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Monday, September 3, 2012

HAS QE3 ALREADY BEGUN? COMMODITIES AND GOLD MAY BE SAYING YES.

According to recent statements by Bernanke, the Fed stands ready to act with further easing of monetary policy (QE3) if economic conditions warrant it. But let's face it, because the Fed has never been audited we only receive the data they deem fit to publish. We know the government lies to us about inflation, unemployment, GDP, etc. Does anyone really believe the Fed is publishing true accounting numbers? I'm starting to suspect Bernanke has already begun the next round of quantitative easing. 

Politically QE is a hot potato, and impossible to publicly announce. But there have been enough hints (the last FOMC minutes maybe the loudest) that it is clear that Bernanke intends to print. Hey, we are in a currency war after all, and one can't win the war if you don't shoot your guns!

First case in point. The CRB exploded out of its three year cycle low in June just as I had predicted. Oil is already knocking on the door of $100 a barrel again. Grains in many cases have rallied 50% or more and show no signs of reversing. As a matter of fact, the CRB is showing no inclination to even retest the summer bottom. The complete failure up to this point of commodities to retest the three year cycle low is of itself a warning bell that something has changed. I think we can all agree that the global economy didn't all of a sudden ratchet into high gear, creating a surge in demand. Barring that, the only thing that would generate this kind of explosive move without even a hint of a correction would be another round of massive liquidity injections.

Another odd development is the action in bonds. A month and a half ago the bond market started to discount the inflationary surge as commodities launched out of their three year cycle low. Mysteriously, two weeks ago, interest rates started to tank. 


One has to ask themselves, who in their right mind would be buying bonds with a negative yield in a rapidly accelerating inflationary environment? 

This sudden reversal in interest rates is another warning bell, in my opinion, that QE3 may have already begun, and Bernanke is already buying bonds in the attempt to hold interest rates under 2%.

The next confirmation will come from the stock market. As we have seen in the past, the daily cycle in the stock market has tended to stretch far beyond its normal timing band (35-40 days) during periods of quantitative easing. The current cycle is due to bottom right around the next Fed meeting on September 13. If stocks are still rising with no clear decline into a cycle low by mid-September that would be a pretty clear sign in my opinion that Bernanke is lying to us and QE3 has already begun.



If I am correct then the penetration of the three year cycle trendline by the dollar index on Friday is going to be a harbinger of hard times ahead for the world's reserve currency.



As many of you may recall I've been expecting the three year cycle low in the CRB to correspond fairly closely to a top in the three year cycle on the dollar index. So far the rally out of the May 2011 three year cycle low has been very weak. The dollar still isn't close to moving above the 2008-2011 three year cycle high, and has now formed a monthly swing. 


The dollars three year cycle is now at risk of having topped in only 14 months in a left translated manner. If so, this greatly increases the odds that we will see the dollar index fall below 72 and probably below 70 by the time the next three year cycle bottoms in mid-2014.

If the dollar's current daily cycle continues to drop all the way into the FOMC meeting on September 13, then it will be unlikely we see any significant corrective action in commodities or stocks for the next two weeks, and at that point I am going to seriously entertain the idea that the Fed is lying to us and has already begun the next round of bond purchases.

The big question though, is how do we invest based on this possibility? 

First off one doesn't want to be short if there is even the slightest risk that the Fed has resumed bond purchases. Second, one has to ask themselves which sector stands to benefit the most from another massive increase in liquidity? 

The obvious answer is commodities. But most commodities have already rallied quite significantly as we've seen with the grains and energy. That doesn't mean there isn't more upside, I'm sure there is. But I think much larger percentage gains are going to be made in the precious metals as price and breadth are still quite depressed in this sector.

The metals are now set to "catch up" as traders take profits on some of their other commodity positions that have already generated large gains, and look to put that capital back to work in undervalued areas with more upside potential (precious metals, especially miners).

It's been my theory for several months now that we saw a B-Wave bottom for gold back in May.



With the recent breakout of the frustrating consolidation zone that always follows a B-Wave bottom, I think gold is now ready to begin the initial phase of the next C-wave advance.



Gold is now entering the high demand fall season. It has been my expectation that gold will generate its first test of the all time highs sometime this fall. If my intermediate cycle count is correct (explained in depth in the nightly premium newsletter) we should see a move above the A-wave top of $1800 and a rally close to $1900 by late October or early November. At that point the intermediate cycle will enter the timing band for the next corrective move, which should prevent gold breaking out to new highs



Following an intermediate degree decline in late November to mid December the breakout to new highs should occur during the next intermediate cycle this spring, followed by a retest of that breakout at the next intermediate bottom.



Yes I know these daily and intermediate cycle counts are some what complicated and beyond the scope of this short article. I do cover them extensively in my premium newsletter. Suffice it to say that cycle analysis lays a general guideline for when to expect major bottoms, and to a lesser extent tops. I like to think of it as a tool that signals when to step on the gas and when to start tapping on the brakes.  

While I don't think gold has much chance of moving above $1920 this year, conditions are definitely in place for a significant rally in the sector over the next couple of months. Miners, and silver in particular, have the potential to generate some pretty respectable gains over the next 2-3 months.

SMT premium newsletter.


200 comments:

  1. Is it possible that a sudden surge in the price of commodities is due to the drought?

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  2. The drought doesn't explain oil, nat gas, gasoline, coffee, cattle, cotton, etc.

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  3. hi gary..

    whats your target gold silver ratio in two or three years?

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  4. I think it will go below where it was at in May 2011.

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  5. Gary do you share Jim Rogers view - he expects to make more $ in raw commodities (sugar esp) than in precious metals. His view is also the bull to run after 2020.

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  6. Jim might make more in softs than me but I prefer precious metals because I know the market better and I can get a cycle count on the metals.

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  7. Gary,

    I said earlier if one was watching the market close enough they would have seen the miners lead Gold out of May lows. I picked the bottom early enough to act on it. Buying more physical and miners. If I remember correctly you were still concerned about the consolidation phase lasting until Nov-Dec. You repeated that two weeks ago when I asked you again.

    I stand by my call of $1500 not being penetrated on the downside...EVER.
    Also possible that when $1700 is breached, that buying today could very well be the last opportunity in this cycle to get it that cheap.

    Your suspicions of the FED lying...IMO are 100% on the money.

    I said last week..
    "The FED is the lender of last resort. Be assured that any future money printing in EUR will be funded by the FED. They dont need to announce a QE III...they have already/and continue to participate in that event, under the radar. MSM and public at large (incl some people here) are oblivious to the mechanics of the FED".

    "All this is in effect INFLATIONARY. Markets across the globe are being flooded with money...courtesy of the FED. The FED is funding southern peripheral Europe. Be careful what you read and what you believe. Moreover think outside the box".

    Draghi speaks with so much conviction these days...why ? Because he has the FED in his back pocket. Geithner's recent visit to Europe was "reassurance" disguised as a holiday.

    Anyone care to check the balance sheet of the FED will see that they're not doing LTRO/Twist..they are adding.

    How do they do that....hmmmmm....Swap Lines. The new QE tool.

    The coming three months will shock more than a few people. PM's will move with jaw dropping pace to test previous highs only to take a breather into mid-late Nov. Come mid-2013 we should see new highs being achieved. Ultimately the price of Gold should do no less that 100% from here. Silver will do no less than 4X-6X.

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  8. Liquid Motion,
    This article suggests otherwise
    http://ftalphaville.ft.com/blog/2012/08/31/1140881/if-qe3-is-so-close-why-is-the-feds-balance-sheet-shrinking/

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  9. Gold is still in the consolidation phase. Until it breaks out above $1920 that will continue. Like I said in the article I don't look for that to happen until next spring.

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  10. Au Contraire,
    The Fed has never been audited. They've fought mightily to keep it from happening with the flimsy excuse that they need to maintain their independence. Hogwash!

    I don't believe the inflation numbers, unemployment numbers, GDP or virtually any of the propaganda the government spews on a regular basis. Why would anyone think that the Fed would publish accounting numbers that are even remotely accurate?

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  11. The FED nor the Govt dont comply with GAAP. That's all that needs to be said about that.

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  12. Gary,

    The matter of trust will become an even bigger issue when society wakes from its slumber. A civilised society cannot function without it. It starts at the very pinnacle of TPTB and works its way down to parish priests and even teachers.
    Destruction of the global economy leads to collapse and chaos (Jim Rickards prediction - 4th Horseman of the Apocolypse - his "most likely scenario" for the financial system).
    This is what Gold is predicting. The fear trade (sentiment) is gaining pace. Fear in the destabilising, ever increasing fiat money system.

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  13. For anyone that wants to better understand the Feds balance sheet you can get pretty granular disclosure on the Federal Bank of St Louis and the Federal Bank of NY websites. They provide the Feds securities holdings on a weekly basis every Wednesday as well as considerable information on the duration of their holdings, liquidity swaps, repo agreements and outstanding loans and deposits with other federal reserve banks. If you want specific information about swaps with the ECB, the ECB website provides pretty detailed information on that on a weekly basis.

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  14. Wondering why gold finally broke out on August 21st? Perhaps it was that the PBOC conducted a record liquidity injection using reverse repos during Asian market hours. Per Bloomberg on 8/21, “The People’s Bank of China conducted 220 billion yuan ($34.6 billion) of reverse-repurchase operations, the most in a single day, according to a trader at a primary dealer required to bid at the auctions.”

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  15. Gary,
    Why you think the surge in bond rates is any different than the surge in rates in March?

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  16. Gary,
    How important is month swing in dollar? Looks like you also had month swing in dollar at first top out of 08 low.

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  17. Liquid Motion
    How do the Fed use swap lines as the new QE tool? What are the mechanics of the Fed that we are oblivious - swaps or others?

    ReplyDelete
  18. Gary,
    Looks like you are right about Fed QE. Now ECB needs to join the money party.

    http://www.telegraph.co.uk/finance/economics/9516957/Federal-Reserve-has-already-started-QE3-says-investor-Jim-Rogers.html

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  19. Take the tinfoil hat off, Gary. The FED had not started any new asset purchases. It would simply leave too many tracks (real tracks that its counterparties, especially the primary dealers, would notice, not just "commodity prices are going up") for that not to be obvious.

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  20. I believe like Jim Rogers does that the numbers the Fed publishes are phoney.

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  21. if I'm not mistaken that a disingenous question and it belongs in the annals of the fed reserve.

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  22. smt troll...take off the rose coloured glasses....qe doesnt imply asset purchases unless you refer to the traditional "mainstream" definition. Remember you are dealing with psychopathic neo keynesians who have manipulated every appendage of the financial system. Thats what everyone misses...QE doesn't get announced bcos of the tremendous success of the previous attempts.

    thats what Jimmy Rogers talks about...he knows they are doing it but cannot precisely describe how they do it.


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  23. Besides the primary dealers are and always have been in on the ponzi scheme from day dot.
    FED is not permitted to buy directly from treasury....cannot directly support the governments deficits. Typically referred to as debt monetisation. Enter primary dealers.Problem solved with margin the main benefit for the dealers.

    FED provides "support" to two dozen CB's around the globe. How they (FED) account for those LOC who knows...if they even do...but the creditor would need to recognise the debt on their balance sheet..u would think !!!! Those lines are credit = debt = money printing = QE.

    Clear ??

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  24. Is is much simpler than this conspiracy nonsense about phantom QE. Investors are anticipating that a QE like stimulus will commence shortly and are bidding up commodities.

    By the time the stimulus is announced to general public, the change will be largely priced into commodities. Following the announcement will be a general sell off (sell the news) to shake late comers and then a further price appreciation in commodities.

    This happened earlier this summer, however when the Fed announced there was no additional stimulus gold and miners sold off. Even at that time people were speculating about phantom QE stimulus. When in reality investors were placing bets that QE would begin shortly.

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  25. Any thoughts on why the market would be down for the last two weeks if QE3 was really happening

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  26. Like I said in the article the market is due to drop down into a daily cycle low by the next Fed meeting. If it's still rising at that time that would cement in my mind that the Fed has already started QE and the stock market cycles are already being affected.

    Now we will just have to wait two weeks and see what happens.

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  27. Wouldn't that imply that cycles are more impactful than QE? I would think that if QE3 was started then all asset prices would rise regardless of where they are in their cycles. What happened during earlier QE?

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  28. As I noted in the article during periods of QE the stock market cycles go haywire and stretch way beyond the normal timing bands. Sentiment also becomes almost useless.

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  29. I bit the bullet and bought a little bit of GDX. Can't get too excited about the SMT strategy, since, after all, it is not only underperforming the S&P year-to-date, but is still down for the year. I've stopped blindly following SMT (it was fun while it was working), and now take my own trades, with proper hedging as protection.

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  30. We just needed to get through the consolidation phase of the B-wave bottom. It looks like that is now complete. I'm confident the next two months will put us many percentage points past the S&P and most fund managers.

    In the last year we have handily outperformed not only the stock market but also gold and miners. Not exceptional but certainly nothing to sneeze at in one of the toughest markets I've ever seen.

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  31. FWIW, Another trader that I know still thinks the Model Port will eventually underperform the interest rate paid on Treasuries over time. He is firmly convinced that SMT is just another dart toss, and is no better than ordinary TA as a way of timing the market. He doesn't like the most recent trade involving long-term options either. He thinks that type of trade is too risky...and thinks the position size is still too large on that trade. Could it still work?...yes, but he says those types of trades, statistically tend to be too risky even though if one trade works the reward on that one trade could be huge.

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  32. Luckily I don't pay to much attention to "another trader" :)

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  33. BTW we are up so massively even after missing the exact top in silver that there's no way treasuries will ever come even vaguely close to our returns.

    It is a bull market after all. And in a bull market if one is long, it's pretty hard to lose money.

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  34. It is true that the SMT Model Port is beating the S&P since last July, but the trader who is critical of SMT says that the extra reward isn't worth the extra risk and stress of trying to time a highly volatile sector.

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  35. The Model Port had a big drawdown from being up around 29% since inception....because, at one point during the summer I believe it gave back all but a few percent of that 29% gain before it bounced back. The "other trader" is good at using hedging to avoid nasty drawdowns like that. That's why I pay attention to him. He admits he's not a timing genius, but doesn't actually need to be right all the time in order to still make money.

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  36. As long as it is still a bull market, everyone is going to win even if they're not a genius (unless they get chopped up trying to time it with surgical precision, or try to short it).

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  37. For those not interested in trying to time the moves there is the Old Turkey portfolio.

    I've made my position on hedging know many times. It's a scam foisted on retail traders by wall street.

    Hedging just means you have to manage two positions instead of one.

    If you want less risk just reduce position size. That will accomplish the same thing as hedging some part of the trade.

    If you want to be market neutral then just go to cash.

    Hedging is useful for large funds that can't easily get into and out of positions without moving the market. Obviously retail traders don't have that problem. We can enter or exit with the click of a mouse.

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  38. The other trader had some comments in response to hedging being a waste of money, and in respose to your being glad that you don't pay attention to his concerns about SMT trading methods being too risky versus reward.

    Keep in mind the words I'm about to paste in are his words, not mine. Also, his idea of hedging isn't simply to buy inverse ETFs...but that's all I'm willing to say at his point about how he hedges.

    Here's what he said:
    ____________________________
    Here's my stats From Jan 1 to the close last Friday, and I've been in the same sh** as he has, more or less..

    Max draw-down 5.31%
    Sharpe Ratio: 2.18
    Sortino Ratio: 3.35
    Calmar Ratio: 10.09
    2012 Return to date: 23.02%

    He's such a retard. My kids could out trade that idiot because they know basic math.

    That's why he sell subscriptions and doesn't trade his own money for a living. He doesn't understand how he could do infinitely better by just thinking about it more, and talking a f*** of a lot less.

    Making money reliably and methodically has nothing to do with the crazy bullsh** he purports.

    You can quote me, by all means.
    ____________________________

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  39. I told him I pasted in his comment and he said this:

    ________________________
    lmao, well I could have skipped the 'retard' part :-) lol

    I can beat him with facts, so I guess there's no need for name calling, lol.
    ________________________________

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  40. One of the trolls that only show up when we are taking a draw down, and of course they claim to have traded the move perfectly. The funny thing is it's always in hindsight, never in real time.

    Trading in real time makes it much harder to outperform the SMT.

    Once our trades turn around, like they always do (it is a bull market after all), then these fleas are no where to be seen.

    Like Saif said they can only throw punches, they can't take them :0

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  41. Well, he does trade in real time and has posted real time trades to me at least since at least last fall.

    Here's his latest response:

    _______________________________
    never real time? lol that nonsense again. Well, you know that's not true, at all.

    lol, you can tell him I've been calling my real time trades to you pretty much this entire time, and explaining the MATH behind my moves as opposed to the nonsense "Wave" stuff.

    There's nothing about 'hindsight' about my trading as you know.

    This is exactly what I mean. Guys like Gary spend more time running their mouth and under-performing with great risk, that they could be using instead to figure out how random events such as stock prices can have mathematical apparatus applied to them to give one an edge, again as you've seen.

    You could print the details of a guaranteed system in the largest news paper in New York and you wouldn't get anyone that would voluntarily follow it.

    People are just dumb. Gary is no different as should be obvious. I've come to the conclusion that people really do not want to make money.

    The great part about my hedging as you're aware, is that when things turn around, "this flea" will be there, because I never left. I don't need to time a thing with any amount of precision. Six month will suffice. That's the point of the exercise. If he understood how to hedge he would see this, but again we have the problem of him investing too much time in his nonsense system to actually sit down with his yapper shut and engage his brain to see how it works. It's basic math applied to the problem. Well, the real problem, which isn't Gary's problem. You can't fix his problem, but a trading problem we can fix.

    The guy is an amateur with no defense. The facts are the facts and you know them to be true. You've seen both sides.

    Yes, quote away! He's got nothing.
    ___________________________________

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  42. This comment has been removed by the author.

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  43. And there's more:

    _______________________


    'Trading in real time makes it much harder to outperform the SMT."

    Oh,and with the 5.31% draw-down you KNOW there's no hindsight nor open-ended BS going on. There's no way a cowboy like Gary could manage the market in these resource based stocks and only have a 5.31% draw-down combined with 20+% return without being hedged very well.

    What is his risk-ratio's anyway?

    Let's take a look and see just how full of risk this guy is. The proof will be found in his own trading.

    I've watched enough to know, but it would be a good exercise for the clearly uniformed crowd he has.

    One can only blindly follow a known-fool for so long before it become your own fault.

    I try not to blame the victim, but at some point one has to take the "I'm with stupid" T-shirt off and grow up.

    ReplyDelete
  44. J Reality - what a complete dunce.

    I quote " I've stopped blindly following SMT (it was fun while it was working), and now take my own trades, with proper hedging as protection."

    What kind of complete Moron:

    1.) I qote again "blindly following SMT" - BLINDLY FOLLOWS ANYONE

    2.) Puts it in clear print and ADMITS IT.

    3.) HEDGES - or even suggest he has any knoledge/ability to do so considering NUMBER 1 and 2!

    What a compelte dunce....do you honestly think with the above for mentioned..anyone here..anyone at all considers you anything more than a complete and total dunce?

    Dunce.

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  45. Well, by "blindly following" I meant taking the trades verbatim. Yes, I did read the reports when I took the trades.

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  46. ...but yes, I probably was a dunce to put so much faith in SMT in the first place, even though I did read the reports...but at least I'm not CONTINUING to be a dunce. :-)

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  47. Go "continue not being a dunce" somewhere else.

    Obviously any credibility here is completely shot....seriously....what would the point be?

    Obviously you got hosed / lost your original $1000.00 funded trading account - and are bitter cause you didnt find the holy grail in a freakin silly paid subscription....

    Best of luck to you in the future.



    ReplyDelete
  48. If you must know, I'm actually up for the year, overall, across all 3 of my taxable accounts, although I am still down in one of those 3 accounts. Granted, I still made some dumb mistakes this year, because I'm still learning avoid old bad habits of taking on too much risk.

    The trader that I've been quoting is the one up who is better at hedging and he is 23%. Again, here are his stats for the year....ask Gary to post his stats and see how they compare:

    Max draw-down 5.31%
    Sharpe Ratio: 2.18
    Sortino Ratio: 3.35
    Calmar Ratio: 10.09
    2012 Return to date: 23.02%

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  49. LOL after that inane tirade I doubt anyone is going to believe your nonsense anymore.

    I suspect and I think probably everyone else does to that JR and the "another trader" are one in the same person.

    Seriously, who is going to go to all the trouble of copying all that emotional ranting just to post in on someone else's blog?

    This looks like the same style as the troll Shawn. I'm pretty sure he's just created another username so he can post without having to endure that fact that he was flat out wrong.

    I said I was going to make all the trolls sorry they gave up their subscription, and I'm now on the way to doing it. The market has followed my predictions to a T other than one early entry into miners, which I never worried about anyway. Why? Because it's a bull market.

    It did give the fleas some ammunition for a few weeks, but their time is done.

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  50. My stats have been posted in real time on the website.

    You want us to take your word for it that the numbers you post are true and were made in real time. They certainly weren't called in real time on this website.

    Good luck with getting anyone to believe your nonsense.

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  51. Shawn its time to go troll somewhere else.

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  52. FWIW, the person I've been quoting isn't Shawn. This person does post in realtime to me via email, but I can understand if you don't want to take my word for it. At one point, he was looking to join Covestor to track his returns, but they don't support options and futures.

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  53. He trades options and futures. Leveraged instruments.

    We are seriously supposed to believe he doesn't suffer serious drawdowns?

    This just gets funnier and funnier. :)

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  54. Folks here's one you can always, always depend on.

    If it sounds to good to be true, it is.

    JR/Shawn/Pibe or whoever you are, go peddle your snake oil somewhere else.

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  55. To be clear, he uses options as hedges, and his futures trades are pair trades (not just naked long or short)

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  56. What's the point of hedging away your risk?

    If the underlying goes up you just end up losing money on your hedge. Your total portfolio ends up flat.

    Like I said, if you want to be market neutral just go to cash. If you want less risk take a smaller position size.

    For the most part, hedging strategies just mean that you have to manage two positions instead of one.

    Like I said hedging is really only useful for large funds that can't get into or out of positions easily without moving the market against themselves.

    Other than that hedging is probably the greatest scam Wall Street ever pulled on the retail investor. It generates large transaction fees and accomplishes nothing that couldn't be done with position size alone.

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  57. FWIW ...many MM and Large Fund Managers dont hedge their positions 100%. They can be net long/short depending on their view/how far above or below the averages(deviation) the market is trading. They simply adjust their position accordingly. I dont believe they would want to operate where they are net ZERO/FLAT. That's wasting time and money.
    They dont need to move markets...just get the direction right most of the time...where their sheer size and minsicule margins will reward.

    I have used hedging (currency) for decades and it serves a useful purpose. Options are also useful if one wants to play the leverage bet...but as you put it ..you can get smashed on any inverse moves.

    It all needs to be put into context. In isolation some of these trades can be rewarding ...but when combined it can get hell messy. I always try to follow the KISS principle...Keep it simple stupid.

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  58. There are times when certain option trades like strangles or straddles, etc. are appropriate, but simply using options to hedge long or short side bets is a waste of time, energy and money for retail traders.

    One can accomplish the same thing by adjusting position size. Then you don't have to time the exit of the position and the hedge to make money.

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  59. Another confirmation of what the smart money is doing....
    Recently watched an interview with Frank Giustra (Canadian billionaire)..
    Heavily invested in Gold and resources stocks ...which he entered positions in early 2011. Suffered drawdown (>50%) and averaged into those same stocks. He strongly believes in the INFLATION story.
    His words..."Buy right...and sit tight".

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  60. I've never done it but from my understanding of what a market neutral strategy is you would want to be long the strongest stock in a category and be short the weakest. You play the spread, and theoretically you're not concerned with market direction. Then I guess if you're leveraged it juices returns while smoothing volatility.

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  61. Yeah LM, I liked that interview so much I embedded on my blog. Very impressive.

    http://lyon-share.blogspot.com/

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  62. You can sense the power he has. Very well tempered/balanced and astute man. Almost the same age and yet we are worlds apart in wealth stakes ...but I share exactly the same philosophies as he does. That's why a felt the connection I guess. Worth watching again...pearls of wisdom from one of the best.
    Nice job with the blog ...btw.

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  63. Thanks LM! Yes, very astute. I had not really thought about how some phrases kind of train us, such as "to big to fail", "trillions", like they're so common, ha. Guess they will be when Bernanke is done. lol

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  64. Just read a good article about energy. Mentioned uranium. Said Putin is trying to corner the market. I better start scoping out some of those investments. The article also talked like another spike in oil could put the new base price between 200-400$ a barrel. I am light energy stocks too.

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  65. Bullish percentage was at 85% last week. You might want to wait till that comes down a bit before jumping on the energy train.

    I think one will get much better returns during this time of year in the miners. This is the season for gold and the bullish percent in miners is still under 50.

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  66. Yes Gary I agree. The 'bang for the buck' is definitely in mining stocks right now. I am very overweight mining shares, AGQ, NUGT and trading gold and silver futures too.

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  67. FYI, there is a massive shortage of hay in the USA. The loss of CO due to fire, and now KS mean it's irreplaceable. The drought in TX continues. Hay actually rose again here recently to a price near its recent June high.

    The impact is the flood of livestock into the slaughterhouses, and the drop in availability coming up within the year. Prices of cattle will jump after the last of the liquidation takes place. It's happening now in cattle and sheep and hogs. I see it in sheep.

    The problem is simple. The animals need to eat. In feedlots, they fatten, but don't add muscle. They're being take off the range as the range is too expensive due to trucked in hay. The feedlots and slaughterhouses are backed up.

    The future will be a much reduced animal protein availability. The price will rise due to this fact. Just right now, the growers are eating losses and that will continue until their inventories drop. But they won't increase their inventories fast enough if it rains to meet the demand, which is pretty steady in its seasonal pattern.

    I somehow got involved in this crazy area as I'm interested in the wool. So, I'm watching and hearing what's happening among a lotta guys in the midwest and west.

    ReplyDelete
  68. Gary, do you pay any attention to Martin Armstrong?
    Do you think we could be looking at an Autumn 2010 - like run up in silver here? It looks very strong...

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  69. I don't think silver is going to break above $50 if that's what your asking, but something has clearly changed since June.

    I believe Bernanke has already begun another round of QE. That liquidity landed in energy and grains first but now the metals are starting to sniff it out, plus gold is entering the high demand season.

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  70. The statistical initial average price target for an upward breakout of silver's textbook descending triangle is: 49.82

    Although this breakout could fail, it seems doubtful that it will fail. It looks to me like a pretty solid upward break out.

    If the initial target is reached 3 things could happen; a significant pullback followed by even higher highs, a surprise surge much higher than 49.82 with no significant pullback, or a collapse in price all the way back to 26.15 or lower.

    I won't try to guess which of the 3 scenarios will pan out, but if I had to guess I would lean toward a pullback after 49.82 is reached, followed by even higher highs.

    Regardless of what happens, the silver descending triangle is so large that all of this could take several or even many months to play out. We should have some time to think about it.

    http://scharts.co/NgG4mi

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  71. That is interesting Slumdog. I have seen a glut of chicken and steak at the market and thought it was corn related. Didn't even consider hay. Now, how do we profit from that? :)

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  72. Gary,
    Silver not above $50?? Within what time frame. I would think no later then next year it should break above 50. No?

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  73. Typo correction: initial average price target is 50.88

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  74. http://www.pimco.com/EN/Insights/Pages/The-Lending-Lindy.aspx

    ReplyDelete
  75. Lyon,

    Forget about Putin trying to corner the market in Uranium..watch out for the Indians...they're literally on the war path...(pun intended).

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  76. Gary,
    Its getting a bit late for the USD and for stocks. Still waiting until FOMC on 13th ?? Disappointment not factored in. Plus ECB doing what it said it would implies US will follow to keep currency from strengthening.
    Current weakness points to exactly that is taking place already. Fireworks (risk assets)are primed ready for ignition switch.

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  77. SILVER

    http://traderjoed.blogspot.com/

    ReplyDelete
  78. The USD is in a continuing decline against the RMB. The RMB is now 6.33, nearing a new high vis a vis the USD.

    This is driving the PM's.

    Politically, it's just what Americans should wish for. The Chinese can take their paper they received for the goods they produced and shove it up their backsides. They had a chance to be responsible, world community citizens; they decided to be self-serving, indulgent mercantilists. They are morally bereft, not bankrupt, just without, no judgment here, just amoral. To deal with that, their currency is finally rising, after a squeeze against those who anticipated this. And now, it's happening quickly, weekly.

    Let's watch to see if China can keep its lock on the USD. IMO, it can't. Their game of selling cheap is changing right before our eyes. The US economy will get a helluva boost when we see 6.10 as we will know their corrupt leadership (nice kids, nice families, yup, sure, indeed) has lost control over that lock.

    Then we'll watch China experience its first post Commie Depression.

    Mercantilism has a helluva snap back. It's about time.

    ReplyDelete
  79. As has been stated here before, the right price for silver is $150/oz which is within the inflation adjusted ballpark of the prior '80's $50 high. Will it happen immediately? I'm with Gary on this, 2014.

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  80. My gold futures system has been on this buy for 46 days currently, the longest of the bull market.I've got to think that a correction is imminent.

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  81. Slum

    Yeah they took their paper alright and bought Gold with it. Crazy mercantilism...I know...u not giving them enough credit....wish I had their foresight....Oh I did and still do...coz I own and continue to buy gold with my worth less paper.

    Cant really compare their shortcomings and missed opportunities to that of American politicians who foolishly believed that a house of cards could be built on credit and who used the inflated USD as leverage to create market advantage and build corporate strength and artificially produce GDP which was never sustainable while allowing criminals to rule the country and elitists to rape and pillage its citizens and the rest of the world. All the while they achieve their desired result of creating a totalitarian regime where its zombified citizenry are deprived of their freedoms and liberties. Oh lets not forget the harboring of financial terrorists who have crippled the financial system and almost brought the entire world to its knees.
    Nope...not even close.
    Sad thing is if China were to go into depression then it will only be following Europe , Japan, and the USA. IMO ...it wont happen..not this decade or next. I would add that what we do see in the years ahead may in fact resemble/feel like one. Certainly a deflationary event is possible only after we experience a very bad case of Inflation.
    What you need to be particularly concerned about is the ever increasing oppression and repression. Desperate governments do desperate things. Only have to look to history to see how all this plays out. History books of the future are being written today. Same chapter headings different participants.

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  82. Liquid motion or anyone else who can answer. Can you explain what the ECB just announced in regular terms. If they buying bonds why is market disappointed and gold falling. If not then why is stocks holding up.

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  83. The ECB have announced OMT which is the new name for sovereign debt buying. Just rhetoric again. Except there is a lot more substance behind the words with actual mechanisms of operations.
    Markets may have expected some quantifiable amount to gauge the potential impact ...ie 1 TLN Euro. Nothing mentioned except for how the program works...conditionality , ranking of debt and sterilisation. The last one is considered not to increase monetary base/supply...therefore not debasement in the normal sense. This is probably what the market believes to be the case as the ECB balance sheet doesnt grow. The sad reality is that any form of credit expansion does flow through the economy notwithstanding the nonsense entries to sterilise the debt. Ultimately it is inflationary. Gold will continue is upward trajectory. These actions are only just the beginning of the ongoing monetary easing that is required by all CB's.
    Additionally interest rates were expected to come off in EUR and UK. Both are on hold.
    Seems markets have digested all and have stabilised and moving higher.

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  84. It's not risk on. It's called printing money. I'm watching the RMB and the equity market, S&P/DJIA, and oil and what I see, hay. In CA, hay is $225/ton. Note that. It will get worse before it gets better. There's a shortage. The horses of the rich need to eat, and so do the dairy cows and sheep.

    Veronica is right; it stretched.
    We have a key reversal on a daily in SI. But the daily gap filled; so, the rise may not be over yet.

    It's a good thing to know what's coming. LM, when you read what you wrote and apply it to China, it fits tight as a glove.

    The strategy continues to be to drop the value of the currency and flood the place with money as well as fiscal policy changes.

    If you listened to Clinton's speech, he said what is obvious, and correct. The game is jobs, employment. And to hell with everything else. We undermine private wealth stored in fiat and near money and we create work for the citizenry. This is a solid economic policy; remember FDR? Same logic. This logic works. I was first in line to wish in 2006 for a payback to the real estate robber barons. But Bush and now Obama have saved the day. I'm frankly amazed. Still, fiat is a four letter word, and more damage to its core value (oil anyone?) will help America much more than it does anywhere else.

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  85. Anyones thoughts here on the 10 year "tlt" and or "$tnx" with interest rates?

    Its starting to look like a "lower high" in TLT and possible reversal / downward.

    Is Big Ben still in the market or not?

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  86. I have thought for several weeks not that the dollar wasn't going to hold at support (the weekly chart uptrend line, even though that is the general consenses that I see. It is starting to look like I am right. The dollar looks to be rolling over. There is another "cycles" guy (not Gary)that disagrees with me. Jury might still be out, but it is starting to look clearer.

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  87. The "right " price for Silver / Gold is where the market takes it to. Setting targets may give you some degree of certainty over exit points...but its not the key to selling/taking profits. If you knew when to exit the dot.com bubble..then u know what I refer to. We're on the train...running fullsteam....u wanna jump while its on level ground...or wait until its climbing the mountain.

    In the words of Marc Faber "I will never, EVER, sell my gold". He also thinks the government of the US will get so desperate that it will come after all the gold that its citizens hold.

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  88. Slum...no it doesnt fit like a glove....
    Amerika exports inflation to the rest of the world via the USD
    China exports deflation
    Amerika was entrusted with the stability of the world's reserve currency. The last 3-4 decades it has abused that priviledge.

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  89. If the government didn't seize gold in the 80s it seems very unlikely they would do it now.

    The only reason the government ceased gold in the 30s was because the dollar was still pegged to gold and the government wanted to devalue the currency but didn't want to pay everyone 40% more for their gold.

    So it was easier to just steal the gold first by government decree and then debase the currency.

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  90. Yes exactly Gary...thats the point he was making....confiscation would be required "IF" they wanted to do a revaluation of the currency. A revaluation of the currency has to be considered as an "alternative" to the continuous debt cycle and inflation it creates. As mad as we all think they are in printing...why discount that possibility.
    Lets say they wanted $10,000 as the new gold peg/standard level. We cant have every man and his dog benefiting from that now could we ? Not saying it would work or is part of their plan, but as I said desperate govts....do ...

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  91. Swing high in gold and silver in overnight, as long as we don't hit new highs today even as the DX plumbs new lows. This enables a swing low now to be made much easier in DX.

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  92. http://www.peaktheories.com/self.php?id=1695

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  93. Scratch the swing highs as today has turned out to be an incredible day!!!:)

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  94. GOLD CYCLE



    http://traderjoed.blogspot.com/

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  95. LM, it might behoove you to read what I wrote again about what will happen, not might, but will happen.

    You obviously don't wear gloves. While I thought you had your limits, before, your reaction is without depth of thought. I realize some can't no matter what they try. I was there for a long time decades ago.

    I wrote above in relevant part:
    "Veronica is right; it stretched.
    We have a key reversal on a daily in SI. But the daily gap filled; so, the rise may not be over yet.

    It's a good thing to know what's coming. LM, when you read what you wrote and apply it to China, it fits tight as a glove.

    The strategy continues to be to drop the value of the currency and flood the place with money as well as fiscal policy changes.

    If you listened to Clinton's speech, he said what is obvious, and correct. The game is jobs, employment. And to hell with everything else. We undermine private wealth stored in fiat and near money and we create work for the citizenry. This is a solid economic policy; remember FDR? Same logic. This logic works. "

    The USD is doing what Gary says. it's also going to do this because Bernanke is going to get employment up or keep it flat by shoveling money into the system which drops the store of value of the fiat.

    The US has nursed enough of the bootstrappers, like China. Now it will be appropriate to add a tax on imports reflecting the degradation of the environment for the abuse of it by the country I think LM holds so dear.
    That albatross will sink all those who can't see the game but want to play mercantilism is real.

    The PMs rise and no big player govt, save the UK, cares that much. China is still being economically favored, now in environmental gear. This will come to an end. But again the huge questions matter. Do we save the environment by supporting China to switch to being environmentally conscious instead of top brass adding another Ferrari to their holdings or do we keep them in the environmental destruction mode? Which is better for the USA?

    That will still jack the PM's towards what Sinclair showed on the first of his two charts posted at his website earlier this week. We can all retire on that price rise, if we're loaded up in our core positions.

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  96. I guess the gambling guy shorting gold from a couple of days ago learned not to violate rule #1 today.

    Never, never, never, never, short a bull market.

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  97. I know the trolls will never come on and admit it, we've probably seen the last of them for a while, but it looks like my system called these markets pretty darn close.

    At this point, because I think Bernanke the has already started another round of quantitative easing, I have no earthly clue when to expect the next intermediate decline.

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  98. Now wait a minute! i think he should double down now. This is undoubtitly THE top. Don't cha think? lol

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  99. Garys getting cocky again. Must mean hes getting close to breakeven for the year. Just think once your breakeven you can then say your better than every hedge fund that is still negative. If you throw punches were allowed to to throw back

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  100. Slum

    I was calling the debasement card and its effects on the dollar long before Gary recognised or acknowledged what Bernanke was doing. Its the only solution (inflate away the debt problem). All the other tools in their chest have been tried and they dont work.
    As a side point (you might want to take note of this) the FED is not working for the economy at large...The FED is a private institution that works for Government and Wall Street (Banks).
    Your eyes are wide-shut. U cant see the forrest for the trees. Can U not see the obvious after making a statement like...." The USD is in a continuing decline against the RMB"...WHY ?
    If you think the US can lower its dollar to a point where it makes it more competitive, which btw is exactly what the Chinese have done(in a futile attempt to create jobs)..the side effects will be a astonishingly lower standards of living for everyone in the USA. When that happens you then border on the cusp of having a lack of faith in a supposedly "reserve" currency. Markets dont like that. They demand higher returns for higher risk. That puts Amerika back into the doghouse...an unserviceable debt load and bankruptcy of the Government.
    The solution should be creation of new industries...to replace others (manufacturing) that have deteriorated. Forget about trying to compete with the Chinese or Indians or Africans. They are coming from a very low base. Their cost of labour brings Americans back to a level not seen since the 1920-30's.
    Currency games/wars have been part of history for a very long time. Today is no different. Finger pointing is useless when you cannot look in the mirror. Trade restrictions in the form of import taxes dont work either, in fact it is detrimental. AND is just another tool of a desperate government. Besides trade restrictions beget more Govt interference from all sides.

    I dont side with China as you so eloquently put it. I just take offence to one-sided and mis-informed argument.

    You listen too much to politicians. The very same ones that everyone trust, but got us into this mess. Clinton + Greenspan with his unregulated and free market hypothesis. He (Greenspan) was wrong and he admitted it too. Crony government with their Ivy League economic advisers fully supportive of Crony Capitalism. Wake up man...smell the roses.
    How is Bernanke going to get employment up,when even he cant work it out. Seriously do U actually read what you write, moreover believe it. He has injected 2.5TLN dollars and for what? Unemployment has actually gone up over the last 4 years on normal unadjusted metrics. Debasement is not working on the jobs front. All its doing is trying to stimulate exports to improve GDP while creating havoc on the world markets and destoying the faith in the USD. NO..debasement is not good, does not create jobs and will lead Amerika to the brink of banruptcy and default. A monetary system that was once fully supportive of a USD, is now falling apart. There is nothing they can do to stop the rot. They (CB's) are all caught / trapped/check-mated.
    In your words " as we will know their corrupt leadership has lost control" is very relevant. Start looking inward not outward and you will find the root cause of the problem.
    Gold is a measure of the lack of faith in fiat. People need to start recognising the real value of consumption and assets and other metrics (S&P /DOW)as priced in Gold to appreciate the absolute trends. It reflects real value as opposed to nominal value. Nominal value is a distortion, its trickery, its deceipt of the highest order.

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  101. So called experts... Citi- Fitzpatrick..now calling what we expect to face in the coming years...Stagflation. Hmmmmmm ...glad to see these guys are ahead of the curve. Geeeeeeeeeezzzzzzzzz !!!!

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  102. Holy crap, you've got to be kidding me, you fleas have been throwing punches for months.

    Now that it turns out I was exactly right, all the trolls go back into hiding under their bridges.

    I said back in the fall of last year when it became apparent that golds C-wave had come to any end, that it was going to get much harder to make money in the coming months. Why?

    Because I knew we were in store for an extended period of whipsaws as gold worked through the D-wave correction and consolidation phase of a B-wave bottom. Despite this directionless mess, and the entire sector entering a very sharp correction lasting many months, we were still able to make some money. Which is better than most money managers.

    Now we are starting the first trending phase of the new C-wave. I really doubt gold will move above $1923 this year though. It's going to take more consolidation before gold can generate enough energy for the next leg up. My best guess is not till spring.

    Other than an early entry into miners this spring we have traded this bull market almost perfectly since the 2008 bottom.

    Am I not allowed to have at least one early entry in four years?

    Jeez this is a tough crowd!

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  103. Gary wrote, "At this point, because I think Bernanke the has already started another round of quantitative easing.."

    That was a powerful insight, that there was no trigger needed, that Bernanke had started the easing without announcing the date; that will be post facto.

    When the DJIA jumped, thereafter, it was confirmation. When the PM's failed to fall, even in today's normal yet so painful to watch early morning lure to pile on and go short, there was just the lure, and the shorts just got slaughtered, many in Asia trapped until Monday morning, their time. And as I pointed out, the RMB is flirting with new highs against the USD, while trying to ride the USD's skirts down so the suckerfish doesn't have to fend for itself. At some point, when the suckerfish thinks it can suck another fish tastier than the USD, when they let go, they'll go straight into recession and probably worse as the ridiculous land speculation there is on and beyond par with that of the West in 2006.

    The 1900 number is high enough to confirm that the lid will lift and we'll experience again in the next year to two years what happened in 1979 and 1980.

    Most here don't remember it. I was there. I'm waiting like the physicals holder, Bernanke, here is waiting.

    Gary if you're reading my posting, you know I re-upped last month. You're not the genius of all, but you get the PM story really well, and your timing when not in the choppy waters of recent months, is stable and trustworthy.

    If you're looking for trolls, many of the guys who were here and moved on are yakking it up as they were here, with only less than a handful worth respecting; calm as the new "dealer" is, if one were to have played that hand since the crowd moved, the player would be a bit more than modestly underwater, having missed most of this PM move. The dealer is an objective, fair person; but the silver touch is not there as it was in late 2010 and up til May 2011.

    I thought I'd find the harmony between your positions more attractive than one. It's like seeing two psychologists instead of one. You're slow and steady at the helm, over and over again. What seems so difficult for you and maybe you'll change and risk a piece of your ...... yearly from the newswriting by shrinking subscribership by saying straight up, there is just no reason for those who are trend followers to enter into what were assuredly to be choppy waters. Look at any sharp parabolic move and you see the drop beyond it to be choppy waters, which is time sensitive... when all the prior players have been drained and tap out... then calm, and then up and away without those players, yet again.

    Peace out.

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  104. Good call on the D wave and B waves in gold, Gary.

    The way I look at it, knowing a bit about you, I think that your "mistake" of "getting in early" was probably more about a mistake of not holding Old Turkey per your cycle convictions.

    And good point about the govm't not seizing gold in the '80's. Once again you have good insights.

    Me, I'm still a terrible trader. I'm thinking now to become a buy/hold investor in gold bullion, based on fundamentals (ECB + Fed money printing).

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  105. Here's one "flea's" numbers for the year as of Friday's close.

    Max Draw-down: 5.28%
    Sharpe Ratio: 2.35
    Sortino Ratio: 3.67
    Calmar Ratio: 11.08
    2012 Return to Date: 25.57%

    Def'n:

    Sharpe Ratio: A measure of excess return per unit of risk. Used to characterize how well the return compensate the investor for the risk taken.

    Sortino Ratio: Measures the risk-adjusted return. It penalizes only those returns that fall below the require ROR.

    Calmar Ratio: A ratio used to determine return vs draw-down risk.

    In all cases of these risk-ratios a larger numbers equates to better management. For reference, here are the SPX ratios for the year.

    Max Draw-down: 9.81%
    Sharpe Ratio: 1.83
    Sortino Ratio: 2.09
    Calmar Ratio: 3.18


    Gary's continued use of the comment "I was right" is beyond stupid and smacks of a dice-rolling fool, of which I have seen many in my time. Applying actual statistics to the situation instead of his hyperbole, you can easily see that the "I was right" comments simply doesn't apply to Gary in any meaningful way. The facts, oddly enough, show that he's underperformed the market this year and his ratio's although not supplied by him I can estimate beyond any doubt are significantly worse than the market in general. He has suffered greater draw-downs with less reward to show for it. His risk is off the charts. He can and will, no doubt, simply choose to ignore the mathematical facts and continue on with empty "I was right" comments because more than enough fools of the game will buy the empty dreams being spun.

    As you can see from the results of the "Flea" one truly can, using hedging techniques available to the basic retail trader and with modest accounts of even $20K, in fact can have your cake and eat it too.

    There's actually no problem at all being able to limit the negative effects of market chop, stay in the game for results such as the previous 2 days have given us, allow us to keep most of those gains that chance has provided, continue to allow more and more hedging techniques to be applied to compound the continued effects of "being right" on a truly mathematical basis, thus reducing draw-downs further while enhancing long term returns.

    In short, one can continue to be an "I was right" dart tossing fool, manufacturing losses where they need not exist, increasing volatility of the negative kind and ultimately reduced returns, or one can choose to play a more intelligent game with math as your ally.

    You would think that these people, if not being honest to others would at least be honest enough to take a serious look at their own accounts and accept that what I've said here applies directly to their own realized results as opposed to multiple fictitious accounts of which it is clear are not actually being traded with one's own money and thus the true effect of the nonsense is not felt by the purveyor of the paper-trader comments.

    In short, if you truly have to eat your own cooking to survive, you tend to become a better cook. When all you do is cook for others, it's amazing what you can say of your own cooking, disregarding totally, the empty seats and hungry people.

    Gary treats the market like a shooting gallery. Most do so it is of no surprise. There's a reason the circus always comes to town. People like to play known negative expectancy games.

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  106. I am not calling anyone a liar, but a "Sharpe Ratio: 2.35" is questionable. I have back tested many hundreds of trading systems and at least the software I use has never given any of them a Sharp Ratio even close two 2. One very experienced trader/programmer who has written three books has said any system that would give a sharp ratio of 2 would make someone very rich very fast. If he hasn't done it I find it questionable that you have.

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  107. Here's the cockroach numbers


    Max Draw-down: 0%
    Sharpe Ratio: 100
    Sortino Ratio: who cares
    Calmar Ratio: to the moon
    2012 Return to Date: I am so rich with so much extra time on my hand I have to come to some blogger's comment area and leave unsubstantiated, numbers about how good I am



    Why can't people just get a life is beyond me

    if the fleas are so good fleecing the market so clean, why does he even bother?


    how about next time, the flea calls a trade ahead of time instead of printing some sharp ratio nobody can verify without third-part audit of actual trades


    get a life!

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  108. FWIW, I saw The Flea's trades get called in real-time via email. Whether or not you believe The Flea's own performance, the key point is that Gary's style of trading is very risky.

    ReplyDelete
  109. Lyon said...

    I am not calling anyone a liar, but a "Sharpe Ratio: 2.35" is questionable. I have back tested many hundreds of trading systems and at least the software I use has never given any of them a Sharp Ratio even close two 2. One very experienced trader/programmer who has written three books has said any system that would give a sharp ratio of 2 would make someone very rich very fast. If he hasn't done it I find it questionable that you have.

    September 8, 2012 11:30 AM

    That's interesting Lyon. Note the SP500 Index Sharpe Ratio is currently 1.83 and I must say I don't see anyone at all getting very rich, very fast.

    As for back-testing a system I suggest it would be extremely difficult (but not impossible) to back-test a stock+option/hedge system. In the hundreds of systems that you've tested I would bet you a fair wager that none were of this type.

    I see I neglected to give the SPX 2012 return thus far in my previous post. 14.34% I believe it is.

    Your writer/programmer has me bested in the book writing category by at least 3 books and oddly enough so has Jim Cramer.

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  110. So, you have seen the flea's trades, well, good for you


    how can we verify any of this


    and the bottom line remains:

    why either the flea or anybody capable of making so much money so easily bother touldn't the o

    1. seek a blogger's site like this that is not a major by any measure
    2. bother to waste time read comments on a blog like this
    3. bother to comment and bash the blogger


    wouldn't the flea and the ilk be better off marketing their money makers to big boys of wall street with deep pockets. all they need is to have someone like KPMG certify their gains and billions would roll in?

    get a, go make the billions!

    ReplyDelete
  111. "wouldn't the flea and the ilk be better off marketing their money makers to big boys of wall street with deep pockets. all they need is to have someone like KPMG certify their gains and billions would roll in?"

    Why doesn't Gary market directly to the big boys with deep pockets, if he is really such a trading genius?

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  112. "So, you have seen the flea's trades, well, good for you


    how can we verify any of this "

    I think your time would be better spent focusing on whether the potential reward in Gary's strategy is worth the risk. Just sayin'

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  113. Piazzi said...

    So, you have seen the flea's trades, well, good for you


    how can we verify any of this


    The truth is you can't, and JReality could, to a very large degree.

    JReality had mentioned previously that I had looked into Covestor with the idea being that since I am making the trades anyway that it would be in my best interest to potentially further profit without expending any extra effort or risk.

    The exact comment back to me from Covestor was the following:

    "Yes, only stocks and ETFs at this point. No options or futures for the foreseeable future."

    Since my stock program requires the use of options as hedges primarily and since the returns in my previous also include various futures trading it makes how I do things a moot point from a Covestor standpoint.

    An even greater point than any of the comments to this point would be to introduce a risk-averse mindset towards stock trading.

    There's a reason why so many people fail in trading. It just defies the odds that the numbers would be so skewed, yet there they are in plain sight.

    The secondary yet very real problem we have is investors/traders coming to incorrect reasons as to why they failed.

    The thought process typically being that when they make money they were "right" and their reasoning as to why they took the trade was a result of their acumen.

    The flip side for when they lose is somehow attributed to the Fed, the ECB, intervention of some sort or unknown sources IE they got 'screwed'. They never seem to entertain the idea that what they believe in either or both cases is for the most part irrelevant rubbish.

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  114. From Ed Steers column today,

    "JPMorgan's short position is now 26,000 contracts [130 million ounces] at a minimum...and that represents 26.3% of the entire Comex futures market in silver."

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  115. Piazzi said...

    wouldn't the flea and the ilk be better off marketing their money makers to big boys of wall street with deep pockets....



    To a fair degree, it's from these very same types that I got my info, methodology and mindset from.

    I consider myself one of the most fortunate retail traders out there because of it.

    What I have found equally revealing is how much effort people put into not understanding that very same information and also how much effort they put into defending in indefensible nonsense they do.

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  116. Folks, here's what my daddy told me many years ago, and it's just as pertinent today as it was back then. If it sounds too good to be true, then it is.

    I think we all know JR is spouting pure BS.

    For heavens sake he's calling the SMT strategy risky. We're trading a secular bull market from the long side. How much more can one get the odds in their favor than that? Plus this is the most powerful bull market in history.

    When trolls make ridiculous comments like that, or claims that are obviously fairy tale dreams, does anyone really take them seriously?

    The cold hard fact is that hedging can reduce risk, but it also reduces profits. You can't have one without the other. You can accomplish the same thing with position size.

    There really is no magic strategy that will allow one to make great loads of money with no risk...well at least not in the real world.

    ReplyDelete
  117. flea says:

    "To a fair degree, it's from these very same types that I got my info, methodology and mindset from."

    LOL

    WOW!!!!

    OK, but why make posts tell them they are wrong. If you correct them and they do better then you won't be able to use them


    anyhow, bottom line is, the question is not what Gary does, this is his space and he's free to say what he wants, you and your ilk, on the other hand, are wasting your time


    As I said, all that takes for billions to kick at your do is to have your magnificent trades certified and advertised


    money will find you if you are 1/10 as good as you say you are

    I know that for sure


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  118. Flea says:

    "I see I neglected to give the SPX 2012 return thus far in my previous post. 14.34% I believe it is."

    That's it?

    14% is all you have made

    with all you hoopla hoopla, I thought you were cgoing to claim 20-25%

    14% is peanuts

    you will still find money coming to you if you can certify it by 3rd part

    but 14% is, really, common ---- poooewww

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  119. and, BTW, if you used futures to achieve 14%, then, it really is nothing, I mean nothing

    it's Ok if you made it straight without much leverage

    but if you hit futures, you should have made a lot more, just look at how many points S&P has made since the last intermediate cycle low


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  120. I see a lot of handsome rhetoric. The type that stirs crowds even.

    What I don't see are a lot of facts however.

    I don't see the risk metrics on the account either, despite asking many times. That by itself doesn't require any rhetoric whatsoever. It's just math applied to what has been, at best, paper traded.

    I do see a heck of a lot of innuendo once again and the total lack of understanding of hedging techniques by the guru himself, Gary Savage, a supposed professional.

    Since hedging supposedly reduces returns (it doesn't but let's humor him shall we? - I suggest Gary look up concepts such as volatility eroding returns-he'll be looking into the mirror with that one) then where Gary, is all your returns for all that draw-down and risk coming from? It's simply not there, kind of like the Yeti - supposed footprints everywhere but no carcass to be found lol.

    All I see is draw-down and open-ended risk, yet at my end I see minimal draw-down and returns!

    Now you can attempt to explain away this with more baseless rhetoric as I know you will, but I ask you again, where's your return vs the risk and draw-down?

    You call this a bull market. Maybe you're speaking of a different type of BULL?, of the feces variety?

    If it's a "bull" then where's all that meat you should have been eating for the past 8 months?

    Cycles win again? Really? Where?

    You are right about one thing. there is no magic strategy that can make money with no risk, but the problem is, you're all risk and no return. What I have and will continue to show is that you're so far away from optimal it is actually ridiculous.

    What's more is I'm showing the few how you can actually reduce risk by hedging and it will mathematically add incrementally to your return.

    The fact that you don't seem to understand a thing about hedging should in no means be a reason to speak of things you don't have the first clue about. What it really should mean is that you excuse yourself from commenting since you have nothing intelligent to say about the matter and thereby relegate yourself to listen-only mode when topics such as hedging are discussed.

    You recently claimed taking smaller positions as the same as hedging a larger one in terns of risk/reward. That is simply some of the most daft logic I have ever heard.

    If you understood how one can use options for hedging first, then income at no risk later - which is a form of hedge-recovery + income then you'd realize, possibly, the skewed rewards that can only come from getting away from one-dimensional thinking such as yours.

    The facts are you just don't understand and at this point you are incapable of even listening and learning. I could show you what I've shown JReality literally a dozen times and you would still not believe it.

    You are a typical trader and a typical guru. Far too invested in your own nonsense to see your lack of returns and excessive risk and the reasons for said issues.

    You don't need a emotional, pointless debate to see what your risk metrics are. You don't need it to see your lack of returns either.
    You simply choose not to deal with that facts of the matter. It's really as simple as that.

    It's like I've said many times. It's as if people really don't want to make money. The resistance to what works well is an amazing feature than humans seem to have in abundance.

    You're a linear player in a non-linear game.












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  121. Piazzi said...

    and, BTW, if you used futures to achieve 14%, then, it really is nothing, I mean nothing

    it's Ok if you made it straight without much leverage

    but if you hit futures, you should have made a lot more, just look at how many points S&P has made since the last intermediate cycle low.



    Two things. So now you went from arguing that I didn't make the returns (btw sharpen your reading skills, I said the SPX is up 14% I'm up as I stated a tad over 25%),..

    So you've gone from The Flea didn't make those returns, to......now I haven't made as much as I should have since I use futures which are leveraged vehicles.


    Well, which is it?

    Flip-flop a few more times and you'll understand why I just laugh at you guys spending so much time defending the nonsense you do.

    So, which side do you want to argue because right now you're all over the map.

    Is it that I should be making more than 25% in 8 month + days or is it that I've really not made anything at all and am likely a paper trader that seems to have made a pile of great paper-returns for a long time now as can be verified by JReality live with timestamps?

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  122. Piazzi said...

    and, BTW, if you used futures to achieve 14%, then, it really is nothing, I mean nothing

    it's Ok if you made it straight without much leverage



    Let me give you a hand here. What would help in your development is to start looking at trading as a probability and efficiency game.

    You seem to think that futures somehow equals high rewards. Well maybe it does and maybe it doesn't. For most, because they're so far off the reservation, all futures really do is provide a faster way of emptying your wallet than stocks will, so typically futures is just high-stakes poker with a low-entry ante. Similar to Forex.

    Being the high-probability/low risk trader I am, we don't play one future directionally but hedge futures against one and other. this provides a fair amount of safety that we require. It also lessens greatly the use of capital and because we are generally smart about it we don't abuse it. Because of our reasonably safe process we are able to play very high-probability and highly efficient games that you just can't find in stocks.

    That in a nutshell is how we tame futures and why we use them at all.

    As our risk metrics show, we have a high rate of return with a very low risk attached to it. We sit on piles of cash 90% of the time because we don't need to have that much risk to gain acceptable returns. Could we make more by swinging for the fences?

    Maybe, maybe not, but we're not in the high-risk business. We see daily the problems that arise from such attitudes and I don't see a reason to go there with my money.

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  123. Gary, I hope to have months of sideways movement in gold to finish off this base, as I think if we break to new highs soon it will end up failing to go far.

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  124. I still do not understand why Flea feels compelled to talk up his trading prowess here

    whom is he/she kidding or shaming and why?


    he/she should certify his achievements by 3rd party audit and go for big money

    he/she can talk blah-blah all he wants how good he is on this blog or similar, it won't really get him much more than some self-injected ego-boost

    wasting your time man/woman, get the trade sheets in order, certify 3rd party, and go for the big bucks

    enough said on this by me!

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  125. Wow...pure venom. PS in real time anyone following Gary for the past couple years has made quite a bit of money. Wow..seems like quite a few people are just pissed at lossing a couple burrito bets...

    Debating issues is one thing, and then there is this.

    We should rename this blog to the "snake's layer".

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  126. Like I said, If it sounds to good to be true then it is too good to be true.

    Please go peddle your baloney somewhere else.

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  127. V,
    I really doubt gold will break out to new highs this year. Maybe sometime in the spring, but one year isn't a long enough consolidation IMO. I think the vast majority of traders will take profits at $1900 preventing a breakout.

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  128. "PS in real time anyone following Gary for the past couple years has made quite a bit of money"


    yes,

    the CRB low and the S&P low and the SOX were money makers par excellence


    any futures, S&P, NQ, oil, corn, gold, silver, whatever would be one's game would make more than 14% is matter of weeks

    that's why I say 14% year to date is nothing to brag about -- simply not good enough for all the blah-blah

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  129. gary
    I never threw punches at you. You were the one who came on last night looking to instigate and start a fight. I posted that I was going short gold and the trade lost me some money. Your the one that decided to give me shit about it so don't play the victim here.

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  130. Sorry if my making a point about violating rule #1 was irritating. At the time you posted your trade it sounded to me like you were taking a shot at gold bugs. I'm pretty sure you would have gloated if the trade panned out. What was the point of posting the trade if you didn't intend to rub our faces in it?

    Be that as it may. Let's just forget the whole incident.

    By the way we are not down for the year. I'm not sure picking Jan. 1 as an arbitrary beginning is all that relevant. If you want to pick a starting point why not the spring of 2010. If you start at that point we are up so huge that the stock market has no chance of ever catching us.

    The point is that I don't trade stocks. Why? Because they are in a secular bear market.

    I trade gold and silver. Why? Because they are in a secular bull market. In bull markets one can make a timing error (like we did in April) and the bull will eventually rescue the position (like it just did).

    Since last July the model portfolio is up a respectable 13% (not including the current trade which is up about 8%) and during that time gold went through a D-wave decline and miners a 30+% correction.

    So all in all, considering what has transpired in our chosen investment vehicle, I think most people would consider we've done pretty darn good.

    ReplyDelete
  131. I did warn everyone last fall that it was going to be a lot harder to make money in 2012. Conditions just weren't going to be the same as they were in 2010 & 11.

    I do think we are nearing the end though, and it should get easier with more trending markets during the end of the year and into 2013 & 14, as the next c-wave gets underway in earnest.

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  132. Gary, yes, you did warn us last September we would be "spinning our wheels" for a year :o)

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  133. Hi Gary I've been following your blog on and off for about a year now and was thinking about finally paying for subscription. Before doing so I was wondering if you could post your monthly geometric average return over the last year.

    Thank You

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  134. Gary, I was also wondering what you think will happen to gold and silver if Bernanke doesn't announce QE3 this year?

    Thanks

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  135. The Flea,

    Would you care to share a bit of your trading and hedging tactics that you use that even retailers, with small portfolios can utilize and still make respectable gains?

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  136. Kami,
    You can view every trade we have made in the model portfolio since July of last year with a trial subscription.

    I kind of doubt Ben is going to publicly announce QE, but I think he's clearly already printing.

    The commodity and stock markets are clearly responding to something big and it's certainly not a rapidly improving global economy.

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  137. Unknown said...

    The Flea,

    Would you care to share a bit of your trading and hedging tactics that you use that even retailers, with small portfolios can utilize and still make respectable gains?


    Sure. Give me your email address and I can give you an idea on where we start. We don't have any new stock purchases planned for now but I can begin to show you our method and you can apply it as you wish with your own list of stocks.

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  138. I wouldn't mind waiting even till next fall for new highs, as I think the BO at that point would have some serious legs. I think the next huge buying oppurtunity will be a touch of the lower Bollinger Band and if it coincides with an IT cycle low all the better.I repeatedly posted earlier this year every time the weekly BB was hit and held on weekly basis, and if this correction transpires as previous ones we will get a touch of the lower band before a BO to new highs.

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  139. I think it's going to be awhile before gold hits the lower weekly Bollinger band again. To do so now would require a move below the D-wave bottom, and that seems extremely unlikely.

    It would probably also require a much more significant sentiment extreme than what we are seeing at the moment. Right now we don't have enough of a stretch to trigger that violent of a regression to the mean reversal to trade down to the lower band.

    In order to hit the Bollinger band now we would need enough time to go by to turn the lower band up.

    If it turns out we have to re-phase the intermediate cycle then that could happen in maybe 10-12 weeks but the lower band would be rising and much higher than where it is today.

    The immediate future depends on whether or not the market is convinced Ben has already begun QE. Unless he says something to clearly dispel that notion virtually all markets, stock and commodity, are acting as if the presses are running again.

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  140. I think expectation is so high for SOME kind of QE announcement that Bernanke will announce something, or else. Removing the interest the FED pays banks for overnight deposits might be one thing. But quantitative teasing isn't going to cut it any more IMO.

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  141. The Flea,

    dylanbob920@gmail.com

    thanks

    ReplyDelete
  142. The Flea -

    I would be interested in your market neutral strategy too. I like to stay on the side of the maths!

    grimweasel@o2.co.uk

    Cheers

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  143. The Flea,

    I'd like to see your strategy as well.

    Thanks.

    atigunpass@live.com

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

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  145. The Flea

    I am interested in knowing more about your strategy. please send me details on bmf7924[at]gmail[dot]com

    ReplyDelete
  146. The Flea

    If possible, I am interested too : altayana@yahoo.fr

    Thanks a lot

    ReplyDelete
  147. Any cycle gurus - how likely is another LT daily cycle in the dollar after this one before it puts in an ICL?

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  148. Another left translated DC after this one would signal that we need to re-phase the last ICL to June. We would then have 6-8 weeks yet before a bottom.

    The fact that this IC is already stretching well past the normal timing band is a warning that this may be the case.

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  149. Gary -

    It appears you are in good company in thinking the FED may have already initiated QE3 "under the radar."

    Jim Rogers has expressed the same notion:

    http://etfdailynews.com/2012/09/10/jim-rogers-and-marc-faber-agree-bombs-away-gld-slv-agq-iau-spy/

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  150. Gary, when you said:

    "Another left translated DC after this one would signal that we need to re-phase the last ICL to June. We would then have 6-8 weeks yet before a bottom. "


    you mean S&P or gold


    You sometimes do not mention which underlying issue when you mention phasing, most times, I can tell from context, but sometimes, I am at a loss whether it is gold or S&P cycles.

    Could you elaborate in this case?

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  151. Glad I was hedged today...just sayin' :-)

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  152. P,
    I was responding to Kens question about the dollar cycle.

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  153. JR
    Your hedge has been working against you for 7 weeks. I think I would be more pissed off that the strategy has cost you a whole lot of profit.

    We've been waiting for months for a trend to develop, and now that it has, hedging has just prevented one from capitalizing on the move.

    Like I keep saying, if one wants less risk just lower position size. There's no need to fill the pockets of your broker buying expensive wasting assets when you can accomplish the same thing by trading smaller.

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  154. Gary, a suggestion that might help others, and would definitely help me.

    Everyone who reads your blog knows that you trade based on cycles, sentiment, technicals, and experience/history.

    Regarding cycles, in hindsight, I'd like to see how you see the D wave in gold, and then the A, and then the B.

    Esp. the B. I want to know why you went in early - was it the cycles, or sentiment, or ?

    And, is there anything you'd do differently if that happened again, in real time?

    I do remember how there were so many false reversals, so it was a tough time.

    Teach us cycles, esp. for gold's recent D, A and B waves!

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  155. If I came to believe that cycles did in fact work for the recent B wave in gold, I'd become a subscriber again. Maybe others out there are a bit like me, too.

    Teach us cycles.

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  156. Bill,
    That's way beyond the scope of a free blog. I cover that stuff in the nightly reports.

    ReplyDelete
  157. Well, that's up to you of course, but what's your market? Folks who already believe in cycles? What about those like me who don't?

    I would have thought that most TA traders don't yet believe in cycles - I'm just offering a suggestion here to educate folks like me who don't yet believe, with a few exammples of where if did work, esp. when TA didn't (like the last B wave, where candle reversals failed over and over, yet cycles may have worked).

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  158. I'm not asking you to give away any of your proprietary skills/methods - just using the last B wave in gold as a real life factual example of how cycles work, whereas TA didn't.

    When I subscribed, I didn't find that in there either, by the way.

    It's kind of like going to church, where everyone inside believes already. Not much teaching for the non believer. Just as an example.

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  159. Another example is how EWI puts out 101-level info on EW and how waves work.

    Me, I agree w/you that cycles are the market "breathing" in and out, but that their periods are not regular, thus cycles have no predictive value that I see. In hindsight, as in EW, one can re-label stuff, and "make" it work, but that's cheating.

    I believe that markets breath as you say, but it's non-linear and chaotic. That leaves me either a) using TA to look for divergences in momentum, or b) makes me want to drop trading altogether and buy/hold long term.

    Despite all this, overall you are very successful as a trader, and that's the ONLY reason why I keep one ear cocked for learning anything new on cycles.

    Cycles are a mystery, man.

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  160. Alright, alright, alright.

    Just answer me 1 question, yes or no, on your honor:

    Did cycles predict the timing of the B wave bottom in gold? Or was it f'd up? I think, f'd up, and only in hindsight can one call it a B wave bottom.

    BTW, on the weekly $GOLD chart, we are still making lower highs and lower lows. No breakout by that measure yet.

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  161. Bill,
    The average duration of golds intermediate cycle is 18-25 weeks. The B-wave bottomed on week 20. So you tell me, did cycles hit that bottom pretty close?

    The reason you don't believe in cycles is because you are looking for something that is 100% accurate. Unfortunately there is nothing that is 100% accurate, so in your mind cycles don't work.

    I use a system of cycles, sentiment, regression to the mean, COT and technicals to give me an edge in the market. On top of that I only trade bull markets, and only from the long side. That way when I make a timing mistake I don't worry because the bull will eventually rescue my position.

    Is it a perfect system? Of course not.

    Does it make money? Yes pretty consistently.

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  162. "The average duration of golds intermediate cycle is 18-25 weeks. The B-wave bottomed on week 20."

    "The reason you don't believe in cycles is because you are looking for something that is 100% accurate."

    Yup, that's the nut of it. ;-)

    Thanks for telling me when the B wave bottomed.

    So my next question is, why do you think you went in early?

    Would have buy/hold have not worked, if it's truly a B wave bottom and not the D, or was there question then about if it was the D?

    Thanks much.

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  163. I'm thinking that either a) holding, or b) putting in a floor (5% or whatever), would be a nice compliment to your system.

    Anyways, just trying to learn and help here.

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  164. There were several trend line breaks and big reversal days on miners that looked like a bottom.

    I stopped out on the first try. By the second attempt it became apparent to me that the bottoming process was going to be too complex to call in real time and all I was going to do by repeatedly stopping out of positions was to whipsaw my portfolio to death.

    So I decided to hold the position and let the bull market do it's thing. It was getting late enough in the intermediate cycle that a final bottom was due any time anyway so I didn't worry much.

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  165. Bill,
    Holding "Old Turkey" is definitely going to be a huge winner by the time the next C-wave tops. The downside is that you are going to have to hold through 4-6 intermediate declines along the way.

    Those are always scary in real time. It always seems like the bull is ending. It isn't but it will seem like it to those holding through a multiweek drawdown.

    I try to avoid those and buy as close to the intermediate bottom as possible. Sometimes it works perfectly, and sometimes I miss, like I did in April.

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  166. Gary said:

    "There are times when certain option trades like strangles or straddles, etc. are appropriate, but simply using options to hedge long or short side bets is a waste of time, energy and money for retail traders. "

    Yep! and Yep!

    the only way to make money in options is to be a net seller

    but before that, one needs to get the trend right


    cycle low projections are great as the they have let me sell puts

    but, when one sells puts, one, IMO, should do so willing and ready and capitalized to be put the underlying issue


    one could sell put spreads if one's less sure about the trend and the cycle low


    The intermediate cycle lows have been money makers par excellence

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  167. http://screencast.com/t/IxdSgD4K

    Here is how I've done so far this year against buy & hold, and without hedging.

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  168. Gary said...

    JR
    Your hedge has been working against you for 7 weeks. I think I would be more pissed off that the strategy has cost you a whole lot of profit.

    Gary, it's been said that it's better to remain silent, than to open ones mouth and remove all doubt.

    You are so wrong it is unbelievable.

    There' been more profit made over the last 7 weeks than the previous 10.

    You once again show your complete ignorance. By all means keep it up. It makes it that much easier to disprove your nonsense.

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  169. No matter how much you want to pretend, the simple fact is that anyone hedging miners over the last 7 weeks has made less money than someone not hedged.

    Maybe in your imagination the rules of the real world don't apply, but for the rest of us they are inescapable.

    Sure one could take a leveraged position and then hedge away some of the risk. But you can accomplish the same result by just taking a smaller position size.

    A hedge just means you now have to manage two positions instead of one.

    If the position goes up you end up losing money on the hedge.

    If the position goes down you now have to pick the bottom in order to make money on your hedge.

    If you miss the bottom and your position goes back up then you again threw money away on the hedge.

    If you can pick the bottom then why didn't you just wait till the bottom to buy the position in the first place?

    Or here is the most likely outcome. The position goes up, you sell the hedge for a loss and then your position turns around. You put the hedge back on at or close to the bottom and then your position continues higher. You sell the second hedge for another loss.

    Like I said a hedge just means you have two positions to manage instead of one.

    Folks I've dealt with lots of these types claiming they've found the holy grail over the years. Trust me not one of them ever did, and they are all long gone and I'm still here.

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  170. Gary,

    Lets assume B-wave bottom is in.
    If true we are in C-wave (Gold).
    This implies B-Wave bottom cannot be violated. Pick an IT cycle bottom in this C-Wave and go for the ride...yeah ??? Suffering drawdowns (4-6x) is nonsense if the C-wave theory is true. You trade once (at a bottom)and HOLD ur position or add to already existing positions. Why is that so hard. Dont tell me about inability to withstand drawdowns. If you have conviction about your cycle theories then its a no brainer..isnt it ?

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  171. This comment has been removed by the author.

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  172. Of all things to not celebrate on the anniv. of 9/11....

    BE AFRAID...very afraid.
    Look not outwardly but inward for the real threat.....

    http://www.economicpolicyjournal.com/2012/09/the-scariest-thing-about-living-in.html

    If this doesnt make the hairs on the back of your neck stand up..then U aint living.

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  173. What a Joke !!!
    AND ...This guy is running for a second term ....???

    http://www.ijreview.com/2012/09/15290-case-closed-if-moderate-voters-see-this-video-its-over-for-obama/

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  174. ....No matter how much you want to pretend, the simple fact is that anyone hedging miners over the last 7 weeks has made less money than someone not hedged....


    Risk adjusted? Comparable position size? You'll have to be more specific but I know it's tough when you don't actually take the trades - It's the part about not eating your own cooking that I spoke of earlier.


    ......Sure one could take a leveraged position and then hedge away some of the risk. But you can accomplish the same result by just taking a smaller position size....


    Actually, no you can't.


    ".....A hedge just means you now have to manage two positions instead of one. ..."

    We've stated all along we treat it as one position. You continuing to say the opposite won't make it any different.


    "...If the position goes down you now have to pick the bottom in order to make money on your hedge. ..."

    We're not interested in making money on or the timing of the hedge. It's sole reason is to protect capital. We treat it as one position. Stocks moving up and down for whatever reason tends to improve our position over time, even when they're within a range. Perfect timing can't be done so we reduce its effect and we don't worry about what we can't know.

    "....Or here is the most likely outcome. The position goes up, you sell the hedge for a loss and then your position turns around. You put the hedge back on at or close to the bottom and then your position continues higher. You sell the second hedge for another loss...'

    Thank you for pointing out what you don't understand about how we hedge. The folks reading will now have a good understanding why we don't trade like you or hedge like you.

    You're making this so easy Gary.

    I don't know what the Holy Grail is but since we still take losses we must not have found it yet.

    As for you still being here. My working theory is people clinging to hope despite the math against any meaningful long term success. It also helps that you don't eat your own cooking so the real world effect is lost on your paper trading.


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  175. This comment has been removed by the author.

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  176. Yes it does seem likely that one of the dissidents has changed his google name and is now trying a different approach since the first one failed and all my expectations have come to pass.

    Rather than admit I was right they disappear from the blog. Sometimes they change their name and try a second time :)

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  177. Liquid,
    We have two portfolio's. One is pure Old Turkey play that isn't traded. We only add to positions at ICL's.

    The other is the model portfolio. I try to avoid ICL's with that portfolio because no matter how easy it is to say most people are not emotionally capable of riding out an ICL. They end up freaking out and selling at the bottom.

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  178. Cool...was too obvious to overlook..so thanks for clearing the air on that.

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  179. Mike,
    And is generating alpha just has hard as holding a long position in a bull market?

    Like I said there is no holy grail. If this was easy then everyone would succeed. One can either employ complex option strategies, hedging strategies, mechanical systems, trade by gut, or keep it simple and just buy long in a bull market. There are literally thousands of ways to make money in the market. Each will work in certain conditions none will work in every condition.

    I prefer to keep it simple and use what I'm comfortable with, which is cycles and sentiment and stick with only trading secular bull markets.

    I'll let others delude themselves into thinking they've found a risk free system to fame and riches.

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  180. I was implying that the Flea character was deluding himself thinking he had a fool proof system for beating the market.

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  181. Gary said...

    I was implying that the Flea character was deluding himself thinking he had a fool proof system for beating the market...


    Your failure to read what I write in no way makes what you say anything but hyperbole.

    The first and generally only line of defense from people like you is to continue to make assertions about a system that we've already addressed as incorrect.

    By all means, continue to spout. It only makes it easier to show the difference.

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  182. Although not the method we employ, mikezza is a lot closer to the mindset we use than you, Gary, could ever hope to understand given what little understanding you've shown to this point.

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  183. i'll interpret the lack of response as a lack of interest in a discussion. i'll go away now

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  184. Flea,Gary's system has built incredible wealth for the people that have followed him since he started writing his newsletter. The biggest mistake you could have made is hedging the greatest bull market our generation has had.The easiest part of holding this bull has been the fact we are actually trading something tangible that has had value for all of humankind, no pets.com here:)

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  185. I'm more than happy to debate opposing views, although I'm on a climbing trip at the moment and my responses may be infrequent.

    What I'm not very tolerant of is trolls whose sole intent is to stir up conflict.

    I think we all know that is the Fleas intention here.

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  186. "Gary's system has built incredible wealth for the people that have followed him since he started writing his newsletter. "

    Was that a result of genius, and/or good risk management, or just a bull market correcting his mistakes?

    "The biggest mistake you could have made is hedging the greatest bull market our generation has had."

    Easy to say that now. :-)


    "The easiest part of holding this bull has been the fact we are actually trading something tangible that has had value for all of humankind, no pets.com here:) "

    Tell that to whomever bought Gold at the top around 1980. :-)

    (granted, I realize it's not 1980)

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  187. The Flea sounds a lot like Basil.

    If you aren't even mature enough to post without resorting to vulgarities how is anyone supposed to take you seriously?

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  188. Flea,

    Where is any proof of what you are saying your trades are? You haven't even given one example of one of your trades, let alone any performance. So, you are the one talking smack on here. Put up or shut up.

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  189. Flea,
    My trades are published in real time in the portfolio performance link. Veronica has been a subscriber for years and he certified the SMT performance.

    It's clear you are here only to stir up conflict. Almost certainly a young male, probably in your twenties and with a little too much testosterone controlling your emotions.

    Do us all a favor and troll somewhere else. You're not adding anything to the blog.

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  190. This comment has been removed by the author.

    ReplyDelete

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