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Monday, March 17, 2014

Portfolio change

The Fed is fighting hard to keep the stock rally rising. Not only is there an FOMC meeting Wednesday but also options expiration on Friday. I think the Fed is going to be very determined to make sure the market goes back up this week. 

Gold is reacting with a knee jerk reaction down as stocks rise. This may continue over the course of the week if the Fed succeeds in driving the stock market back to new highs. This would also provide cover for another manipulation event in the metals. So just to be on  the safe side I'm going to book profits on 75% of our metal positions today and then wait to see what happens as we move into the FOMC statement on Wednesday. 

That statement always seems to be a good excuse to hit the metals and if they can force gold down today and tomorrow I don't want to have a heavy metal position on right before that statement is released. 

Gary

Exiting 75% of each position:
GDX $27.02
GDXJ $43.37
SIL $14.31
SLV $20.48

39 comments:

  1. Gary, can you explain how a big BoW number can result in prices going down? One should expect it was driving prices up?

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  2. Gary,
    Is gold going to have its gold cross aborted before it even gets started?

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  3. Gary, so we exit 75% of our metal position prior to gold reaching $1425 as originally planned. However, do you anticipate gold and miners coming back after FOMC meeting? If so, is it safe that we just stay in if not already sold 75%?

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    Replies
    1. You're asking me to predict the future in a rigged market.

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  4. Personally, I'm adding miners and juniors here.

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    1. Be careful. I also think gold & miners have topped. 5 waves up complete since the low. and now a strengthening sell off. It could get ugly fast.
      The only think I'm not sure of is if Silver has topped. It lagged the rally on the way up, so it might have a little more upside before we top out.

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  5. Gary, I think you significantly overstate the role of the Fed in the day-to-day movements of the stock market. jmho.

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    1. Do you really think the last ICL bottomed prematurely right before the Humphrey Hawkins address? Do you really think it's coincidence that the stock market is rallying hard today despite nothing unexpected happening this weekend, and doing so right before the FOMC decision?

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    2. I agree. Apparently, the market can't have any wiggle on its own anymore. Everything is the Fed, and only the Fed. Can't be actual buyers, that's crazy talk :)

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  6. Hamvestor, I totally agree. Today's move in stocks is a relief rally in reaction to the fact no violence broke out in Ukraine. I don't think the fed has anything at all to do with this. Also gold is pulling back for the same reason.As I stated last week, it hard to get a read on gold's move because of geo-political events. The gold stocks would have made a more dramatic move last week if gold's move was just based on $ weakness, and not Ukraine. The $ is weak today, but gold is also down.

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    1. I would disagree. The market has known all along there was never going to be a war and it's known all along what the vote would be. Nothing is happening today that wasn't already priced in on Friday. The only difference is the Fed needs the market rallying before the next taper.

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    2. Why were the markets in europe up big today. Were they manipulated by the fed also. Did they go up because the futures were up this morning? I do believe the Fed manipulates the market at times, but I can't base my trading on Fed manipulation. Even though the market knew of the outcome of the vote in Crimea, I don't believe they knew for sure if there would be any violence or escalation in Ukraine. To me the biggest red flag in the gold price last week, was the response by the gold stocks. If the move in gold wasn't partially because of Ukraine, the gold stocks would have confirmed on Wednesday, not thursday when it broke out of its consolidation, and would have followed through more strongly on Friday.

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  7. VOO joining SPY on the SOS...

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  8. Looks like another left translated ICL

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  9. Gary, POG going down to 1185 now?

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    1. I doubt gold is going back to $1185, but I'm content to sit with smaller positions for a few days and see what happens after the FOMC statement.

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    2. But April 1430 + is still the scope?

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  10. I don't like that they have forced gold back below $1377. On just a pure chart basis it looks like the Sept. FOMC top has been defended and that's enough to keep me skittish. We have some nice profits, I'm not going to let them all vanish if manipulation starts again.

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  11. Gary...as it looks right now are the 1460 out of the picture before the next icl??

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  12. Again you are asking me to predict the future in a rigged market. Al we can do is take this one day at a time. Maybe tomorrow everything reverses 180 degrees. But as of right now it looks like there are forces at work trying to cap the gold cycle. I have no idea whether they will succeed or not, so I'm going to lock up some profits.

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  13. Fed needs a stronger dollar more than ever. Russia and China could start dumping dollars at any moment.

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  14. I suck at micromanaging my positions. So I'd just stay in because the trend is up and we're just out of a congestion zone.

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  15. O and by the the 50 ma is going to cross the 200 ma real soon any way

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    1. What underlying are you talking about? And, please explain the significance of this cross.

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  16. It will be a miracle if gdxj can avoid a test of the 50dma in the near term.

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  17. Gary,
    You talked of a lot of BOW of GDX this morning, isn't that what we are looking for. As well as the 50 day about to make a golden cross of the 200. Can they abort this cycle as they did in Sept? I thought we had until May for the next attempt to crush gold.

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    Replies
    1. it disappeared by the end of the day.

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  18. Predictions are not an exact science. Are you going to hold Gary to his predictions if the world ends tomorrow? The only thing certain in life is death and taxes. (And maybe football players making multi-million salaries.) :-)

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  19. I think he is just asking for clarification of change of plan and why, nothing more. It is relevant information.

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  20. Hi, Gary -

    On Sunday's "COMMENTS REACTIVATED" page, toward the bottom, three members (I being one of them) generally addressed receiving some accommodation on the monthly membership (e.g., adding some days to the expiration date) because of the frustrating website issues and the relative difficulty in finding and accessing the updates in a timely manner, so action can be taken. I know I missed your PM portfolio changes by almost an hour, and it cost me significant (for me) money. I feel that with the former (still broken) SMT site, I would have caught that update much sooner. I simply feel some adjustment would be a professional stance on this. Maybe you feel otherwise. Thanks.

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    1. And I wouldn't mind adding a week to everyones subscription except its impossible to do. I would have to go in and manually cancel 2500 subscriptions. Recreate each subscription manually along with having to manually send out notices of expiration for every sub as the auto renew feature would be aborted.

      I would be up for an all invited SMT party to strangle the SOB that did this if we ever find him.

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  21. The comments section and free blog open up just as the "I told you so" moment happens. Classic.

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    1. The reports have been on the blog all last week. I announced the switch multiple times in the comments section before it went down, and tweeted it to the text alerts every day also.

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  22. Gary two thing you said in the morning that if it did not close below 1355 you would not worry and second that we where about to have a golden cross??
    what do you think about that?

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    1. I wasn't terribly worried early in the morning as gold was still flirting with 1380 and there was a modest BoW number in GDX. That disappeared by the close and as we now know they kicked the crap out of gold during the middle part of the day.

      Also don't make the mistake of thinking a golden cross can't be negated. I'll stress again that these are rigged markets and our job isn't to trade expecting the natural supply and demand laws to work. Our job has become a game of trying to second guess when and where the next manipulation is going to occur. We got the stock market right but underestimated the effect that would have on metals.

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  23. Gary, last year when I brought up the opinion of Rick Rule saying that he said gold was going to crash last summer (instead it rallied), you said that Rick Rule doesn't know anymore than anyone else and was expressing his own uncertainty (you said just listen to how he nervously expressed himself). Now this year Rule is repeating himself in exactly the same manner as last year, but now you are embracing his opinion. Exactly the opposite of your approach last year. I also remember how "everyone" was saying last year that gold's strong season was the end of the quarter, but, again, just the opposite happened, it collapsed. Now March is strong when it 's supposed to be weak historically. I think that if you ignored Rule last year (rightly so) you should do so again this year, or explain why his opinion this year is more credible than last's.

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  24. My own opinion about gold FWIW (and I realize it's not worth much especially for the price everyone's paying for it) is that it has very limited downside and an explosive upside. I know the world is turned upside down, but unless I'm living on another planet (and maybe I wish I would), Russia is about to annex the Crimea and perhaps the eastern Ukraine. Putin is about to place 60,000+ Russian troops in what is now Ukrainian territory and call it Russian. Now if that is not a historical and strategic world re-balancing act by a major player with as yet unknowable political and economic consequences I don't know what is. Which, again IMHO, is at least a short-term negative for the stock market, in addition to the FOMC being a negative event as well, no matter which they go, as you already correctly explained.

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  25. marc are you talking about iraq? putin took crimea without firing a shot

    does it sound like the russians and ukraines want a fight? the ukraine army is practically russian, they aren't going to fight each other, the ukraine army doesn't even support the people the US backs

    its all nonsense, america is escalating the whole situation intentionally, probably because they are hell bent on another conflict, who knows, its utterly moronic

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