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Monday, May 7, 2012

GOLD IS AT OR NEARING A BOTTOM.

I am making Monday's premium report available to the public. I think we are at or very close to what is likely to be a once or twice a decade opportunity in the metals sector, especially the mining stocks. If you like today's report the $10 one week trial is still available. That includes the archives, cycle counts, COT reports, and model portfolio. I strongly suggest one read the last several weeks of reports so they understand how we got here and what is unfolding. Now on to Monday's report.

I doubt anyone is surprised by the reversal in the dollar index today.

 

It’s been made painfully clear that Bernanke is not going to tolerate a rising dollar, at least not for very long. Cycles are still working, and still generating bounces out of daily cycle lows, but they are never allowed to get any traction before the next beat down starts.

I would say there’s a pretty good chance that today’s reversal is signaling that the current daily cycle topped on day four, and the pattern of lower lows and lower highs is still intact.

Presumably the dollar will now start to decline and penetrate the May 1st intraday low before the next significant bounce. The daily cycle timing bands have adhered pretty closely to standard durations in the dollar index. I don’t see any indication that has changed, so we can probably expect the next significant bounce sometime around the last week of May.

Stocks:
If the dollar cycle has topped then the half cycle low scenario is still on the table.

 
In this scenario the stock market is on day 19 of its daily cycle and due to form a half cycle low at any time. As most of you probably remember, I’ve been expecting an extended consolidation in the general stock market. A dollar cycle topping on day 4 and a half cycle low on day 19 would be consistent with that theory.

If by some chance the dollar can recover and continue to rally for a few more days it could force stocks to penetrate the April 10th low. In that scenario I would re-phase the daily and intermediate cycles as shown in the chart below.

 
At the moment I have no idea which scenario has a greater odds of playing out, although I must admit the reversal today does not look good for the dollar.

Gold:
In my opinion gold is trying to move down into one more failed and left translated daily cycle, which I’m pretty confident would mark an intermediate degree bottom. However, as you can see from the chart below, as soon as Bernanke broke the dollar rally gold lost all of its downside momentum.

 
This has turned gold’s B-Wave decline into a mostly sideways consolidation for the last two months. If the dollar has indeed topped then I have my doubts that gold will be able to finish its intermediate decline and penetrate the April 4 low. The fact that the current daily cycle is running out of time may indicate that we are going to have to leave the April 4 low as an early intermediate bottom.

 
I would prefer to see gold drop down and penetrate $1612 as it would make the intermediate cycle count “fit” better. I know that’s not what most of you would like to see. Most of you probably just want the draw down to end as quickly as possible. I on the other hand understand that this is a secular bull market and that this is going to be a winning trade. (Well unless the bull market has ended ). So I’m not overly worried about a draw down. In a bull market timing mistakes get corrected.

To me a move below $1612 means that we didn’t waste an entire daily cycle on a sideways consolidation and that we have all of a new intermediate cycle still ahead of us. That’s why I would prefer to see gold poke through the April 4 low. It would signal that we have more time to rally, an entire daily cycle more.

So even though we weren’t  able to time a perfect bottom, I’m confident that we have entered “close enough” and when the regression to the mean occurs, and it always eventually does, our mining positions are going to deliver a very hefty profit.

Heck, if one was willing to just turn their computer off and wait for the bubble phase of the bull market, our current positions are probably set up to deliver a 500-1000 percent gain. Of course the cost is that you have to ignore the market and go on with your life for the next several years. 

When you think about it, that’s a pretty good bargain. Do absolutely nothing, and get rich doing it.

218 comments:

  1. Gold system stop is oscillating between 1625 and 1626 the last few days. Being at 2 straight losses, and not having more than 2 consecutive losses this entire bull market, I'm hoping the stop is not hit and we go up from here. If it goes to 3 losses I'm really not sure what to expect, but something a little bit different would be happening. Maybe a deeper correction than we all think and followed by the final blow off move?

    ReplyDelete
  2. Veronica,

    Your system that generates your stop losses has been pretty correct for you even during the last gold run, yes? I believe thats what i read on another blog.

    Gary, great report.

    Thanks

    ReplyDelete
  3. Just wondering if you have looked at the majority of indexes out there.. They are all forming head and shoulder patterns, similar to 2008, any concerns about this gary?

    ReplyDelete
    Replies
    1. I'm not seeing any clear H&S in $INDU or $SPX. Can you post a chart?

      Delete
  4. I don't put a lot of stock in chart patterns. More often than not they end up morphing into something else. I remember the head & shoulders pattern in the summer of 09.

    I prefer to trade cycles and sentiment. Right now the stock market is either just coming out of an intermediate cycle bottom or about to finish one.

    ReplyDelete
  5. USLV vs AGQ for tax reasons.

    During tax season there was a lot of chatter about AGQ and the tax consequences of the legal structure being a “Partnership (3C1)”

    Instead of AGQ why not buy USLV which is a 3x silver ETN?

    —————————————-
    “Tax efficiency
    An ETN offers a tax-efficient way to invest. It is treated as a prepaid contract (such as a forward contract) for tax purposes. The buyer of a prepaid contract pays an initial amount in order to receive a future payment based on the value of an index or other underlying benchmark at a specified future time.
    Very often index mutual funds and ETFs are required to make yearly income and capital gains distributions to its fund holders that are taxable. When a fund is forced to sell stock to rebalance or otherwise change its composition, the fund holders have to pay any resulting capital gains tax.
    With ETNs, in contrast, there is no interest payment or dividend distribution, which means there is no annual tax. Capital gain (or loss) is realized when an investor sells the ETN or it matures. Long-term capital gains are treated more favorably than short-term capital gains and interest (> 1 year holdings are taxed at a capital gains rate of 15%). There is no way to avoid paying capital gains tax, but there can be great advantage in wealth building by delaying it.
    Recent tax rulings have suggested that ETNs may be qualified tax shelters for the purpose of changing current interest income into deferred capital gains income.”
    ———————————————-

    This “tax friendly” ETN tracks AGQ perfectly.
    http://stockcharts.com/h-sc/ui?s=USLV&p=D&b=1&g=0&id=p24028858100

    Comments appreciated.

    ReplyDelete
    Replies
    1. USLV is 3x
      AGQ is 2x
      They will not track perfectly.

      Delete
    2. Correct...here is a comparison chart.
      http://stockcharts.com/freecharts/perf.html?uslv%2Cagq

      What are your thoughts about the "Tax efficiency" of USLV?

      Delete
  6. Iluvpms, I don't put much stock into my systems sells currently. It's consolidating it's equity/profit curve currently and the curve will go sideways for a while, I'm sure.It's big sells are usually at the end of parabolic moves, and it is incredibly accurate. I'm pretty sure it will keep me from being a bagholder once this bull is finished:)

    ReplyDelete
  7. Veronica,

    Bagholder eh? Wonder who will be holding the bag once this gold run is over. I personally believe that we will outdo the tech bull or any other bubble. Why? Because those markets were based on GREED: this current market will be based both on greed and FEAR. the ultimate combination for human irrationality:)
    Gotta love it

    ReplyDelete
  8. GOLD TIME CYCLE ANALYSIS

    http://change-in-trend.blogspot.com/

    ReplyDelete
  9. I got two quotes from the article, which I wanted to comment on:

    - As most of you probably remember, I’ve been expecting an extended consolidation in the general stock market.

    Actually I do not remember that. I do remember that your view was that a Dollar is going to spike into April and May of 2012 and that a runaway move in stocks will produce a crash or a mini crash. These views were constantly posted on your blog from Jan to March of this year...

    - However, as you can see from the chart below, as soon as Bernanke broke the dollar rally gold lost all of its downside momentum.

    Bernanke did not break the Dollar. Your constant remarks of Bernanke doing this and that, actually shows that you do not know why currencies move, so you just blame it all on Bernanke. Currencies are relative, and there are always two sides to the coin. It is actually Draghi that broke the Dollar. He so far refuses to cut interest rates, refuses to ease further, refuses to run another round of LTRO and refuses to do more PIIGS bond buying. All of these are designed not to debase the Euro at present. So since Euro yields more than the Dollar (1% ECB vs 0.25% FED), investors naturally chase yield...

    Other than that, I agree with the above article. PMs selling has now run for weeks on end and everything from Gold Miners to Silver is oversold. On Friday, Silver put call ratio reached a level of 1 to 1. That means 1 put for every 1 call. That is a 52 week high in bearish options sentiment! Public Opinion by SentimenTrader is also very low, while COT contracts have been cut by at least half in the recent few months.

    Silver is down over 20% from late February in a straight line, 9 out of the last 11 weeks. Platinum is down 10 out of the last 11 weeks. Gold and Gold miners are edging onto fourth month of straight losses. There is a good chance an intermediate bottom is coming, just as Gary stated. Very nice read.

    ReplyDelete
  10. - As most of you probably remember, I’ve been expecting an extended consolidation in the general stock market. This was only published in the premium reports.

    I think Twist was in reality another round of QE. It was politically impossible to label it as such but M2 has been rising along with virtually all assets. Pretty good indication that the dollar continues to be debased.

    The dollar responds just like every other commodity in the world. Too much supply equals lower price. So yes Bernanke broke the rally out of the three year cycle low by printing faster than our competitors.

    ReplyDelete
    Replies
    1. The Fed did operation twist during the 60s - without any balance sheet expansion.

      Delete
  11. Accounting and statistics was a pretty useless subject in the Finance degree, but one thing you learn in accounting is to work through the details to make sure things balance. If Bernanke printed, where is the sign of that printing? If the economy was credited a certain amount of X Dollars through M2 as you state, than where is the debit side?

    Usually it appears on the Fed balance sheet, so how come it didn't this time? When Fed credits the economy with freshly printed paper, it debits its own balance sheet with more Bond purchases. Things balance out. You are just claiming M2 spike this this and that. Over the last 50 years there is no direct correlation with M2 rising and Dollar falling. Every good currency trader knows that. In my opinion you are just guessing (making things up), so you should prove to us that you know what you are on about, by showing how Fed printed money and broke the Dollar...

    My uni professor always use to quote William Deming and his famous quote that said: “In God we trust, all others must bring data.”

    Anyways, on another topic, some of you might find this interesting, because you guys own Gold Miners. Bob Hoye of Institutional Advisor published a report on Friday titled “Gold Consolidation Approaching an End.” The report shows that the relative strength of mining shares to the price of gold bullion is at extremes only seen five times in the past one hundred years. The report also notes that, historically, investors should look to the junior tier names to exhibit the greater price action relative to their senior peers.

    ReplyDelete
  12. The Fed's balance sheet has increased from 2.3 trillion last fall to 2.8 trillion currently. Since 09 it's gone from 900 billion to its current level.

    ReplyDelete
    Replies
    1. The dollar is up since last fall in the face of the Fed's balance sheet expansion.
      And the dollar has been falling more from 2000 well before all the balance sheet increase.

      There might be something else that you are missing that is making the dollar behave as it does.

      Delete
    2. Yes, but what about other currencies? The US might be the best house in a bad neighborhood right now.

      Delete
  13. Gold value is increasing day to day and i think this is at the peak. After this the chances are that the Gold price will fall, Gold touched the highest level which is beyond the imagination.

    Stock and Commodity Investment Advice

    ReplyDelete
  14. Complacency and trust in this market is at levels that should be discounted at your own peril.
    Does "close enough" imply get set now or wait for confirmation ?
    Nothing is certain about the anticipated exponential gift thats sitting with miners.
    Otherwise conviction is what the market participants need and the trend reversal is what we wait on the sidelines for.
    Bring it on I say.....Nice Gary...and very timely.

    ReplyDelete
  15. Veronica, if i may ask. you´re stopped today ? Gold touched 1625$.

    Thks

    ReplyDelete
  16. Yes, my system was stopped out last night. First time since 2001 that it has generated 3 straight losses.

    ReplyDelete
  17. Veronica,

    Those are not normal times...The CBs are playing too much around the markets and we cannot see clearly anymore...Good luck and don't get too frustrated, we will get out of those difficult markets soon

    ReplyDelete
    Replies
    1. Good call Sophia...100% agree. Not a place for weak stomachs or lazy capital.

      Delete
  18. Gold just hit $1611 so Gary got his wish...

    ReplyDelete
  19. Dollar is not really going anywhere yet. Just testing yesterday's highs.

    ReplyDelete
  20. Danno,

    do you have an update on your HUI chart with the big circle?

    ReplyDelete
    Replies
    1. http://scharts.co/KiqmFr

      Delete
    2. The Rounding Top has clearly printed a sell signal (does not mean we won't have a short term rally) and ZSL just broke out (that doesn't mean too much but worth noting).

      Delete
    3. that is one ugly mofo of a chart. Thanks, Ill be buying more miners as we get into the high 300s. EDR is my main accumulation miner. so if i can get it close to 7 ill be a happy camper.

      Delete
  21. Gary.....considering the current fundamentals...and investment environment - with focus on EU Zone in particular - how can we still refer to "Ben effecting the dollar" as if he´s the only influence?

    Would it not be fair to say that "fear" and safe haven flows would still favor the buck (as well as Yen)- here and now when stocks look to be rolling over?

    What is Ben actually (and literally) doing here this morning that could possibly superceed global movments on a global scale? - other than the bond purchases?

    ReplyDelete
  22. Let's face it. The trade has gone bad using the Gold Mining BP percentage. It's already down 10-13% from entry.

    GDX simply don't put in major bottoms without big volume. I'll wait until 40.

    ReplyDelete
  23. 40 will look even scarier than 42. It's probably unlikely you will be able to pull the trigger.

    ReplyDelete
    Replies
    1. There's a lot of overhead. We need that float turnover or else any rally will be meet with a lot of resistance. The best rally for the miners have always been after a monster volume reversal day.

      Delete
  24. Gary, a two point difference should make someone not pull the trigger. Gimme a break. GDXJ is going to 13 as stated. Silver is going to 26 before it bottoms. and GDX is going lower than 40.

    ReplyDelete
  25. looks like today is the day to buy..

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

    ReplyDelete
  27. Gary, wjhats your line in the sand with respect to the dollar and invalidating your article here?

    ReplyDelete
    Replies
    1. I'm interested in knowing the 'line in the sand' too.
      Taking a 20% correction means you will need a 25% rally to break even.

      Delete
  28. Don't lose sight of the big picture. This is still a bull market. Gold is still moving into an intermediate degree bottom. And before this is all over any position in this general area will be up many hundreds of percent. Probably several 1000 percent.

    ReplyDelete
    Replies
    1. "Probably several 1000 percent."

      I doubt it. I'm sure most folks will be happy with 50% gain with 10 year at 2%.

      Delete
  29. Ok, we got the breakdown. GDX is 1% above its LOD, other miners more. Was that it?? Extremely strong hand here, but started to get indigestion in the past week.

    ReplyDelete
  30. Sorry, this does not look like any gold miner bottom.

    ReplyDelete
    Replies
    1. LOL I've yet to see a chartist spot a bottom. Bottoms never look like bottoms until after the fact. That's why I use cycles. Gold is 19 week into an intermediate cycle. The average duration is 18-20 weeks.

      Charts are saying, no bottom in sight. Cycles are saying, start buying a bottom is very close, or if you have a position hold on, now is not the time to sell.

      Delete
    2. is it 18-20 or 18-22?

      further below, you mention 18-22

      Delete
  31. Gold 1580 and hui 380 very much possible in 2-3 days

    ReplyDelete
  32. I give Tim Knight a ton of credit. He's been spot on with this melt down in the miners. It's not that MA and trendlines don't work. It's how you interpret them and trade around them....

    ReplyDelete
    Replies
    1. TK was holding the bag in miners yesterday and unloaded at a loss this morning. He recognized the breakdown potential several weeks ago and went short. But he went long way too early on the trade only to sell at a loss today. I actually added EXK to my portfolio today (sold originally at $12, I think it looks better here)..hopefully I'm not too terribly early.

      Delete
  33. Wow, I think I'm going to turn off the computer for a year.

    ReplyDelete
  34. SPX setting up for a possible BB crash bounce.

    ReplyDelete
  35. DUST is flying, sorry, couldn't resist the pun.

    ReplyDelete
    Replies
    1. I think the better question is who is trying to short dust

      Delete
  36. Euro is breaking down people, looks to be going down to the 120 zone based on our HS pattern. This is going to be one delfationary spat before we move higher IMO. Just my opinion.

    ReplyDelete
  37. Gary, how can dollar and gold cycles work in a world where currency prices are artificially manipulated?

    Here manipulated means QE1, 2, TWIST, etc.

    Aren't cycles based on masses/herds of people, buying and selling, based on sentiment, greed and fear?

    Then in comes these massive influxes of currency.

    How can cycles work with such reckless abandon (to borrow a phrase from Lord of the Rings)?

    Me, I'm still 100% cash, not shorting, waiting for a trend change. Not a worry in the world.

    ReplyDelete
  38. "Aren't cycles based on masses/herds of people, buying and selling, based on sentiment, greed and fear?"

    Stopped working for the stock market.
    Haven't worked for the miners and gold lately.

    ReplyDelete
    Replies
    1. But above Gary wrote, "Cycles are still working", plus I believe he's heavily long GDX based on cycles and sentiment. Sentiment I understand, but not cycles. Regardless, prices continue to trend down, and so SOMETHING is wrong, and I believe it's cycles.

      But my specific question to Gary is, why is he still trusting cycles? I'm sorta sure that they once worked fine. That was in a different world than now. Those days are when PEOPLE traded stocks, w/out Fed intervention for the most part. Now, COMPUTERS trade ETF's and futures, w/constant disclosed/nondisclosed Fed intervention. The very premise and design of how CYCLES work has to do with PEOPLE and HERD THEORY - but we don't have that anymore as 85% or so of all trades are comp, and the avg position is held for something like 7 seconds or less (from memory, on FastMoney, Najarian, I might be slightly off).

      And even if one stubbornly still believes that sentiment and cycles still work, the FACT is that PRICE is still TRENDING DOWN. So what on earth? SOMETHING must be wrong, as I believe Gary's on the wrong side of this trade for the moment, w/no apparent stop loss. I'm assuming/guessing here, so please correct me if I'm wrong.

      Delete
    2. The HFT traders and other rogue houses design their algorithms to fool as many other houses as possible. Fooling a subset like cycle traders just allows them to shake us down more than before. I believe anything relying on chart patters is manipulated today like never before, as evidenced by numerous all clears in the past six months or so. The longer term trend will not be suppressed, but the shakeouts are more often and more abrupt, making cycle analysis and every other kind of analysis less useful. Welcome to the future.

      Delete
    3. Depressing isn't it? Makes me want to shave my head and sit by a waterfall.

      What's next? It will morph - perhaps dynamic HTF, where different strategies are combined, or attack one another. This is just like chess - the higher one's skill, the more one has to rely on deception and trickery.

      Luckily gold is still trending up, on the weekly/monthly charts. Perhaps buy/hold is the HTF killer for gold.

      Delete
    4. On the contrary, the gold cycle is working just fine. The normal duration for an intermediate cycle is 18-22 weeks. Gold is now into the 19th week. Normal cycle duration would call for an intermediate bottom as soon as this daily cycle makes a final low. Considering that we are 23 days into this daily cycle it could happen any day now.

      I think you need to know a little bit better how cycles operate (at least know the normal durations )before you make statements that they aren't working.

      Delete
    5. Gary,

      you used to say gold intermediate cycle averaged 13-25 weeks. Have you revised that into 18-22 weeks?

      Delete
    6. Gary, I didn't mean to say they aren't working (if you are referring to what I wrote) but rather they are bound to become less effective (i.e. subject to more rephasing after what appeared to be extremely clear signals; or that-never-happened-before stuff). The houses aren't going to ignore us. But I also believe longer term, they cannot break the cycles, either, so they will continue to be a very useful tool.

      Delete
  39. FYI on the weekly charts, though the week isn't out yet, $GOLD has broken horiz support, and MACD has been negative since March. $HUI's since late Feb.

    $SPX weekly turned negative this week as well.

    ReplyDelete
  40. There is a good chance the dollar topped yesterday (at least short term) and the markets bottomed today. It's too early to say of course, but I'd be careful disagreeing with Gary too strongly. It has not served me well in the past. And remember, Gary has made some people a lot of money. I'm sure, sooner or later, he will do it again.

    ReplyDelete
    Replies
    1. The only thing I'm slightly leery about is silver. It's acting like is could cascade lower if pushed just enough.

      Delete
    2. Hard to imagine SLV falling to $20 based on the charts I see. I think Gary is right about this being an accumulation/consolidation period. Nobody will guess the bottom but my guess is that Gold and silver are in the process of forming a rounded reversal with their current action around the bottom area. I've been guilty of waiting for another capitulation/reversal day but so far it isn't happening which gives me more reason to believe the rounded reversal in progress. Did some nibbling today.

      Delete
    3. "Rounded reversal" - a good descriptor and I agree.

      "I'd be careful disagreeing with Gary too strongly" - well since my people skills need constant checking and improving, I'll circle back on this. But I do know Gary a bit: he likes facts, he doesn't like personal attacks, and he doesn't like liars. Plus he's flexible and humble - I believe he used to be a support/resistance trader before he became a cycles/sentiment trader - so he's switched strategies before - and he had a reason then - and I'm just asking him again if we're still on track. Plus one doesn't climb 5.12c or squat 210 kg w/out being constantly open to better options. That's all I'm doing here - is presenting the fact that the HUI is still trending down, and questioning whether cycles is still working. I can't answer that because I'm no expert on cycles. Also, I question whether it's wise to try to bottom pick (based on cycles) w/out a hard floor. I'm also suggesting a possible better solution, which is to wait for a reversal in trend.

      But you know, like everyone else, I too don't have all the answers and I do hope to continue to learn from Gary and others here on this blog.

      Delete
    4. I'll let you in on a secret. There is usually no way to tell if a down trend has ended until the move is already half over. We've had reversals, trendline breaks, and big percentage rallies. All of them were false starts.

      If you wait until your emotions tell you the down trend is broken you will almost always be buying at at least a short-term top. This is one of the reasons why I use cycles. When an asset gets into the timing band for a bottom I know I need to be looking for a turn and not selling, or heaven forbid, selling short.

      Gold is now in that timing band for a turn. This is why I'm confident holding my positions even though I'm having to weather a draw down.

      Another reason is that miners have now reached levels of undervaluation on par with what we saw in 2008. At times like this traders need to throw away technicals and become value investors.

      Delete
  41. SMH Semi's Daily Channel Chart:

    http://screencast.com/t/eJzpkVbfJV

    Gann360

    ReplyDelete
  42. Sophia, I will certainly not get frustrated as I've held long term pm positions since 2002.This correction is not much different than many I've held through, and if we do get a much larger correction than expected I am quite confident that the mania phase would be starting much like the Nasdaq before it's bubble.Systems work and consolidate and then work again, and I have expected that after the huge run it had.

    ReplyDelete
  43. gold has broken a support line that has given support since late 2008 (http://www.financialsense.com/contributors/carl-swenlin/gold-decision-point).

    At last year's peaks the blogosphere was crowded with bullishness, gold was all over the media, and calls were made for astronomical highs; silver crashed before taking out a historic high. All this could have been considered warning signs of an end rather than an intermission of a bull market. Bull markets don't always end in blow off tops that exceed the kind of tops we've seen. I think we were at high enough levels in PM to still be worried about whether or not we might have seen the highs for this bull.

    I've been bullish since 2006, even throughout some nasty downdrafts, and I'd really love to remain generally bullish, but the gold camp has made so many wrong calls about all aspects of the overall economy in recent years that I am wondering whether the gold camp's calls can still be taken seriously or whether we now might have entered a stage of denial rather than approaching the beginnings of a new uptrend.

    ReplyDelete
    Replies
    1. If you are worried about whether or not the secular bull is still intact, just ask yourself one question. Is the fundamental driver of this bull market still in play?

      As far as I can tell all central banks are still debasing their currency and show no indication that it's going to stop anytime soon.

      If you will look at history you will notice that all C-wave trend lines get broken during the D-Wave, or the consolidation that follows. None of those trend line breaks ever stopped the bull market.

      Delete
    2. Add to that the fact that real interest rates are negative and have been for the better part of this secular bull in GOLD (+10years). We cannot expect this to turn unless the FED relinquishes on its promise. If it does that...then kiss any semblance of a recovery good-bye. Plenty of other factors that continue to stack in favour of gold, but the primary drivers are debasement and interest rates.

      Delete
    3. some of these reasons you mention (and the ones you don't mention) have also been suggesting that bonds should be crashing, which they didn't; that the dollar should be crashing, which it didn't; that the economy to should weaken, which it hasn't; for stocks to ultimately fail, which they haven't; for hyperinflation to take place, which it hasn't. Markets often have fundamentally good reasons to do many things while doing the exact opposite - that's why there is always some one ending up holding the bag. That's why there were many gold and silver bugs holding the bags all the way down in the gold and silver bear market of the 80s. That is the unfortunate downside potential when you hold bullish convictions about falling asset prices.

      Delete
  44. Veronica,

    Happy to know that...I was hoping for such a reaction.... Markets are tough but with methodology we can beatbthem! LOL

    ReplyDelete
  45. Veronica: what is your buy level now in gold?

    ReplyDelete
  46. Veronica ... was this your trade :) ...

    Gold’s weakness was exacerbated by “another one of those tsunamis of selling,” says John Howlett, division vice president with Mitsubishi International. “Supposedly upwards of 14,000 lots of gold were sold in the 5 minutes from 8:20 to 8:25--the old open-outcry opening time,” he says. “After the 7,500 that went on April 30, it may be safe to say that somebody’s system is telling them to abandon ship. And that somebody has some substantial volume to chuck around.”

    http://www.kitco.com/reports/kitcoNewsMarketNuggets20120508.html

    Steve in Winnipeg

    ReplyDelete
    Replies
    1. Its absolutely disgusting what they do. Ultimately physical buyers will win this WAR...hands down. Gonna get a helluva dirtier than eaveryone expects.

      Delete
  47. Dollar Index should hit 92 by Next June.

    ReplyDelete
    Replies
    1. Why are you so conservative? are you kidding? USD is gonna hit 200 by next July...

      Delete
  48. 2015-2016 when Japan has its default/hyperinflation, that is when we might see it.
    We will see no more QE till Jan 2013. The QE at that point will be much smaller than required to offset the European debt crisis.

    ReplyDelete
    Replies
    1. What is going to go up against the dollar? The Aussie? We will likely see 50% decline in that within 3 years as their epic housing bubble burst forces zero % interest rates. On a purchasing power parity a 30% decline is warranted. We could easily overshoot. The Swiss franc? Look at the climax top we had in that currency and since then it has lost 17% against the USD. Swiss banks are more leveraged on the european garbage than most other nations. The JPY? The central bank which is buying REITS and ETFS with Debt to GDP of 2X Italy?
      The Euro? 35% overvalued on PPP with potential exits by Spain, Italy, Portugal and Germany? With banks on average 4X as leveraged as US banks? I hear what you are saying. "The day will come when the USD will go to zero." Perhaps ....But it is not this day.

      Delete
    2. Just a thought....perhaps...just perhaps...the US digs itself out of the depression it is in. NOT anytime soon in the book of reality.
      The FED will print and print with a vengeance. You can be sure of that as the sun rising tomorrow. Just dont expect them to announce it in the usual fashion.
      Besides that, the FED is the banker of last resort for the EUR economy. Operation TWIST proved that. It will happen again repeatedly. That being the case, sets up for some massive moves in currency ....specfically the USD (on the downside)with the EURO moving in tandem.
      The ONLY solution the US (& EUR,JAP) has for its debt problem is unfortunately more DEBT.

      Hard assets will be the likely recipient of the flight to safety from this utter mess. There is no other asset class that affords the luxury of no counter party liability.
      Included in that basket is commodities and commodity linked currencies.
      Your call on the "Aussie" is too out there.. to be believable.
      So too is ur call on their "epic housing bubble". What is present there is householders carrying the burden of mortgages...and speculation driven by investors (not BANKS via CDO's). If their economy falters then that poses different Q's.
      What is present there, is a Banking system that didnt allow the ludicrous unregulated activities that occurred in the States and some parts of Europe.
      Gary has been saying for some time about the Fed's weak dollar policy...nothing has changed.
      A stronger currency will destroy the US economy.....QUID PRO QUO !!! Just as money printing is bad for the currency. They know that their last option is to stimulate the economy via stealing from its trading partners. That happens when all else fails. AND it happens via currency debasement.
      Expect market action to rectify any short term strength.

      Delete
    3. Yes I get the plan. The plan will not succeed and The USD will strengthen. try this. Go back and calculate the total Japan QE during the 90's. adjust for GDP and then check what happened to the yen during that time. The Yen did not even have other countries going bust to help it. I am long a little Gold stocks (10% portfolio) and little oil stocks (10%) but I am net short the stock market and short the EUR and AUD. HUF looks ripe for a short too.

      Delete
    4. I beg to differ....the FED's mandate still exists.

      Delete
  49. If the USD goes to 92 by next June June, S&P will go to 500.

    This is election year. No QE = S&P to 500 in 1 months.

    Obama needs to keep this market afloat - Inflation, here we come

    I don't get it. People repeatedly keep shorting at the bottom calling for s&p 500 and USD 200 etc.

    Bernanke has clearly stated and SHOWED that he will print as much as he wants.

    I don't get why anyone is fighting the tape.

    Buy the dips and enjoy your profits :)

    BTW, sentiment is already at Sept 2011 levels. Everyone is a bear already and they're all waiting to short the bounce.

    Please do not fight the tape.

    ReplyDelete
    Replies
    1. e-mini S and P futures show the little guy long 200,000 contracts net. Crazy bearish sentiment!

      Delete
    2. You can long the USD or short commodities or short stocks as you please.

      The current environment is asking me to be long. I have my stops in case I'm wrong. Maybe I'll be on your side in a few months.

      As long as we both have our stops and change our thoughts as the market changes, we would both make money.

      One only loses money when they refuse to change their mind and be stubborn.

      Good luck to you.

      Delete
    3. BTW S&P to 500 in 1 month? You buy ur weed from Nancy Botwin?

      Delete
  50. $GOLD Symmetrical Triangle bearish breakout met its initial average trading target.
    http://scharts.co/JeztWC

    $USD Symmetrical Triangle bearish breakout still in play. No close above upper trendline. Only what could turn out to be topping tails.
    http://scharts.co/J6gJHe

    ReplyDelete
    Replies
    1. It's actually possible to draw a larger $USD triangle going back to mid November that suggests $USD could drop to the 300 ma or a bit lower.

      Delete
  51. Spot gold at 1582.20 in Asia's evening, Europe's morning.

    This could be a washout day.

    The daily $USD chart on StockCharts shows two shooting star candles, both touching 80. Today's rise did not make a decisive higher high. Looks like topping.

    I think that Gary's right that gold is bottoming soon. This despite his cycles magic. ;-)

    ReplyDelete
  52. Steve, I am LOL!That certainly was not me:)

    ReplyDelete
  53. Gold has come down to it's weekly bollinger band, usually an excellent time to buy in consolidations.

    ReplyDelete
  54. I'm seeing 1571.26 as the bottom of the StockCharts weekly BB.

    You know, I just have to say this, I think it's still *possible* that we're in gold's D wave. Insane, I know. If we go down below the Dec lows, that would confirm. I'm thinking this is possible because we had such a huge and long run up for the C, so the corresponding D should be dramatic. But it isn't. Compare on the weekly w/the correction back in 2008. We're only about 1/2 as big on the log chart. $-wise, the fall from 1900 to 1600 is a lot, but %-wise it isn't as large as the last correction (26.2% as of last Dec vs. 51.8% in 2008).

    ReplyDelete
    Replies
    1. We could rally hard here for weeks, faking everyone out, then still roll over for a final drop. The biggest mistake I've seen the average guy make (myself included) is underestimating just how long it can take for things to develop. This is what usually kills options traders.

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

    ReplyDelete
  56. Here is a sense of reality:

    This article is called Gold Bottoming and yet almost everyone is forecasting prices lower by 5%, 10% or even 20% form this level within various PMs classes. That is so ironic. So, traders on this blog claim to be bullish on the Precious Metals sector? Really? All majority here are doing is sounding like consensus of bears out there. Honestly, where are the bulls? One only ever saw bullish action and proper buying here when Gold and Silver were racing up in January and February. How easy it is to be a bull when prices are rising in a straight line...

    By claiming prices will go lower, it doesn't make you a bull, it actually makes you a bear. Sure you might be a bull in the long run, but than everyone is. Still... you are actually a bear right now, just like majority of bears on PMs sector For example... Silver's Public Opinion sentiment is near the lowest readings in over a decade. Imagine that... the most amazing opportunity within a decade to buy Silver as a contrarian and yet all I hear is Silver will go lower to $26, $24, $22, $20, $19... etc etc etc!

    Majority of you sound bearish with your calls and act bearish as I see no buying on the PMs assets. There is outright total disbelief about these asset classes bottoming. Gary is actually doing the right thing, by being a bull in a bull market and having no fear of a drawdown because he knows Gold will go so high (click on the chart here), so he will be smoking a cuban cigar on a beach 5 years from now counting his mills.

    That is actually what you are meant to do in a bull market.

    ReplyDelete
  57. >TIHO on April 26, 8:25PM
    >Gold won't zig zag too much again. Gold tape is bullish and you should be holding long for a break out.

    Result: gold -$56 lower.
    TIHO WRONG.
    Other people right.

    ReplyDelete
  58. >TIHO on April 26
    >
    - We refused to go down when Bernanke said no QE3 and did a strong hammer. Why would we sell off again? From my experience, I have learned that when the asset price refuses to go lower on the back of unfavourable news (Fed said no QE3), than we have already priced in or discounted that news. The Gold market just refused to go down on bad no QE3 news, which is super bullish!

    Gold down -$56.
    NOT super bullish.
    TIHO wrong.

    ReplyDelete
  59. >TIHO on April 26
    >The triangle resistance line is around $1,660. So we now paused on that line and will consolidate, waiting for some type of a catalyst to break out. Over the next 24 to 48 hours you can have a slight pullback of a few dollars, but not a zig zag down to the bottom of the triangle towards $1630 again. Break out is coming up.

    Breakout didn't happen.
    Gold breakdown.
    TIHO wrong.

    ReplyDelete
  60. >TIHO on April 26 8:31PM
    >As for Silver, the tape is also quite bullish right now. There is a major physiological support at $30.

    Result: Silver -$2.00 approx.
    TIHO wrong.

    ReplyDelete
    Replies
    1. Wow, $2 makes me wrong. My view is that Silver is going to over $150!

      Delete
    2. Your focus must be making money on the 1 minute chart. Therefore, for you all of these are wrong. But if and when Silver trades back to $50 in 12 to 24 to 36 months from now... pick your number, they won't be wrong for me.

      Delete
    3. Yes, what you said makes you wrong.

      Trying to cloak it in "1-3 years from now I will be right" is disingenuous when you pick gary's comments apart in teh span of 24hrs.

      I guess it's only fair when YOU do it, eh?

      Delete
  61. Replies
    1. The close it the thing that matters most. Could turn out to be another topping tail. We'll just have to wait and see.

      Delete
  62. Jus sayin.Not that i care too much.Prolly a fake.
    Gold target 1575

    ReplyDelete
  63. Gary, what is your line in the sand for the dollar before you give up on this article?? The dollar seems to be going to 86 IMO based on its breakout from the inverted HS, also the EURO is breaking out but to the downside so more pressure on the metals. Oh yes, YOU DONT FOLLOW TECHNICALS, so whats your line in the sand for the dollar.

    ReplyDelete
  64. That doesn't mean that the intermediate cycle still hasn't topped in a left translated manner. The dollar would have to rise above the Jan. 13th high of 81.81 to confirm that the dollar's intermediate cycle is still intact. It is pretty unusual to have a left translated and failed daily cycle followed by a higher high though.

    We live in strange times indeed. Gold is still in a bull market though and any position in this area is going to produce huge gains before the bull is over even if one has to weather a draw down first.

    ReplyDelete
  65. BTW I never said I don't follow technicals. I said that I only use them if cycles and sentiment first confirm. Almost no one I know has ever made any longer term money by trading purely technical indicators.

    ReplyDelete
  66. Draw down... I'm weathering my mine draw downs and will buy more once this capitulation starts... intestines doing okay for now :)

    ReplyDelete
  67. Iluvpms, if i may ask have you mental targets for this bottom on Gold. Silver and Gdx ?

    ReplyDelete
  68. Gold, no idea because I don't hold it as a core.

    Silver, between 25-22, most likely 25. 22 if we capitulate. GDXJ, 14, if we capitulate. I dont own GDX so i don't research it. own individual stocks and GDXJ.

    ReplyDelete
    Replies
    1. Many thanks Iluvpms.

      Hope your targets will be "touched" :-)

      Delete
  69. Dollar! Dollar! Dollar! Euro breaching 1.30. Let the fireworks begin.

    ReplyDelete
    Replies
    1. Could turn out to be another topping tail on $USD. Can't say for sure until the close.

      Delete
    2. True. But the odds are so ever in the USD's favor.

      Delete
    3. Obviously not a topping tail. This changes a few things. Will have to think about it.

      Delete
  70. i think gary's prediction cycle is having a left translated cycle :)

    ReplyDelete
  71. Conspiracy theory, of course I am not smart enough to fiugre it out ahead of time but what if "we are paying back some money we owe in some type of favor THe East want gold and they have our crappy dollars but gold was getting too high and making the dollar look bad so a "swap" is agreed upon Probably nonsense but who knows

    Here are some physical news. Early this morning we learned that Turkey exported a massive quantity of gold to Iran. Istanbul, Turkey is generally the gateway into the Arab world. What is more fascinating is the huge exporting of gold from Hong Kong into China. For 3 months a huge total of 135 metric tonnes arrived in the Mainland. If they continue on this pace, China will import 540 tonnes of gold or approximately 22% of annual world gold production. China also produces somewhere around 440 tonnes of gold. This country is on fire for physical gold. Strange that we have many countries buying massive amounts of gold and our bankers sell paper gold driving down the price much to the delight of our easterners who pick up low priced physical gold and thanks the west wholeheartedly. Demand from India will now pick up as the strike ended and the government removed the gold tax.

    (courtesy Goldcore)

    ReplyDelete
  72. I do not think gold has bottomed here even though a rally up of a few days is possible.

    (My opinion of the gold STOCKS is that they are not even in a bull mkt by almost any technical measure and should be avoided in favor of 'straight metal' generally. Trading a clearly bearish asset for intermittant bounces higher is not a good idea in my opinion. PS: I welcome anybody demonstrating technically how mining stocks are currently in a bull mkt. It's hard to do at the current time.)

    If gold DOES return back up to the triangle break out (demonstrating this was a fake lower) then I will resume trading it from there. Otherwise if gold continues lower I have a buy point ready, but will likely only trade it for a bounce.

    Until gold can return to a more bullish appearance I will remain cautious about going long. (I have a moving average method which roughly says "things aren't looking good". It said that in 2008. And it has also said that for mining stocks for a long time.)

    And finally, silver isn't beating gold on a continuous ongoing basis (like miners) so my focus is only gold until we get something like another summer 2010 where that asset shows outperformance and not just post selloff rebound spikes.

    ReplyDelete
    Replies
    1. "My opinion of the gold STOCKS is that they are not even in a bull mkt"

      what sector in bull market? like home builders??

      Delete
  73. The black swan of the current situation is another 2008 crunch whereby there are significant selloffs all around including metal (and especially miners and stocks) that can't be cured easily (or which isn't cured IMMEDIATELY) by the central banks printing.

    Staying cautious until a turn is seen is more important to me at this time.

    ReplyDelete
  74. black swan's typically appear at tops of markets, not when they have been moving lower for 2 months......looks like the USD's last hurrah today

    Bernanke apparently speaks tomorrow morning, could be fireworks

    ReplyDelete
  75. TZ, you are correct long-term for miner indexes like GDX and GDXJ. They will under-perform gold over long periods of time and they should not be long-term holdings. But today is not that time.

    Also, it is possible outperform gold by good stock picking in very oversold conditions like fall 2008 and maybe right now. I purchased NGD for less than $1 (now 8.65 and hit 14 last year) and SLW for $3. And I also did this with options (SLW and GDX) to make it even more exciting. I let a portion of these options convert into stock positions in January 2009 and built my core.

    ReplyDelete
    Replies
    1. Frank,
      how did you know NGD @ $5 or @ $3 was not the bottom @ 2008?

      what indicators did you look at?

      Delete
    2. >But today is not that time.

      But it was yesteday. And the day before.

      I guess we are now evaluating securities based on 24hr windows?
      Should be an interesting trading system.

      Delete
    3. Today as in this time period. Not literally "today".

      You (at least I) can't use indicators in a freefall event like that. Some of my buys fell 20% and then I bought some more. We are talking $1 to $0.80 or wherever it bottomed. But you don't want to buy at the catching knife stage. I guess the advantage was that I was still focusing on shorting the financial sector until October 2008. I started dabbling in miners and did some minor knife catching, but it's hard to avoid that.

      It's admittedly more difficult when you are focused on the sector. It wasn't easy buying something at $1 and seeing it drop to $0.80 in a couple of days. At that point you think the company is going out of business.

      In the end, as Gary preaches here, you can't have perfect timing and you will see large paper losses as you enter the position. A strong psyche is key.

      Delete
    4. Sorry if I'm going off here, but I'm not arguing perfect timing.

      I simply don't see the reason to buy miners (vs either staying in cash or going straight metal) until it begins outperforming on an ongoing, continuous basis (note those two adjectives).

      stockcharts.com/h-sc/ui?s=GDX:CEF&p=W&b=3&g=0&id=p37965121899

      Yet gary, gary's blog, poly, poly's blog, doc, and doc's blog the vast majority seem either unable to understand the argument or unwilling to concede it's validity.

      It simply amazes me. It is like I'm a extra-terrestrial looking down at a petri dish and watching all the cute little life forms run into walls, hurt themselves and do things that don't make sense.

      I chalk it up to 'specimen #56b4, experiment 77' and put the petri disk back in the incubator for more development.

      Delete
    5. "This species not yet ready for contact or colonization."
      :-)

      Delete
    6. Assuming we get a reversal in the PM market (maybe here?), you don't agree that in the near term miners are a better buy??

      Last summer miners were a better buy short term than gold, e.g. from end June bottom to the September top. My darling NGD went from 8.70 to 14. That certainly out-performed gold's 1500 to 1900. Ideally one would want to take some profits on these miner trades and convert these profits into a combination of gold and cash, ratio to be determined. I'll try to do that next time.

      Delete
    7. Your CEF chart should also show the ratio for 2008......

      Delete
  76. That looks mysteriously like an Enormous white candle in the HUI. Gary could probably climb a rock right now... with no hands.

    ReplyDelete
    Replies
    1. If that ain't bullish engulfing I don't know what is

      Delete
  77. TZ...loved the imagery.. and appreciate seeing your input.. While I may not always agree I admire your very logical brain. It must appeal to my Vulcan side.

    ReplyDelete
  78. I guess we're in good company as both Gary and Doc are looking for a low here. Doc just pointed out on his blog that gold broke down from a weekly coil and should reverse hard to the upside. I'd like to have the patience of you guys.

    ReplyDelete
  79. just wanted to give gary his due for sticking with the miners trade. well done.

    ReplyDelete
  80. Indeed, it seems the PM sector is bottoming.

    I'm not sure we're all done yet though. Notice on GDX's 10 min chart how it seems to have filled it's gap, and couldn't go higher at 1 pm vs. 12 noon, then broke down a bit. I'll feel better and start buying if price punches through this mini roof of 43.63, as then I'd be surer we're going higher.

    ReplyDelete
    Replies
    1. Also I'd really prefer to see spot $GOLD regain 1600.

      Delete
    2. Like the mythical gold and scarlet Phoenix, GDX will now rise from it's ashes.

      Delete
    3. Bill, Miners aren't bottoming, this is a temporary relief rally. The HUi formed a major top and took a while doing it, we still have a big bottom to form. Its all about symmetry. Also, look at UUP, notice how the dollar broke out of its triangle pattern, its going to move up.

      Delete
    4. Yup, I think you're right as I'm also seeing the exact opposite of UUP, in GLD - breaking down out of the small April triangle that Danno showed the other day. And as you state, symmetry suggests that we have another whoosh down in GLD - in the 146 area in this case. That would be a valid re-test of the Dec low.

      I'm ready to buy GDX though if it does start to plow higher. Gotta stay neutral, as we can't predict the future. Gary's right in that HF's and large specs are all hating gold now, so it's only a matter of time until big money flows in.

      For now though I sit in cash and wait for a sign.

      Delete
    5. Bill, my fellow Tokyoite, you need to start scaling in at some point. I don't advocate this all-in/all-out approach that some (ahem) people advocate. If you allocate 10 or 20% of your money now then having it drop 10% further is irrelevant in the large scheme of things. There is a lot of psychology in building a position unless you do it in one fell swoop.

      And it's also better to select individual stocks than the index. GDX will under-perform over the long term.

      A decent, conservative play could be RGLD (royalty company), which performs similar to gold over the long-term although you will forego potential upside leverage. Or SLW or Sandstorm gold.

      And I will continue to preach that NGD is a great company. Once they resolve the extortion by the Indians at El Morro then it will get added rocket fuel to the upside and hopefully that will coincide with an uptrend phase. We saw that it in 2009-2010 regarding Cerro San Pedro.

      Delete
    6. Missed money is better than lost money. Picking individual miners is not for most people.

      Delete
    7. Scaling in works OK in front of a big trending move. However in a trading range scaling in just raises you average cost and lowers you average selling price so that usually one ends up making nothing or losing money. There is no perfect way to enter and exit and a lot depends on what kind of trading environment one is in.

      I prefer entering and exiting all at once because most of the time cycles get me in at or pretty close to a bottom. This just happened to be a very complex bottom and I couldn't spot it in real time.

      Delete
    8. "pretty close to a bottom"

      Sorry Gary but 11-12% below your entry isn't exactly close to a bottom.

      Delete
    9. It is if this is the bottom of the B-wave and the next C-wave gains 100-300%. Assuming this is the bottom, then our last entry, which was made when the intermediate trend line was broken, only missed by 10 days. We managed to avoid the first 31 days of the decline for the most part.

      All in all I'm satisfied that I made the right calls in real time with the facts that were available at the time. I'm sure the Monday morning quarterbacks will find a way to complain (they always do), but then again hindsight is always 20/20. The problem is in the real world none of us ever get that luxury.

      Delete
    10. Don't worry Gary . . . the "Monday morning quarterbacks" will be quite silent when the miners are turning in first single digit returns . . . then double digit returns . . . then triple digit returns.

      You will be looking back at this post and saying "can you believe how close I picked the bottom."

      Delete
  81. Gary/wavers/cyclists, if gold went below it's Dec low by just $1, would you consider the current wave still a B wave, or a D?

    ReplyDelete
  82. @GracegiftMay 9, 2012 7:12 AM

    Who hold's the GOLD is King.
    In the coming currency crisis, the strongest hand will rest with those (CB's)that hold the most Gold.
    At that point the US will have in excess of 17000T of the stuff in its possession from which to dictate the course of the new monetary system. China has a long way to go to get to those levels.
    At current production and import levels with existing stockpiles it would take China another 12 years. The world cannot wait / neither can the monetary system persist that long.
    In the meantime the US and Bullion Banks will use paper gold to keep a lid on Gold.
    One event that will set the cat amongst the pigeons though, will be the coming PAGE.
    Another is the continual use by China /India in settling purchases of Oil with Gold. Last year (Dec 13-14) I said that the biggest issue for 2012 was the reduction of use of the USD in international trade settlement. This will come to a head in late June 2012. Two events of major importance for GOLD culminating. All this coincides with the end of Op. Twist. Timing wise this period could very well turn out to be "THE BEST" buying opportunity for the PM.
    Staying with physical and some miners notwithstanding market gyrations and noise out of EUR.

    ReplyDelete
  83. New thoughts on the dollar (in purple)..
    http://scharts.co/JxH8RI

    ReplyDelete
    Replies
    1. Danno, read your chart about the double-bust. To me, what's probably more correct is what Gary and a few others have said, that patterns no longer work. It'd be a shame, because they worked well in the past. But to think that a triangle can have 2 fakeouts means that the triangle itself wasn't a triangle, in my humble opinion. I'm guessing, but the root cause for the dollar chaos is probably currency manipulation, or perhaps HF's programming in false triangles via HFT comp platforms. Regardless, I myself now put triangles in the same heap pile as H&S. They are something to notice, but not to trust. Too bad, because it was so easy before.

      Delete
    2. Nice charts, by the way. I always read your charts. Thanks much.

      Delete
    3. Thanks Bill. Don't let busted patterns sour you. They happen. I'm not sure I would take a trade based only on a pattern. I look to patterns more as an rough estimate of what could happen, not necessarily of what will happen... and take appropriate precautions.

      Delete
  84. A reasonable (even likely) target for $INDU..
    http://scharts.co/KShiE6

    If so, after that it's either a bounce or a bearish breakout attempt.

    ReplyDelete
    Replies
    1. Your chart looks like a megaphone in progress. Reminds me of the HUI before the carnage.

      Delete
    2. Yep. But any carnage would potentially be a lot smaller. Much smaller pattern. And Megaphones can breakout upward too.

      Delete
  85. Danno,

    thanks for your dollar chart... watching it closely... dollar looks a tad strong still... kinda sucks.

    ReplyDelete
  86. Liquid Motion,

    Thanks for the response. I tried the reply funciton but it wouldnt work.
    The only thing that concerns me we dont have the gold we say we do. Maybe that is one reason the price is being beat down. Cant let it get too high too fast. I also believe that all of the SLV and GLD is not in vaults and the comex is not trustworthy. The government is after our money in one form or another. Taxation, confiscation, or devaluation. Going to be a long hot summer. God BLess

    ReplyDelete
  87. consp analysis buy signal - Markets & PMs heading higher

    ReplyDelete
  88. FRANK,

    >Assuming we get a reversal in the PM market (maybe here?), you don't agree that in the near term miners are a better buy??

    I agree.
    Anytime a security is about to go up more than another security, that is the one you want to own.

    Now take a break, count to 10, and read that sentence slowly a few times.

    ReplyDelete
  89. >Your CEF chart should also show the ratio for 2008......

    www.barchart[PUT.DOT.HERE.TO.FIX]com/chart.php?ss=1&spread=%24hui%2Fcef&p=MO&d=M&sd=01%2F01%2F00&ed=12%2F28%2F11&size=M&log=0&t=LINE&g=1&x=19&y=5&sh=100&indicators=&addindicator=#jump

    There is a ratio chart going back to the start of the bull market. Draw a trend line down diagonally and to the right from the peak in 2004 to the present value. Underperformance.

    But of course, clearly, anytime the hui or gdx is about to outperform for a temporary period of time, then that is the security you want to own.

    Now count to 10 and read that last sentence slowly a few times.

    ReplyDelete
  90. TZ: do you always like to belittle people. Are you always an asshole with your comments?? Just wondering

    ReplyDelete
    Replies
    1. Interesting I get a comment like that and not TIHO.

      Let's just agree to disagree.

      I was making a valid point about how you can't justify a trade based on the assumption that the trade will de facto work.

      Delete
    2. I actually like TIHO and his approach. Your comment on telling people to count to 10 and read the sentence slow a few times is pretentious and belittling.

      Delete
    3. I didn't view it that way.

      I wrote a subtile sentence which sounded correct at first glance, but then stressed the reading of it again closely to see the logical trick.

      Delete
  91. As I said earlier I don't think GC has bottomed yet. I'm out mostly, but have buys waiting somewhat lower (but above the dec low).

    I'm relatively certain these buy points will hold (or at least bounce) so I'm risking a bit more this time. (If gold at least bounces then I can move up stops or mitigate loss if it later fails.)

    If gold does not hold then we really have significant weakness and need to consider a much longer and deeper pullback (coinciding with a possible 2008 style crunch worldwide into the summer and fall). Veronica recently mentioned 3 system losses in a row as being out of the ordinary and earlier I said that gold had triggered a "it isn't looking good..stay away" indication of mine that also triggered in 2008.

    ReplyDelete
  92. What i see are bullish hidden divergences on RSI, MACD, Slow stoch weekly chart, suggesting reversal and continuation of uptrend in gold

    ReplyDelete
  93. ...suggesting mid-term reversal and continuation of long-term uptrend, that is

    ReplyDelete
  94. $USD printed the smallest white candle. I would be a bit nervous if I were long the dollar.

    ReplyDelete
  95. @ Gracegift May 10, 2012 6:46 AM

    UR Welcome.

    I believe the price gets beat down bcos TPTB are protecting the USD. Suppression is the order of the day. They cannot have GOLD (real money) replacing USD (fiat) too fast without destroying the US economy and the world's monetary system. A run on the USD will create a currency crisis...leading to a hyperinflation. A hyperinflation will be very difficult to stop and will cause excessive hardship.
    They do have the physical GOLD and are therefore able to play with paper dealing with it. Bcos of the size of their holding (in possession of) they can dictate markets. Large paper orders via Bullion Banks/ Dealers can sway the market at the most "appropriate" time. Usually overnight or on public holidays in Asia or London.
    Agree that having physical is by no means protection against the "thieving hands".
    God speed.

    ReplyDelete
  96. LM, the economy is being 'protected' by debasing the dollar, increasing exports and jobs. We'd be up the creek without a paddle if the dollar had not declined the past few years. The economy is tenuous at best with a loss of a couple million jobs the past three years (real unemployment around 14.5% according to Shadowstats U6 figure), and a strengthening dollar will push it over the edge, imo. A controlled decline is the desired outcome, of course, lest everything blow up into a dislocation and systemic crisis.

    ReplyDelete
  97. I just noticed the huge SOS number for SPY on WSJ's website ... -$230.4

    http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow.html

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  98. USD Index at 80.17. HUGE line in the sand.

    Jesus Christ, this is the hardest market I've ever traded.

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  99. Bernanke is that you? I like that you're reading Shadowstats!

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  100. It looks like the bull market in silver is over for now. $50 is not going to be reached any time soon.

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    Replies
    1. why do you say that.. because dollar is breaking out??

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    2. Heck we knew that when the parabola broke last year. It usually takes a year or more before the next breakout can occur. My best guess is next spring before gold can break out above 1900. Silver probably a little after that.

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    3. ....risk adjusted returns....lol

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  101. Man, spot gold at 1579.90 in Asia's afternoon, Europe's morning. This sell-off is relentless. I wouldn't be surprised now to see a re-test of the Dec low of 1523.90.

    Relentless.

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  102. You know, w/QE3 temporarily off the table, and TWIST winding down, there's no more buyers for equities. So, there may be a huge sell-off in the S&P, to lock in profits. And that would include gold, as a 5% or 10% position. Don't have any facts or 3rd party info, just am thinking this in my own pea brain. But I do play chess. ;-)

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  103. Pushing this a bit father, I would not be surprised at all to see the March 2009 S&P 666 number get a 50% retracement (1044). Or even a full retest. ;-)

    Then QE3 would have to start.

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  104. 1575.90 spot now.

    I sure hope that folks who are long GDX or whatever have a hard floor, so soon put one in. We seem to be melting down.

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  105. I've been day trading silver by picking the lows of the day (and making money nearly every day even though silver has been falling). Pretty neat trick huh? Well, my luck finally ran out Thursday. I did not pick the bottom, then hung on too long and went all dear in the headlights. Couldn't sell. So I plan to sell first thing Friday morning no matter what the price is, wiping out two weeks of profits. But it's the appropriate thing to do and I will feel much better afterward. You can always buy back later, even at higher prices, once silver proves that it has stabilized. And if silver does not stabilize... it could cascade lower.

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  106. Good Morning all. Here is a view of Gold by Channel&Patterns:

    "I've been posting my big picture gold chart on and off for the last three months and gold has broken my first support level and is testing the second. If this support level breaks then I'd be inclined to write off the possible IHS forming. This current level is the last level of trendline support. On a break below it I have some support in the 1500 area and below that I'd be expecting a drop into the 1230-1330 area:"

    http://content.screencast.com/users/...re%20Chart.png

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  107. I am surprised that Gary is now silent on $USD.

    I thought Gary used the $USD breach on 4/30 and 5/1 as the base of his arguement to declare Bernanke won and High Inflation is coming, so shovel everything into Gold and Mining Stocks like GDX.

    But now, $USD just breahced and CLOSED higher for last 3 days above $80.17. So I wonder if GDX or Gold's bottom case is still there?!

    But I am still buying/averaging GDX everytime there is a major sell off. Could be buying some again today.

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    Replies
    1. Yep it's 25 days into the daily cycle and will be on the 20th week of the weekly cycle next week. So yes gold is close to a bottom. It could happen any day.

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    2. what does that mean gary. USD looks to be breaking out and that will take gold down very hard and fast as well as the miners. since the dollar is up a lot doesn't it invalidate your initial argument that it went left translated.

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    3. Why are you assuming that a higher dollar means gold will drop big? The dollar rose in 2010 and gold rose right along with it.

      Right now the only thing I'm watching is the daily cycle which is moving deep into the timing band for a low. Now I'm just waiting for a swing to mark the low.

      Delete
  108. What if gold breaks below the December lows? What then ? 1300s?

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