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Wednesday, March 12, 2014

Mar. 12

Stocks:

Based solely on the reversal off the early morning selling I would say the half cycle low correction completed today. However during a brief period when the market was positive this afternoon I noticed a huge selling on strength number in SPY (it's back as of the close). Granted this isn't 100% any more than any other tool, but I have to think that someone who can throw around 300-400 million dollars probably knows more about what tomorrow holds than me so I'm going to stay on the sidelines for now and see what plays out. 

It's entirely possible this is a manufactured reversal to allow big money to dump shares on eager dip buyers. So for now better safe than sorry, and let's wait to see what tomorrow brings before we make any decisions on whether or not to re-enter stock positions.

Dollar:
So far so good. As expected the dollar has begun the final move down into it's daily cycle low. This should accelerate over the next 5-6 days and I don't expect to get the next bounce until the dollar tests the Oct. lows.


Oil:

Oil is getting late in it's intermediate cycle (average duration 50-70 days). Once we move past 50 days I'm going to  watch for a swing to get us back into our DBC position, and probably DBA also. 



Gold:

As I was expecting gold has finally broken out of the multi-week consolidation. Also as expected it did so with a big move. As we should be entering the final scary phase for the dollar cycle, this should be the happy phase for gold bugs over the next week to week and a half.



The first daily cycle delivered a 100 point gain. The second daily cycle a 118 point gain. I should think a move to test $1425 shouldn't be too hard to accomplish during this third cycle, and we might even have an outside chance of 1500 if the dollar cycle stretches or we get that final short dollar cycle I've speculated about.

Once the miners finally break out of their consolidation I think they too will deliver a large aggressive move to the upside. I don't think it's unreasonable to see a move to $30 before this third daily cycle tops. 



Gary

PS: comments have been opened on the blog until the premium site is repaired. 

47 comments:

  1. Gary, for gold, will this 3rd DC top also mark an IC top? Thanks for helping me hang in there with the miner positions.

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    Replies
    1. I can't say for sure. Cycles are mostly worthless for spotting tops.

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  2. The fact the miners have lagged a bit and silver as well, I think we will overshoot 1425 bc thats only 55.00 away now. $1440+ seems more likely, plus silver was 25.12 at that point and its really lagging. We would need a 4.00 move in Silver in the next 60.00 in Gold to match last August move.

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  3. Hi Gary,

    The link behind "final short dollar cycle" is broken.

    When we get to the next ICL, will we get back to "the bull will fix any entry timing errors"?

    Best,
    Le Fou

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  4. Any ETA on the premium site? And what happened? Fed hackers? ;-)

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    Replies
    1. I haven't been able to get an answer out of the host company. They are restoring to an old date and then they have to transfer files. Very frustrating.

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  5. With the dollar dropping through the floor they still manage to take gold down. Amazing.

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    Replies
    1. Do you see what direction this will go?

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  6. Asking cos I am ready to add miners, but are unsure if I should wait a bit

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  7. I would wait until they breakout

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    Replies
    1. can you explain how I see that? How big move up?

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    2. Nixim,

      A breakout is shown on a stock chart. You can find free charts here: http://stockcharts.com/freecharts/index.html

      You can "see" a breakout when the current price of a stock "breaks out" above the previous high price for the period you are looking at. Breakouts are used by technical analysts to predict substantial upside or downside movement.

      Good trading,
      Le Fou

      Delete
  8. sup Gary,
    hope I find you well
    What way would you know to trade copper? ETF I mean

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  9. btw
    I thought we saw the breakout in miners yesterday (big candle, nice volume)

    ReplyDelete
    Replies
    1. Gold broke ou yesterdayt, but GDX has to go above $27 to breakout.

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    2. GDX just broke out. Lets see if it sticks.

      Best,
      Le Fou

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    3. GDXJ is in + now. Consider this a warning?

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    4. How far above 27.- and how long?

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  10. GDX just passed 27. For how long?

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  11. GDX has popped over $27 . Bought more April $24 calls at $3.25.

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  12. SLV lagging. Is it concerning?
    Thanks.

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  13. Gold is lagging too. They are trying to hold it down. I don't think they will be successful as the dollar still has another week or more to drop.

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  14. Hopefully, insiders know better which way gold will go next week.

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  15. It's starting to look like yesterday was indeed a manufactured reversal in stocks to unload on the retail investors.

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  16. XLF not looking so hot. Tends to lead the market a little, so I'd be surprise to see stocks do much today. Nice day for miners in general inspite of GLD and SLV.

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  17. How far do you think NUGT will go in this short term run? I'm having trouble to predict, 75 or 100? Judging from GDX's chart NUGT could go to 100.

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    Replies
    1. You don't time moves in miners off miner charts. You time them off the gold chart. I think gold is going to $1425 or a little higher.

      Delete
  18. Gary -
    When the markets drop, my/our TLT holding rises. Maybe that's a "duh" observation. Won't there be a time - maybe in the coming six months after the stock parabola starts collapsing - when they both drop? Also, for those who are not in the TLT long-term puts, is now a good time?
    Thanks, sir.

    ReplyDelete
    Replies
    1. I'm having trouble timing bonds. Personally I'm staying out. If you are going to trade this one I'd probably look at it as a multi year hold.

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  19. eliyahu,

    Many are saying that the breakout of this pennant formation should take GDX at least to 30-31, around 10% higher from here. So, that would take NUGT to around 72-77, around 30% higher. I have a feeling we will overshoot these targets, but I will start taking profits on NUGT in the low 70's.

    Miner bullish sentiment still has ways to run, so that is what I am basing my 'overshoot' on at the moment. The rally in GDX has been very orderly.

    http://stockcharts.com/h-sc/ui?s=$BPGDM&p=D&yr=3&mn=0&dy=0&id=p30088950723

    Hope this helps!

    ReplyDelete
    Replies
    1. And NUGT's now above the 200-day MA for the first time since Nov 2012. (-:

      Delete
  20. Gary hey
    thanks for answering.
    So assuming we analyze the gold chart and say odds are major res at 1425. How one interprets that to analyzing gdx's chart? you just sell when gold hits 1425 no matter how miners are behaving?

    Troy - NUGT is not exactly 3 times. check the history I thought so too at the beginning. Someone smart here suggested I look at NUGT:GDX and there it's as if NUGT:GDX could go to 3-3.5 in this short term run, which means a 100 for NUGT.

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    1. This comment has been removed by the author.

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    2. gdx
      damn this site is hard to figure out..just noticed gary updated some more posts

      Delete
  22. CNBC just said "Gold is Golden Again"

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  24. Silver has once again entered a squeeze on the daily TF..... GDX & NUGT have already been running for 4-days now.... won't be long before we get a fire & direction up or down.... suspecting we will move higher off a positive fire here.... Diggers will lead...

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  25. Gary,
    Can you comment on how long more SLV will consolidate before moving up or will it?

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  26. Heavy manipulation from 11:30 'til noon...roughly 32k contracts above avg. volume for this time of day on a Friday...and happening just after London shuts her down with the last Gold fix...

    32k Contracts controlling 3.2 million troy ounces of gold at an average price per ounce of $1,378.5 comes to a position of roughtly $4.4 billion...who has $4.4 billion to throw at the paper gold market in a 30 minute time span...yep, you guessed it...Janet must be "Yellen" at 'em now...LoL... :-)

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  27. Gary, what are you going to do to be more "cautious" after POG rises above $1,425? We've been on the lookout for scalper M's for the past two years as they have been relentless in their shorts, HFT, painting the tape, etc. Only during the last 30 days or so have they given us a relatively normal market that has allowed you to use your usual tools to successfully call the markets and that has given us SMT'rs some excellent gains, whether using leveraged or unleveraged ETFs. I for one will be tightening up my stops every Friday afternoon as we continue (hopefully) to move up. I'm not concerned about getting whipsawed out; I'm more concerned about losing a large portion of my gains.

    I still don't really understand why you are so averse to shorting after you believe the top is in and we move down into the next cycle low. I know they go down differently, but if the cycle duration is expected to be long enough, a short position can be very profitable. For example, wouldn't you have done well if you bought a traunch of DUST in 2011 when POG was at $1,900 and held it until the POG bottomed and made a swing at the $1,180 level (I know hindsight is 20/20)?

    Anyway, thanks for doing all you do. You make this experience of investing much more interesting, profitable and even ENTERTAINING (LOL).


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  28. Bail "Out" 2 Bail "In", I really appreciate your efforts giving us the details of the M's at work. Can you ever make a trade based on what you are seeing in real time? Where do you find that information? Also, do you use to track real time price, volume, True Strength Indicator, etc. of any ETF or stock? John Townsend is a master using this and his own charts (I look forward to the day when he has recovered from his divorce and health issues to return to his blog, or Gary's blog or SMT).

    If you don't mind, I plan to give this information (not your blogger name) to Merrill G. Davidoff, Esq. He is working on a class action lawsuit involving the suppression of the gold price from 2011 until now. He is with the law firm Berger & Montague and has worked for years with GATA. I read his professional bio and he's a real gunslinger - should be very interesting. Thanks to whoever posted on SMT the link to GATA's website that discusses what's going on. BailOut, thanks again.

    ReplyDelete

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