Gary - It seems you and John Townsend differ on where gold is headed. He says, "I see a good possibility that gold has further to fall - much further." $1430 - 1395. And you say just the opposite. We are at or very near a bottom. John "hopes" it doesn't happen. But hope is not an investment strategy. That is what stops are for.
John is basing his prediction on what has happened in the past. I'm making a call based on what is happening now. Right now gold is 22 weeks into an intermediate cycle. The COT has hit a 100 on the Bless rating, sentiment is as bearish as it has ever gotten. Now maybe gold will eventually work down to those levels but I doubt it will be during this intermediate cycle.
Even I knew that the markets would be down this AM, just from the cycles and looking at the Nikkie and also the futures this morning. Stunning reversal (so far) in the miners. Just the divergence we've been looking for. Just the back test we were looking for.
Today is a great example of how hard it is to buy at the bottom (which I think this is).
Except that you didn't buy at the bottom - you bought much higher up. Your positions are underwater, and if these positions move back down (and there's a good chance they could) you'll all be out of capital.
Hoping for reversals without stops is not a trading strategy - its gambling.
Yikes, I need to change my password, I didn't realize you had logged into my account!! I guess you didn't notice what I bought today then... too late, my PW has been changed!
Look, I have no desire to see you (or anyone else lose money) but when I glance at my screens I see big down-trends. Yes there are temporary pull-backs in the down-trends, but the mkts are all heading down. Arguing with Mr Market can get expensive - I hope you've got deep pockets.
Too bad he doesn't subscribe to see what is really occurring in our community. Oops lets say rather that he wouldn't be welcome with the attitude anyway......would really add a bit of insolence to a great site.
Kind of like a tailgater ( I call them butt sniffers ) you want to jamb the brakes on.
48% of bearish breakouts from Rounding Tops rally back to the breakout point or slightly above. 47% of the time these 'Pullbacks' reverse direction, and price continues in the direction of the breakout. In other words the odds that the HUI will suffer further downside is nearly 50%.
Making some nice money being SHORT, selling rallies.
Am finding Gary's subscribers to be a good contrary-an indicator at the moment as emotions are running high due to the severe draw-downs. So I'd like to thank the abusive ones particularly; I went short again after yesterday's abusive comments "Rich is obviously an uniformed A hole." lol. Shorted SPX and Gold (both positions now in profit). I leave emotions out of trading, so praise or abuse is meaningless. Profits and losses however are not. Some food for thought maybe?
Be sure to tell us in real time when you cover instead of after the fact. I suspect most people, myself included, are inclined to be a bit skeptical when it comes to people bragging about trades after they have already occurred.
My gold system has not generated a stop yet, and is close to giving an add on buy. With some strength the add on buy will generate, followed shortly with a stop being set.
Hey gary, thanks for your work. What do you think of this? I thought when gold snd stocks found their icl, they would blast off at least 3 or 4 sessions. But they are not. Does this concern you? Greg
Gary, Since the SMT premium is doing so well, may I suggest that you revert the SMT blog here back to what it was with anon status. It is clear that the SMT blog is no more as compared to what it used to be.
I mean of course do what you like!!!!! Just that I enjoyed the morons and their crap feasts during drawdowns! We don’t get that anymore. You have either conditioned players, or they don’t play. Anyways just a thought……feel free to ignore with no ill regard!
Saif, Yes. This is clearly a breakout attempt by $USD. A sharp pullback at some point, maybe soon, is probably likely but after that I would be hesitant to be long PMs. I've been posting this chart for months. It appears the 'Larger potential Rounding Bottom' theory may be happening.
You might be a bit conservative on your target there of 102 Danno. EUR looks hopeless. JPY which has been holding USD back has some serious issues which will come to the forefront soon enough. JPY could drop 50% versus the USD. CHF is pegged to the Euro and AUD and CAD have huge housing bubbles beginning to burst.
The 110 number was based on the smaller of the two Rounding Bottoms. I won't even try to guess how high the dollar might rise if a bullish breakout of the larger pattern happened.
I find it funny that everyone thinks they are going to ride the precious metal bull to untold riches when gold hits 10k and silver hits 200. Do you really think it is going to be that simple where masses of apocalyptic gold bugs will emerge from their bomb shelters as the new moneyed elite? Where there will be a massive transfer of wealth to the great unwashed just because they had the foresight to sell all of their personal belongings and invest in physical bullion? Sorry everybody but aint..never..gonna..happen!
There are countless ways that the powers that be can crush your gold and silver lined dreams thru confiscation, taxation, manipulation, or any other "tion" you can think of. The thing is they won’t need to use any of these glaringly obvious methods. The powers that be have too many resources and advantages over the small investor that they simply can use to have you voluntarily dumping your holdings en masse.
Think about it. If the price of gold went from $1600 to $800, most of you would be in the fetal position wondering how you were going to be able to afford that new prius you've had your eye on or how you will send the little princess to dance camp. Now do you think that Central Banks with the ability to print money and the elite with nearly limitless resources really care what happens to the price of gold in the short-term? Their mortgages are already paid off and their meals are already bought and paid for. Their quality of life would not be impacted in the slightest if gold were to crash and burn. Besides, they already own all the means of production so regardless of what we choose to use as a currency, they will be the beneficiaries of the proceeds that those generate.
The elite are holding precious metals as a long term store of value. They have the means and the ability to hold and wait out the small investor for the next 100 years if need be. Let gold and silver plummet and drop an extra zero off their net worth and see if they really care. It is irrelevant when you are talking about the magnitude of wealth that these people already possess. In the end, it’s not about how much they are worth in fiat terms anyways. Everything has value relative to something, and fiat is only a fictitious measuring stick for those that don’t make the rules. The real game is the slow accumulation of all the world’s hard assets that collateralize the fiat toilet paper system.
At some point you are going to realize that the only transfer of wealth that will be happening is when the elite purchase your gold and silver back for half the price that you paid for it. They actually want the masses to put all their savings into gold so it will be that much easier to harvest it in the end, just like with the tech bubble. So go ahead and keep dreaming the dream about your soon to be fortunes. Just make sure you have some extra lying around to pay the bills when the rug gets yanked from beneath you.
If I have any left I'll pass it on also, not so blind guy. Relax it will okay, you seem very serious about it is just investing. Before it goes to 800 I will sell.
Gold has been in a secular bull since 2001 and has been crushing stocks. The only people who haven't made a mint are cowboys who used too much leverage and had to liquidate into corrections.
Really hard to find a point in your post. If da Boyz are so fixated on making it impossible for the little guy to profit, explain the last 11 years. Explain silver's action from 2010-11.
E-MINI S&P 500 STOCK INDEX - CHICAGO MERCANTILE EXCHANGE Code-13874A FUTURES ONLY POSITIONS AS OF 05/22/12 | --------------------------------------------------------------| NONREPORTABLE NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS --------------------------|-----------------|-----------------|----------------- LONG | SHORT |SPREADS | LONG | SHORT | LONG | SHORT | LONG | SHORT -------------------------------------------------------------------------------- ($50 X S&P 500 INDEX) OPEN INTEREST: 3,000,650 COMMITMENTS 344,174 519,091 45,878 2121988 2197861 2512040 2762830 488,610 237,820
CHANGES FROM 05/15/12 (CHANGE IN OPEN INTEREST: 32,835) -64,539 37,962 -12,826 87,620 776 10,255 25,912 22,580 6,923
PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADERS 11.5 17.3 1.5 70.7 73.2 83.7 92.1 16.3 7.9
NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 510) 87 103 47 208 218 323 340
The small investor continues to "Buy this dip" with gusto. I think 1050 is in the cards on the S and P. Sentiment may say one thing but actions speak louder than words.
WhereOnceIWasBlind The only thing the 'ELITE" are concerned about is that gold will become more popular than fiat and if it eventuates...they stand to lose....everything. While fiat persists they rule. Oh BTW...if I had a spare $1 MLN and had a choice between holding notes or gold bars....I know which one I would choose...knowing what has happened to fiat over the last 11 years. Trading gold is a dangerous game. Even the masters lose. More importantly if you dont know the rules...you shouldn't be playing.
$3T of cash being chased by $60T of debt and credit. Deflation has got a grip on the balls of the world. Once people get desparate and the markets sell off in a big way, people will not want to sell stock holdings that are down 40%+. they will sell what they are up in, which is GOLD. This will cause gold to sub-1000 by the end of July. Gary has been WRONG ever since his FOLLOWERS (think Jim Jones) where holding call options on silver at $50. Everyone took a beat down. This will repeat. Get the fuk out while you can.
22 weeks into an intermediate cycle and with a Blees rating of 100 I think I will give it the benefit of the doubt.
We managed to avoid all of the D-wave except the last month, most of which has been recovered in the last 7 days.
We even managed to generate a 20% plus return during this time solely on the long side.
So I'm not sure what you mean by totally wrong??
I seriously doubt we will ever see sub $1000 gold ever again, even after the bubble bursts.
Deflation in a purely fiat monetary system is a political decision not an inevitability. Central banks can print 60 trillion just as easily as they can print 1. Heck if the government is willing to risk the currency they could mail every man women and child a check for a million dollars. They already started in 2008 when they mailed out checks for $300.
Jammer What would be the trigger for your scenario...? Greek exit ? Contagion ? Amplified JPM Losses ? Bankruptcy of some EUR Banks ? Your comments are very reminiscent of a HF Trader....short every damn thing that moves...until you look at the net long position. All those shorts btw will need to covered eventually..d-day for that is not only nearing but growing exponentially as well...that coiled spring that Gary has mentioned will soon "spring" into action. I' m working on the ultimate of likely actions which is printing to infinity...ie. more of the same ...which means less of the USD value...and higher Gold. What you descibe is as Gary puts it "politically undesirable". I must say I dont agree with their actions though. One qualification is that they dont wait too long to take that very action. The market could actually beat them to it...but the rally thereafter will set everyones hair on fire. Which btw would not be such a bad thing to have - some market cleansing and re-setting. I believe they need to hold everything together for at least the next few years. This "time" will allow them to ensure continuation of a financial system beyond the crushing implications of built up inflationary trends. Debasement, in reality, is the only digestible "way out". The downside is that as we get further into the DEBT spiral...it speeds up the process of the requirement to print and also the quantum of same. But with each progressive increase we receive lower returns or net benefits. By the time the recognition comes that DEBT is not the solution ...the currency will have a crisis. The Bank runs you see in EUR will be a precursor to what will happen in the States. Then L & G's we have Gold.
Actually its more to do with the fact that they (Greek Govt) will be out of money by then. FOMC is sch. for 19/20 June. Slightly out but same direction nonetheless.
Some short term contrarian signals and indicators:
- US equity Put / Call ratio recently reached bearish extremes. Usually, this type of sentiment readings tend to bottom the stock market if the price is in an uptrend or above 200 day MA like we have currently.
- Hedge funds are now shorting the Aussie dollar for the first time since March 09 lows. Since Aussie is the global poster child of risk on barometer, this type of sentiment reading could mean majority of risk assets are close to or at an intermediate low. Aussie finds itself on a major support level around 97 cents.
- According to EPFR Global fund tracking company, investors pulled $1.18 billion from commodity funds last week, the fifth consecutive drop and the most this year. Gold and precious metals outflows totaled $631.7 million, also the biggest exit this year. From a contrarian point of view, we could have experienced a washout last week and a rebound could now be underway. Continuous Commodity Index is technically very oversold on the daily chart and slightly oversold on the weekly chart. Rebound is now overdue.
- Crude Oil bearish sentiment is reaching short term extremes not seen since August and October of 2011. Last week, Daily Sentiment Index reached a very very low reading of only 9% bulls. Single digit DSI readings majority of the time tend bottom an asset at least in an intermediate time frame. At the same time Treasury Bonds, German Bunds and British Gilts reached bullish extremes last week, of around 95% bulls respectively.
- Emerging market equities, tracked as MSCI Emerging Market Index, is now down 10 straight weeks in the row. This type of losing streak has not been seen since 1994, which is almost two decades ago. Considering that majority of emerging market stocks are now close to major support levels of October 2011 bottom (Russia, Brazil, India) we could stage a counter trend rebound sometime soon.
- Shanghai Composite continues to buck the trend against other risk assets, as it moved up strongly over the last few sessions. This type of price action is most likely discounting further easing policy out of China and also ongoing rumours that Chinese government is about to engage into 2008-type of stimulus package to proper up internal economy and demand, as Eurozone slows down meaningfully (Europe is Chinese biggest trading partner).
Lol Jammer. That was entertaining. I am on you camp although I did not forget to take my chill pills. Gary's "Bless" ratings would have not worked in 1974 -1976 when Gold declined 50% and I believe they will fail miserably now. That said a currency crisis in the Eurozone or Japan could trigger enough Gold buying to cause it to rise alongside the USD. That is why I think Gold stocks look relatively cheaper as their costs denominated in other currencies will go down even if Gold goes down.
Your last comment about the direction of the market and trajectory of CRB is a bit premature. I know people pay you to make projections, but it seems such a projection is unwarranted at this stage with the buck still above 82.
I would like it to go that way too since i initiated GDX positions in the low 40s but one shouldn't be over leverage on the gold trade with the dollar breaking into 2 year highs.
Hi, I have been reading this blog for about six months now I have never posted until now but i feel like a need make a comment with regards to the misinformed assumption that the money multiplier explanation of the monetary system is correct. The majority of money is created through the issuance of credit by the many banks that we all use. Bank when issuing a loan create deposits in the process. This mean that banks don't have to have the reserve before they make a loan. they than have up to 2 weeks to meet all their requirement. So just because the FED is implementing QE doesn't mean we are going to get inflation, what matters are bank issuing credit. We do not live in a trade and barter system and cannot, the monetary system is a dynamic, emergent, and inherently unstable system. Sorry for rambling
Sooth Sayah - that's not what was posted. I haven't been posting my positions, I'm merely pointing out that selling rallies in a down-trend results in profitable trades.
To use your own example, if someone sold Gold short on the open or close of May 23, they are now in profit. I rest my case.
Sorry to inform you that the dollar is breaking out my friend. Oil is below 90, need to watch it as it is forming the last part of a right shoulder to a large head and shoulders pattern. The neckline is 83, if it breaches it may go to 33 again.
I agree it look like we are definitely going lower. I just don't understand how anyone can think that gold will go higher with Europe continuing to deteriorate. 2008 and last September demonstrated that the metal will sell of if the economic problems intensify.I continue to own both gold and silver and feel like a complete idiot for not selling when I should have. I guess that is what I get for listening to all the ideological Austrians and opportunists trying to pimp their gold.
As I repeated many times in last 2 weeks, Gary probably get it right about Gold moving higher on a long term basis, but for the wrong Fundamental reasons.
In other word, Gary is probably 1-time lucky bastards getting on the Gold train for the wrong reason.
In order to sell subscriptions or maybe his own short comings, his only reasons that Gold will rise is Central Bankers Print Print Print. Though he obviously cannot comprehand the complexity of Credit Induced Inflation/Deflation.
Yes, now Gary's magic reason of $USD to toilet has faded, instead $USD broke out and close at new highs and he went silence because he cannot OFFER a good fundamental reason why gold would move higher LT with $USD.
But it may, and it has little to do with Central Bankers Printing press.
It doesn't take a genius to see what's going on. Since 2000 stocks have been in a secular bear market. Governments and central banks have tried to fight this process by debasing currencies. During periods of QE, especially as the dollar moves down into a three year cycle low gold experiences what I call a C-wave advance. The last one topped in Sept.
These are followed by either a violent correction or a multi-month consolidation before the next C-wave can begin. Obviously this one is going to be a consolidation instead of the violent correction scenario as it has only been able to retrace 38% of the prior C-wave.
There is never any shortage of emotional traders that can only project the past into the future. Those people could only see upside several months ago as the stock market rose day after day after day.
I've been doing this for a long time. I understand how markets work. Long periods of gains are followed by swings just as persistent in the other direction. We are experiencing the overhang from the rally in out of the October low right now. It's called regression to the mean and it applies to all markets.
But on the flip side the harder the correction the more violent and persistent the rally tends to be once the selling pressure is released.
Since gold is still in a secular bull market that means that we are sitting the stage right now for the next C-wave advance.
The fact that sentiment is so extreme in both gold and the dollar along with gold now moving into the 23rd week of its intermediate cycle, and a Blees rating of 100 means that we are probably very close to the turn if it hasn't already happened.
There are plenty of people that will go through their entire investing career controlled by their emotions. They will forever miss these turning points and consequently they will always be buying high and selling low. Or selling low and covering high as the case may be.
This is why most people don't make money. This is why I use cycles and sentiment, they let me know when it's time to start leaning against the trend. That time is now.
Despite a powerful rally in the dollar over the last two weeks stocks, gold and especially miners are starting to diverge. You can either take the hint or you can get caught at another major turning point just like the perma bulls did on April 1st.
It's fast approaching the time for the perma bears to get run over.
Agree with Shawn. Gary good at selling newsletters and cycles, but do not understand macroeconomics and how everything connected. He has all outcomes covered with drama over inflation or deflation. His 2012 worst year prediction clearly wrong and that was only one he dared put time frame on. He learned lesson so we no be seeing time frames no more. Will gold bull go up and miners benefit. Yes. Will gary claim to be right and take benefit. Yes. Will he admit to bad call on timing and having 20% drawdown. Never.
Good Stuff Gary. I would like to point out that, not everyone is a perma bear here. They may just differ on the price they would like to buy Gold. Now run that "Bless" rating system on the Euro. It would have given a Buy signal based on COT positioning about 20 weeks ago yet Euro continues lower week after week. All that means is that things can get much more extreme that you imagine. I will give you another. Guess which class of investors was most bullish at the 2009 stock bottom? It was the small investor as defined by Small spec positions on E-minis. Go check it out. If you went by that you would piled on short positions right next to the bottom. For me miners vis a vis the stock market looks like a good bet but Gold could go much much lower.
Aren't you doing the same? You've been only expecting higher prices without entertaining the fact that prices 'could' collapse. Gold and the miners made a swing low already, are you going to put a stop at 39 for GDX?
I've already admitted I will almost certainly be wrong about 2012. I also became convinced a month ago that this bottom was going to be too complex for me to spot it in real time so I quit trying. All published in real time. At that point I just took a position and I will let the bull take care of it.
I just can't stay on the same side of the boat as everyone else with gold 23 week into an intermediate cycle and with sentiment at extremes.
As of today everything appears to be on track for the bull to rescue our positions and almost certainly generate huge profits in the coming months.
As I've said many times in the premium letter I will sell when I think the dollar has put in an intermediate cycle bottom. Since we don't even have a top yet I'm in no hurry.
You have to admit because you can't deny. It is on part of public record. You don't admit bad call on miners. If someone say buy Apple at 600 and then goes to 480 would you say bad call or early.
I don't know what else you want me to say. Once I became convinced the bottoming process was going to be too complex for me to call it in real time I just took a position and held on until the bull and the intermediate cycle rescued the position.
It is a bull market after all and buying high and selling low is the one sure fire way to lose money in a bull market. Two years form now I expect all of my positions will be up 200-400%. Does it really make any difference that one had to weather a one month draw down while waiting for the next C-wave to begin?
Agree Gary that makes no different if early. But also no different if you wait until confirmed uptrend. Noone does care if you miss starting 10% move if it goes 300% as you claim.
The problem of course is that once your emotions confirm that an uptrend has begun that's when you've reached a short term top so you end up experiencing an immediate draw down. If you are an emotional trader then you freak out and sell. The ole buy high sell low bugaboo.
I'm convinced a turn has occurred. The miners are holding above the 10 and 20 DMA. Volume was huge at the bottom. The Blees rating has hit 100 three weeks in a row. Sentiment is extreme in both gold and the dollar. For the dollar it has reached levels not seen in the last 12 years.
Hey and if I'm wrong, so what? The bull will rescue my positions anyway.
On March 29 GDX printed a 2b reversal that could have potentially marked a bottom.
On April 12th GDX generated a large percentage rally day and closed above the 10 day moving average that could have also marked a bottom.
On April 27th GDX broke through the intermediate down trend line as did gold and again closed above the 10 DMA.
And on May 9th GDX formed a very high volume reversal.
In real time this has been a very complex bottoming process with multiple false starts. It only looks easy with the benefit of hindsight, but as we all know hindsight is 20/20.
Unfortunately none of us get the luxury of trading in hindsight, well except the Monday morning quarterbacks...but they don't actually make any money :)
JC, I told all my subs over a month ago that this bottom was going to be too complex for me to call in real time. At that point it was up to everyone if they wanted to generate multiple whipsaws trying to pick the bottom or just sit tight as I was doing with the model portfolio.
So my accountability has already been covered weeks ago. Everyone knew exactly how I was going to play this and it was up to them if they wanted to do it differently.
"Two years form now I expect all of my positions will be up 200-400%."
Wow! 2 Years! lol!
Gary you are really onto something to defend a mistake.
Yeah, Bankers are printing print print print! Buy my subscription Buy Buy Buy!
Let's not forget, you have been claiming High/Hyper inflation is coming due to $USD printing and QE1, 2, 3 and even 4 is coming.
Remember? "$USD is dead" "Bernanke has destroyed $USD" "We are on path to Hyper-inflationary type of DEPRESSION".
Well, no sooner you claim all these and beating 90% of hedge fund including John Paulson/Warren Buffet, $USD beat the hell out of your records.
So where is my Hyper-inflationary Depression? Any more explanation to do now?
However, you did well in technical Cycle analysis. So just stick to it, admit you know NOTHING about monetery policy and credit flow.
Just remember, don't repeat "Printing = $USD Destruction = High/Hyper Inflation". Just Remember Japan. And you should be fine riding the Gold train to moon with all here.
I like Garys blog very much. I thought blogs were for disagreing and debating no? Instead of just defensing gary why don't you tell where I am not correct or offline.
The weekly MACD crossover and RSI look ready to rumble. The monthly chart looks quite constructive as well with a breakout over 80 on the 1 year level. We should see 92 at a minimum and possibly as high as 100 on the index.
Lots of things happening concurrently in this wonderful world of PM's to rescue everyones bacon. Those who are not selling into this USD rally have rocks in their collective heads.
Yep in that post I was agreeing with your original call for the dollar to have topped. Ole uncle buck fooled us both...but it did mean I won the burrito bet :)
Well I do owe you so if you are ever in Hong Kong, let me know - or anywhere in Asia. By the way, you won by luck. You yourself turned bearish just at the bottom of the Dollars rally and it took off into a complete opposed direction than you forecast. As you know already, I covered all my shorts from mid Jan 2012 and became a netrual - while you a bear. So maybe just half a burrito than ? :-)
I think your cycles let you down, as they tricked you. I've noticed it wasnt just you, many cycle traders predicted lower low in the Dollar at the end of April and start of May, but got fooled with a super Dollar rally. I guess we all did...
Furthermore, I have one observation to make. You can thank your lucky stars Gold Miners are not crashing with the Euro and other commodities, as the Dollar is going vertical in recent days! You will argue that miners strength despite Dollar ralliy is a sign of underlying strength. Yes that is true.
But I remember when you got into your trade, it was on the back of "inflation trade starting" and prediction of Dollar downtrend. While you got both of those wrong, somehow Gold Miners managed to avert themselves from a total free fall in recent weeks. Wile that's welcomed for all who own it, it was lucky and not planned.
All I'm going to say is, it could have been much much worse and I'm sure you know it. You got very p lucky, but with crisis spreading to Spain and Italy, you might not yet be out of the woods, especially if Gold cracks $1,530.
p.s. please don't tell us again about where the COT positions and Public Opinion readings are. We have heard it 10 times and all understand that bearish sentiment is very high.
Not really luck. I knew that gold was late in its intermediate cycle. All intermediate cycles eventually bottom. In over 100 years of history I've never seen a time when one didn't.
Gold's intermediate cycle has been the most dependable of all the cycles, so I was very confident the trade would reverse.
On top of that we got a 100 Blees rating. As I've pointed out every single time that has happened in this secular bull market gold was either at or very close to an intermediate bottom with no significant draw down.
Miners had reached a level of undervaluation that has only been seen one other time in history. That spawned a 300%+ rally in two years. The miners were a no brainer. At a time like that one has to turn into a value investor and quit worrying about draw down.
All in all, despite a bigger draw down than I would have liked it's still playing out as expected. Gold is in the process of putting in an intermediate bottom, even while decoupling from the dollar, as are miners.
I have no doubt that an intermediate cycle bottom will form, and it will be followed by a powerful rally just like the last two intermediate cycles out of the Sept and Dec bottoms.
I doubt gold will move to new highs during the next intermediate cycle though, but a test of the $1900 level certainly isn't out of the question.
I don't really expect a break out to new highs until next spring.
Stocks may have bottomed or they may have one more move to new lows first. Either way it's getting late in the daily cycle and very late in the intermediate cycle. Once the bottom has formed I'm confident we will see at least a retest of the recent highs and probably a breakout to new highs.
Notice AAPL isn't crashing as a normal parabola would be expected to do. AAPL is the leader of this cyclical bull. As long as the AAPL rally continues the market is probably going to follow.
I'm starting to believe that the AAPL parabola is consolidating for one more leg up before this parabola breaks for real.
Has anyone here done business with Cube Global Storage in Vancouver Canada? They will store up to 1,250 ounces of gold in segregated account with insurance for $20/month. I researched storage facilities for a couple days and this looks like a winner. Also, where is the best place to buy Maples in the Vancouver area? TIA.
." In over 100 years of history I've never seen a time when one didn't." Of course all cycles bottom, that is like saying eventually the sun rises in the east. As I have pointed out repeatedly, 1974-1976 cycle lasted 80 weeks down. This is likely to be similar.
Gary, I think I understand everything you did, and all your reasons. And I applaud you for sticking to your cycles. However, what I don't get is, why you don't put in a floor. Nothing is 100%, right? This is the only part I don't get. There is always a small chance that cycles could fail, or the bull run is over, and your position could fall out from under you. Small chance, but a chance. No one can know everything all the time. Unless your crystal ball is fixed. ;-)
"Likely" is not good enough. You want to play based on ur assumption ? Gary's got some solid support for his actions. Warning ..It requires balls of steel. History doesnt necessarily repeat nor rhyme. Besides today's climate cannot be compared with your thesis on 1974-76 cycle and what's in store for Gold.
looks like this board might be starting to come back to life. good to see.
i'll offer an opinion from a crusty money management vet. there is no excuse to take a 20% drawdown in any position especially if it accounts for your entire portfolio. more importantly though is no one position or one sector should ever account for your entire portfolio. if you have a system that tells you when to buy then your system should also define your risk and downside upfront. if not then you have no risk management
Lm, I said likely to refer to the depth of the decline not to its near certainty to me. I have played it like this and stayed away from most of PMs till recently. my Long USD thesis (and you can check comments as far back as u like) has been consistent and profitable.U say we today's environment is not like the 70's.
U r right , it is not. in th 70's we actually had double digit inflation for most of the decade. Oil, base metals and everything other than healthcare and education costs hit their highs in 2007 and in the past 5 years have gone nowhere. 0% total return on commodities in 5 years. Look at the CRB, specially with NG trading well below 2007 one could argue that Gold has become so overvalued relative to the rest.
Bill, We now have a floor because gold has formed a Daily cycle low. I don't make it a habit to stop out of positions 23 days into a daily cycle so while it's easy to say one should never take a 20% draw down it's not practical in real life. Why? Because stopping out of a position 23 days into a daily cycle will end up costing one lots of money if done consistently.
And what's the difference between doing it once or 100 times. Without the benefit of a crystal ball no one knows whether a cycle is going to bottom on that 23rd day or wait 7 more days and bottom on the 30th.
I appreciate the concern but I've been doing this for a long time I really do know how to use my system. And if I don't follow the rules then I end up losing money. I prefer not to lose money generally speaking.
Meant 2008 not 2007 in comment above. Really meant to point out that Oil has gone nowhere since 2007 (though it topped in 2008). Same for Base metals and Food complex as a whole.
Trying to convince us that Gold has formed some kind of a low based on cycles it nonsense right now. Gold hasn't formed anything yet. It's just bounced around between $1,530 and $1,600.
In a week from now Gold "could" form a bottom if it rallies above $1,600 or it "could" drop below $1,530 if the Euro starts a waterfall decline due a default in Spanish banking system. Than, cycle counts will not work, just like the last Dollar cycle didn't work as it shot straight up, instead of down!
Tiho - the cycles worked fine in my view. They called the timing window of a high probability bottom for gold and the dollar.
Cycles don't tell you that the dollar will rally or that gold will falter just the location of the bottom. Cycles also don't tell you how much the asset will rise nor the data of the peak. (They may give hints by right/left translating).
Cycles work in most markets but work best in bull markets like gold was in up to at least Sept 2011. Since than gold has been forming lower lows and the use of cycles has not been as successful as pre-2011.
I think one key for using cycles is to be invested in "bull" rising markets (where in general each daily lows forms a higher high). This would be like the bond market now and perhaps the dollar. In this case, you use cycles to time your entry and the rising bull takes care of the rest.
Mike, I've found a system that's works for me. Does it work perfectly every time? Of course not. If you've been at this for 45 years then you know that no system works 100% of the time.
Now if you have a better system then by all means use it, but just because your system works for you doesn't mean it will work for me. I may not be emotionally suit to use your system.
Over the years I've made a small fortune with my system. I accept that occasionally it will break down. This is why I tend to almost exclusively trade a bull market because I know when my system breaks down the bull will rescue me.
Funny that everyone was thinking if Euro/Greece was gone, $USD would soar and Gold would be demolished!
Well, hold on for a second. Fundamentally, why investors buy gold? One of the main reason is during the time of Crisis, especially financial or monetery or currency crisis, Gold become one of the safest store of value.
So don't be surprised when $USD and Gold choose to soar together at the same time, just like on long term basis $USD and $GLD does not have a 1-to-1 correlation.
Pull up a weekly chart of $USD and $GLD and you would see it. Don't assume $USD is always inverse to GLD.
"because I know when my system breaks down the bull will rescue me"
Again, as I asked many times in the past, how do you know if Gold is still on LT Bull? Give me 2 Technical reasons for LT Bull, and give me 1 Technical Observation that you would declare LT bull is over.
gary fair enough and well said. what i've learned is that no "system" works everytime which is why risk management is so important. all the young bucks that thought they had it figured out learned the hard way in 2008. your system works for you so more power to you
keep up the good work and let's keep this blog going
"saif said... Meant 2008 not 2007 in comment above. Really meant to point out that Oil has gone nowhere since 2007 (though it topped in 2008). Same for Base metals and Food complex as a whole."
A breakdown of support at $1,530 is what I think could occur, because buyers seem to be hesitating to bid at the support.
I wouldn't short Gold right now coz everyone is bearish, but to me it looks like Gold is going for lower support levels. As i already stated here before.
This is why I turned super bearish on everything several weeks ago and instead of buying at contrarian inflection points, I would just add some calls. That means limited downside and limited risk.
Real buying opportunity will come when Europe crashes apart and ahold has a down year!
saif said... " CRB will definitely drop more in my opinion, but I expect that the 2008 highs will also be taken out further down the line. (much further :))"
I use Firefox w/ XP and everything looks normal on this page. Like I said earlier, only once did I see the coloring of Gary's notes, so I have no clue what's happening for others.
I understand your floor is based on cycles, and that you've studied them a long time and rely on them. I've always felt they are fuzzy, and I agree w/Tiho that $GOLD needs to close above 1600 on the charts before it looks like a bottom. But if I believed in cycles I can understand where you're coming from now. Good luck.
I use this page for posting (e.g. the comment page I referred to). I guess I could always come here instead... it was easier to find Gary's comments on the regular (public SMT) page, although if I can't read 'em...
Shawn, I don't use technicals to determine whether a bull market has ended or not. As most technical traders usually figure out at some point in their career, trading based on nothing more than chart patterns isn't a very long term profitable way to trade.
I will consider the gold bull dead when I see a Dow: gold ratio of 1:1, and when I see everyone and their cousin buying gold.
There will also have to be a fundamental change in the currency markets before the gold bull can end. Either the US dollar will have to be backed by gold or some other currency will emerge as the reserve currency and it will be backed by gold.
When that happens then the fundamental driver behind the gold bull will have ended.
Currency markets are too manipulated for the dollar to get too much momentum. At some point soon Bernanke is going to fire the next shot in the ongoing currency war. If the employment report is crappy it will be sooner rather than later.
I think 21 up days out of 23 is a heck of a lot of momentum . We already know the employment report is going to be crappy. Why would it be good? Fed Bill Dudley mentioned in his speech yesterday that any QE is off the table for the June Fed meeting. What options does big Ben have left?
SF Giants Fan, incidentally the first up day came right after Gary used a 0.01% violation of the previous low to declare that the dollar was about to die.
I am not sure about a tradable low on the USD anymore. If we got rampage selling today and tomorrow then perhaps it would be more likely. There are too many counter trend rallies happening in the stock market which keep forcing shorts to cover. I am afraid there is not that much buying power.
Technically he was right calling it a failed cycle by definition. The same thing happened in December 2010. But I guess that's the games the big boys play. The dollar chart is starting to look like AAPL :-)
Now this action looks encouraging for a USD top S & P bottom...short term. Covered all remaining USD longs and ES Shorts. Will look at redeploying after a correction
"I will consider the gold bull dead when I see a Dow: gold ratio of 1:1, ... also have to be a fundamental change in the currency markets before the gold bull can end..."
I think we can probably chalk up another round to cycles :)
The market should also bottom any day now as it's very deep in the daily cycle. This isn't unusual to break to new lows to sucker in the bears before reversing.
Gary, I became convinced yesterday that you only have it half right. Yes gold, silver and mining stocks are going to do well, but it's because of deflation, not inflation. Stocks in general are going to tank as the economy grinds to a halt. Mining stocks will do well because energy will go down. The markets could drop 80% in the next few years. Deflation because no one wants to barrow money when their debt is already so high, so all the "printing" in the world won't help anything.
JC, I will claim victory when the trade is closed. This intermediate cycle is just getting started.
Just a reminder: It's a bull market. I don't have to time every trade perfectly.
In case you haven't figured it out yet, no one on the planet can do that consistently.
In a bull market all one has to do is get close. We missed by a month. Not what I would like but before the trade is finished it won't matter.
This is why I tend to stick to bull markets, because I know a timing mistake will get corrected, and as long as I continue to trade the bull then by the time it's over I will have made a small... or large fortune. While emotional traders make nothing.
BTW I've already made a small fortune, now I'm working on the large one :)
Gary, Not trying to be bad guy but many now on the miner trade. To claim that you chalk up to cycles when it didn't work so well is not right. Sure you ride the bull, but how is cycles responible for chalk up?
Gary, I think the FEDs hand will be tied. They've already had QE1 an 2 to save the banks and that money pumped the commodities and the markets. How long can deficit spending continue. It has to end sometime and then the piper has to be paid. Massive deflation is coming...I think.
For the reasons I've already gone over it becamae obvious to me that this bottom was going to be too complex for me to spot in real time. It was late in the intermediate cycle. Knowing that I was confident in taking a position and just holding on understanding that if I couldn't time it perfectly the bull would rescue my position, and do it soon because it was late in the cycle.
Like I said these strategies have already made me a small fortune. Before this is over I expect to make a very large one, even if I can't get every turning point perfect.
Those who don't "get this" are destined to make nothing during the greatest bull market that any of us will ever see in his lifetime.
Fellow SMT'ers, this blog is helpful if there are constructive posts. If you want to oppose, then propose. Don't just post to say Gary is wrong, or too early, or complain. Add your thoughts and insights, something we can learn from. Also, if you think someone is going to be perfectly right 100% of the time you are nuts.
Another hint at deflation is oil at 83.11 a barrel. Crude isn't sniffing out inflation here. Sure it went to 147 when we had massive QE infussion but it's been weak lately. As Gary correctly pointed out that in 2008 the FED didn't let the economy bust as it needed too. They stimulated us out of that by saying GM and they banks were too big to fail.
Our friends at Absolute have agreed to forward you an alert they sent out on gold earlier this week. Since then there has been another bit of gold related news. The Basel Committee for Bank Supervision, which sets international banking requirements, is considering allowing gold to be a Tier 1 asset for banks rather than a Tier 3 asset. This means banks can now count 100% of the value of gold when calculating its capital versus the current 50%.
Needless to say, this would make it much more attractive for banks to hold gold and would give further support to the price of gold. It also emphasizes the point made below that gold is being increasingly viewed as a very important financial asset.
All of this news seems even more relevant in light of gold having gained almost $70 this morning (from its lows) after the announcement of the very poor job creation report.
Gold Lion, Oil and the CRB are moving into a major three year cycle low. All commodities should rally for the next two years culminating in an explosive parabolic spike in late 2014 as the dollar puts in it's next three year cycle low.
It's hard not to get sucked into these powerful trends, but that's why I use cycles, so I have some idea when these major turning points are due.
Gold has already formed it's bottom. The CRB and stock market should form major bottoms very soon. If not later today sometime early next week.
What looks like deflation right now as the bottom forms is going to morph into a powerful inflationary wave over the next two years.
Deflation is the only way I see for the DOW and Gold to have a 1:1 ratio. The world economy is slowing, even in China. American's are tapped out. We're not going to be buying China's goods like we used to. I have been in the Inflation camp until yesterday. I guess we shall see. I went long Gold and short the market yesterday. So far it looks like a good call.
Okay, one last point. The FED can't stimulate the economy just by printing money. The only way money is created is by someone taking out a loan. With the economy slowing so will barrowing. Bankers would rather keep their money in the bank than loan it to a bussiness or for a mortgage. That is why the government has become the lender of last resort.Even that will have to stop and businesses will have to be allowed to fail.
If you're out there, I'm wondering what you think of the hui:gold performance in recent weeks. How much more if any would you want to see before buying miners?
He is gonna wait for short term top around 500 to enter the position because all of his indicators will confirm buy signal by then. Then he is gonna get stopped out of his position when gold moves towards short term bottom. It's always the same with most og the people. They enter too late and get stopped out of positions
Wow, what a day. A small portion of today's move triggered a hard stop on this latest buy, and an add on buy was triggered almost simutaneously.My pivot system that is very good at delineating between bull and bear cycles also went to a buy and triggered at 1603.Props to ya Gary for sticking in there as the naysayers kept trying to beat you down.
There's always a good supply of trend followers that show up here right at tops and bottom.
Right about the time my cycles are telling me to lean in the other direction. They get run over and then never show up again. Then at the next turning point a whole new crop will pop up.
Hahah, good one Gary. Yep, it's always the same. When there is lots of verbal abuse and lots of silly numbers being thrown around( like 1000 $/1oz Gold), one can be sure we are at or very close to bottom.
Yes, isn't it interesting how the short sellers never post their sells in real time but often crow about their profits after they've supposedly covered? ; )
Oh come on Catbird. I made money on all three sides today and I have been posting in real time. I was long the USD all along (and you can check every comment) while I was being ridiculed for having rocks in my head. I was shot the market from 1380 and I was long Gold stocks. Now that is a rare trifecta.I covered this morning (USD and Short stock position) and posted in real time here. See not all shorts are liars. I am long Gold stocks but I still think Gold ultimately goes much lower. Not shorting it yet.
I said it before and I'll repeat it again..... I LOVE the smell of shorts getting burned....that coiled spring is about to be released.
Gold Lion.. When consumers stop borrowing the government normally takes up the slack (keynesian economics). Expect stimulatory injections in the form of infrastucture and rebuilding across the nation on a massive scale. Europe will need to do the same. The stimulation (borrowing ) will need to be specifically targetted over the remainder of this decade.
For those confused about the FED's delayed action....some things to consider (food for thought) Why "print" when you know the consequence...? Let the cost of energy (OIL) fall and value of USD rise before debasing. That way its more politically acceptable. Time people ...Time. I say that with qualification though...it does need to happen this month. Have some faith in Gary's calls...by all means question them & ensure they're right for you. Trade accordingly.
Gold by the way... is being monetised on an increasing basis. This is very bullish.
Also...while everyones attention has been focussed on the EUR mess and the rise of the USD...under the radar...we have seen the miners turn over the last few weeks. They are leading the PM...just wait for the explosion going further into summer. The fireworks are about to start. I find it very surprising that this has not been discussed at great length...how they (miners) have held up in this across the board market drawdown. Hold onto your hats peeps....some very strong tailwinds are a blowin.......
Gary, today's move was definitely impressive but, if we have another 2008 Lehman type event I'm still worried that gold will sell off significantly. Also how do you think commodities will go higher if all the emerging markets are going into contraction? Would like to here everyone's opinion
Gary - It seems you and John Townsend differ on where gold is headed. He says, "I see a good possibility that gold has further to fall - much further." $1430 - 1395. And you say just the opposite. We are at or very near a bottom. John "hopes" it doesn't happen.
ReplyDeleteBut hope is not an investment strategy. That is what stops are for.
It is only money, besides, AAPL is the new gold.
ReplyDeleteJohn is basing his prediction on what has happened in the past. I'm making a call based on what is happening now. Right now gold is 22 weeks into an intermediate cycle. The COT has hit a 100 on the Bless rating, sentiment is as bearish as it has ever gotten. Now maybe gold will eventually work down to those levels but I doubt it will be during this intermediate cycle.
ReplyDeletethe megaphone pattern in the DX daily chart is bearish but with all the manipulation going on who knows if it'll break to the down side.
ReplyDeleteactually, megaphones are often great continuation patterns.
Deletetake a look in Bulkowski's Encyclopedia of Chart Patterns
MARKETS
ReplyDeletehttp://traderjoed.blogspot.com/
Miners holding well above recent bottom so far, especially the majors (GDX).....
ReplyDeletemarketcycles79
yes, but when the dollar breaks above 82.5 the miners will fall hard and fast.
DeleteSo far it is a higher low.
ReplyDeleteYou seem to be making trading decision based on emotions and what if's
ReplyDeleteGary, I would have been shaken out of my GDX long if not for your conviction. Appreciate it and glad you keep cool all the time (:
ReplyDeletegld could get back to 50 ma
DeleteYes, Ben's working hard to get an honorary knighthood from QE2 :)
Deletegary may indeed be right, with all of the shrieking that you see on this board. it would lead anyone to believe gary is down 30%. LOL :)
ReplyDeleteNUGT 42 to 10... blood in the street
ReplyDeleteWell I predicted before mkt open that Gold and SPX would be down heavily - and so it is!
ReplyDeleteHow did I know? SIMPLE - we're in a DOWNTREND folks.
Listen, Gary posts some good stuff, but these positions are underwater and if you're not careful you may all end up drowning.
BE CAREFUL.
Even I knew that the markets would be down this AM, just from the cycles and looking at the Nikkie and also the futures this morning. Stunning reversal (so far) in the miners. Just the divergence we've been looking for. Just the back test we were looking for.
DeleteToday is a great example of how hard it is to buy at the bottom (which I think this is).
Except that you didn't buy at the bottom - you bought much higher up.
DeleteYour positions are underwater, and if these positions move back down (and there's a good chance they could) you'll all be out of capital.
Hoping for reversals without stops is not a trading strategy - its gambling.
Yikes, I need to change my password, I didn't realize you had logged into my account!! I guess you didn't notice what I bought today then... too late, my PW has been changed!
DeleteYes of course you picked the absolute bottom - no doubt all your positions are up 100% on the day.
DeleteI know it hurts when you lose money, not trying to belittle you just trying to make you think - perhaps it might not be wise to lose more?
I'm not worried about the small picture, nor any service you are trying to launch.
Deletehttp://www.businessinsider.com/down-goes-gold-2012-5
ReplyDeleteFriend still providing a nice road map.
ReplyDeletehttp://humblestudent777.blogspot.com/
I just got back form climbing. Looks like a lot of people have some splaining to do. LOL
ReplyDeleteI'll continue to stick with my cycles, sentiment and COT. They rarely let me down, and they didn't this time either.
higher lows
ReplyDeleteGold is leading the miners - Gold rallied hard a few days ago. Then the miners follow.
ReplyDeleteGold is now falling again - guess where the moners may go???
Try looking at it the other way around....and you might get close to what is really happening.
DeleteSounds like Rich is violating rule #1 (Never, never, never, never short a bull market)
ReplyDeleteGary - that's assuming this is a bull market.
DeleteLook, I have no desire to see you (or anyone else lose money) but when I glance at my screens I see big down-trends. Yes there are temporary pull-backs in the down-trends, but the mkts are all heading down. Arguing with Mr Market can get expensive - I hope you've got deep pockets.
This comment has been removed by the author.
DeleteRich is obviously an uniformed A hole.
ReplyDeleteToo bad he doesn't subscribe to see what is really occurring in our community. Oops lets say rather that he wouldn't be welcome with the attitude anyway......would really add a bit of insolence to a great site.
Kind of like a tailgater ( I call them butt sniffers ) you want to jamb the brakes on.
Gary's red lines of financial death!
ReplyDelete48% of bearish breakouts from Rounding Tops rally back to the breakout point or slightly above. 47% of the time these 'Pullbacks' reverse direction, and price continues in the direction of the breakout. In other words the odds that the HUI will suffer further downside is nearly 50%.
ReplyDeletehttp://scharts.co/JdT5Iv
Making some nice money being SHORT, selling rallies.
ReplyDeleteAm finding Gary's subscribers to be a good contrary-an indicator at the moment as emotions are running high due to the severe draw-downs. So I'd like to thank the abusive ones particularly; I went short again after yesterday's abusive comments "Rich is obviously an uniformed A hole." lol. Shorted SPX and Gold (both positions now in profit). I leave emotions out of trading, so praise or abuse is meaningless. Profits and losses however are not. Some food for thought maybe?
Be sure to tell us in real time when you cover instead of after the fact. I suspect most people, myself included, are inclined to be a bit skeptical when it comes to people bragging about trades after they have already occurred.
ReplyDeletegary, please bring back the troll meter.
ReplyDeleteRich will chime in at each higher low until he doesn't. This is number 2.
ReplyDeleteMy gold system has not generated a stop yet, and is close to giving an add on buy. With some strength the add on buy will generate, followed shortly with a stop being set.
ReplyDeleteHey gary, thanks for your work. What do you think of this? I thought when gold snd stocks found their icl, they would blast off at least 3 or 4 sessions. But they are not. Does this concern you? Greg
ReplyDeleteGreg,
ReplyDeleteThe HUI is up over 13% in 6 days. How much more of a blast off do you require?
$usd may pullback here but medium term looks like a breakout of a 18 month Cup and handle pattern. Target would be at least 10% higher from here.
ReplyDeleteGary,
ReplyDeleteSince the SMT premium is doing so well, may I suggest that you revert the SMT blog here back to what it was with anon status. It is clear that the SMT blog is no more as compared to what it used to be.
I mean of course do what you like!!!!! Just that I enjoyed the morons and their crap feasts during drawdowns! We don’t get that anymore. You have either conditioned players, or they don’t play. Anyways just a thought……feel free to ignore with no ill regard!
Saif, Yes. This is clearly a breakout attempt by $USD. A sharp pullback at some point, maybe soon, is probably likely but after that I would be hesitant to be long PMs. I've been posting this chart for months. It appears the 'Larger potential Rounding Bottom' theory may be happening.
ReplyDeletehttp://scharts.co/MMe6jn
CME lowers margin requirements on many futures contracts, including gold and oil.
ReplyDeleteYou might be a bit conservative on your target there of 102 Danno.
ReplyDeleteEUR looks hopeless. JPY which has been holding USD back has some serious issues which will come to the forefront soon enough. JPY could drop 50% versus the USD. CHF is pegged to the Euro and AUD and CAD have huge housing bubbles beginning to burst.
The 110 number was based on the smaller of the two Rounding Bottoms. I won't even try to guess how high the dollar might rise if a bullish breakout of the larger pattern happened.
ReplyDeleteFriend has been laying out clear roadmaps that help in trading very much with. I highly recommend.
ReplyDeleteGary is bar none the best PM forecaster I run into.
http://humblestudent777.blogspot.com/
This is my falling wedge target for USD, dating from July 2011.
ReplyDeletehttp://imageshack.us/photo/my-images/191/dolartarget83.png/
I find it funny that everyone thinks they are going to ride the precious metal bull to untold riches when gold hits 10k and silver hits 200. Do you really think it is going to be that simple where masses of apocalyptic gold bugs will emerge from their bomb shelters as the new moneyed elite? Where there will be a massive transfer of wealth to the great unwashed just because they had the foresight to sell all of their personal belongings and invest in physical bullion? Sorry everybody but aint..never..gonna..happen!
ReplyDeleteThere are countless ways that the powers that be can crush your gold and silver lined dreams thru confiscation, taxation, manipulation, or any other "tion" you can think of. The thing is they won’t need to use any of these glaringly obvious methods. The powers that be have too many resources and advantages over the small investor that they simply can use to have you voluntarily dumping your holdings en masse.
Think about it. If the price of gold went from $1600 to $800, most of you would be in the fetal position wondering how you were going to be able to afford that new prius you've had your eye on or how you will send the little princess to dance camp. Now do you think that Central Banks with the ability to print money and the elite with nearly limitless resources really care what happens to the price of gold in the short-term? Their mortgages are already paid off and their meals are already bought and paid for. Their quality of life would not be impacted in the slightest if gold were to crash and burn. Besides, they already own all the means of production so regardless of what we choose to use as a currency, they will be the beneficiaries of the proceeds that those generate.
The elite are holding precious metals as a long term store of value. They have the means and the ability to hold and wait out the small investor for the next 100 years if need be. Let gold and silver plummet and drop an extra zero off their net worth and see if they really care. It is irrelevant when you are talking about the magnitude of wealth that these people already possess. In the end, it’s not about how much they are worth in fiat terms anyways. Everything has value relative to something, and fiat is only a fictitious measuring stick for those that don’t make the rules. The real game is the slow accumulation of all the world’s hard assets that collateralize the fiat toilet paper system.
At some point you are going to realize that the only transfer of wealth that will be happening is when the elite purchase your gold and silver back for half the price that you paid for it. They actually want the masses to put all their savings into gold so it will be that much easier to harvest it in the end, just like with the tech bubble. So go ahead and keep dreaming the dream about your soon to be fortunes. Just make sure you have some extra lying around to pay the bills when the rug gets yanked from beneath you.
bump
ReplyDeleteThe elite will be dead if they hold gold for a 100 years.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteI just like it to go to $2000 or 2500, than I will cash out and buy some nice clothes or car. Take a vacation
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteIf I have any left I'll pass it on also, not so blind guy.
ReplyDeleteRelax it will okay, you seem very serious about it is just investing.
Before it goes to 800 I will sell.
WhereOnceIWasBlind,
ReplyDeleteGold has been in a secular bull since 2001 and has been crushing stocks. The only people who haven't made a mint are cowboys who used too much leverage and had to liquidate into corrections.
Really hard to find a point in your post. If da Boyz are so fixated on making it impossible for the little guy to profit, explain the last 11 years. Explain silver's action from 2010-11.
Oh, and while you're at it, do tell us where you have YOUR money.
ReplyDeleteE-MINI S&P 500 STOCK INDEX - CHICAGO MERCANTILE EXCHANGE Code-13874A
ReplyDeleteFUTURES ONLY POSITIONS AS OF 05/22/12 |
--------------------------------------------------------------| NONREPORTABLE
NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS
--------------------------|-----------------|-----------------|-----------------
LONG | SHORT |SPREADS | LONG | SHORT | LONG | SHORT | LONG | SHORT
--------------------------------------------------------------------------------
($50 X S&P 500 INDEX) OPEN INTEREST: 3,000,650
COMMITMENTS
344,174 519,091 45,878 2121988 2197861 2512040 2762830 488,610 237,820
CHANGES FROM 05/15/12 (CHANGE IN OPEN INTEREST: 32,835)
-64,539 37,962 -12,826 87,620 776 10,255 25,912 22,580 6,923
PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADERS
11.5 17.3 1.5 70.7 73.2 83.7 92.1 16.3 7.9
NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 510)
87 103 47 208 218 323 340
The small investor continues to "Buy this dip" with gusto. I think 1050 is in the cards on the S and P. Sentiment may say one thing but actions speak louder than words.
Catbird,
ReplyDelete+1
GDX has rebounded stealthy. Likely to continue.
ReplyDeleteWhereOnceIWasBlind
ReplyDeleteThe only thing the 'ELITE" are concerned about is that gold will become more popular than fiat and if it eventuates...they stand to lose....everything. While fiat persists they rule.
Oh BTW...if I had a spare $1 MLN and had a choice between holding notes or gold bars....I know which one I would choose...knowing what has happened to fiat over the last 11 years.
Trading gold is a dangerous game. Even the masters lose. More importantly if you dont know the rules...you shouldn't be playing.
danno
ReplyDeletedo you read http://likesmoneycycletrading.wordpress.com/ ?
you will like all of his charts and this weekend report when it comes out
Thanks jeffwilm. I'll check it out.
ReplyDeleteLessons in Trading: Reversal Indicator
ReplyDeleteGOLD expectation
ReplyDeletehttp://changeintrend.wordpress.com/2012/05/27/special-report-gold/
GDX has rebounded stealthy.
ReplyDeleteStealthy? Mate, the whole world is talking about it.
http://arum-geld-gold.blogspot.com/2012/05/my-thoughts-for-week-ahead_27.html
ReplyDeleteMy latest post
a bullish view of the dollar index:
ReplyDeletehttp://isitsoorisitnot.tumblr.com/post/23928101094/a-bullish-view-of-the-monthly-us-dollar-chart-an
$3T of cash being chased by $60T of debt and credit. Deflation has got a grip on the balls of the world. Once people get desparate and the markets sell off in a big way, people will not want to sell stock holdings that are down 40%+. they will sell what they are up in, which is GOLD. This will cause gold to sub-1000 by the end of July. Gary has been WRONG ever since his FOLLOWERS (think Jim Jones) where holding call options on silver at $50. Everyone took a beat down. This will repeat. Get the fuk out while you can.
ReplyDelete22 weeks into an intermediate cycle and with a Blees rating of 100 I think I will give it the benefit of the doubt.
ReplyDeleteWe managed to avoid all of the D-wave except the last month, most of which has been recovered in the last 7 days.
We even managed to generate a 20% plus return during this time solely on the long side.
So I'm not sure what you mean by totally wrong??
I seriously doubt we will ever see sub $1000 gold ever again, even after the bubble bursts.
Deflation in a purely fiat monetary system is a political decision not an inevitability. Central banks can print 60 trillion just as easily as they can print 1. Heck if the government is willing to risk the currency they could mail every man women and child a check for a million dollars. They already started in 2008 when they mailed out checks for $300.
june 17 will be important week to decide which way $$ will go
ReplyDeleteilove guys like jammer
ReplyDeleteoa92000
ReplyDeletewhy the date? scrolled back to see if i missed something and did not see anything
new post by friend over at cycles. http://humblestudent777.blogspot.com/ detailed analysis in the May 28 weekend report
ReplyDeletemarketcylces79
jeff, greece & fomc
ReplyDeleteJammer
ReplyDeleteWhat would be the trigger for your scenario...?
Greek exit ?
Contagion ?
Amplified JPM Losses ?
Bankruptcy of some EUR Banks ?
Your comments are very reminiscent of a HF Trader....short every damn thing that moves...until you look at the net long position.
All those shorts btw will need to covered eventually..d-day for that is not only nearing but growing exponentially as well...that coiled spring that Gary has mentioned will soon "spring" into action.
I' m working on the ultimate of likely actions which is printing to infinity...ie. more of the same ...which means less of the USD value...and higher Gold.
What you descibe is as Gary puts it "politically undesirable". I must say I dont agree with their actions though.
One qualification is that they dont wait too long to take that very action. The market could actually beat them to it...but the rally thereafter will set everyones hair on fire. Which btw would not be such a bad thing to have - some market cleansing and re-setting.
I believe they need to hold everything together for at least the next few years. This "time" will allow them to ensure continuation of a financial system beyond the crushing implications of built up inflationary trends.
Debasement, in reality, is the only digestible "way out". The downside is that as we get further into the DEBT spiral...it speeds up the process of the requirement to print and also the quantum of same. But with each progressive increase we receive lower returns or net benefits. By the time the recognition comes that DEBT is not the solution ...the currency will have a crisis. The Bank runs you see in EUR will be a precursor to what will happen in the States.
Then L & G's we have Gold.
oa92000
ReplyDeleteActually its more to do with the fact that they (Greek Govt) will be out of money by then.
FOMC is sch. for 19/20 June. Slightly out but same direction nonetheless.
Some short term contrarian signals and indicators:
ReplyDelete- US equity Put / Call ratio recently reached bearish extremes. Usually, this type of sentiment readings tend to bottom the stock market if the price is in an uptrend or above 200 day MA like we have currently.
- Hedge funds are now shorting the Aussie dollar for the first time since March 09 lows. Since Aussie is the global poster child of risk on barometer, this type of sentiment reading could mean majority of risk assets are close to or at an intermediate low. Aussie finds itself on a major support level around 97 cents.
- According to EPFR Global fund tracking company, investors pulled $1.18 billion from commodity funds last week, the fifth consecutive drop and the most this year. Gold and precious metals outflows totaled $631.7 million, also the biggest exit this year. From a contrarian point of view, we could have experienced a washout last week and a rebound could now be underway. Continuous Commodity Index is technically very oversold on the daily chart and slightly oversold on the weekly chart. Rebound is now overdue.
- Crude Oil bearish sentiment is reaching short term extremes not seen since August and October of 2011. Last week, Daily Sentiment Index reached a very very low reading of only 9% bulls. Single digit DSI readings majority of the time tend bottom an asset at least in an intermediate time frame. At the same time Treasury Bonds, German Bunds and British Gilts reached bullish extremes last week, of around 95% bulls respectively.
- Emerging market equities, tracked as MSCI Emerging Market Index, is now down 10 straight weeks in the row. This type of losing streak has not been seen since 1994, which is almost two decades ago. Considering that majority of emerging market stocks are now close to major support levels of October 2011 bottom (Russia, Brazil, India) we could stage a counter trend rebound sometime soon.
- Shanghai Composite continues to buck the trend against other risk assets, as it moved up strongly over the last few sessions. This type of price action is most likely discounting further easing policy out of China and also ongoing rumours that Chinese government is about to engage into 2008-type of stimulus package to proper up internal economy and demand, as Eurozone slows down meaningfully (Europe is Chinese biggest trading partner).
Lol Jammer. That was entertaining. I am on you camp although I did not forget to take my chill pills. Gary's "Bless" ratings would have not worked in 1974 -1976 when Gold declined 50% and I believe they will fail miserably now. That said a currency crisis in the Eurozone or Japan could trigger enough Gold buying to cause it to rise alongside the USD. That is why I think Gold stocks look relatively cheaper as their costs denominated in other currencies will go down even if Gold goes down.
ReplyDeleteGary,
ReplyDeleteYour last comment about the direction of the market and trajectory of CRB is a bit premature. I know people pay you to make projections, but it seems such a projection is unwarranted at this stage with the buck still above 82.
I would like it to go that way too since i initiated GDX positions in the low 40s but one shouldn't be over leverage on the gold trade with the dollar breaking into 2 year highs.
Technically with the dollar breaking above 82 and holding above it, it opens the door to the top of the 1 year up channel at 85-86.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteAm I still allowed to say be short Gold? Especially as it's now down about another $30 since I last posted? We could lock in profits here.
ReplyDeleteHi, I have been reading this blog for about six months now I have never posted until now but i feel like a need make a comment with regards to the misinformed assumption that the money multiplier explanation of the monetary system is correct. The majority of money is created through the issuance of credit by the many banks that we all use. Bank when issuing a loan create deposits in the process. This mean that banks don't have to have the reserve before they make a loan. they than have up to 2 weeks to meet all their requirement. So just because the FED is implementing QE doesn't mean we are going to get inflation, what matters are bank issuing credit. We do not live in a trade and barter system and cannot, the monetary system is a dynamic, emergent, and inherently unstable system. Sorry for rambling
ReplyDeleteThis comment has been removed by the author.
ReplyDeletehttp://mises.org/daily/6054/The-Bernanke-Bust
ReplyDeleteRich you went short May 23rd, you are still underwater on that trade.
ReplyDeletejammer = basil
ReplyDeleteSooth Sayah - that's not what was posted. I haven't been posting my positions, I'm merely pointing out that selling rallies in a down-trend results in profitable trades.
ReplyDeleteTo use your own example, if someone sold Gold short on the open or close of May 23, they are now in profit. I rest my case.
Gary,
ReplyDeleteSorry to inform you that the dollar is breaking out my friend. Oil is below 90, need to watch it as it is forming the last part of a right shoulder to a large head and shoulders pattern. The neckline is 83, if it breaches it may go to 33 again.
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ReplyDeleteI agree it look like we are definitely going lower. I just don't understand how anyone can think that gold will go higher with Europe continuing to deteriorate. 2008 and last September demonstrated that the metal will sell of if the economic problems intensify.I continue to own both gold and silver and feel like a complete idiot for not selling when I should have. I guess that is what I get for listening to all the ideological Austrians and opportunists trying to pimp their gold.
ReplyDeleteDollar is topping out.
ReplyDeleteMove along, nothing to see
The dollar has been 'topping out' for 2 weeks now according to Gary and others
ReplyDeleteGuys and gary,
ReplyDeleteAs I repeated many times in last 2 weeks, Gary probably get it right about Gold moving higher on a long term basis, but for the wrong Fundamental reasons.
In other word, Gary is probably 1-time lucky bastards getting on the Gold train for the wrong reason.
In order to sell subscriptions or maybe his own short comings, his only reasons that Gold will rise is Central Bankers Print Print Print. Though he obviously cannot comprehand the complexity of Credit Induced Inflation/Deflation.
Yes, now Gary's magic reason of $USD to toilet has faded, instead $USD broke out and close at new highs and he went silence because he cannot OFFER a good fundamental reason why gold would move higher LT with $USD.
But it may, and it has little to do with Central Bankers Printing press.
Dollar has moved 1% up in the last 2 weeks and it's topping out.
ReplyDeleteIt is a process, not an event, as always
Anyway, take a look at my dollar target of 83, dating back from July 2011.
ReplyDeletehttp://imageshack.us/photo/my-images/191/dolartarget83.png
gary probably goes out to rock climbing
ReplyDeleteIt doesn't take a genius to see what's going on. Since 2000 stocks have been in a secular bear market. Governments and central banks have tried to fight this process by debasing currencies. During periods of QE, especially as the dollar moves down into a three year cycle low gold experiences what I call a C-wave advance. The last one topped in Sept.
ReplyDeleteThese are followed by either a violent correction or a multi-month consolidation before the next C-wave can begin. Obviously this one is going to be a consolidation instead of the violent correction scenario as it has only been able to retrace 38% of the prior C-wave.
There is never any shortage of emotional traders that can only project the past into the future. Those people could only see upside several months ago as the stock market rose day after day after day.
I've been doing this for a long time. I understand how markets work. Long periods of gains are followed by swings just as persistent in the other direction. We are experiencing the overhang from the rally in out of the October low right now. It's called regression to the mean and it applies to all markets.
But on the flip side the harder the correction the more violent and persistent the rally tends to be once the selling pressure is released.
Since gold is still in a secular bull market that means that we are sitting the stage right now for the next C-wave advance.
The fact that sentiment is so extreme in both gold and the dollar along with gold now moving into the 23rd week of its intermediate cycle, and a Blees rating of 100 means that we are probably very close to the turn if it hasn't already happened.
There are plenty of people that will go through their entire investing career controlled by their emotions. They will forever miss these turning points and consequently they will always be buying high and selling low. Or selling low and covering high as the case may be.
This is why most people don't make money. This is why I use cycles and sentiment, they let me know when it's time to start leaning against the trend. That time is now.
Despite a powerful rally in the dollar over the last two weeks stocks, gold and especially miners are starting to diverge. You can either take the hint or you can get caught at another major turning point just like the perma bulls did on April 1st.
It's fast approaching the time for the perma bears to get run over.
Agree with Shawn. Gary good at selling newsletters and cycles, but do not understand macroeconomics and how everything connected. He has all outcomes covered with drama over inflation or deflation. His 2012 worst year prediction clearly wrong and that was only one he dared put time frame on. He learned lesson so we no be seeing time frames no more. Will gold bull go up and miners benefit. Yes. Will gary claim to be right and take benefit. Yes. Will he admit to bad call on timing and having 20% drawdown. Never.
ReplyDeleteGood Stuff Gary.
ReplyDeleteI would like to point out that, not everyone is a perma bear here. They may just differ on the price they would like to buy Gold.
Now run that "Bless" rating system on the Euro. It would have given a Buy signal based on COT positioning about 20 weeks ago yet Euro continues lower week after week. All that means is that things can get much more extreme that you imagine. I will give you another. Guess which class of investors was most bullish at the 2009 stock bottom? It was the small investor as defined by Small spec positions on E-minis. Go check it out. If you went by that you would piled on short positions right next to the bottom. For me miners vis a vis the stock market looks like a good bet but Gold could go much much lower.
Gary,
ReplyDeleteAren't you doing the same? You've been only expecting higher prices without entertaining the fact that prices 'could' collapse. Gold and the miners made a swing low already, are you going to put a stop at 39 for GDX?
I've already admitted I will almost certainly be wrong about 2012. I also became convinced a month ago that this bottom was going to be too complex for me to spot it in real time so I quit trying. All published in real time. At that point I just took a position and I will let the bull take care of it.
ReplyDeleteI just can't stay on the same side of the boat as everyone else with gold 23 week into an intermediate cycle and with sentiment at extremes.
As of today everything appears to be on track for the bull to rescue our positions and almost certainly generate huge profits in the coming months.
As I've said many times in the premium letter I will sell when I think the dollar has put in an intermediate cycle bottom. Since we don't even have a top yet I'm in no hurry.
You have to admit because you can't deny. It is on part of public record. You don't admit bad call on miners. If someone say buy Apple at 600 and then goes to 480 would you say bad call or early.
ReplyDeleteDepends if Apple comes back to 800 or languishes around 500 for years??
ReplyDeleteI don't know what else you want me to say. Once I became convinced the bottoming process was going to be too complex for me to call it in real time I just took a position and held on until the bull and the intermediate cycle rescued the position.
ReplyDeleteIt is a bull market after all and buying high and selling low is the one sure fire way to lose money in a bull market. Two years form now I expect all of my positions will be up 200-400%. Does it really make any difference that one had to weather a one month draw down while waiting for the next C-wave to begin?
No Daniel. You buy Apple in at $520 once confirms it now in uptrend. Why guess at falling price bottom.
ReplyDeleteAgree Gary that makes no different if early. But also no different if you wait until confirmed uptrend. Noone does care if you miss starting 10% move if it goes 300% as you claim.
ReplyDeleteWe can agree to disagree :))
ReplyDeleteOK Daniel.
ReplyDeleteAlso look at miner charts in April. No complex bottoming process as you claim. Just continue downtrend.
The problem of course is that once your emotions confirm that an uptrend has begun that's when you've reached a short term top so you end up experiencing an immediate draw down. If you are an emotional trader then you freak out and sell. The ole buy high sell low bugaboo.
ReplyDeleteI'm convinced a turn has occurred. The miners are holding above the 10 and 20 DMA. Volume was huge at the bottom. The Blees rating has hit 100 three weeks in a row. Sentiment is extreme in both gold and the dollar. For the dollar it has reached levels not seen in the last 12 years.
Hey and if I'm wrong, so what? The bull will rescue my positions anyway.
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ReplyDeleteJC,
ReplyDeleteQuite the contrary.
On March 29 GDX printed a 2b reversal that could have potentially marked a bottom.
On April 12th GDX generated a large percentage rally day and closed above the 10 day moving average that could have also marked a bottom.
On April 27th GDX broke through the intermediate down trend line as did gold and again closed above the 10 DMA.
And on May 9th GDX formed a very high volume reversal.
In real time this has been a very complex bottoming process with multiple false starts. It only looks easy with the benefit of hindsight, but as we all know hindsight is 20/20.
Unfortunately none of us get the luxury of trading in hindsight, well except the Monday morning quarterbacks...but they don't actually make any money :)
JC,
ReplyDeleteI told all my subs over a month ago that this bottom was going to be too complex for me to call in real time. At that point it was up to everyone if they wanted to generate multiple whipsaws trying to pick the bottom or just sit tight as I was doing with the model portfolio.
So my accountability has already been covered weeks ago. Everyone knew exactly how I was going to play this and it was up to them if they wanted to do it differently.
"Two years form now I expect all of my positions will be up 200-400%."
ReplyDeleteWow! 2 Years! lol!
Gary you are really onto something to defend a mistake.
Yeah, Bankers are printing print print print! Buy my subscription Buy Buy Buy!
Let's not forget, you have been claiming High/Hyper inflation is coming due to $USD printing and QE1, 2, 3 and even 4 is coming.
Remember? "$USD is dead" "Bernanke has destroyed $USD" "We are on path to Hyper-inflationary type of DEPRESSION".
Well, no sooner you claim all these and beating 90% of hedge fund including John Paulson/Warren Buffet, $USD beat the hell out of your records.
So where is my Hyper-inflationary Depression? Any more explanation to do now?
However, you did well in technical Cycle analysis. So just stick to it, admit you know NOTHING about monetery policy and credit flow.
Just remember, don't repeat "Printing = $USD Destruction = High/Hyper Inflation". Just Remember Japan. And you should be fine riding the Gold train to moon with all here.
OK Gary so accountability not right word. Probably admission is word I looking for. I don't subsciber so only going by public posts here.
ReplyDeleteANXIOUS MARKET MOMENTS
ReplyDeletejc & shawn ,
ReplyDeleteif you dont like Gary's blog, you really do not have to be here..
I like Garys blog very much. I thought blogs were for disagreing and debating no? Instead of just defensing gary why don't you tell where I am not correct or offline.
ReplyDeleteUSD looks overbought only on a daily chart. Weekly and monthly charts look like they are just getting started.
ReplyDeleteThe monthly and weekly just getting started? Are you for real? What the hell are you looking at
ReplyDeleteThe weekly MACD crossover and RSI look ready to rumble. The monthly chart looks quite constructive as well with a breakout over 80 on the 1 year level. We should see 92 at a minimum and possibly as high as 100 on the index.
ReplyDeleteLots of things happening concurrently in this wonderful world of PM's to rescue everyones bacon.
ReplyDeleteThose who are not selling into this USD rally have rocks in their collective heads.
I love the title of the post on 01st of May 2012 on this blog.
ReplyDeleteYep in that post I was agreeing with your original call for the dollar to have topped. Ole uncle buck fooled us both...but it did mean I won the burrito bet :)
ReplyDeleteWell I do owe you so if you are ever in Hong Kong, let me know - or anywhere in Asia. By the way, you won by luck. You yourself turned bearish just at the bottom of the Dollars rally and it took off into a complete opposed direction than you forecast. As you know already, I covered all my shorts from mid Jan 2012 and became a netrual - while you a bear. So maybe just half a burrito than ? :-)
ReplyDeleteI think your cycles let you down, as they tricked you. I've noticed it wasnt just you, many cycle traders predicted lower low in the Dollar at the end of April and start of May, but got fooled with a super Dollar rally. I guess we all did...
Furthermore, I have one observation to make. You can thank your lucky stars Gold Miners are not crashing with the Euro and other commodities, as the Dollar is going vertical in recent days! You will argue that miners strength despite Dollar ralliy is a sign of underlying strength. Yes that is true.
But I remember when you got into your trade, it was on the back of "inflation trade starting" and prediction of Dollar downtrend. While you got both of those wrong, somehow Gold Miners managed to avert themselves from a total free fall in recent weeks. Wile that's welcomed for all who own it, it was lucky and not planned.
All I'm going to say is, it could have been much much worse and I'm sure you know it. You got very p lucky, but with crisis spreading to Spain and Italy, you might not yet be out of the woods, especially if Gold cracks $1,530.
p.s. please don't tell us again about where the COT positions and Public Opinion readings are. We have heard it 10 times and all understand that bearish sentiment is very high.
ReplyDeleteNot really luck. I knew that gold was late in its intermediate cycle. All intermediate cycles eventually bottom. In over 100 years of history I've never seen a time when one didn't.
ReplyDeleteGold's intermediate cycle has been the most dependable of all the cycles, so I was very confident the trade would reverse.
On top of that we got a 100 Blees rating. As I've pointed out every single time that has happened in this secular bull market gold was either at or very close to an intermediate bottom with no significant draw down.
Miners had reached a level of undervaluation that has only been seen one other time in history. That spawned a 300%+ rally in two years. The miners were a no brainer. At a time like that one has to turn into a value investor and quit worrying about draw down.
All in all, despite a bigger draw down than I would have liked it's still playing out as expected. Gold is in the process of putting in an intermediate bottom, even while decoupling from the dollar, as are miners.
I have no doubt that an intermediate cycle bottom will form, and it will be followed by a powerful rally just like the last two intermediate cycles out of the Sept and Dec bottoms.
I doubt gold will move to new highs during the next intermediate cycle though, but a test of the $1900 level certainly isn't out of the question.
I don't really expect a break out to new highs until next spring.
Stocks may have bottomed or they may have one more move to new lows first. Either way it's getting late in the daily cycle and very late in the intermediate cycle. Once the bottom has formed I'm confident we will see at least a retest of the recent highs and probably a breakout to new highs.
Notice AAPL isn't crashing as a normal parabola would be expected to do. AAPL is the leader of this cyclical bull. As long as the AAPL rally continues the market is probably going to follow.
I'm starting to believe that the AAPL parabola is consolidating for one more leg up before this parabola breaks for real.
Has anyone here done business with Cube Global Storage in Vancouver Canada? They will store up to 1,250 ounces of gold in segregated account with insurance for $20/month. I researched storage facilities for a couple days and this looks like a winner. Also, where is the best place to buy Maples in the Vancouver area? TIA.
ReplyDelete." In over 100 years of history I've never seen a time when one didn't."
ReplyDeleteOf course all cycles bottom, that is like saying eventually the sun rises in the east. As I have pointed out repeatedly, 1974-1976 cycle lasted 80 weeks down. This is likely to be similar.
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ReplyDeleteThis comment has been removed by the author.
ReplyDeleteGary, I think I understand everything you did, and all your reasons. And I applaud you for sticking to your cycles. However, what I don't get is, why you don't put in a floor. Nothing is 100%, right? This is the only part I don't get. There is always a small chance that cycles could fail, or the bull run is over, and your position could fall out from under you. Small chance, but a chance. No one can know everything all the time. Unless your crystal ball is fixed. ;-)
ReplyDeleteGary,
ReplyDeleteHow do YOU get exposure to the miners....Stocks or ETF's ??
Saif,
ReplyDelete"Likely" is not good enough.
You want to play based on ur assumption ?
Gary's got some solid support for his actions. Warning ..It requires
balls of steel.
History doesnt necessarily repeat nor rhyme. Besides today's climate cannot be compared with your thesis on 1974-76 cycle and what's in store for Gold.
looks like this board might be starting to come back to life. good to see.
ReplyDeletei'll offer an opinion from a crusty money management vet. there is no excuse to take a 20% drawdown in any position especially if it accounts for your entire portfolio. more importantly though is no one position or one sector should ever account for your entire portfolio. if you have a system that tells you when to buy then your system should also define your risk and downside upfront. if not then you have no risk management
Lm, I said likely to refer to the depth of the decline not to its near certainty to me.
ReplyDeleteI have played it like this and stayed away from most of PMs till recently. my Long USD thesis (and you can check comments as far back as u like) has been consistent and profitable.U say we today's environment is not like the 70's.
U r right , it is not.
in th 70's we actually had double digit inflation for most of the decade.
Oil, base metals and everything other than healthcare and education costs hit their highs in 2007 and in the past 5 years have gone nowhere. 0% total return on commodities in 5 years. Look at the CRB, specially with NG trading well below 2007 one could argue that Gold has become so overvalued relative to the rest.
Bill,
ReplyDeleteWe now have a floor because gold has formed a Daily cycle low. I don't make it a habit to stop out of positions 23 days into a daily cycle so while it's easy to say one should never take a 20% draw down it's not practical in real life. Why? Because stopping out of a position 23 days into a daily cycle will end up costing one lots of money if done consistently.
And what's the difference between doing it once or 100 times. Without the benefit of a crystal ball no one knows whether a cycle is going to bottom on that 23rd day or wait 7 more days and bottom on the 30th.
I appreciate the concern but I've been doing this for a long time I really do know how to use my system. And if I don't follow the rules then I end up losing money. I prefer not to lose money generally speaking.
Meant 2008 not 2007 in comment above. Really meant to point out that Oil has gone nowhere since 2007 (though it topped in 2008). Same for Base metals and Food complex as a whole.
ReplyDeleteTrying to convince us that Gold has formed some kind of a low based on cycles it nonsense right now. Gold hasn't formed anything yet. It's just bounced around between $1,530 and $1,600.
ReplyDeleteIn a week from now Gold "could" form a bottom if it rallies above $1,600 or it "could" drop below $1,530 if the Euro starts a waterfall decline due a default in Spanish banking system. Than, cycle counts will not work, just like the last Dollar cycle didn't work as it shot straight up, instead of down!
Tiho,
ReplyDeleteGold has formed a cycle low. Now we have a logical place to put a stop.
If you don't know how the system works please quit telling me how to apply it.
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ReplyDeleteTiho - the cycles worked fine in my view. They called the timing window of a high probability bottom for gold and the dollar.
ReplyDeleteCycles don't tell you that the dollar will rally or that gold will falter just the location of the bottom. Cycles also don't tell you how much the asset will rise nor the data of the peak. (They may give hints by right/left translating).
Cycles work in most markets but work best in bull markets like gold was in up to at least Sept 2011. Since than gold has been forming lower lows and the use of cycles has not been as successful as pre-2011.
I think one key for using cycles is to be invested in "bull" rising markets (where in general each daily lows forms a higher high). This would be like the bond market now and perhaps the dollar. In this case, you use cycles to time your entry and the rising bull takes care of the rest.
Mike,
ReplyDeleteI've found a system that's works for me. Does it work perfectly every time? Of course not. If you've been at this for 45 years then you know that no system works 100% of the time.
Now if you have a better system then by all means use it, but just because your system works for you doesn't mean it will work for me. I may not be emotionally suit to use your system.
Over the years I've made a small fortune with my system. I accept that occasionally it will break down. This is why I tend to almost exclusively trade a bull market because I know when my system breaks down the bull will rescue me.
Funny that everyone was thinking if Euro/Greece was gone, $USD would soar and Gold would be demolished!
ReplyDeleteWell, hold on for a second. Fundamentally, why investors buy gold? One of the main reason is during the time of Crisis, especially financial or monetery or currency crisis, Gold become one of the safest store of value.
So don't be surprised when $USD and Gold choose to soar together at the same time, just like on long term basis $USD and $GLD does not have a 1-to-1 correlation.
Pull up a weekly chart of $USD and $GLD and you would see it. Don't assume $USD is always inverse to GLD.
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ReplyDeleteGary,
ReplyDelete"because I know when my system breaks down the bull will rescue me"
Again, as I asked many times in the past, how do you know if Gold is still on LT Bull? Give me 2 Technical reasons for LT Bull, and give me 1 Technical Observation that you would declare LT bull is over.
Thanks.
gary
ReplyDeletefair enough and well said. what i've learned is that no "system" works everytime which is why risk management is so important. all the young bucks that thought they had it figured out learned the hard way in 2008. your system works for you so more power to you
keep up the good work and let's keep this blog going
"saif said...
ReplyDeleteMeant 2008 not 2007 in comment above. Really meant to point out that Oil has gone nowhere since 2007 (though it topped in 2008). Same for Base metals and Food complex as a whole."
$crb will drop more , if follows ndx bubble?
"$crb will drop more , if follows ndx bubble?"
ReplyDeleteCRB will definitely drop more in my opinion, but I expect that the 2008 highs will also be taken out further down the line. (much further :))
I think we should put a tradable USD top by tomorrow or early Monday.
ReplyDeleteBut it will be a pause and we could some pretty huge moves before then.
A breakdown of support at $1,530 is what I think could occur, because buyers seem to be hesitating to bid at the support.
ReplyDeleteI wouldn't short Gold right now coz everyone is bearish, but to me it looks like Gold is going for lower support levels. As i already stated here before.
This is why I turned super bearish on everything several weeks ago and instead of buying at contrarian inflection points, I would just add some calls. That means limited downside and limited risk.
Real buying opportunity will come when Europe crashes apart and ahold has a down year!
saif said...
ReplyDelete"
CRB will definitely drop more in my opinion, but I expect that the 2008 highs will also be taken out further down the line. (much further :))"
what is your target for $wtic ?? $1000?
I definitely expect HI in many countries so nominal price is moot.
ReplyDeleteMarket is due for a small pop for sure...after that, we are in no mans land.
ReplyDeleteI use Firefox w/ XP and everything looks normal on this page. Like I said earlier, only once did I see the coloring of Gary's notes, so I have no clue what's happening for others.
ReplyDeleteGary, glad you have a floor now.
ReplyDeleteI understand your floor is based on cycles, and that you've studied them a long time and rely on them. I've always felt they are fuzzy, and I agree w/Tiho that $GOLD needs to close above 1600 on the charts before it looks like a bottom. But if I believed in cycles I can understand where you're coming from now. Good luck.
Driver, here's a screen shot -- looks the same on three computers, two browsers, and three OS's for me:
ReplyDeletehttps://docs.google.com/open?id=0B8zLwM0USxPWczJNLVhkZGpKSW8
Ben, I don't use that page. This is what I'm on:
ReplyDeletehttp://www.blogger.com/comment.g?blogID=7130708113832839690&postID=4622012797221485103&page=1&token=1338491460515
I use this page for posting (e.g. the comment page I referred to). I guess I could always come here instead... it was easier to find Gary's comments on the regular (public SMT) page, although if I can't read 'em...
ReplyDeleteI tried with Chrome and Firefox, same view as Ben attached.
ReplyDeleteI use Win XP, it should not matter.
Don't click on the title but click on comments. It looks normal that way.
ReplyDeleteShawn,
ReplyDeleteI don't use technicals to determine whether a bull market has ended or not. As most technical traders usually figure out at some point in their career, trading based on nothing more than chart patterns isn't a very long term profitable way to trade.
I will consider the gold bull dead when I see a Dow: gold ratio of 1:1, and when I see everyone and their cousin buying gold.
There will also have to be a fundamental change in the currency markets before the gold bull can end. Either the US dollar will have to be backed by gold or some other currency will emerge as the reserve currency and it will be backed by gold.
When that happens then the fundamental driver behind the gold bull will have ended.
Gary
ReplyDeleteCould the dollar be in the early stages of a runaway move?
Currency markets are too manipulated for the dollar to get too much momentum. At some point soon Bernanke is going to fire the next shot in the ongoing currency war. If the employment report is crappy it will be sooner rather than later.
ReplyDeleteI think 21 up days out of 23 is a heck of a lot of momentum . We already know the employment report is going to be crappy. Why would it be good?
ReplyDeleteFed Bill Dudley mentioned in his speech yesterday that any QE is off the table for the June Fed meeting. What options does big Ben have left?
SF Giants Fan, incidentally the first up day came right after Gary used a 0.01% violation of the previous low to declare that the dollar was about to die.
ReplyDeleteI am not sure about a tradable low on the USD anymore. If we got rampage selling today and tomorrow then perhaps it would be more likely.
There are too many counter trend rallies happening in the stock market which keep forcing shorts to cover. I am afraid there is not that much buying power.
Saif
ReplyDeleteTechnically he was right calling it a failed cycle by definition. The same thing happened in December 2010. But I guess that's the games the big boys play.
The dollar chart is starting to look like AAPL :-)
And what would happened in Apple if you bought after the first 5% up move after results 2 quarter's ago?
ReplyDeleteI would be on a beach in Fiji :-)
ReplyDeleteNow this action looks encouraging for a USD top S & P bottom...short term. Covered all remaining USD longs and ES Shorts. Will look at redeploying after a correction
ReplyDeleteA move above 1600 should clean out the naysayers. One or two were a little rude but that's what you get near major turning points.
ReplyDelete
ReplyDelete"I will consider the gold bull dead when I see a Dow: gold ratio of 1:1, ... also have to be a fundamental change in the currency markets before the gold bull can end..."
Thanks Gary.
I think we can probably chalk up another round to cycles :)
ReplyDeleteThe market should also bottom any day now as it's very deep in the daily cycle. This isn't unusual to break to new lows to sucker in the bears before reversing.
Gary,
ReplyDeleteI became convinced yesterday that you only have it half right. Yes gold, silver and mining stocks are going to do well, but it's because of deflation, not inflation. Stocks in general are going to tank as the economy grinds to a halt. Mining stocks will do well because energy will go down. The markets could drop 80% in the next few years. Deflation because no one wants to barrow money when their debt is already so high, so all the "printing" in the world won't help anything.
Let me see if it get this strait. You buy month and half too early. You still underwater by what 5-10%. And you claim victory. Yes you nail it.
ReplyDeleteJC,
ReplyDeleteI will claim victory when the trade is closed. This intermediate cycle is just getting started.
Just a reminder: It's a bull market. I don't have to time every trade perfectly.
In case you haven't figured it out yet, no one on the planet can do that consistently.
In a bull market all one has to do is get close. We missed by a month. Not what I would like but before the trade is finished it won't matter.
This is why I tend to stick to bull markets, because I know a timing mistake will get corrected, and as long as I continue to trade the bull then by the time it's over I will have made a small... or large fortune. While emotional traders make nothing.
BTW I've already made a small fortune, now I'm working on the large one :)
Gold lion,
ReplyDeleteThis will most definitely be about inflation. We aren't going to make the same mistakes we made in the 30's.
We've already decoupled all currencies from gold backing so the stage is set to go 180 degrees from what happened in the deflationary depression.
Bernanke has made it clear that he isn't going to allow deflation. Every time we get a whiff of it he cranks up the presses.
This will almost certainly end in an inflationary currency crisis...the exact opposite of what happened in the 30's.
Gary,
ReplyDeleteNot trying to be bad guy but many now on the miner trade. To claim that you chalk up to cycles when it didn't work so well is not right. Sure you ride the bull, but how is cycles responible for chalk up?
Gary,
ReplyDeleteI think the FEDs hand will be tied. They've already had QE1 an 2 to save the banks and that money pumped the commodities and the markets. How long can deficit spending continue. It has to end sometime and then the piper has to be paid. Massive deflation is coming...I think.
For the reasons I've already gone over it becamae obvious to me that this bottom was going to be too complex for me to spot in real time. It was late in the intermediate cycle. Knowing that I was confident in taking a position and just holding on understanding that if I couldn't time it perfectly the bull would rescue my position, and do it soon because it was late in the cycle.
ReplyDeleteLike I said these strategies have already made me a small fortune. Before this is over I expect to make a very large one, even if I can't get every turning point perfect.
Those who don't "get this" are destined to make nothing during the greatest bull market that any of us will ever see in his lifetime.
Fellow SMT'ers, this blog is helpful if there are constructive posts. If you want to oppose, then propose. Don't just post to say Gary is wrong, or too early, or complain. Add your thoughts and insights, something we can learn from. Also, if you think someone is going to be perfectly right 100% of the time you are nuts.
ReplyDeleteAnother hint at deflation is oil at 83.11 a barrel. Crude isn't sniffing out inflation here. Sure it went to 147 when we had massive QE infussion but it's been weak lately. As Gary correctly pointed out that in 2008 the FED didn't let the economy bust as it needed too. They stimulated us out of that by saying GM and they banks were too big to fail.
ReplyDeleteAftershock Alert - Gold
ReplyDeleteJune 1, 2012
Our friends at Absolute have agreed to forward you an alert they sent out on gold earlier this week. Since then there has been another bit of gold related news. The Basel Committee for Bank Supervision, which sets international banking requirements, is considering allowing gold to be a Tier 1 asset for banks rather than a Tier 3 asset. This means banks can now count 100% of the value of gold when calculating its capital versus the current 50%.
Needless to say, this would make it much more attractive for banks to hold gold and would give further support to the price of gold. It also emphasizes the point made below that gold is being increasingly viewed as a very important financial asset.
All of this news seems even more relevant in light of gold having gained almost $70 this morning (from its lows) after the announcement of the very poor job creation report.
Gold Lion,
ReplyDeleteOil and the CRB are moving into a major three year cycle low. All commodities should rally for the next two years culminating in an explosive parabolic spike in late 2014 as the dollar puts in it's next three year cycle low.
It's hard not to get sucked into these powerful trends, but that's why I use cycles, so I have some idea when these major turning points are due.
Gold has already formed it's bottom. The CRB and stock market should form major bottoms very soon. If not later today sometime early next week.
What looks like deflation right now as the bottom forms is going to morph into a powerful inflationary wave over the next two years.
Deflation is the only way I see for the DOW and Gold to have a 1:1 ratio. The world economy is slowing, even in China. American's are tapped out. We're not going to be buying China's goods like we used to. I have been in the Inflation camp until yesterday. I guess we shall see. I went long Gold and short the market yesterday. So far it looks like a good call.
ReplyDeleteOkay, one last point. The FED can't stimulate the economy just by printing money. The only way money is created is by someone taking out a loan. With the economy slowing so will barrowing. Bankers would rather keep their money in the bank than loan it to a bussiness or for a mortgage. That is why the government has become the lender of last resort.Even that will have to stop and businesses will have to be allowed to fail.
ReplyDeleteTZ,
ReplyDeleteIf you're out there, I'm wondering what you think of the hui:gold performance in recent weeks. How much more if any would you want to see before buying miners?
He is gonna wait for short term top around 500 to enter the position because all of his indicators will confirm buy signal by then.
ReplyDeleteThen he is gonna get stopped out of his position when gold moves towards short term bottom.
It's always the same with most og the people.
They enter too late and get stopped out of positions
Gold Lion,
ReplyDeleteSome one is borrowing. They're borrowing billions upon billions upon billions.
That someone is call the US government. And they are pumping that money into the economy as fast as they possibly can.
Now you know why I keep repeating rule #1. Never, never, never, never short a bull market.
ReplyDeleteSince Rich never mentioned anything about covering in real time I guess we have to assume he's learning a painful lesson right now.
Wow, what a day. A small portion of today's move triggered a hard stop on this latest buy, and an add on buy was triggered almost simutaneously.My pivot system that is very good at delineating between bull and bear cycles also went to a buy and triggered at 1603.Props to ya Gary for sticking in there as the naysayers kept trying to beat you down.
ReplyDeleteThere's always a good supply of trend followers that show up here right at tops and bottom.
ReplyDeleteRight about the time my cycles are telling me to lean in the other direction. They get run over and then never show up again. Then at the next turning point a whole new crop will pop up.
I've come to expect it by now.
Gary deserves credit for being correct so far. There is no denying that.
ReplyDeleteHahah, good one Gary.
ReplyDeleteYep, it's always the same.
When there is lots of verbal abuse and lots of silly numbers being thrown around( like 1000 $/1oz Gold), one can be sure we are at or very close to bottom.
Gary @ 2:14,
ReplyDeleteYes, isn't it interesting how the short sellers never post their sells in real time but often crow about their profits after they've supposedly covered? ; )
Oh come on Catbird. I made money on all three sides today and I have been posting in real time.
ReplyDeleteI was long the USD all along (and you can check every comment) while I was being ridiculed for having rocks in my head. I was shot the market from 1380 and I was long Gold stocks.
Now that is a rare trifecta.I covered this morning (USD and Short stock position) and posted in real time here. See not all shorts are liars.
I am long Gold stocks but I still think Gold ultimately goes much lower. Not shorting it yet.
I said it before and I'll repeat it again.....
ReplyDeleteI LOVE the smell of shorts getting burned....that coiled spring is about to be released.
Gold Lion..
When consumers stop borrowing the government normally takes up the slack (keynesian economics). Expect stimulatory injections in the form of infrastucture and rebuilding across the nation on a massive scale. Europe will need to do the same. The stimulation (borrowing ) will need to be specifically targetted over the remainder of this decade.
For those confused about the FED's delayed action....some things to consider (food for thought)
Why "print" when you know the consequence...?
Let the cost of energy (OIL) fall and value of USD rise before debasing. That way its more politically acceptable.
Time people ...Time. I say that with qualification though...it does need to happen this month.
Have some faith in Gary's calls...by all means question them & ensure they're right for you. Trade accordingly.
Gold by the way... is being monetised on an increasing basis. This is very bullish.
Also...while everyones attention has been focussed on the EUR mess and the rise of the USD...under the radar...we have seen the miners turn over the last few weeks. They are leading the PM...just wait for the explosion going further into summer. The fireworks are about to start. I find it very surprising that this has not been discussed at great length...how they (miners) have held up in this across the board market drawdown.
Hold onto your hats peeps....some very strong tailwinds are a blowin.......
Saif,
ReplyDeleteLucky you then. You are an exception.
Gary, today's move was definitely impressive but, if we have another 2008 Lehman type event I'm still worried that gold will sell off significantly. Also how do you think commodities will go higher if all the emerging markets are going into contraction? Would like to here everyone's opinion
ReplyDeleteThanks