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Friday, June 29, 2012

The BOTTOM IS HERE

I think it's clear by the action in the dollar index this morning and the response by risk assets in general, that the bottom I have been looking for is here. Today will be the first day in a commodity rally that should last roughly 2 years topping in mid-to-late 2014 when the dollar puts in its next three year cycle low.

The next two or three weeks should produce an exceptionally violent rally from extreme oversold conditions followed by a consolidation period as the dollar bounces weakly out of its intermediate bottom and rolls over quickly signaling that the three year cycle has topped.


I must admit this is been an extremely tough bottoming process to hold through but I think I'm about to win a whole lot of burritos :)

248 comments:

  1. I'm hedged 50/50 so you guys will all owe me burritos eventually. But I appreciate the efforts Gary has made to call this bottom. If this does turn out to be the bottom it sure was a nasty one.

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  2. Eurozone crisis has been solved ,this is about the seventh time it has been solved (once and for all) over the last 18 months.

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  3. Euro shorts are getting squeezed

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  5. Gary might end up getting sick of burritos! LOL

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  6. Well it looks like Gary will be collecting a few Burrito's.

    @LM. Looks like you had a few doubting deflationists calling you ( and I suppose myself as well) out about the coming dissolution of the Euro and the EU. In fairness to the doubters, in isolation and under academic economic theory they should be or should have been correct. But we live in a bizarro world where things are controlled and manipulated.

    It should be obvious to everyone now that deflation will not be allowed to happen anytime soon. QE to infinity is still the name of the game.

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  8. Wingman, did Gary not present options to subs indicating they could stop out or hold? My understanding is that he did.

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  9. Gary, I've never bagged on you on this forum, but I've been a sub for two years and I'll say even if that trade becomes positive your trading was careless. It would be one thing if you went into the trade saying it's an old turkey trade, but it's another to go into it with stops and then pull those stops. It earns you no respect to act like you were right on this one. It would do you (and your business)well to at least acknowledge you exposed your subs to way more risk than you should have and that you learned your lesson for next time.

    You really need to realize it's o.k. to make mistakes. And that when you do make mistakes, you humbly apologize if those mistakes caused anyone any pain and that you've learned something from your mistakes. People respect that.

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  10. wingmen,
    and where would you have suggested I put those stops?

    As I have explained multiple times, stopping out late in a daily cycle 9 times out of 10 ends up costing you money. One ends up buying high and selling low, and that is how you lose money in a bull market.

    Now if you can tell me ahead of time exactly when a cycle is going to run long then I will be happy to stop out on the 23rd day and wait for you to give me the signal to reenter.

    The problem is that no one can actually see the future so you didn't know any better than me whether the bottom was going to come on day 23 or day 30. I just knew it was going to come so rather than play a strategy that has very low odds of success I chose to just hold positions old turkey and wait for the bull correct any short-term pain, which it is now in the process of doing.

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  11. aljiowa, later in the trade he did. But initially he just pulled his stops because he didn't want to get whipsawed out. That's careless. If he entered the trade with a stop he should honor it. As you know from the forum, both public and private, a lot of traders just followed him and suffered as a result of it.

    My point is, no trader is immune to mistakes, and it is disengenious for him to act like he's somehow different. This was a mistake on his part, but not because he lost money (we all do), but because it was careless and he didn't follow his plan, which was good at the outset.

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  12. The story out of Europe of yet another bailout is yet another idiocy. Giving money to people who will never pay it back, means that this money just went poof! It means that the place the money comes from will now be at risk as well. This is not good news. That the markets are now moving upward is bait for clueless idiots.

    Also, what happened the other day in the US is shocking, a very bad omen. The seemingly last place in the world that stood for freedom, no longer does. Essentially, the US Supreme Court has now said that there is no limit to the taxing ability of the Congress.

    These are very desperate and destructive moves, and they should serve as a warning to all. We are heading lower.

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  14. Gary, I would have left your stops where you had them. It was a good trade to begin with. If you get whipped out, so be it. So you pay $10 for a commission to get back in. No big deal.

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  15. Mike,
    Yes it is a mistake but they already made the mistake to the tune of 1 trillion in the first LTRO.

    After throwing that kind of money away you can't just admit you're wrong and choose a different path. Once you make a mistake of that proportion there is no turning back. Your stuck on the dark path to the bitter end from that point on.

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  18. Wingman,
    I see you are great at trading in hindsight but let me go over what happened in real time.

    On May 8th gold violated it's prior daily cycle low on the 23rd day of a daily cycle. Remember day 23 is right in the middle of when most daily cycles bottom.

    If we had stopped out on that day at a little under $43 we would have been treated to a strong reversal the next day as the miners formed a bullish engulfing candle stick on very heavy volume and opened higher the next day also.

    In real time what do you do? You buy of course because the odds are massively in favor that you just stopped out at the very bottom of the cycle.

    However this turned out to be one of those rare times when the final low still had one more three day dip before the final low.

    So what do you do in real time? If you stop out again you would have done so with only one day left in the cycle and by now you would be so gun shy that you would not be able to re-enter.

    This is how things played out in real time.

    I'm always amazed at how well people can trade in hindsight and how quickly they forget what happened in real time.

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  19. No new money has been committed. All the strong euro countries still have veto power. This takes additional printing from Bernanke further off the table. The only thing that matters is the 10 year bond yields on Spain, Portugal and Italian bonds. Unless they move down sustainably all the printing cures are not working.
    Considering the deflation in those three countries the real yields are north of 10%. There is not a single country that can survive 3% real yields with such a debt burden, let alone 10%.

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  20. Gary,

    It's not hindsight. It's sticking with the plan. You made the plan knowing the possibilities. Stick with it for better or worse.

    If you get stopped out nobody can gripe about a thing. But when you remove stops a la this trade and the vix trade, people can and will rip on you.

    Believe me, I know how tricky this bottoming process has been. But that's why discipline is necessary.

    I certainly wish you nothing but the best, and I will be thrilled if this trade works out for you and those who followed you!

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  21. Gary nailed it again, tards begone!

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  23. TF,

    I don't follow Gary on his trades. I enjoy his analysis and take it into consideration when establishing a position, but I don't "follow" him. I'm fortunate to be a part of a pretty sharp investing/trading group where we all bring different skills to the table and where we all help each other quite a bit.

    But as I said, I wish the best for Gary and those who do follow him. It's a very tricky market and we all need the support of wise and experienced and sincere help in our investment/trading decisions.

    All the best!

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  24. Gary said: " and a lot of pretty rude people are going to owe me an apology"


    Does the moon care when the dog barks at it?


    if those who bark knew how to play the market and make money ""in real time"", why would they waste time barking?

    only the liar is always right. but some stick the neck out and make a call and monitor to see when to call it a bad call and get out

    that is just the nature of doing business, any business, but the dog does not understand and barks -- that is just the nature of the dog

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  25. Wingman,
    I wondered what happened to you...are you in a hedgefund group or is your group trading friends?

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  26. BTW just in case one hasn't figured it out by now, removing stops once we get late in a daily cycled is a hard and fast rule that I almost never violate. Why?

    Because it eliminates the buy high sell low pattern that costs traders money in bull markets.

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  27. Gary,

    You said it, buddy. It has been tough on the psyche to weather. It's easy for me to ignore the blog, ignore the wiggles (and volatility in trading accounts) and wait for the cycles to bottom, but you're stuck "answering to" (for lack of a better phrase) some of the trolls out there in this series of tubes. Hats off to you for keeping your composure. I know I wouldn't be quite as understanding.

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  28. Veronica: Whats your position? still out or longs triggered? if not, then when do you get long?

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  29. Everybody is acting as if Gary were right - I realy really hope so-. What if Gary is wrong again?

    I have to admit that following Gary might be rewarding (hopefully) but my experience has been very frustrating and my portfolio is still 17%down (same as Gary's).

    So I really hope that this time Gary gets it right.

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  30. There is no doubt this is the real bottom and I wasn't wrong. I've been telling everyone for weeks now but this was coming.

    I'm going to win a whole bunch of burritos from the perma bears if they are man enough to pay up.

    Today the CRB generated a major 3 year cycle low. If that low gets violated then we are in a bear market. No and's if's or but's.

    So we can all draw a line in the sand at yesterdays low. If that gets penetrated then we convert to bear market strategies.

    Personally I think there is almost 0 chance of that happening. The powers that be just confirmed again that they are going to print rather than allow deflation. Ultimately we are going to pay a terrible price for this decision, but that price won't come due until sometime in mid-2014 when inflation is spiraling out of control.

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  31. Sorry but I have to express my frustration and state the facts:

    Model portfolio is NOT +22.3% since July 2011.

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  32. Yes we have all experienced a drawdown during the three year cycle bottoming process.

    This was one of the toughest markets I have ever seen, but the low is now behind us and it's time to ride the next C wave.

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  33. @Natanarchist
    True my friend...but can understand their perspective.. EU(and the world) is a complex beast and deflation is the natural call. Like what I said couple years ago on this (or goldscents blog)...I can recall trying to convince the man GS that Bernanke was hell bent on avoiding deflation ( I called him the anti -deflationist). Gary's retort was that if he did that "he would destroy the dollar"...Yes that was/is the play....and its not unintended. The same applies to EURO...
    I can understand difference of opinion but I have a distaste for personal attacks.
    I remain committed to the points I made....but I'm not challenging anyone to prove me wrong.
    Anything I blogged was merely to offer an alternative viewpoint.
    I commend Gary on his calls..that is appropriate...it is the right thing to do.
    Happy weekend to you all....

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  34. At Ease, I haven't posted here in a while. I just happened over when a friend recommended I read Gary's public post.
    In any case, to answer your question the group I'm a part of is a private group, though a couple of MM's and a former HF guy are a part of it.
    I hope you're well and have been able to survive this turbulent market.

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  35. Wingman, If you want to get stopped out of positions the day before major turning points go check out thefinancialtap.com.

    I think they have some of what you are looking for over there.

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  37. I commend Gary on his calls..that is appropriate...it is the right thing to do.
    ==

    No, it is not. It is not the correct thing to do. It is extremely premature to make the kind of call Gary is making. In fact, everything I'm seeing is indicating that this counter-trend rally will be very short lived. Gary is wrong.

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  38. All good rallies are on the back of some hapless shorts. And with Europe-this-and-Europe-that pumped from every mouthpiece everywhere, getting a day like today would be easy, just hit the futures with a few billion leveraged 30X and voila — shorts will carry the rest

    Now with commodities having been due for a 3-yr low and Semi’s being due for a 2-yr cycle low, the question is: What will happen when the last of squeezable shorts are creamed and discarded

    But, the beauty of a day like today is that it gives any long the chance to reduce or hedge or go on trailing stops so that even if the long-cycle low expected is not in place, one does not lose much

    getting in was the hard thing against the crowd and media, the squeeze was the easy thing for the market to do, now it's managing the position -- that should not be difficult -- one needs to define one's own risk parameters and take steps to mitigate those

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  39. I re-iterate that the Basel III (capital adequacy)changes to come into effect in 2013 to allow GOLD to be held as a Tier 1 Asset @ 100% will be the game changer for GOLD. This re-monetisation of Gold will create a paradigm shift. Banks will buy into this requirement and the general population at large will see merit in GOLD. Full steam ahead...make sure ur hats are fastened....

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  40. short squeeze ...yeah...end of qtr dash and splash...window dressing...whatever....a call is a call...holding without stopping out takes guts...call a spade a spade...he does it with conviction and has integrity written all over.
    even the smart money takes a bath in this crazy market. Sure 1 day does not make a trend...but its saved a few bacons....peace out.
    Lessons for more than a few peeps.

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  41. Mike,
    We now have a definitive line in the sand. If the CRB trades back below yesterdays low then we are in a bear market, no and's, if's, or but's.

    That being said I think it's very unlikely that will happen, and certainly not in the near future as the rally out of a three year cycle low is the most powerful rally, and not likely to turn down within the first year.

    Stocks also shouldn't violate the June low. If they do, then again we are stuck in a bear market. Again I think it's pretty unlikely that those lows will get violated in the near future. The powers that be have clearly telegraphed their intent to print (like they didn't already with QE1 & 2 and LTRO).

    This will continue to levitate asset markets despite a slowing global economy. Unfortunately it's going to drive commodity prices higher at the same time that the economy is slowing and that combination is what will eventually trigger the next economic collapse, probably starting in 2013 and bottoming in 2015.

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  42. The powers that be have clearly telegraphed their intent to print
    ==

    And? We've hit peak credit. Creating more debt (which is exactly what's being done by creating debt-money) is just going to suffocate the system even further. This will force redemption of debt with the selling assets. All assets. Gold included.

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  43. That isn't how the debt is going to be serviced. This debt is so huge that it can never be paid. The only recourse is to debase the currency.

    If we were in a monetary system that had limits like we were in the thirties then yes we would go into a deflationary depression. However all currencies are entirely fiat now. So the end game is going to be different this time.

    This time the end game will be a very severe inflation or hyperinflation as the powers that be continue to debase the currency markets in the attempt to service an unserviceable debt load.

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  44. when was the last time a national debt was paid? What did follow the debt-free status?


    debt is the very essence of fiat. without debt fiat dies


    maybe this time it is different and debt is paid through austerity-mausterity, maybe this time it is different

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  45. That isn't how the debt is going to be serviced.
    ==

    This is exactly how debt will be serviced. The bankruptcy of Lehman being a case in point.

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  46. Mike,
    I would be willing to make another burrito bet that we don't see the CRB back below Thursday's low anytime in the next two years.

    I'm just about to collect on a whole bunch of burritos, I'll be happy to add one more :)

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  47. Piazzi,
    Europe just tried the austerity path and discovered it was too tough to follow it through to the end.

    The problem with austerity is that it takes at least two terms to cleanse the system. By the time the next election comes the population is so depressed they vote for the candidates that promise something to relieve their pain. And the austerity past gets short-circuited before it can accomplish its goal

    The vote out of the EU today confirmed what we already knew, now everyone is on the printing path.

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  48. What do you have against burritos? We know where we stand, leave them poor burritos out of it.

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  49. Hi Liquid Motion: Regarding the Basel requirements for Gold as a tier 1 asset, any thoughts on Silver? Will it rise similar to Gold? Or will industrial demand cap its price?
    Thanks!

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  50. I don't have anything against burritos, I think they're delicious. I use them as payment for all of my financial bets.

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  51. Mika.

    I suspect Greshams law will be in full effect by the time he US or Europe defaults or more likely they "reset" their currencies, meaning, Gold and probably Silver and other real assets will have already been hoarded. good luck buying these assets at that time.

    It will last until confidence in a new system is assured.

    That has been proven throughout history.

    Regardless, we all have a front row seat as this slowly unfolds right before our eyes.

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  52. Gold and probably Silver and other real assets will have already been hoarded.
    ==

    Hoarded by whom? People don't have gold, banks have gold. Gold will be sold, along with other assets, to pay off debts. Expect to see gold at liquidation prices.

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  53. With my meager knowledge o history, Andrew Jackson made US debt free in 1835

    Now, if anybody's interested, just see what happened as a follow up from 1835 to 1837

    and it wasn't an all-out fiat back then

    now, repeat after me:

    debt is the very essence of fiat

    to save fiat, debt must be saved

    without debt, fiat dies

    it's just that simple

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  54. "Europe just tried the austerity path and discovered it was too tough to follow it through to the end"

    and there they have an interesting situation where some, like Greece, cannot print themselves, otherwise, they would have started the presses

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  55. Why is Thursday's low the line in the sand and not the very bottom of the entire move, which was on June 22nd?

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  60. "Jr, Thurs. was first DCL."

    In the CRB, or in Gold?

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  63. Wingman,

    The strategy of using Cycle analysis, and pulling stops when a bottom is expected, and then letting the bull correct one's timing mistakes will keep working great, until the strategy doesn't work. When this strategy fails, then Gary and subcribers may not be able to recover from the drawdown, even though it likely will work out okay this time. The lesson will likely eventually be learned though.....the hard way. :-)

    I'm hoping that I learned my lesson THIS TIME, and not after a unrecoverable drawdown.

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  65. LOL The Angry Hippie! That's one of the funniest things I've heard and so true!

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  66. @ NJ,

    Gold is the money..of Kings
    Silver is the money.. of gentlemen.
    Debt is the money... of slaves.

    I favour silver appreciating more in % terms over the next few years than gold. Keep watching the gold:silver ratio currently ~58. LY this got down to 33. I see it getting closer to 20 or below. You can do the math if Gold goes to $2000 or above. $130/oz is not inconceivable in that circumstance.

    Still Silver is a tricky beast.
    - heavily manipulated in the paper market...(bullion banks shorting)
    -still a cheaper option than Gold attracting retail investors
    -Chinese demand is insatiable.
    -Japan (with China soon to follow) have a high desire to use solar power. This requires significant amounts of Silver in solar panels. The industrial demand is only increasing.

    With the re-monetisation of Gold (based on my earlier comment), silver by association will follow.
    Once the US banks recognise the importance of this new asset ("GOLD" having the same qualities as CASH for capital adequacy), I believe the knock on effect will be felt in SILVER...to the upside.
    When the Banks start accumulating, there will be a consensus from the public of the true qualities of the PM's.

    The printing of debt money is the only solution for the Banks/CB's/SOVEREIGN debts of the world. This will only be possible for a limited time...laws of diminishing returns...an alternative will be required. In time it will create increased distaste for all things fiat. Lack of trust in Govts. and Banks will draw people to the "riskless" precious metals. Under Basel III ..Gold will become exactly that. You can already see the side effects of money printing in the currencies of the counterfeiters.
    When they print too much...you will experience a currency crisis. Before a hyperinflation gets hold..they will need to put in place a PLAN B.

    I hold a significant amt of phys silver (since $14/oz) (more than I hold in phys gold and fiat) and have watched this play out for some time. I hold a high degree of conviction in the ultimate direction of Gold ( & Silver). A few entries on this blog have rightly concluded exactly the course of the central planners. Nothing is allowed to fail.

    Some seem to suggest that we may even be headed to a hyper inflation/depression scenario. The talking heads of economic theory would have you believe that its unavoidable. It can be avoided...but it will necessitate Gold being involved to a greater degree (monetary system). Basel III is really the game changer because its the recognition point of the importance of an asset that actually holds value. Where it was once viewed as "a barbarous relic" - JMK..it will again find its true purpose/value.

    Hope this helps.

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  67. "and there they have an interesting situation where some, like Greece, cannot print themselves, otherwise, they would have started the presses"

    Ireland did something out of the box a few years ago....they printed $$$$ and didnt tell anyone until it was uncovered.

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  68. But, but, saif and tiho said dollar was going to rally hard towards 90.
    What just happened here?

    They also mentioned that dollar was safe haven.
    Confusing stuff, i am shocked with this commodity rally.
    Not

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  69. Bear market rallies are notorious for over confidence.

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  70. Yes bear market rallies tend to be the most aggressive. However the initial rally out of an intermediate cycle low in a bull market usually gains 6-10% in the first 1-15 trading days.

    The S&P tacked on almost 8% before moving down into the half cycle low.

    Consistent with normal rallies in bull markets after a normal intermediate correction.

    The dollar will almost certainly form a left translate cycle since it has clearly topped early in the cycle on day 8. It should continue down for at least another 10-20 days before the next short term bounce.

    By that time the market will probably test the highs. It will still be early in the intermediate cycle at that point and if the dollars intermediate cycle started only six weeks ago then the dollar still has 10-15 more weeks to fall.

    In that event the stock market is easily going to make new highs and gold will probably trade above $1800 and maybe test $1900.

    All in all the CRB has bottomed just like I said it would and the dollar has topped, at least on an intermediate basis and I think on a three year cycle basis.

    I'm pretty confident I'm going to win a whole bunch of burritos. Which is probably a good thing as I expect they are going to get very expensive over the next two years.

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  71. I believe burrito is a new safe haven.
    And you can eat it too

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  72. A small farm w/ small livestock and fruit/nut trees near a river w/ trout and salmon will be worth millions of Bernanke Bannana Bucks a few years from now! ;-)

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  73. The dollar will almost certainly form a left translate cycle since it has clearly topped early in the cycle on day 8.
    ==

    $81.18 is the level to watch.

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  74. Correct. A move below that level, especially this early in the daily cycle will confirm that the dollar trend is now down and heading for an intermediate bottom.

    The intermediate cycle count is a bit fuzzy. Doc thinks we are on week 6. I think week 17.

    Either way though I don't expect any major rally in the dollar until sentiment turns sour, and we are a long way from that happening yet.

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  75. Not wise to count burritos before they are ordered and paid for...

    GDX was very bearish on Friday. It could manage no bounce at all.

    People need to accept that GDX is in long-term bear market. At its recent lows, GDX was 40% of its highs... show me another cyclical bull market with this kind of a "pullback"

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  76. Secular bull market, not cyclical.

    The miners have been in a cyclical bear since last Sept. but I think that's done now that the three year cycle low is in.

    Miners rallied almost 3.5% and ended the day near the highs of the day. They outperformed the S&P, Dow, Nasdaq and small caps. Actually about the only thing that did better than miners was oil service.

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  77. Miners went down 15% when SPX went down 4%. Now miners bounce 5% when SPX bounces 4%

    Which one is strong?

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  78. Inspite of GDX bearish, I suspect you will win your burritos because in Aug 2010, when SPX went down, GDX did not.

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  79. @ Liquid Motion: Thank you for your detailed explanation. Very helpful and much appreciated!

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  80. I don't think anything in Europe has been solved. I don't think the Euro is at its final bottom. I don't think risk asset bear market has ended. I haven't heard anything major from Bernanke (yet), nor have we had a major capitulation in markets with a spike in the VIX, credit default swaps or junk bond spreads. I'm pretty sure there are no major signs of a bottom right now despite various overly confident traders running out proclaiming victory by a very mediocre EU announcement. I found it so surprising that Eurocrasts did not discuss anything regarding collapsing Greece, an increase levels of government debt in all countries since 2008 and a worrying reactionary down-spiral in Eurozone's economic activity, further proved by this mornings PMI numbers.

    Having said all that, I am a very eager participant in a secular bull market for Precious Metals on regular basis due to long term fundamentals. My cash levels have now swelled up, as I have delayed purchases for months on end. I believe that cash is pretty much worthless over the long run in the current Central Bank money printing environment. At the same time, Silver is now down 4 months in the row - something that didn't even happen during the Lehman default of 2008. Silver is also about 45% from its $49 peak in May 2011, while S&P 500 is only 4% from its peak in April 2012. Furthermore, Silver is still below its peak from the 1980 high in both nominal and inflation adjusted terms. There is a lot of value here!

    Technically speaking, Public Opinion is once again below 35% bulls, which shows that hardly any optimists are present in this asset class - a contrarians dream. This Friday's COT report on Silver was negative too, with least amount of net longs since 2001. Gold and Silver's good seasonal period starts in August. Finally, Bullish Percent Index on Gold Miners, as well as all other major long term breadth indicators in this sector, are incredibly oversold for a prolonged period of time and mining shares have not confirmed new closing lows like Silver did last week (so far anyway).

    Therefore, I am increasing my investment fund's stake into Physical Silver (PSLV) by 20% of NAV from recent large inflows I have received and continue to hold existing large investments. Nevertheless, I think Gold, Silver and Platinum will most likely go lower from these levels and possibly have one last break down below current support levels of $1530, $26 and $1400 respectively. On any further declines in coming months or quarters, I plan to accumulate more physical Gold and Silver through CEF due to constant monthly inflows my fund receives.

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  81. "Tiho said...
    I don't think anything in Europe has been solved. "

    Do you think anything in US has been solved?

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  82. Tiho, very nice charts! Thanks for sharing.

    But given all these extreme oversold and negative sentiment, why you think Gold/Silver will have one more break lower?

    Thanks

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  83. One thing that really jumped out at me on Friday was the miners inability to rally above the 50 dma.
    It really needs to get going soon or else down we go to test the lows at 39.

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  84. ISM Manufacturing Index first time under 50 since June 09

    http://mam.econoday.com/byshoweventfull.asp?fid=451495&cust=mam

    49.7

    How does this effect PM's if we are heading into a recession last time they tanked?

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  85. pretty easy to see, looking at the charts I think PM's did pretty well at/after those times no?

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  86. This just means it will be sooner rather than later before Ben hits us with the next round of QE. Although they will never call it QE from now on as that has become a political hot potato.

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  88. Eri,
    I have changed my mind on the dollar. I now think it will go to 100 and not just 90.
    If you go back and read my comments I said it will bottom between June 20th and 1st Trading day of July.
    I think it has. Have fun with your commodity rally while it lasts.

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  89. This comment has been removed by the author.

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  90. GASL -- Could Be Heading for a Gas Rally

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  91. Or, Friday could have been a BIG window dressing day for the end of the quarter. As always, I could be wrong, but, to think commodities are going to ralley for 2 years is to put total faith in Bernank to do the wrong thing, no?

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  92. Ben and his predecessor Alan Greenspan have been consistently doing the wrong thing for 12 years now. Why would anyone think they would all of a sudden admit their mistake and reverse course?

    Besides Bernanke has already told us at every Fed meeting that he will step in if the economy starts to stagnate.

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  93. Time will tell, but I no longer have a strong desire to catch the turn. After being up 25% in the 1st quarter, then giving half of it back. I want to be sure. Mining stocks need to be above the 200 DMA before you can really say they're in a bull market. And I am a knife catcher from way back when :)

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  94. 0a92000
    GOOD point !!...reality will slap some people in the face soon.

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  95. Gold Lion
    ST seems to be safe on the sidelines. When you get an event like 29th...just a few words (propaganda ??)confirming expectations, has the potential to push Gold and miners up very quickly (as it did). Imagine the case in the event of "actual words into action"...!! You are certainly not going to be early in miners now or in that event...you wont have time to react. Just need to have conviction. Waiting for confirmation (200MA)might be ok, but that doesnt give you absolute certainty either of continuation.

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  96. Liquid,
    I agree on the 200DMA not giving absolute certainty, in fact most break outs do fail. It might be A LOT early for the mining stocks right now since the metals need to break out and run first. Gold needs a very convincing move above 1600 or even 1680 to really make the miners fly IMO. Good luck!

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  97. Gold,
    We're on the same page.
    I favor Gold staying in the 1570-1650 range for at least the better part of this month. Will have to break 1665 or thereabouts for miners to continue (notwithstanding miners leading from mid May ~ +25% currently +15% while Gold is consolidating). Too many factors in favour of PMs going forward. Miners should outperform. Tricky few months ahead.

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  98. oa92000 said...

    Do you think anything in US has been solved?


    No, I also do not think anything in the US has been solved. I also do not think anything in China has been solved either. But here is where my view differs from majority on this blog. US enjoys a reserve currency status. Therefore, US has the ability to postpone its problems down the road, while the EU, Japan and China does not. United States is the last in line to have a crisis, so the focus is on others until then...

    Shawn said...
    Tiho, very nice charts! Thanks for sharing.

    But given all these extreme oversold and negative sentiment, why you think Gold/Silver will have one more break lower?

    Thanks


    Yeah my pleasure mate. To answer your question, yes it is true sentiment is negative, breadth is oversold and technicals are beaten down. That is why I bought, because in the markets you are either a contrarian or you are a causality. I rather buy when others are selling, but I also acknowledge more selling could also come...

    Looking at the fundamentals for all risk assets, I would say that in the it does not look good post US elections. Even though PMs have great fundamentals in the long run, I believe Gold's cyclical bear market is not over because the deflation trade, which started on 01st of May 2011 for most asset class (chart here).

    Some cycle trader will tell me why I am wrong and that we are at this cycle and that turn and this will happen for this number of weeks or years and etc etc etc etc. Fair enough for cycle traders - do what you think is right for you. Fundamentally, the Euro has NOT bottomed in my opinion, regardless of what someone says about how many weeks into whatever cycle we are in. When Italian and Spanish problems heat up in a final stage of the EU Crisis, and a total panic comes you will see all safe havens spike one final time before the EU crisis is over. That includes the Dollar.

    The Dollar does not do a final top on some mediocre EU announcements and an Operation Twist expansion. Historically the Dollar has topped with a huge price spike in a terminal paid / capitulation mode - similar to the VIX, Credit Spreads or CDS (chart there). These panics occur during a major catalysts like default and are finally topped by a massive intervention as Fed restarts printing money.

    So... Shawn, to answer your question, I believe Gold & Silver still have an above average possibility of one more leg lower because, I expect things to get worse before the final capitulation of all risk assets, the final Dollar spike and Bernanke's reflation.

    Finally, I have been posting here for months that one of the great trades of 2012 will be to play Wheat and all Grains on the long side. Many have commented on oversupplies in the Wheat market and how prices will go below 5 dollars. gary states that because Agri commodities do not have cycles, he does not invest in them. Here we are approaching 8 dollars on Wheat now. Furthermore, Agriculture tends to lead all commodities higher out of bottoms, so maybe "Burrito Master Gary" could be right with his CRB bottom here. Who knows, time will tell...

    p.s. I am pretty sure too many burritos don't help climbing walls!

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  99. Sell Gold and forex biases

    Buy eurjpy , cadjpy and usdjpy. The EU schatz (2 year bond) has broken the uptrend and matter of time before EURJPY sails to 104. Forex is all about bonds and yields.

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  100. Yes If I win all these burritos it is going to slow down my climbing for a while. Its a sacrifice I'm willing to make though.

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  101. Game over for GDX here in 46.20 - 46.50 area IMO.

    Next up is 41

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  102. GDX isn't going to turn down until gold does. And gold is now at the very beginning of a new C-wave.

    Just another burrito I'm going to add to my collection :)

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  103. Just like I said everything was waiting for the oil cycle to bottom. It did, almost exactly as I predicted, on the 5th day after the breakdown.

    Now we have a final bottom in commodities and almost certainly a final three year cycle top in the dollar.

    This is the very start of an inflationary cycle that should come to a head in mid to late 2014 with the first global currency crisis, to be followed probably be a second much worse one in 2017.

    I expect at that point price controls will be implemented to try and side step what will have happened in 2014. It will make the catastrophe infinitely worse.

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  104. Tiho, many thanks for the detailed response. Whew.. that is like a free reserach report! :)

    " I believe Gold & Silver still have an above average possibility of one more leg lower because... the final Dollar spike and Bernanke's reflation."

    I agree Dollar is in strong IT or probably LT up up away. But, I am not so sure about inverse correlation of Gold to USD. Look at the past few weeks, Gold show that it can rise with USD when SPX went down, due to panics in Europe. And if you pull up LT charts of USD vs Gold, there are long periods when they both rise and fall at the same time.

    Anyway, I have enough holdings into miners and gold, and would average if they break down below recent lows. Thanks

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  105. Gary,
    Kudos for your outstanding timing skills. I would like to disagree to your bashing of the reinflation measures by central banks.
    In the run-up of wealth and income concentration towards the upper 1% since about 1980 we had reached the same concentration as before in 1929 recently in 2005 again. In such a situation, the average Joe could only keep up demand by going more and more into debt. Once his credit ran out, the game suddenly stopped. The reinflation measures by CBS IMO aim at taking wealth from the rich who purchase masses of treasury debt and now have to suffer real income and wealth losses. The average Joe, for example in the RE market, profits from nominal gains and comes out from being underwater on his mortgage. I think this is much better than the "liquidate farmers, liquidate businesses, liquidate everything" policies of the past. Let the "currency crises" come IMO.

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  106. Joe,
    You are failing to take into account inflation. The average person suffers much more than a wealthy person during an inflationary period. Maybe they can service debt easier, but that assumes their pay will rise and keep pace with inflation. It never does.

    So while it may become slightly easier to pay a mortgage it becomes much more difficult to afford normal living costs. Things like gas and food drain ones capital leaving even less money for paying bills.

    The only thing in the entire history of mankind that as ever worked to cure our problem is a surge in productivity. After WWII it was the new plastics and electronic industries. After the Vietnam war it was the personal computer and the internet.

    We need a new industry to create new jobs and new productivity (and we need to cure our energy problem). Without it we will continue to ride this roller coaster up and down as Keynesian economic policies generate inflation, followed by ever larger recessions which if we don't stop at some point will end up in a hyperinflation.

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  107. At 2 or 3pm this morning watching gold break to the upside of 1600 and silver over 28, I said to my self, "self, I guess Gary was right, it is going to be inflation." So, I loaded up on AGQ to get some exposure. I might be a little slow buy I don't stay on the wrong side of a trade too long

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  108. Gary: I don not disagree that average Joe will suffer from inflation and maybe more so than a rich person (depending on if he can raise his salary proportionally or not - in the 1970s the rich suffered more than average Joe and the income portion of the top 1% fell to a multi-decade low in the late 1970s). But average Joe will suffer much more from a deflationary shock with massive unemployment like in the GD or recent GR. Even a small disruption to his income stream will bring him over the brink due to non-existant reserves and debt-load. I agree the only effective policy now needs to be to redistribute income from the top earners to average Joe, so that a healthy and non debt-leveraged, sustainable demand in the economy can rebuild.

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  109. So I guess Obama's goal is to redistribute wealth from the rich to the average Joe, by printing money. Since the Average Joe doesn't any substantial assets or savings, then inflation is less of an issue for the Average Joe....as long has Average Joe's wages can keep up with inflation. Is that correct?

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  110. "doesn't any" = "doesn't have any"

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  111. USD:GOLD correlation is very interesting.
    Any one care to pull up a chart can identify that previous support levels ~.055 have not been tested in fact ~.053 is a new resistance level.Three or four attempts have all failed. Third one failed miserably.Rising wedge with breakdown soon. All the action in USD and Gold since Aug-Sept 11 has implied an astonishing increase in USD (~40%)as a backdrop against an end to the C-Wave peak in Gold.
    Where is money flowing now...??
    Looking good for Gold and bleak for USD.

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  112. It is clear to me that they modern socialist Keynesian engineering post 1970s has been built on ever increasing debt levels for the average Joe, which has been possible through ever decreasing interest rates, aka the credit bubble. This has avoided the rather insidious wage/CPI cycle of the 1970s and there has of course been CPI engineering to provide cover.

    If you look to a more socialist country like Sweden (with higher taxes on earned income) you will see this phenomenon amplified. A larger housing bubble, which has not yet deflated. I recall an interesting article in the Swedish press that discussed how wealth among the middle class in Stockholm largely depended on what type of apartment building one lived in and how and when it went condo in the 1990s or 2000s. Compared to this the average managerial person has no chance to save anything meaningful from his/her wages.

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  113. ahhhh...Inflation...the thief that rides in the darkness of night.

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  114. Federal Reserve Chairman Ben Bernanke (Ben Bernanke) will be in July 17 testimony before Congress, the specific content of the economic outlook and monetary policy.

    The report quoted the Senate, an aide as saying that Bernanke will be held in July 17 to Senate Banking Committee (Senate Banking Committee) to discuss the semi-annual report on monetary policy, on the 18th and will testify before the House Financial Services Committee.
    Many economists believe the Fed will be a new round of asset purchase plan view of the recent weak economic data, to help boost the economy.

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  115. Wingman,
    Yes surviving and on the rebound back now following Gary. I put half my funds in TGLDX, so went through the drawdown and recovering, but figured I would rather have it there than attempting to trade it all or sitting in cash the last 6 months. Looking forward to getting back to trading. Good luck making the boocco bucks! :)

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  116. The Dollar is still moving higher from here by the looks of things, as I already mentioned a few times in recent posts.

    If another couple of green candles occur, you'll be buying a lot of burritos for everyone Gary...

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  117. Yes I have to admit the move in the dollar is surprising. By Friday it looked like the dollar was caught in a left translated daily cycle. Not so much today.

    I still think the CRB as put in a three year cycle low though. Oil and the ES are holding up very well.

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  118. I don't think the move in the Dollar is surpassing. Nothing in Europe has been solved and can kicking effect lasts less and less time every time Eurocrats announce something.

    As I already stated Gold and Silver could easily break support levels due to the weak Euro. The market doesn't want anymore bailouts and can kicking. The Dollar will not top until it spikes during a default in Eurozone. It is time to write some debt off... this is still a debt crisis.

    It won't become a currency crisis (insane printing) until we get default that panics global politicians . Greece is about to go!

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  119. Gary,

    The major spike in gold that we had occurred one day prior to the cycle turn date.. Thus gold may have actually made the high it was suppose to make for that cycle turn date.. If so, then we may still be in our downtrend for gold.

    Gold is suppose to making new highs until the next cycle date which is the 16... if we go down till then then it shows that we are in this correction still.

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  120. Cycles don't have "turn dates" they have timing bands. Gold clearly bottomed in the timing band for a daily cycle low.

    The dollar cycle has become somewhat fuzzy as of today.

    It looked like the dollar had started down into an intermediate decline and this is almost always signaled by a failed daily cycle. That was in progress on Friday but looks to have aborted as of today.

    The recent dip doesn't really qualify as an Intermediate decline as it never moved below the 10 week moving average.

    I'm now inclined to look more seriously at Doc's cycle count with a short ICL low on May 1st.

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  121. Looks like Gary is going to lose...
    weight.

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  122. http://www.zerohedge.com/news/time-wasnt-different-after-all-spain-666

    Gary try to understand the significance of this....just this nothing else. All your cycles don't matter against this reality

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  123. Fundamentals move markets in the longer term and emotions move markets in the shorter term. Cycles have the ability to predict timing bads, as Gary put in above. However, if you are on the wrong side of a trend, or if you do not understand what the market is "discounting" fundamentally right now, you will be on the wrong side of a trade. I think the Dollar is discounting a default in the Eurozone and it's coming...

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  124. Employment Friday is just around the corner

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  125. Jobs Gains Seem Headed Toward Zero friday

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  126. Tiho,
    I don't believe the powers that be are going to let any of the dominoes start to fall. Once the chain reaction starts it's extremely hard to stop as we saw from Lehman.

    The stock market is clearly still in an uptrend. It's holding above the rising 200 and 50 DMA. So I'm not sure why one would think the trend has turned down at this point.

    There are way too many sectors at, or very close to new highs for me to entertain the idea that we've topped yet.

    I agree with your topping model but I think it's going to begin in 2013.

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  127. I'm long physical PMs (PSLV & CEF) and short Tech stocks (XLK) & Junk bonds (HYG). I'm 110% long and 130% short, which is about 20% net short overall with slight leverage. I believe gross profit margins have peaked, record earnings have peaked and economy globally is entering a recession. China is in awful shape right now. I also believe a default in Eurozone will occur.

    Whenever recessions and defaults occurred before, governments stimulated economies through large deficits and central banks monitze those deficits through bond purchasing programs. That has always helped raw materials like Agricultrue and rare assets like Gold, Dilver, Platinum and Diamonds. therefore I'm optimistic on commodities and super negative on cyclical stocks, risk-on currencies and high yield junk bonds.

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  128. MARKETS

    http://traderjoed.blogspot.com/

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  129. So much for that dollar topping end of june..

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  130. Be patient and let's see what happens after tomorrows jobs #.

    Commodities are still acting like the three year cycle low is in and I don't think that can happen unless the dollar tops.

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  131. So far in the EURUSD it looks like a ABC correction for the EURO with A=C today. This should be the US$'s last hurray here... unless the Euro breaks below the early June lows, but I don't think so.

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  132. On a Purchasing Power Parity the Euro is at least 40% overvalued compared to the USD.
    On a balance sheet expansion basis, the FED has to expand its balance sheet by at least 600 Billion just to catch up to the ECB.
    This two factors alone should drive Euro to parity, not even taking into account the defaults within the eurozone.

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  133. I like how Gary changes his mind in a blip.

    From the "bottom is in" to "I don't think that can happen unless the dollar tops"

    Gary:

    You should be more careful because there are a lot of people who make investment decisions based on what you write.

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  134. This comment has been removed by the author.

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  135. Angry Hippie,
    Why so angry? The owner of thefinancialtap.com has done quite well over the last year.

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  136. Pibe,

    I think what Gary is saying is the bottom IS in and the dollar has topped, even though it is showing some strength today

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  137. Gary,

    any concern that although the CRB is on fire, Gold and Silver aren't really exhibiting behavior consistent with a 3yr bottom in commodities?

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  138. Mike,
    What exactly should gold and silver be doing?

    Gold dipped down to $1600 where buyers stepped in.

    Gold has formed a higher low and broken the intermediate trend line. Now we are just waiting on a higher high as the final confirmation that the B-wave has bottomed.

    B-wave bottoms are a process. At the moment I don't see anything to make me think this isn't just a normal convoluted B-wave bottom the same as every other B-wave bottom.

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  139. Saif,
    Dont agree with your case for USD strength.
    I've said here on numerous occasions that the USD is losing its mantle in the international trade = "world reserve currency by default"(China, Russia, Jap, Brazil etc are putting an end to that). Additional to that is China's distaste for US Govt. Treasuries.
    USD is on borrowed time. Who will buy the next round of issuance.. the FED ? If we follow the argument that the Central planners are not going to let this get out of hand (DEFLATION / DEBT Destruction) printing in oder of greater magnitudes cannot be avoided. Fiat turns to dust and crises are created. There remains a heavy burden for the USD
    notwithstanding the so called "lowest risk" quality it holds. I think the macro issues will inevitably drive the direction.
    Gary I am surprised at your uneasiness about this USD ST move.

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  140. Only in so much as the dollar is due to move down into an intermediate degree bottom. That move appeared to have begun on Friday.

    Now I'm at a loss for how to count the current intermediate cycle.

    That doesn't change anything else though. Stocks, gold and now the CRB have all clearly put in major cycle lows. And all can rally along with the dollar. I just don't think they can rally strongly with a rising dollar.

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  141. So we have a game of chicken little here. How long can the FED hold out given what transpired in UK, EUR, China....warning bells ringing...Ben's got an itchy trigger finger.
    I would add to the earlier comment I made about who would buy the next round of govt issuance other than the FED...I forgot to mention that there is still the Pension Funds that can be forced to "diversify" into to Govt treasuries for the good of the country......but isnt that called repression ?
    Too many important developments that go under the radar which collectively point to a sad reality. Dont think for one minute that the US isnt complicit in this.

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  142. Liquid Motion - Why does Ben have an itchy trigger finger? I do not understand? As a matter of fact I have heard that phrase on this board since March of this year, but for 4 months now Gold and Silver has declined and for 4 months Bernanke did not expand his balance sheet.

    Correct me if I am wrong, but Federal Reserve is always behind the market, so they are always looking at lagged data like GDP and Non Farm Payrolls. As long as GDP is not printing negative quarter of growth and as long as Non Farm Payrolls are not contracting, than Ben can and will hold out. He will act, I agree, but only when it is necessary to do so. It still isn't...

    Besides he just extended a Twist. We all know that does nothing, but politically he cannot engage into new programs too many times in the row, especially as elections approach. He is doing a wait and see approach.

    Also, as a final note, I believe QE will come when S&P tanks hard back towards 1000 / 1100 support level from May 2010 and August 2011. Technically those levels look very strong on the S&P 500. We are very far away from that as we sit near 1,370 and only 4% from a bull market high.

    As long as S&P 500 stays above 200 day MA and does not fall hard, Ben could care less that emerging market equities, european equities, industrial commodities, precious metals and risk currencies are all keep falling hard. Lower commodities, means lower inflation as far as he is concerned...

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  143. Also I would like to put forward an observation, which specifically applies to Gold investors (I am a Silver investor more so).

    Despite sideways action and consolidation, which is very healthy in a bull market - from peak to trough, on closing daily basis, Gold has not yet even entered an official 20% decline bear market.

    With 11 annual gains in the row (record breaking stuff as last one I remember was Nikkei at 10 years in the row), and still up this year too, and not even in a bear market yet... what is all the fuss about? Perma-bulls cannot even take a basic correction despite 500% or more in gains in the last decade?

    God forbid Gold experiences a run-of-a-mill basic 30% bear market decline. Kleenex will be in shortage...

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  144. Yes agree Fed has propensity to act in delayed manner...no doubt behind the curve....way behind.
    The itchy finger is in relation to the others acting out of "FEAR".They know things arent as rosy as the central planners would have wished for (petrified to tell the real truth).
    Dont discount this time they are using the same thinking/acting in the same manner though...just as likely to do the "pre-emptive" thing than NOT do anything at all. Waiting for the market to correct by 20% ..well sure ...but so is everyone else...read a tad crowded.Besides isnt the PPT supposed to take care of the downside....watch for trading at the close tomorrow esp. if markets fall away...& esp. in the last hour of trade. Also take note of the futures trading at about the same time and over the w/end.
    If the market were to do that...then what is the driver...are we saying bad numbers in employment, poor half yearly's, contraction of gdp growth, debt levels too high, OTC derivatives expanding, more JPM losses .....well I would say that most of that is already factored into the market...wouldnt U !!!
    So, in the case of where you might consider a default of some nature....then we enter the realms of bankruptcy....and that my friend opens up the flood gates....QE to astronomical levels.
    Too many peeps consider the FED's current inaction ( I dont consider twist a response of any magnitude or bearing)as the precursor to a market "correction"...I'll take the contrarian view on that and with GOLD. The fuss about Gold goes well beyond what mainstream coverage will tell you or expects you to believe.

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  145. Tiho,
    Gold tends to have its bear market at eight year cycle lows. The last one occurred in 2008. It just so happens that it bounced back quickly enough by the end of the year to register a small gain.

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  146. Tiho,
    Your thoughts and mine are identical on many subjects. We better disagree on something otherwise people will think we are the same person with 2 different aliases.

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  147. it appears that gold did not bottom on that cycle turn date, but rather made a high... and is still in its bear correction... we are suppose to be making new highs but instead lows, if we make our low until the 16 then its still a bear market!!

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  148. Yep I'm back to cash and the model portfolio is basically flat for the last year.

    The dollar is not moving down into an intermediate cycle bottom like I was expecting.

    It's too early to revert to bear market strategies though. I would need to see both the Dow and the transports move below the June 4th low,and even then it would be dangerous to short as Bernanke could turn the market on a dime with another bond purchase program.

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  149. gary,

    just to let you know that I'm still holding my miners after that "painful" year long correction...

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  150. I would like chilli on my burrito please :-)

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  151. DOW.............

    http://traderjoed.blogspot.com/

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  152. Joed,

    Many have asked you to interpret your charts.. can you please do so as I don't understand what I'm looking at... Not sure how this is suppose to help people who don't understand them.

    Thanks

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  153. Joed,

    Many have asked you to interpret your charts.. can you please do so as I don't understand what I'm looking at... Not sure how this is suppose to help people who don't understand them.

    Thanks

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  154. It's not, Iwould imagine it's supposed to get you to pay him to tell you

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  155. "There is no doubt this is the real bottom and I wasn't wrong."

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  156. How people can invest on assumptions- IE QE3-is beyond me.

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  157. Tiho,
    I'm not giving up yet :) I still think the CRB has put in a three year cycle low.

    If it has the dollar should top sometime soon, but as of today it's not cooperating and the miners and gold have become too volatile for me to hold on anymore.

    Now I'm going to have to wait for gold to make a higher high, preferably above the $1640 resistance level before I'm going to get interested.

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  158. Dan,
    We aren't investing on QE3 just on the odds that cycles and sentiment are indicating a major bottom.

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  159. Gary,

    If cycles and sentiment are indicating a "major bottom" why did you cash out and go to cash causing your portfolio to be flat.. why not ride it out if a major bottom is at hand according to your cycles

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  160. Because the dollar isn't doing what I think it should be doing and gold dropped back below $1600.

    I'm now worried that gold might develop into a left translated daily cycle.

    At this point I'm going to wait until either the dollar generates a failed cycle or gold shows some ability to fight a rising dollar.

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  161. Consolidation pattern is putting in the floor. Too many attempts to break the low put in December...the sellers have failed(are exhausted)...the pressure on the downside is withdrawn.
    Gary you have said on numerous occasions that it is "better being early" than late. You have thrown in the towel ...what bcos of the USD not performing as expected ? When Gold moves up to and beyond that critical level...you wont be early...esp if you wait for confirmation according to the cycle at the time. Patience in this market is a virtue, only the strongest hands will be rewarded..in time.
    Bravo to u ILUVPMS...for holding...me too. Is it too much to ask for at least 100% return in the not too distant future on the miners ?

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  162. liquid,
    I have no problem holding positions when we are late in a daily cycle. Stopping out at that point runs the risk of a whipsaw.

    But this is extremely early in a new cycle and gold is not acting like I think it should. The risk is that this turns into a left translated cycle with quite a few days still to decline.

    If gold moves below $1547 it will indicate a failed daily cycle which usually means the intermediate cycle has topped also.

    If that were to happen then we would have an intermediate gold cycle that topped on week three. That would be an extremely bearish set up.

    At this point I'm still assuming that gold is in the process of putting in a B-Wave bottom but the failure to get any upside traction and the dollar refusing to move down into an intermediate cycle low has me nervous enough that I'm ready to just sit on the sideline for now.

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  163. Gary,
    I know how much you value cycle theory.
    Have you ever researched the Mayans and how they used astrology and planetary alignment for economic forecasting.
    They were regarded as the world's best astrologers and in fact used a cycle count for a number of things. In particular they used one of 76.6 (or 76 and a half years). This one related to the economic cycle. IN fact if you apply the count to the bottom of the last great depression circa 1932....you have July 2008. Coincidence...?
    I did some research about this phenomenon almost about that time and have just recently pulled the papers out again to re-visit.
    Planetary alignment (astrology) is in and of itself a measure of time. The solar system works on cycles of angles as seen from planet Earth.
    As of today everyone is a victim of economic cycles. These are not predicted in advance....charts and graphs dont provide a time relationship. The solar system does.
    However when planetary alignments are considered there is more than a ooincidence of economic turmoil, social changes and upheavals.
    This is a factor of cycles of orbits of planets and how they align at various angles to the Earth and the sun.
    Interesting that America celebrates the 4 july 1776 (Ind. Day)...birth of the nation.
    It is in fact proven that certain planetary cycles and angles coincide with certain events on Earth...as they did some 236 years ago.
    Spend some time when you get a chance to do some research on this. I think you will get some real value out of it.

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  164. Liquid Motion,

    I have been holding my miners and gold and silver certs for years... I don't sell because my account gets a draw down of 30 or 40 %... i could care less... Ill just buy more with my gold and silver which is way up compared to my miners... I eventually know that Im right... Gary, IMO, doesn't have conviction in his system. Why do i say that? Bc, he as repeatedly stated that it doesn't matter if you are late in the bottoming process or early in getting in because the bull market will save you. If thats so, why sell after a mere 25% draw down?
    Doesn't make sense to me.

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  165. I sell if I think I can get in at lower prices.

    Late in a daily cycle it makes no sense to sell because a bottom could come at any time. The odds are high one would miss it and just get whipsawed out at a bottom.

    A cycle that's threatening to roll over early in a daily cycle is a whole different ball game. If the gold cycle topped on day 3 then we have 15 to 25 days of generally declining price ahead and I would rather wait till that runs it's course and try to buy as close to the bottom as possible.

    The other consideration is that a left translated daily cycle usually means that the intermediate cycle has also topped.If that's the case then gold intermediate cycle topped on week three and we have 15-20 weeks of generally declining price ahead of us.

    The dollar is not moving down into an intermediate low like it should 18 weeks into a cycle. On top of that gold is showing no ability to resist the strong dollar.

    All in all, with gold threatening to form a left translated daily cycle I would rather be on the sidelines and see if it can recover and move back above $1640 before doing anything else in the sector.

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  166. Gary, these are your principles and Im glad that you stick to them. We all have different trading or investing methods. However, you have stated numerous times that it doesn't matter if you are in early and get a draw down since the bull market will save you . If thats the case, I would have just held on... No body knows the near future and you may actually be getting whipsawed. who knows... hope you do get back in.

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  167. I will definitely be getting back in at some point as this bull isn't done yet. However I have no desire to get subscribers caught in a left translated intermediate cycle.

    The risk is there if the dollar refuses to move down into an intermediate cycle low so I'm going to wait on the sidelines until something changes.

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  168. Some charts. Not making any predictions. Just FYI...

    $USD
    Rounding bottom intact.
    http://scharts.co/NcBpy0

    $Silver
    Could still breakout up or down.
    http://scharts.co/NcBwtB

    $Gold
    Not looking trustworthy yet.
    http://scharts.co/NcBBNV

    $HUI
    In danger of rolling over to 347.
    http://scharts.co/MPTLtX

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  169. The contrarian in me made me hold my nose and buy a couple stocks on Friday. Hope is a bad word, but I am hoping last week was low volume games. Some of the miners are selling at less that book value, growing earnings at plus 30% quarter over quarter, and seriously just value plays now. (there is two I am going to buy on Monday).Also, there is a chart on Business Insider that shows job growth is the highest its been in several years. The media is all gloom and doom so everyone is freaking out...anyway, my bets are small but leveraged..NUGT and AGQ

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  170. Take a look at this!! WTF?

    http://www.businessinsider.com/year-over-year-change-in-non-seasonally-adjusted-employment-2012-7

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  171. From Ed Steer's Gold and Silver Daily...

    "Well, as Jim Sinclair said, anyone who didn't recognize yesterday's [and Thursday's] price bashing in gold as a rig job "is either blind or brain-dead.""

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  172. I find the unemployment claims a bit odd too. No one that I know is unemployed except the people who have no desire to work. Maybe that is an inaccurate survey, but it's what I am seeing in my neck of the woods.

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  173. I guess Jim didn't happen to notice the huge rally in the dollar.

    This is just normal run-of-the-mill hogwash that most newsletter writers employ when they make a poor call.

    When one of your calls doesn't work out just scapegoat the evil gold cartel. That way you don't have to take the blame for making a poor trade.

    Gold newsletter writers have been using this old trick for decades. It's a great way to keep your subscriber base intact even if your analysis is poor. You just transfer the blame for a bad call to somebody else and deflect subscribers ire to a scapegoat.

    I could play that game to but I prefer to have a little more integrity than that. If I make a bad call then I take my lumps and move on. I don't try to blame someone else for my mistake.

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  174. Jim Sinclair is hardly a news letter writer. Here is his bio:
    Jim Sinclair is primarily a precious metals specialist and a commodities and foreign currency trader. He founded the Sinclair Group of Companies (1977), which offered full brokerage services in stocks, bonds, and other investment vehicles. The companies, which operated branches in New York , Kansas City, Toronto , Chicago , London and Geneva , were sold in 1983.

    From 1981 to 1984, Mr. Sinclair served as a Precious Metals Advisor to Hunt Oil and the Hunt family for the liquidation of their silver position as a prerequisite for the $1 billion loan arranged by the Chairman of the Federal Reserve, Paul Volcker.

    He was also a General Partner and Member of the Executive Committee of two New York Stock Exchange firms and President of Sinclair Global Clearing Corporation (commodity clearing firm) and Global Arbitrage (derivative dealer in metals and currencies).

    In April 2002, shareholders of Tanzanian Royalty Exploration (formerly Tan Range Exploration) approved the acquisition of Tanzania American International, a company managed by the Sinclair family. Following this transaction, Mr. Sinclair became Chairman of Tanzanian Royalty and now leads its efforts to become a gold producer and royalty company.

    He has authored numerous magazine articles and three books dealing with a variety of investment subjects, including precious metals, trading strategies and geopolitical events, and their relationship to world economics and the markets. He is a frequent and enormously popular speaker at gold investment conferences and his commentary on gold and other financial issues garners extensive media coverage at home and abroad.

    In January 2003, Mr. Sinclair launched, “Jim Sinclair’s MineSet” in partnership with David Duval which now hosts his gold commentary and is intended as a free service to the gold community.

    I guess time will tell who made the wrong call.

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  175. The bottom line is that Jim makes his living off the gold bull. He recently made a big prediction that gold was going over $2000 by the end of the year. Gold isn't cooperating with that prediction.

    So Jim could either admit that he may have missed on the call or he can do like almost all advisers do when they miss a call, they blame someone else for their mistake.

    I think it would be refreshing if people would just admit their mistakes. If the government would admit its mistake we wouldn't be in this mess.

    If the CRB rolls over quickly then I will admit that I'm wrong about the inflationary scenario and we are moving into a new bear market. I'm not going to blame it on Bernanke's refusal to print more money.

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  176. Maybe I should have used the word analyst instead of newsletter writer.

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  177. I am a strong believer in everyone drinking their OWN Coolaid. I'm not saying Gary was wrong to liquidate. For him it was the prudent. It isn't about being right. It's about making money when you are right and not losing too much when your not.

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  178. Jim has vaults full of gold. He can afford to be wrong much longer than we can :)

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  179. The problem with creepy Jim is that he intentionally works people into a lather until they rush out and take on way, way too much risk. He does this by making very specific predictions with time limits - predictions that he cannot possibly know will come true or not but behaves like he does know. He disgusts me.

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  180. People HAVE to realize they're just opinions or predictions. Like Gary's charts showing what the dollar, gold or market is going to do..predictions. And Gary often has a lot of conviction too. If he didn't he wouldn't trade on his predictions. Jim doesn't mislead anyone any more than Gary.
    Now who was creepier than Nick Leeson? So why do you use his picture? LOL

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  181. No. Jim takes it to another level of predicting things he can't possibly predict.

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  182. I'm not complaining about making a prediction based on what ever system one uses. Only that many people find it convenient to blame a scapegoat when their system fails to work.

    Gold analysts seem exceptional prone to this crap.

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  183. Gary,

    Jim never stated that gold would be over 2000 this year.. he said it would be in a range from 1700 to 2000 this year...

    ALso, he was off 5% for his long term call of gold hitting 1650 by dec 2011.. it actually happened in 2011... The call was made ages ago..

    Also, he doesn't charge for anything, he has no news letter unlike you. He offers free advice and is actually the smartest gold investor out there.

    You make your money mostly from your subscriptions not from your trades. 3000 clients, 30 dollars a month is quite a bit for opinions, if you ask me.

    Also, Jim comes from a banking family. His family is the seligman family who were NY Bankers and were brought in by the Rothschilds. His dad Bert was trading partner with Jesse Livermoore.

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  184. Danno,

    You're wrong about jim. He tells people to buy gold, avoid margin, pay off your debts and attempt to live a self sustaining life. Armstrong was calling for gold to collapse to 1400 or 1100 dollars based on his cycles, were nothing but ambigous statements. Jim called him out on it and has told people to repeatedly hold their insurance. Don't know what risk jim made people take when he advocates physical gold and solid mining companies, maybe you can qualify your statement.

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  185. ILUV,
    Just for the record the newsletter is a small fraction of what I make and I give a big chunk of that away to friends and charities.

    In just the last 6 months I have donated or given away over $100,000.

    So I find it rather offensive that you assume that I do this only to generate subscriptions. I do this to try and help people ride the bull market in precious metals and survive this economic mess we've gotten ourselves into.

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  186. When the facts change, Gary changes his mind, what do you do ILUVPMS?
    I have a definite new respect for you Gary. Not because you agree with me but because your system allowed you to change your mind when things changed.

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  187. Absolutely Saif...agree that Gary's system allows him to do that. That is the ideal position to be in....nimble and quick footed..if you want to trade this market...BUT
    Gary offers a wonderful perspective on the Gold secular bull market. He plays that trade to suit his own investment agenda.
    Others may not trade to that extent...or quite simply buy on the premise that the secular market takes care of their position.
    Jim Sinclair on the other hand...who knows what position(s) he has....who really cares. He is a well regarded influential persona in the world of Gold. This speaks volumes...he has street cred....well above anyone else I've seen in this space. Calling gold prices has been his agenda for the better part of 40 years..he made big bucks on his call in 1974 (made public for those who wanted to participate)which took 6 years to transpire...(patience) he understands the drivers of it....principally debt,debasement and negative interest rates.
    There is an enormous difference between what Gary and others classify/categorise him as being and other "newsletter/analyst" types out there with dollar motives.
    His motives are to educate the public (without charge)about the deceit, manipulation, crony capitalism, lack of integrity in the regulatory system and the true place of Gold in our monetary system.
    Why does he do this...I believe his cause is to attempt to bring a greater voice to a collective union to fight TPTB. He is a valid member of the community of those that do not trust the central planners and the banksters. He does not "blame" the scapegoats, merely puts the moves into perspective. BTW isnt it convenient to have the ability to be able to find a scapegoat when things dont go according to plan....shortened cycle...left translated...extended cycle = right translated...cmon please. Mixed up cycles = no idea !At least you can be honest and say you have no clue!!

    Gary, I am surprised by your comments on this...very surprised....He in fact put your most recent blog post onto his mineset page and called you as being 100% correct in time...IN TIME !! You have metaphorically driven a dagger.....poor form..very poor.

    I dont normally do this but I will give the readers )bcos of the banter)of this page the benfit of what I believe Jim's real motives are:

    He is himself, preparing for the day when the fiat currency system implodes (via a gold mine that has real gold reserves, in an environment that protects his ownership...one of the best hard assets one can own...out of the reach of third party psychopathic maniacs). His astuteness/awareness of the complexities of the society and moreover the malfeasance of the central planners and banking elites shines a bright light on the ultimate direction of the corrupted casino we all play and live in. The casino is the metaphor I use for the monetary system and every appendage it has.

    In essence if I read and understand Jim's message....we will not or should not trust the banking system to exist within the medium term. Anything paper or electronic which portends to hold/have value...is worthless.....Quid pro quo.
    He does tend to use verbose language which can at times make his mission difficult to interpret/decipher (he has a propensity to talk in riddles too).
    Like back in the 70's he made a call about the ultimate direction of gold....this time its no different(choose your own path). Education is paramount for a fuller understanding....You can risk playing against the best in this casino that is rigged to benefit the "owners"....or you can follow the path of least pain.

    I dont want any retorts to this blog....Im not challenging anyone out there to provide a better argument. It is what it is. There is only one direction that this train wreck of a monetary system can proceed.

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  188. I'm not denying any of that. I just think it's poor form to blame some shadowy cartel every time gold drops. These sell offs always occur when the dollar rallies. Am I seriously to believe that the Fed is somehow rigging the currency markets for the sole purpose of dropping gold?

    I've said it once if not a thousand times. Our monetary system is completely fiat, the government is free to print however much money they desire. The price of gold is meaningless.

    If gold is meaningless then there is no incentive for the Fed to attempt to suppress it.

    If there is no incentive then it's not happening. Sure there may be some short term manipulation around options expiration and such, but that occurs in all markets.

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  189. Oh Gary,
    I wholeheartedly refute your assertion that the FED has no incentive to suppress Gold.
    The shadowy figures you refer to as the cartel...are in fact the bullion banks (4 of them in actuality 2 US, 1UK, 1 GERM). They work in conjunction with their respective central banks.
    Currencies are rigged - without doubt.
    Markets are rigged.
    LIBOR as we now know, has been rigged (watch this space...this could be the black swan for 2012)
    Gold and Silver is rigged.
    Suppression is essential because it keeps the fiat system functional. That is the incentive they need to stay in power and control.
    Gold is far from meaningless. It tells the true story (or will evenutally). It's obvious if you care to look at the connection between debt/debasement/ false expansion and the Gold price.
    Why have central banks (eastern)appetite for physical exploded in the last few years ? Why did China buy the LME ?
    As far as gold dropping....expect the same to occur next week....there you go..in advance ....not after the fact. The Benmeister is about to speak again...and just as he does watch the action on the shorts....BB at work to take gold down probably $30-40. Just this year alone they have done exactly the same some half dozen times. Every time they come up against the physical buyers. Thats not options related and not coincidence. Game up.

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    Replies
    1. Well said Liquid M. I enjoy reading your points.

      Delete
  190. If I may ...
    Happy Birthday George W Bush 6.7.1946 (former president of USA)
    Yes his birthdate is very close to that of the USA's.

    The man who ironically is responsible for much of the economic mess the world is dealing with. Policies including "free market" agendas, corporate welfare programs, tax breaks for the richest, curtailment of social programs and wasting the national treasures for unnecessary wars and increasing the disparity between the haves and have nots.

    Enjoy your day sir for I fear that this 66th year of your life (esp. the 67th (2013), 68th(2014) years) will not be pleasant ones for you personally and for the world at large. Karma has a habit of kicking your butt when u least expect it.

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  191. Liquid Motion,
    I am in 100% agreement on the precious metals price suppression scheme. It is so well documented and proven that even the talking heads on CNBC now even take it for granted. Anyone who can't see it, chooses not to.

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  192. Here are the real facts about the so called gold manipulation.

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  193. Gary,

    If you don't believe that silver and gold can be manipulated, just like the LIBOR and EURBOR rates, then you definitely don't understand silver and gold.

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