come from?

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    Replies
    1. It's a statistical average based on a collection of past triangles. I would not call it a 'prediction' but rather a reasonable potential expectation, unless the breakout fails which can happen. There are also statistical averages for failure rates. Reference: http://thepatternsite.com/st.html

      Delete
    2. What I am trying to do is to identify very defined patterns and their breakouts. If an ideal pattern and its breakout direction happen to sync with Gary's cycle count then I may have more confidence in taking a trade. It's just my thing. I'm not sure if it is for everyone. Just sharing information. Not making any predictions.

      Delete
  42. We are at the top of the gold triangle (bit above it), but breakouts (or screaming runs higher) are not very common on fridays if they haven't happened already. There are reasonable odds we won't run any higher today (no...I'm not bettting on it, just saying).

    Even if we go higher I expect a tradable pullback early next week where I could get in. I'm not chasing today unlike yesterday (which, ironically as markets work, means that the chase may be the correct action.)

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  43. i am still waiting gold 1600..

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  45. Yeah and I'm waiting for Santa Clause! *cheeky smile*

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  46. this thing is like watching paint..1600

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    Replies
    1. The fireworks will be next week.
      Like I said above, a new move or breakout is very unlikely on a friday.

      We went up and stalled as expected.
      Against belief (mine included) the break higher in GC above the triangle COULD be a fakeout, reverse back down, and go lower. Stranger things have happened

      Delete
  47. This comment has been removed by the author.

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  48. This is a very good source of information. I am very positive that gold will do a very good work in the next few months.

    sell gold

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  49. This comment has been removed by the author.

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  50. ahnn, It is very difficult to project more than a week or so at a time in this dicey market (if that). Gary could change his mind if the markets decide to move contrary to reason. Stay flexible and don't take on too much risk.

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  51. I put out a post, lots of charts

    http://www.arum-geld-gold.blogspot.com/

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    Replies
    1. Nice charts, Bob. Do you find that the PSAR gives one too many signals, or how do you use that?

      Delete
  52. Per Doc: dollar hit 78.66...Below 78.65, failed cycle: 9-16 weeks of gains in equities and commodities.

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  53. The morning looks to be a fakeout that will recover.

    I'm 3x right now risking about 1%.

    If we make it back to the fri highs and break higher I will move up stops and probably increase to 5x or so (trying to maintain risk).

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  54. This is sorta freewheel trading and I'm not entirely comfortable with it. I agree (with dod) that gold should be making some kind of significant move soon, but maybe that move is lower?

    In ability to recover the morning drop (or heading even lower of course) would be a bad sign.

    ReplyDelete
  55. The two reverse H&S patterns are still possibly in play and we have a large daily downtrend line back up at friday's highs (which is the expect breakpoint we are all looking at.)

    A recovery higher today, break higher, and then strong weekly shoot higher really puts a lot of things in motion positively from various technical standpoints.

    We will see as always.

    ReplyDelete
  56. broke 300 day MA for a bit... if we break this we go to 1300-1400...

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  57. dunno... thats what most people are saying right... :)?

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  58. Anybody knows where to see official central bank balance sheets data?

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  59. I've been buying as we recover this morning's fakout.
    I'm now 6x risking about 2% and expecting a break higher.

    ReplyDelete
  60. LOTTA contracts blown out by the drop this morning. That group is now watching gold rise without them saying 'bye bye'.

    Yet there has been no significant buying as we climb. Nobody trusts it yet (or is too shell shocked from the drop in the morning).

    Break higher should happen within next hour.
    It now looks like this will be a strong week up as well.

    Just my opinion as always. Could be wrong, but you know my current bet. Buyer beware.

    ReplyDelete
  61. Mercilous climb in gold since blowing out 15,000 contracts this morning.
    Dumped them on the curb and won't let them back in.

    ReplyDelete
  62. I *ALMOST* bought last night and held back.
    If I had and taken a loss this morning I would be much less able to be negotiating this with a clear head. Sometimes you get lucky.

    ReplyDelete
  63. TZ,Was the contracts - retail contracts or an institutional, big money?

    ReplyDelete
  64. I don't get the question. There was large volume on the drop this morning. Simply clearly people who had bought expecting a breakout and got their stops hit on the morning games. Then we recovered fully leaving them behind. Who lost their contracts? Just traders. Longs in the mkt.

    ReplyDelete
    Replies
    1. TZ, Yep... Gary is on to those running stops, so he has changed the rules.

      Delete
  65. Backed off my position to 3x (taking some profit).
    Now risking 0.5%

    I thought we would have more strength into the night and I'm already violating one of my rules of not holding a big position overnight if I dont have a profit buffer.

    I still expect this may be heading up, but the time to reload will be during day hours when the volume is in and it isn't as easy to drift around.

    ReplyDelete
  66. Went back to about 4.5x as we bounced a bit overnight. Small stop. Just on the bet that they might be done trying to walk it down and hit stops.

    ReplyDelete
  67. Back to 6x again. Risking 2% approx.

    Big of indecision and some flipping of half my position overnight, but that's the way overnight goes. You are at risk due to the light volume and I wasn't sure.

    ReplyDelete
  68. I think it is likely (fingers crossed) that we don't see 1660 zone again for the rest of the bull mkt. The games and whipsaw yesterday likely cleared out any weak hands and means any pullbacks ahead will stop at higher levels.

    So like gary says maybe we can just hold from here (the sector I mean. I'm still not a miner bull cause I don't see the outperformance yet.)

    ReplyDelete
  69. OUT.

    I kept my stops tight and this isn't following through like I thought.

    Maybe I'm not giving it time or room to run, but I can always trade it in the future. For it is just whipsawing.

    A bit less than approx 0.5% loss from all the trading since sun night. Perfectly acceptable.

    I'll re-engage if I can figure out what is going on.

    ReplyDelete
  70. Clearly if we are heading up gold is doing a good job of shaking people out and/or causing them to sit on the side and watch.

    ReplyDelete
  71. Small flag in the $HUI. Dollar may be full of baloney as nearly 1/2 of triangle breakouts curl back to the broken trendline before resuming in direction of the breakout. Pullbacks should actually be expected.

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  72. Not sure if anyone was reading the Change in Trend blog, it was very good. The site got hacked but you can get the information in email if you have a gmail account. change.in.trend@gmail.com

    He does cycle analysis that works well with Gary's cycles.

    ReplyDelete
  73. Elaine,
    Has change.in.trend been sending out regularly or sporadically the emails? I know I received a few of them.

    ReplyDelete
  74. At Ease,

    He was pretty consistent last week and I think he wants to grow his readership before he launches the newsletter. I will say that for myself, his analysis the past few weeks, combined with Gary's, has greatly helped me to be patient and with my entry into a position.

    ReplyDelete
  75. Also, his analysis is very technical and I do not completely understand it. I do use it for general trend and it has been very helpful.

    ReplyDelete

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