If the dollar cycle fails and starts moving down to the 3 year cycle low, then you are expecting the final leg of the C wave to begin right? Then what about the intermediate low for gold? Are you expecting it be higher than the last daily cycle low in this event?
If the daily dollar cycle has actually topped, this would constitute a pretty left translated failed cycle, correct? If so we can expect an orderly move down into the 3-year low due in about 15-20 weeks?
Gary, aren't traders just running stops in the current low volume/high volatility xmas environment? Can't the USD move be just a shakeout? I mean the dollar dipped quite hard but is coming back very strongly...
the DeMark indicators are described in his books. The problem with the rules are, that they are described ambigously.
To always get the correct signals it is necessary to subscribe to some expensive services like Bloomberg. He supported these companies to implement the signals correctly.
I love this game, even when it drives me crazy! I am holding my shorts and fortunately didn't get shaken out. China is down 4% since I posted that short idea last week. I am out of PM's and hope to get some, but I think we have a mini-crash in our stock market near future so will surely be there for that. Glad to see the PM's and SPX going in opposite directions. I am not convinced the dollar rally is over (it's recovered almost all of its earlier decline today) nor that gold is done consolidating, so we'll see. Gary is a helluva lot better at that market than i am. Fascinating, as always, though, and with the volatility it'd be great to get the current setups right as the opportunities are large.
Went long some various stuff with reasonable stops. Gonna see how much carry through this buying has today. There might be a lot of people out (like many of us here) that will start to chase and realize (again) the dip isn't coming like they thought.
I said last night how I had the sneaky feeling things wanted to break higher. Mentally I was pretty prepared for this and now that it's looking true I got not problem switching sides and heading out long again. (I wasn't short. I'm just saying re-adding back metals)
92000, I have no idea. I don't invest in individual companies except SLW. That way I don't have to worry about underperformers or company specific news affecting price.
I went from zero to 60 in just a few min. gold silver futures and slw. everything.
All currently long with profits already. I'm now waiting and watching to see how the day pans out. I suspect it could be very strong up. If not and we collapse back or it doesn't look real I can get out without much trouble or loss.
Just when I was getting good at twiddling my thumbs....Could this be a case of deja vous all over again? I am still going to wait for the new year. Are you ready for another month or two of abuse Gary? Remember how bad it got last year? Well still have my core so I can handle waiting a week or two longer. Plus 2010 was a phenomenal year..let just enjoy it that success for a little longer eh...haha
Markets live to surprise people and throw them off. What better than to continue up strongly during low vol vacation week when few are looking or expecting?
Of course it could also be a low vol fake out. And gold/silver futures options expire today so maybe that's playing a game with us.
Like I said, I'm gonna see how the day progresses. It's easy to hold and watch when you have a profit. Having losses is where you lose it mentally.
Odd. The dollar has come back from its losses yet the PMs didn't correct (especially silver which continued to go up!). Any thoughts on why they are moving on their own now? Options related expiration doesn't seem to explain the strength.
Maybe this is a short-squeeze which is made worse for the shorts due to thin volume. Then again, SLV has traded over 11 million shares which is not that thin. I'm still long but trying to understand the reason behind the move although I know many don't care about "reasons" I'm one of those that do.
Are you saying it may be that the bull has bull has taken off again into its C wave even if the dollar is not yet ready to cave in in anticipation of the 3 year dollar decline.
Gary: Your reason for buying back into gold this morning was that the dollar was breaking down from the bull flag. and the that dollar will be the driver of the last leg and final C-wave. Now that the dollar has reversed its sharp drop, do you still think the dollar daily cycle is over, and if not---and the dollar keeps rallying---what then for gold? I suppose tonight's report will address these things. Very interesting and lots of curve balls, eh?
Gary you said in your post yesterday that it was unlikely we would get the start of another intermediate cycle up in gold, 'Not until we get a wicked profit taking correction first. Gold needs to give everyone a good scare and it’s safe to say it has done no such thing yet.' Two questions:
1. Is there any price confirmation in gold that would convince you to add back leverage, or would you only do this if the dollar broke below 78.82? In other words if the dollar kept rallying and so did gold would you just retain a core position no matter how much gold went up?
2. What would confirm for you that the PMs are not heading up again and in fact heading back down to an intermediate low?
DG, I didn't buy back. I never left my core position to begin with.
I was just warning those people that sold all their insurance that they probably better buy it back immediately because what was supposed to happen didn't.
Yes the dollar has rallied back, but it never should have broke down in the first place. That makes me think we got a preview of things to come this morning. The fact that gold isn't giving back any of it's gains is confirming that.
So everyone should be prepared in case the dollar confirms a failed cycle and if that happens gold should take off into the final leg of this C-wave. Stocks could continue to creep for a long time if the dollar is collapsing.
The safest time to short stocks will be at the bottom of the three year cycle low.
Another possibility is what Gary always says that the big money gets people all excited by moving above a big round number (i.e., $30 silver & $1400 gold) so they can exit. This move is utterly confusing!
I still think we will get an int correction, as it's in the cycle timeframe for such. As long as the Q's and SPY stay below their VWAP (currently at 54.69 and 125.64, respectively), we should see more sellers come in the next few days, even if it's just profit taking. SPX posssibly to 1210 or so by the time this short term correction is over.
I bought HL at $11.00 because it is only a triple top if it retests the top on lighter volume each time. Since HL had 2.5 million at 10.00 a.m. , I bought thinking I could sell at day end if it gets light.
now at noon it has 9 million , prob double that at days end...it hasnt had this much volume all day for the past 5 days...so it is PUSHING against the high with volume. Looking for a breakout.
this is how I played GMO...(see that chart for example ...also why i rebought REE at close yesterday)...pushing highs on volume.
This is 'trading' example , not a recommendation. also bought EXK for same reasons
From the below thread line, it’s again obvious that I can call the numbers. I’m not here to prove that. Do you know the name and contact details for a competent psychologist who specializes in trading behavior, anywhere in the USA or the world? MLMT, I joined your blog. Contact me, if you would.
#1 Gold's night session is creating a heckuv an opening NY Pit day over day gap.
Those gaps don't stay open, except on such extremely rare occasions that they're memorable. They fill in 1 to 3 market sessions.
It's a very high probability drop back to 1386 range, the high for the day. So, I shorted the first position at 1391.3, and I'm waiting to see. 8:37 pm #2 Apologies, I won't post like this again. The risk of this current 60 min bar blowing out the top from where it is now 1392.1 is too high. Exited the gold trade at a small loss. 10:02 pm #3 Gary said... Now you see why I never short a bull market and why I keep some kind of core position :) The surprises come on the upside. December 28, 2010 2:34 AM #4 Last before I hit the hay... GC1G is at 1394.8, with a high at 1395.6 or 8.
Gold is moving off of Mon morning's double bottom low, with the extra fuel of the first low, on 12/23, a major reversal. I just noticed it because I've been so mesmerized by all these new measuring tools I didn't "look". Monday morning's double low was one of the more powerful setups. The market target will be 3x. 1X at 1390 was reached later on Monday and there was a skirmish, and now the next targets are 1398.5 and 1405-1408. The stretch will be to the prior high, around 1425. That's a 5x and the max on this run would be 1430-1435.
I'm entering long at 1394.9 area, with a tight stop. I'll exit the first position at 1399+ and the rest higher. December 28, 2010 2:40 AM
Hardly. The dollar should have a minimum of 12 weeks before the intermediate cycle bottoms. Gold can go a long long way in 12 weeks especially if it is the final leg up in a huge C-wave advance.
I'm not short but fully flat. But i suspect a trap here. Euro is weak. The new intermediate that is just started do not take off as it should have already done.
If Euro go below 1.3055, just 50 tick away, we will have a failed intermediate, not on USD but on EUR, and usd target will be 90...
@aaron: maybe situation is not so clear there in US, but it's hard to imagine HOW BAD Europe is now.
There is 1, i mean ONE and ONLY ONE country that is working and growing and making all the slum still staying up.
Well, unless they took out theyr celtic cross flags from theyr drawer and make another europe empire ending all that keynesians madness, which happens to be MORE madness here than in US, there's no future for Euro.
By the way, that of course won't happen (at least i hope not) so we are fu..ed anyway :)
GG, I think that is where everyone has it wrong. Europe is in a deflationary environment and they aren't trying to print their way out of it (at least not yet). That isn't a negative for the euro. That is a huge huge positive. The deflationary forces are going to suck up lots and lots of Euro's. That means a lot less supply and that means value goes up not down.
The fact remains that the Euro isn't going to weaken in a deflaitonary environment. The seeds are ther for a Euro rally and we all know Ben is merrily printing 7-10 billion a day over here.
After having pared down to just under 10% each in FKRCX and INIVX last week, I'm still a bit reticent to start jumping back in here (20-25%). This could be a last head fake before another move down, even though the bullion banks have yet to short hell out of it again (it is Tuesday, after all). Seems like Europe is buying gold and the dollar, which is a few pips from posting a green finish.
Let's also not forget it is the end of the year and there is a certain amount of tape painting, tax loss selling, large funds squaring accounts up, etc. I was hoping for a more forceful move down before Jan 1st, but perhaps it is not to be. Will wait until things clear up a bit more.
I'm not buying this move yet. The bitter taste of last year's intermediate cycle in stocks crushing the miners is still fresh in my mouth.
Interesting junior silver miner I've been watching and had some bought sold it a while back. (Silvermex Resources--merger of Silvermex & Genco Resources). Pink ticker GGCRF. Nice looking chart.
Quick question again: should the $$$ break down, given how stretched Silver is over its Mean, any thoughts on going long AGQ if $$$ broke down? Or should we stick with SLV / SIL?
That's a tough one. Silver is incredibly stretched but gold and miners are not.
At the C-wave top I expect the HUI to be 40-60% above the mean. It's at 18% today. So who's to say silver, a very thin market, can't stretch 100+% at the C-wave top.
I guess you would just have to decide about AGQ yourself based on your risk tolerance.
One more question: Looks like the miners are lagging Gold. Shouln't they lead if this break is genuine? Or will they slowly outperform once the $$$ breaks down?
I'm not sure what you mean by lagging. the gold:XAU ratio is very near the low for the last two years. It looks like miners are still in the process of correcting the massive mispricing from 08 to me.
Here are some thoughts re the dollar, reposting here from earlier comments section:
I can draw a nice looking uptrending channel using the 11/3 low and today's low for the lower channel line and the upper channel line touches both the highs of 10/27 and 11/30. I would want to see the dollar break below this lower channel line (at least, better would be a break below the 12/14 low) before I'd give up on the dollar rally.
We can run a million what if scenarios and one of them is bound to be right.
If one follows the plan, holds onto their core, then if we get confirmation the dollar is indeed headed down into the three year cycle low then we will add back to positions.
If one does that they will come out of this just fine and add significantly to the already huge gains we've made so far.
If one tries to analyze this to death they will probably talk themselves out of a perfectly good plan and miss the final move or at least more of it than they should.
Gary, does this move qualify for the move to new highs before we dscend into the intermediate correction. As you posted about earlier in the month. The big boys selling into these moves on a quiet week?
The fact is that gold and the dollar are not doing what they are supposed to be doing. The stock market is just creeping higher like it's been doing for weeks.
The stock market isn't really my concern. The dollar is what I'm focused on. We know the three year cycle low is coming and when it does it will drive commodity prices into a huge parabolic top.
The only question is whether or not the strange action in gold and the dollar is a sign that the decline into the three year cycle low has begun or not.
I'll explore all the scenarios in tonight's report.
Technically the S&P just took out the intraday high from last Wed. so we officially have a negated 4 day corollary. One could go ahead and trigger stops to cover shorts right here.
IMO I wouldn't be so quick to cover shorts right here. Volume is 1/5 normal today (yesterday too), the SPY is atop the SoS today with this small volume, and we're in the cycle timing band for an intermediate correction. Going to cash is not a bad option amongst all these contrary forces, but going long I believe, the markets, right now is the last place one should be.
What is so complicated for everyone just to follow the DXY plan of 78.82?
I'm still in the doubter camp. Bull sentiment quite high, dollar up strongly from the lows, although I don't think it quite hit yesterday's high. I keep feeling like I've seen this picture before, with inexplicable rallies through the end of the year, then 5 down days to start the new year. I kept a core position and so today has been an up day overall.
Hi, my core position in gold is GDXJ. I entered this position few weeks ago and still in slight red excluding 'distribution'. Could anyone shed lights on the implication of coming distribution in terms of tax issues? I plan to hold this until Gary says otherwise, but it wouldn't hurt to know what's behind my position. Thanks.
OT, but may be of interest re: silver. Many months in 1981 or 82, on the slide off the backside of the parabola, silver was priced at $25-35. Instead of using the $50 parabola top, the inflation adjusted, opportunity cost included value of money then in today's dollars I'm thinking is $75-125/oz.
If the top, $50, were considered, that would price silver at $125-$200.
Either way, we're still a long way below the value of a price reflecting more robust speculative interest.
I always find it fascinating when a trend line that was drawn several weeks in the past shows current relevancy. See pink line that is based from Nov.17 @ ~1332 in gold, drawn 3-4 weeks ago. http://www.screencast.com/users/Mr.Mom/folders/Jing/media/d9ddf176-fd90-4709-9a6f-b99a827b7020
But only has my final and least important tool. And I think a lot more people are using stockcharts. In stock charts that line you drew has no meaning as it was broken handily today.
Let me be the first to say that it is a mistake to use the dollar as the determinant of where the stock market is headed. Furthermore, even if we're to have a dollar crisis, nothing says that has to happen in the next 2-3 years. Nothing.
Further, the dollar and market doesn't necessarily have to have an inverse relationship, nor do they have to have a positive correlation.
Also, nothing in the charts, economy, or political situation indicate to me that the market is headed lower, and definitely not to new lows in 2012, as the bears surmise. Unless there is another MASSIVE fraud going on like the mortgage fraud, this market is headed higher, much higher.
Cheap money can and will drive economies, much further and much longer than anyone can remain solvent (shorting the market). I don't know where you folks get the idea that the shit hits the fan in 2011-2012. No, the shit doesn't need to hit the fan next year or the year after. It could be 10 years down the line, and that's when I think it will hit.
Here is my short term trading for the last two days: Bought and still holding AG(=FR)@12.44 9:50EST today (It was closed at 13.6).Bought SLV' March calls and SLW/HL just before closing yesterday. Closed the option today and will most likely close SLW/HL/AG tomorrow.
What drove me to load up these positions yesterday was based on the following quote by Marty Schwarz at ‘market wizard’: “If the market is letting you off the hook easily on a position for which there was a basis for fear, there much be strong underlying forces in favor of the direction of the original position.”
I had few bleeding short term positions, but I was able to close them at small profit yesterday, which was rather surprising to me considering the fear I carried since the announcement of the rate hike by China on Sunday evening, and I thought that this is a good case of Schward’s quote and I decide to increase my long position. I am not sure if this was just pure luck from gut feeling, but I think Schwarz's call is simply amazing and worth to learn through.
The shit doesn't need to hit the fan in order for stock prices to head lower.
Valuations are very high right now by historical standards. While that doesn't matter to someone trading the next tick, reversion to the mean guarantees that stock prices have to fall over the next few years. Either that or earnings have to explode simply to keep stock prices where they are.
Buying stocks for the long term represents a low-percentage trade right now, akin to picking up nickels in front of a steamroller. I was bullish in March 2009 and have been ever since. But as of now, valuations and sentiment have priced in the recovery and then some. We may have a few months of rally left, but at some point we will be on borrowed time.
Beanie, Show me any year in the last 10 that the stock market was able to rise along with a rising dollar. I can save you the trouble you won't find any. That's because we are in a secular bear market. In order to keep the markets levitated in a secular bear market the Fed has to debase the currency.
The fly in the ointment is that this strategy will continue to spike inflation and that inflation will continue to destroy the economy when it gets too intense.
The dollar most certainly will have at least a minor crisis next year because that is when the three year cycle low is due. These have been coming like clockwork for 40+ years.
The stock markeet will most certainly fall back into at least an inflation adjusted new low and probably a nominal new low because the 4 year cycle is due to bottom in 2012 or 2013 at the latest. And that's what secular bear markets do. They bring extremely overvalued stocks back to extreme undervaluation so the next secular bull can begin.
For the technicians out there: XRA is on the verge of breaking a 6 month downtrend line. GRS is having a 50x200EMA crossover on the daily and 13x34EMA crossover on the weekly.
I still suspect today wasn't a fluke and this really may be starting a strong up phase. Thus, I'm willing to risk small losses with tight stops to establish a large position. It only has to lock on one time - and that isn't as hard as it seems.
If I wait longer till gary's trigger is hit, then obviously I have more certainty, but conversely I have a worse risk/reward position to get in. My style is a bit more suited to more risk by assuming a direction and having a small stop if i'm wrong. I'd rather be in before the move starts strong corrections that make it harder to add.
I think one have to look at the concrete conditions in the society itself. The infrastructure - Excellent. Education, more and more capable people, progress of research -faster and faster yoy. Are the institutions breaking down? no, very capable run. The democracy is functioning.
So it is the superficial paper-things that is out of order. Burn the paper, inflate a period to dilute the debts and revaluate gold. The concrete basics of society mentioned above will still be there. What about Zimbabwe, well in that country everything basic is destroyed. It is fundamentally not a inflation or paper-money problem. Germany after WW1 - completely destroyed, large part of the population killed. International trade-wars.
I'm laughing of the post-traumatic stress syndrom (cronic baby-whining) after Lehmann and 10years of stragnation.
And the sentiment too good, well that is biggest problem after many years of bull, when everybody are in. Presently most people are on the sidelines, and then positive sentiment is a RECRUITMENT-FACTOR. (Different from a mature bullmarket when there are not more to recruit). So don't use it as a mechanical rule without thinking.
I've been given the task of managing a portion of my in-law's portfolio. They have about 80% of their money in a bond fund (I looked it up and it's mostly UST's.). 20% has been in various stock positions (including a position in DUG and SH they have held since 2009!--both down 30-40%, and a position in a tiny drug pink sheet THTCF (around 15K worth) that is down 20%. These were put in play by their prior broker.
So, they are finally seeing the writing on the wall and want some inflation/dollar stability protection and want me to position things. I was hoping we'd get the big intermediate correction so I could dump the SH and DUG. I'm ready to cut loose the drug pinkie now. They had small position in GDX that I took the profits on and will move that $ into GDXJ. Eventually, I want to get this 20% into SIL, GDXJ, SLW.
My parents just retired and have a sizable nest egg. Almost 90% of it is in CDs. My old man just bought a little gold and some TGLDX. I think he's going to start buying more, but they are also way under invested for what could be coming.
Any one else dealing with retired baby boomers who are not prepared for this? Any advice? Thanks.
It could be a bit dangerous to chase precious metals simply based on a failed dollar cycle. While a failed cycle on the DX would almost certainly indicate the resumption of the dollar's plunge into its 3-year low, it does not necessarily mean gold and silver will immediately rocket higher.
Just observe gold's decline into the July intermediate low. Our little yellow friend fell $100 even as the DX formed a failed cycle and plunged 4 points.
Personally, I have no intention of taking a big plunge into PMs without an obvious intermediate cycle low, but I will be more than happy to short the DX once we see a failed daily cycle. In this way, I have a well-defined trade and can control my risk.
The dollar rose along with the market in 1995-2000. http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=%24usd&sid=0&o_symb=%24usd&freq=2&time=20
I believe the same thing will happen in the next few years.
Beanie, The market rose 2.4% for the year. I count that as sideways. Which is about the best the market can do in the face of a rising dollar.
Keep in mind that during this time we were right in the middle of the greatest real estate bubble in history. At full employment. And all the market could do was 2.4%
Doc, I admit that is a tough one. If we go back to full exposure we run the risk of repeating last years mistake, although I doubt we are going to see another year long consolidation like last year.
If anything is going to drive the final leg up in this C-wave it will be the move down into the three year cycle low in the dollar and that is due this spring.
I will point out that the intermediate decline in 06 only fell for 8 days before taking off into the final leg up. That leg up did include a 2 month consolidation.
Gold has already gone through a 2 1/2 month consolidation though.
What I find hard to conceive is for the dollar to rally back above the 200 DMA prior to moving down into the 3 year cycle low. That is what would have to happen if stocks are going to correct to any significant degree.
So unless the dollar can do that, rally back above the declining 200 DMA, I have to wonder how the stock market is going to correct.
Despite terrible breadth & sentiment I'm prepared to see the stock market form a really stretched intermediate cycle. Probably not all the way into the dollar's three year cycle low because liquidity will continue to leak into the commodity markets and at some point surging inflation will halt the rally. But maybe all the way through earnings season and into the middle of Feb.
I'm not really sure that you are making a valid COMPARISON when you point out that the dollar in (June and July) went down and gold didn't take off , because the time prior to that doesn't match the time prior to where we are now...we just had an inverse dollar/gold relationship prior to now
-but-
In Feb to June...Gold & Dolar didnt have inverse relationships...so Gold was tired, needed a consolidation at that point...it doesnt need one now...
Back then, both went up together. they weren't in an inverse relationship like Aug to Nov...The dollar went from 78 to 88 , while Gold went from 1060 to 1280. THEN they both pulled back a bit and gold rallied, dollar dropped.
so on a 1 yr chart....gold was strong , rallied Feb to June, corrected a bit to the low , rallied hard again , now corrected a bit...now??
the dollar rallied , crashed , rallied a bit...now??
Gary, On 12/22, at the close, heavy buying came in on GDXJ. Then look at the heavy buying the morning of 12/23. GDXJ's low on 12/23 was the 38.2 Fibonacci retrace. Is that then resistance level if I was charting?
I have covered most of them. If I am shorting against the trend I don't give them much room (getting stubborn and fighting the tape is the best possible way to go broke!) , so I lost another sliver of the year's gains. Rats. I expect to be there is some size once we start down in earnest, though, as with sentiment as it is the drop should be significant. These "creep up with no down days" rallies trend to end in mini-crashes. In the back of my mind I have some concern that a dollar drop might just propel them higher and higher, but I don't think that's going to happen. We'll see. And sure, PM's can rally as the mkt falls. Correlations stay in force...until they don't. Very hard to know that stuff in advance. i just play the correlations until they stop because they tend to last a long time.
I think SLV busts right through 30. Then takes a big fall and fills all the chart gaps and sweeps all stops everywhere. As soon as everybody is out, it races to new highs!
Here's what I know. GC1G reached 1407-1408. That completed the highest probability move up from the 12/23 low on the 60 min chart. Today, in the 5 min, the first strong reversal set up occurred at the high a few hours ago.
This means the market is facing down. There's a time value to the trigger, so no action above or below the high or low rather soon, like in 12 more bars, approx, will void the signal.
This reversal means it's explosive but only a short distance, with 3 pts being the unit of measure. Given the power of the 60 min, still facing up with a stretch to 24-33 within the power of the double bottom, and with this now new "fuel", I think we will see the current move to be a failed reversal and a blow out to 1422-23. We already had a failure to decline below the 1410.2, which just ran the stops against the 1410.3 prior low.
Without doubt, we will see the 1413.2 penetrated. On a separate logic, the round number 1400 was tagged and we're off to the races to bang against 25 and maybe the high. I don't see currently the source for fuel beyond that range, however... yet.
My position is simple. I believe I can make money hedging my physical positions by avoiding the drawdown I experienced in '82-90 and a few years ago from 1000 to 685 or so. That phrase, "never again", rings in my mind. So, I've approached being here as a trader, not one who is dealing with core. I respect Gary's logic greatly. My dad would have benefited hugely from his advice. I'm just in a different flock, and I'm prepping to tank blast the highest probability trades, with the new software and hardware and the staff invovlement. If it works, great. If not, I'll end up with some new hardware.
Well, for what it's worth, gold will now form a weekly swing low as long as it holds above $1362 this week. Anyone who believes we will see a shallow correction could use this action along with a failed dollar cycle as a pretense for purchases.
All these reversals this and time values that, etc. etc. sound like a great way to make something really complicated when all one has to do is just buy and put a stop under $1361.
Gold is pausing at the underside of the downtrend line drawn by using the lows in nove and early dec. I would think we break through and continue shortly.
This trade still looks good and I am leveraged long with stops that exit at breakeven (gold/silver futures).
So far I would say (like many here) that the market is not yet convinced this rally is real. We still have a 'recognition' point ahead of us if we were to rally today and, say, tomorrow. If the strength to the upside continues then there will be an 'oh crap...i'm missing it' pile in effect.
I really wonder whether following the dollar index so carefully in timing gold/silver purchases is all that useful. Apparently it is 56% weighted by the euro. I think following the Australian Dollar may be better. Gold has a habit of bouncing off the 200 dma and this provided useful entry points in late July, November and just recently (you can get it by keying in $GOLD:$XAD in Stockcharts).
I worry that we could wait several weeks before 78.82 on the dollar index is broken to the downside and we could see gold up to $1500 by then, silver up to $35 and the HUI 15% higher.
Personally, I sold down to core but wish I hadn't. Today, I bought back some of the stuff I had sold: ANV, AZK and SLW. What is annoying is that by selling in Dec. I will have a fairly hefty tax bill. There's something to be said for following Jesse Livermore's maxim: "the money is made in the sitting." Trading is a mug's game for the most part IMO. I will never again sell in December, that's for sure, C-wave correction or not.
yes you can sell SLV based on a condition occurring in another stock or even futures instrument. So you can sell SLV at the market when gold futures trades below 1361.
My broker is TOS and you can do enter these kinds of orders on their platform. You'll have to check with your broker to find out whether they have this feature.
To make this interesting I'll let it slip that I'm over 6x leveraged on my position. This is a *normal* trade and approach for me.
The positions are well profitable now, the stop losses are at BREAK EVEN at this point. When I took the position this morning, the stop loss was LESS THAN 1% of my net worth.
The stop on gold was less than $2. Yes this is small. Yes it is possible. You only have to hit a trade once in a while for it to work out. Yes, in the meantime you will take a few losses while you get stopped out trying to establish the position. I've got it now (it seems) and holding to see where we go.
Oh..and YES I will be following gary's approach more as well in the future, but for now we still don't have an INT low and the market is throwing various curves. So I'm running the game my way in the meantime till some kind of substantial low occurs for a more "Gary" type entry. For now (since we don't know the direction or if this rally is real; just look at the concern or debate...for example DOC) it means that any positions you take (if large) need to have small stops.
OA, I use Fidelity and TOS. You can do conditional orders on Fidelity, but I don't think you can make it conditional on futures. That seems worthless anyway since you are trading an apple to an orange. Seems easier to condition off GLD and SLV.
Yes, happy with TOS. Was happier before they sold the company to TD Ameritrade. Their software upgrades seem to have a lot more problems now than before, I'm guessing TD laid off a bunch of programmers and support staff (gotta cut costs so the CEO can make as big a bonus as possible!) and as a result quality has suffered. But the last update went okay. Platform has lots of features, not always intuitive as to how to use them, but you eventually figure things out.
Some have complained that the platform is slow relative to some others. Not a big deal for me (or even noticeable), I think it might be if I were day trading.
I considered switching to Trade Station when TOS started having problems, but inertia set in and I did nothing about it.
Interactive Brokers gets high marks from some folks, but they are geared more toward folks with lots of experience (support may be somewhat limited) from what I hear.
whew! serious tankage on the dollar! broke below the 78 percent retracement of yesterday's impulsive rally off yesterday's low. Yesterday's low is likely to get taken out.
>If you get nervous and take profits too soon then you will be right back trying to enter again.
As I mentioned a while ago, my historical problem was taking profits too LATE, not early. The recent silver smackdown caught me. But I've cleared up much of that problem by building in some new rules.
I'm actually pretty good at getting into an up phase and adding to the position as we go. I just overstay my welcome many times. (My performance and gains on the fall rally were horrible. Worst of 10yrs trading. It happens unfortunately.)
>Do you know if that tax treatment also applies to options on futures?
No, but the google knows :-)
http://www.greencompany.com/EducationCenter/GTTRecCommodities.shtml 60/40 applies to:
"...Section 1256 contracts include: regulated futures contracts, foreign currency contracts, nonequity options, dealer equity options, and dealer securities futures contracts. For a partnership that's a qualified fund, Section 1256 contracts include bank forward contracts, foreign currency futures contracts, and similar instruments prescribed by IRS regs...."
Of course, you won't have any gains on your options anyway so how the profits are taxed won't matter much :-) (I include myself in this characterization). Options are a wonderfully exciting way to lose money. :-)
Note that article seems to be using the word "commodities" and "section 1256 contracts" as two categories. As usual, the rules and regs are detailed and confusing.
I said 60/40 applied to "section 1256 contracts", but it may actually only apply to "commodities" which *are* "section 1256 contracts". As I said: warning. Seek professional advice.
Thanks for the reply. I should point out that people who can trade within their IRA's can postpone their tax bills, but for those (like myself) who don't have them or aren't allowed to buy double etf's like AGQ in IRA's, we have to be aware of the tax implications before selling. So an item would have to go down at least 10% before you break-even after taxes. Now, that (and more) would happen in a D-wave, but it assumes one could cash in near the top and buy in near the bottom.
With the benefit of hindsight, the smartest thing one could have done is to put $50,000 into the HUI in 2002 (allowing two years after the bull market began) when it was 100 and just hold, no trading whatsoever. It's gone up 6 times so it would now be worth $300,000 (a similar investment in the S&P would be maybe $65,000 today). I wonder how many of those trading in and out of the pm stocks would have done better (though I appreciate your subscribers demand timing advice).
I find one of the hardest things to do is to buy back at a higher price something you've already sold. If you don't mind my asking a hypothetical question, Gary, if silver is 10% higher from here when (if) the dollar index breaks 78.82, would you recommend buying back AGQ even though it's 20% plus higher than now?
Mama, Sure I would. What does past price have to do with future price?
Until the C-wave is finsihed the trend is up.
Lets just take a conservative estimate and say AGQ goes to $300 during the final advance. Are you really going to pass that up just because you missed the move from $150 to $180?
the movie Inside Job: I saw it yesterday evening. I thought it might get overly academic and end up being boring. Boy, was I wrong! Most riveting flick I've seen in a long time. Highly recommended!!
Of course the proper approach is to go to the IRS website and read the rules and regulations yourself. They are in english :-) Don't run your life off sketchy advice on blogs.
Geez, you can never get a Tech analysis past Gary! :)
Gary - am a newer sub - been on aboard since Aug - Sept this year and took me a while to get on baord with your analysis...Sigh! Should have found you earlier and trusted your work since the get go!!
Yes - I was looking @ recent history since Nov....if you look @ the 2.0 Bollinger band, AGQ travels above it for a couple of days and then comes back in around the mid BB line (20 dMA)
But yes, Gary is correct - since July Aug, AGQ kept KISS-ing the upper 2.0 BB.
All these reversals this and time values that, etc. etc. sound like a great way to make something really complicated when all one has to do is just buy and put a stop under $1361.
Gary, I completely agree with you, if I didn't hold the physicals position I have. I've ignored the fluctuations for 3 decades and 2 decades and again a few years back when it dropped significantly.
I'm not in a position to sell my holdings, emotionally. I got the goods. That's what this commodities rally is about. Paper is paper. Account holdings are paper. I want the real thing, and hold that in size.
And I can move all my wealth into more inventory for my biz; but it's a cash cow.
So, my position is probably different from others.
I want the physicals, in fact more, but I want to protect against the retracements.
Your world is different than mine. I've been retired and didn't have hobbies like you do. I've a hobby, "game playing".
So, I'm combining the hobby with knowledge I have.
It's not at all unreasonable to allocate a portion of the portfolio to track what you advise, too. If you're still doing this in a year, I'll probably be a camp follower as to part of the portfolio, as well. I come with some pretty singed wings having watched and trusted too many in the past. I trust "me". I'm reading the last year of your subscription postings (ugh) and when and if I trust you, I'll be a camp follower, too. Right now, it's me.
But for 95% of the people who are your subs, what I'm doing is nuts and a waste of their time. Your statement of KISS and your advice carry value; hence my subscription, too.
Regarding Bollinger Bands on AGQ: Double long and double short etf's are likely to give different results on charts than when charting the underlying. If you're going to mess with charts and TA, I'd stick with either silver futures or SLV etf and avoid charting the double (and triple) etf's.
Gary-- I'm trying to determine the timing on the intermediate cycle in gold. Do we have a new intermediate cycle and when did it start? OR, just a continuation of the prior intermediate cycle and a new daily cycle?
Does anyone know if AGQ has a special dividend/distribution similar to other ETFs (like the one given to GDXJ shareholders recently) and, if so, when is it scheduled to be given?
What is your rationale for not just putting everything into AGQ? If the metals are what we think will take off why have any company risk (even if it is through an ETF or a royalty company)? Just curious.
I'm not quite following your logic on the "currency crisis" you are describing. So, the dollar dives into it's three year low which should bottom this Spring/Summer. Then we get a massive rally in the dollar out of this low taking all of our inflation hedges down big time. So the dollar is not going to collapse or anything according to cycle theory. We are just due to put in a hefty low.
Are you saying this 3 year cycle could get out of control and really plunge into the depths? (Like 60's?) If this "hyperinflation" that you are predicting comes to pass, a rally out of the low could be brief this time. (i.e. end game could be closer than most think)
Martin Armstrong often talks about the hyperinflation tipping point--crisis in confidence in the underlying entity backing the currency causing a massive fleeing and velocity to skyrocket. Just saying we could be looking at a point where things could very well get ugly on us.
I think there is a good possibility the dollar could drop into the high 60's.
The 3 year cycle after that should also be left translated perhaps only moving back up to touch 80 this time before beginning the long slow slog back down to the next 3 year cycle low in 2014
Gold is triangling around the uptrend line (daily; drawn on lows in nov and early dec). I would say a break higher is imminent - prob within next few hours.
TRIANGLE-ing; congesting; putting in a triangle at a support or resistance point in anticipation of it continuing through that point.
I was looking at gold intraday (24hr) against a trendline drawn on a daily chart connecting the lows in gold in nov and early dec. We haven't gotten over that line yet (and the earlier break BELOW that line which is what started everybody on the "we're going down now" vibe).
J, I don't really follow any other currency than the dollar. I know what the normal timing bands are for the dollar. For the most part risk assets move inversely to the buck. So the majority of the time we can get semi close to tops in asset markets like stocks and gold by spotting bottoms in the dollar cycle.
The dollar in my opinion is the critical currency. What the Fed has done to it over the last 10 years is the fundamental driver for a lot of the problems in the world today.
Do you pay much attention to bolling bands during a time like this (i.e., C wave advance). The current silver futures contract is trading a bit over the BB which would normally be a time to at least back off a little but I was curious if you thought this type of indicator loses some / all of its value during this time?
Thanks Gary. Another quick question. DO you think the IT happened and it was just a very shallow one like in 07-08 or this cycle will be extremely stretched and it will eventually happen, hopefully at much higher numbers?
O.K. Gary. I am back somewhat in the metals. I didn't miss all that much, but have to admit your trading style would have been better for me than what I wound up doing. I bought a good chunk but have more I'd like to do so we'll see who this plays out. Thanks for the encouragement not to try to game the situation and just get some exposure (that is, if it works!) I can;t wait to see whether the insane level of stock bullishness can overcome a dropping dollar and get us a SPX decline.
I don't manditorily pick a cycle low just to make it fit in the "normal" timing band. If it isn't obvious then I operate on the "stretched cycle" thesis.
The last daily stock cycle is a good example. One could have tried to rationalize a cycle low in the middle of Oct. However it wasn't obvious so I assumed we were seeing a stretched cycle. With the benefit of hindsight that was the correct assumption.
Currently we have nothing that even vaguely looks like a normal intermediate cycle low in either gold or stocks so I'm assuming we are again in a stretched cycle.
As I pointed out in last nights report the intermediate stock cycle in 06/07 stretched to 39 weeks because the Fed massively debased the currency.
Could that happen again? Sure anything is possible.
If the dollar doesn't start rallying immediately then there is definitely the possibility that stocks and certainly gold could continue generally higher until the dollar hits the bottom of the three year cycle low.
Now that metals have moved up enough over two days to suck people in or change strategies (including gary/me/others), it would be a good time to drop and fakeout *IF* indeed this isn't real. Many sideline or reduced people are going long again or adding up. Now would be the time to reverse back if this isn't legit.
I'm still holding my long futures with breakeven stops and just waiting.
TZ---yes, exactly right. The PM's are starting to "look" better. If in fact a dip is in the near future, now seems like the time, especially with the SPX seasonal support ending. An SPX tank would hit the miners especially.
Brave call on the 100% move up. I still remember last winter, very cold and bitter winter! But nothing can beat old turkey. My core being close to 100% anyways, I guess I will ride this train with you. I topped off my massive 5% missing from 100% with some silver maples today. Might as well take advantage of old turkey while it is easy...Gold at $2500 and silver at $100, then the turkey might start turning into a chicken, but I will deal with that when I get there.
Good luck to all. Hair pulling (being out) versus heart-attack (being in)…choose your fate! And don’t worry, in the short-term, you will be 100% wrong no matter which path you choose. :)
Does anyone know of another proxy for AGQ. I'm asking because at some point I would like to hedge to get long term CG treatment. Shorting 2x SLV is too risky b/c it may not track especially if it is an up/down market.
I do both...no real reason for maples. I am mostly bars, but chose something nicer to look at this time. Bars are real boring to look at. So not a real wise short-term move, but long-term either won't make a difference in my mind. I guess the best bet is to buy massive blocks of silver; use them to prop up the TV or lifts weights with.
I basically buy physical as insurance against my future stupid self. Gold and silver will be much much much higher in the future, and the premium I pay today for the metals, will be well worth the safeguards of forcing me to hold during trading moments. Even during this up-coming D-wave, I plan on holding me pot of gold. Miners and like are different. My views. Cheers
Gary,
ReplyDeleteIf the dollar cycle fails and starts moving down to the 3 year cycle low, then you are expecting the final leg of the C wave to begin right? Then what about the intermediate low for gold? Are you expecting it be higher than the last daily cycle low in this event?
If the daily dollar cycle has actually topped, this would constitute a pretty left translated failed cycle, correct? If so we can expect an orderly move down into the 3-year low due in about 15-20 weeks?
ReplyDeleteGary,typo-- I think u meant 78.82 in the update.
ReplyDeleteGary, aren't traders just running stops in the current low volume/high volatility xmas environment? Can't the USD move be just a shakeout? I mean the dollar dipped quite hard but is coming back very strongly...
ReplyDeleteTZ,
ReplyDeletethe DeMark indicators are described in his books. The problem with the rules are, that they are described ambigously.
To always get the correct signals it is necessary to subscribe to some expensive services like Bloomberg. He supported these companies to implement the signals correctly.
CNBC ticker shows yen, euro and pound all down against the dollar. How is the dollar also down?
ReplyDeleteI love this game, even when it drives me crazy! I am holding my shorts and fortunately didn't get shaken out. China is down 4% since I posted that short idea last week. I am out of PM's and hope to get some, but I think we have a mini-crash in our stock market near future so will surely be there for that. Glad to see the PM's and SPX going in opposite directions. I am not convinced the dollar rally is over (it's recovered almost all of its earlier decline today) nor that gold is done consolidating, so we'll see. Gary is a helluva lot better at that market than i am. Fascinating, as always, though, and with the volatility it'd be great to get the current setups right as the opportunities are large.
ReplyDeleteBede: The dollar is down against every currency but those two. Look at the bottom line of this page for real time futures quotes:
ReplyDeletehttp://finviz.com/futures.ashx
Ra,
ReplyDeleteIf the dollar fails then golds intermediate cycle will probably stretch extremely long.
MBS,
ReplyDeleteYes except the decline will get very unorderly towards the end when we are in a full blown dollar crisis.
Went long some various stuff with reasonable stops. Gonna see how much carry through this buying has today. There might be a lot of people out (like many of us here) that will start to chase and realize (again) the dip isn't coming like they thought.
ReplyDeleteSLW breakout of a down wedge (daily) also. Everything is breaking higher from congestions.
ReplyDeleteNote that I would think gold will rally at least $100 before we get to next resistance point (*IF* this is a bona fide move higher)
Gary ,
ReplyDeleteI'm short ES's but will honor your 1260 Stop .. Jake
(Stop on Close Above ONLY)
I said last night how I had the sneaky feeling things wanted to break higher. Mentally I was pretty prepared for this and now that it's looking true I got not problem switching sides and heading out long again. (I wasn't short. I'm just saying re-adding back metals)
ReplyDeleteToday and this week could be VERY strong 'recognition' days that we are going higher and not lower
ReplyDeleteis it triple tops for HL? good or bad?
ReplyDeleteGary,
ReplyDeletelook at 3 yrs chart. what is wrong with CDE?
92000,
ReplyDeleteI have no idea. I don't invest in individual companies except SLW. That way I don't have to worry about underperformers or company specific news affecting price.
I went from zero to 60 in just a few min. gold silver futures and slw. everything.
ReplyDeleteAll currently long with profits already. I'm now waiting and watching to see how the day pans out. I suspect it could be very strong up. If not and we collapse back or it doesn't look real I can get out without much trouble or loss.
Just when I was getting good at twiddling my thumbs....Could this be a case of deja vous all over again? I am still going to wait for the new year. Are you ready for another month or two of abuse Gary? Remember how bad it got last year? Well still have my core so I can handle waiting a week or two longer. Plus 2010 was a phenomenal year..let just enjoy it that success for a little longer eh...haha
ReplyDeleteMarkets live to surprise people and throw them off. What better than to continue up strongly during low vol vacation week when few are looking or expecting?
ReplyDeleteOf course it could also be a low vol fake out. And gold/silver futures options expire today so maybe that's playing a game with us.
Like I said, I'm gonna see how the day progresses. It's easy to hold and watch when you have a profit. Having losses is where you lose it mentally.
Nat,
ReplyDeleteThere's definitely no reason to increase beyond a core position unless the dollar confirms a failed cycle.
Odd. The dollar has come back from its losses yet the PMs didn't correct (especially silver which continued to go up!). Any thoughts on why they are moving on their own now? Options related expiration doesn't seem to explain the strength.
ReplyDeleteBecause in bull markets the surprises come on the upside.
ReplyDeleteMaybe this is a short-squeeze which is made worse for the shorts due to thin volume. Then again, SLV has traded over 11 million shares which is not that thin. I'm still long but trying to understand the reason behind the move although I know many don't care about "reasons" I'm one of those that do.
ReplyDeleteGary,
ReplyDeleteAre you saying it may be that the bull has bull has taken off again into its C wave even if the dollar is not yet ready to cave in in anticipation of the 3 year dollar decline.
A new lawsuit was filed yesterday on JPM and HSBC... maybe more fuel for the speculators for silver...and its definitely showing it!
ReplyDeleteGary: Your reason for buying back into gold this morning was that the dollar was breaking down from the bull flag. and the that dollar will be the driver of the last leg and final C-wave. Now that the dollar has reversed its sharp drop, do you still think the dollar daily cycle is over, and if not---and the dollar keeps rallying---what then for gold? I suppose tonight's report will address these things. Very interesting and lots of curve balls, eh?
ReplyDeleteGary you said in your post yesterday that it was unlikely we would get the start of another intermediate cycle up in gold, 'Not until we get a wicked profit taking correction first. Gold needs to give everyone a good scare and it’s safe to say it has done no such thing yet.' Two questions:
ReplyDelete1. Is there any price confirmation in gold that would convince you to add back leverage, or would you only do this if the dollar broke below 78.82? In other words if the dollar kept rallying and so did gold would you just retain a core position no matter how much gold went up?
2. What would confirm for you that the PMs are not heading up again and in fact heading back down to an intermediate low?
DG,
ReplyDeleteI didn't buy back. I never left my core position to begin with.
I was just warning those people that sold all their insurance that they probably better buy it back immediately because what was supposed to happen didn't.
Yes the dollar has rallied back, but it never should have broke down in the first place. That makes me think we got a preview of things to come this morning. The fact that gold isn't giving back any of it's gains is confirming that.
So everyone should be prepared in case the dollar confirms a failed cycle and if that happens gold should take off into the final leg of this C-wave. Stocks could continue to creep for a long time if the dollar is collapsing.
The safest time to short stocks will be at the bottom of the three year cycle low.
Another possibility is what Gary always says that the big money gets people all excited by moving above a big round number (i.e., $30 silver & $1400 gold) so they can exit. This move is utterly confusing!
ReplyDeleteI still think we will get an int correction, as it's in the cycle timeframe for such. As long as the Q's and SPY stay below their VWAP (currently at 54.69 and 125.64, respectively), we should see more sellers come in the next few days, even if it's just profit taking. SPX posssibly to 1210 or so by the time this short term correction is over.
ReplyDeleteGavin,
ReplyDeleteI don't know there is a confirmation on the upside because a cycle can top at any time. The confirmation will come if the dollar breaks down.
We would have confirmation on the downside for gold if it moves below the prior cycle low at $1161.
oa92000 said...
ReplyDeleteis it triple tops for HL? good or bad?
I bought HL at $11.00 because it is only a triple top if it retests the top on lighter volume each time. Since HL had 2.5 million at 10.00 a.m. , I bought thinking I could sell at day end if it gets light.
now at noon it has 9 million , prob double that at days end...it hasnt had this much volume all day for the past 5 days...so it is PUSHING against the high with volume. Looking for a breakout.
this is how I played GMO...(see that chart for example ...also why i rebought REE at close yesterday)...pushing highs on volume.
This is 'trading' example , not a recommendation. also bought EXK for same reasons
From the below thread line, it’s again obvious that I can call the numbers. I’m not here to prove that.
ReplyDeleteDo you know the name and contact details for a competent psychologist who specializes in trading behavior, anywhere in the USA or the world?
MLMT, I joined your blog. Contact me, if you would.
#1
Gold's night session is creating a heckuv an opening NY Pit day over day gap.
Those gaps don't stay open, except on such extremely rare occasions that they're memorable. They fill in 1 to 3 market sessions.
It's a very high probability drop back to 1386 range, the high for the day. So, I shorted the first position at 1391.3, and I'm waiting to see. 8:37 pm
#2
Apologies, I won't post like this again. The risk of this current 60 min bar blowing out the top from where it is now 1392.1 is too high. Exited the gold trade at a small loss. 10:02 pm
#3 Gary said...
Now you see why I never short a bull market and why I keep some kind of core position :) The surprises come on the upside.
December 28, 2010 2:34 AM
#4
Last before I hit the hay... GC1G is at 1394.8, with a high at 1395.6 or 8.
Gold is moving off of Mon morning's double bottom low, with the extra fuel of the first low, on 12/23, a major reversal. I just noticed it because I've been so mesmerized by all these new measuring tools I didn't "look". Monday morning's double low was one of the more powerful setups. The market target will be 3x. 1X at 1390 was reached later on Monday and there was a skirmish, and now the next targets are 1398.5 and 1405-1408. The stretch will be to the prior high, around 1425. That's a 5x and the max on this run would be 1430-1435.
I'm entering long at 1394.9 area, with a tight stop. I'll exit the first position at 1399+ and the rest higher.
December 28, 2010 2:40 AM
Slum,
ReplyDeleteI'm not sure what you are trying to "prove".
All that's obvious is that gold suckered you into shorting and then took your money away.
I learned this rule a long time ago. Never, never, never, never, never, never, never short a bull market. It's quite simple really :)
Waiting until the dollar cycle fails will leave us chasing and missing out on a major part of the initial move up.
ReplyDeleteHardly. The dollar should have a minimum of 12 weeks before the intermediate cycle bottoms. Gold can go a long long way in 12 weeks especially if it is the final leg up in a huge C-wave advance.
ReplyDeleteI'm not short but fully flat. But i suspect a trap here. Euro is weak. The new intermediate that is just started do not take off as it should have already done.
ReplyDeleteIf Euro go below 1.3055, just 50 tick away, we will have a failed intermediate, not on USD but on EUR, and usd target will be 90...
Copper is showing the way higher for US stock markets.
ReplyDeleteGary:
ReplyDeleteInteresting times indeed....Silver is way over mean, Gold is about moderately over...
If dollar were to break, given how stretched Silver is, odds favoring an under performance by silver?
USD target of 90? You would need Portugal, Spain, Italy and Ireland along with maybe one more country to default for something like that to happen.
ReplyDeleteIf Snp closes up today that would mean that it only had 3 down days in the entire month of December (to date). What a Christmas rally!
ReplyDelete@aaron: maybe situation is not so clear there in US, but it's hard to imagine HOW BAD Europe is now.
ReplyDeleteThere is 1, i mean ONE and ONLY ONE country that is working and growing and making all the slum still staying up.
Well, unless they took out theyr celtic cross flags from theyr drawer and make another europe empire ending all that keynesians madness, which happens to be MORE madness here than in US, there's no future for Euro.
By the way, that of course won't happen (at least i hope not) so we are fu..ed anyway :)
GG,
ReplyDeleteI think that is where everyone has it wrong. Europe is in a deflationary environment and they aren't trying to print their way out of it (at least not yet). That isn't a negative for the euro. That is a huge huge positive. The deflationary forces are going to suck up lots and lots of Euro's. That means a lot less supply and that means value goes up not down.
http://www.youtube.com/watch?v=mpOoJVzdgog
ReplyDeleteJake
Gary, European Central Bank cannot print money at will. It is not in his "constitution". Really, they can't (I thank God everyday for that).
ReplyDeleteBut they have just talked and agreed to made the new "Euro bonds".
So, the cat has gone out by the door, and will come back in by the window...
The fact remains that the Euro isn't going to weaken in a deflaitonary environment. The seeds are ther for a Euro rally and we all know Ben is merrily printing 7-10 billion a day over here.
ReplyDeleteAfter having pared down to just under 10% each in FKRCX and INIVX last week, I'm still a bit reticent to start jumping back in here (20-25%). This could be a last head fake before another move down, even though the bullion banks have yet to short hell out of it again (it is Tuesday, after all). Seems like Europe is buying gold and the dollar, which is a few pips from posting a green finish.
ReplyDeleteSo, so confusing.
Bull markets are confusing. If they weren't it would be easy to ride them.
ReplyDeleteJust follow the plan and hold your core until we get confirmation the dollar is toast. Then we can start adding back.
Let's also not forget it is the end of the year and there is a certain amount of tape painting, tax loss selling, large funds squaring accounts up, etc. I was hoping for a more forceful move down before Jan 1st, but perhaps it is not to be. Will wait until things clear up a bit more.
ReplyDeleteGary, is the stop above 1260 for the S&P shorts for any intraday move above 1260 or just if the S&P closes above 1260?
ReplyDeleteIt shouldn't move above there intraday if the 4 day corollary is intact.
ReplyDeleteI'm not buying this move yet. The bitter taste of last year's intermediate cycle in stocks crushing the miners is still fresh in my mouth.
ReplyDeleteInteresting junior silver miner I've been watching and had some bought sold it a while back. (Silvermex Resources--merger of Silvermex & Genco Resources). Pink ticker GGCRF. Nice looking chart.
Gary:
ReplyDeleteQuick question again: should the $$$ break down, given how stretched Silver is over its Mean, any thoughts on going long AGQ if $$$ broke down? Or should we stick with SLV / SIL?
That's a tough one. Silver is incredibly stretched but gold and miners are not.
ReplyDeleteAt the C-wave top I expect the HUI to be 40-60% above the mean. It's at 18% today. So who's to say silver, a very thin market, can't stretch 100+% at the C-wave top.
I guess you would just have to decide about AGQ yourself based on your risk tolerance.
Gary:
ReplyDeleteOne more question: Looks like the miners are lagging Gold. Shouln't they lead if this break is genuine? Or will they slowly outperform once the $$$ breaks down?
Ok...cool..I think you answered my 2nd question as well! :)
ReplyDeleteI am looking at todays markets and feel like we are seeing a disconnect
ReplyDeleteSPY, DJIA ,NASDAQ =absolutely anemic volume. Even the GDX is off to a weakish volume break upwards , but look at (on 3 month daily charts)...
GMO , EXK , HL , REE and a few others show real supply/demand as they lift up from downtrends or sideways moves.
GMO is a very legitimate breakout-
I'm not sure what you mean by lagging. the gold:XAU ratio is very near the low for the last two years. It looks like miners are still in the process of correcting the massive mispricing from 08 to me.
ReplyDeleteYeah...sorry...Was looking @ GDXJ, which looks to be doing a gap fill today.
ReplyDeleteSomebody had mentioned a while back about dividends, so maybe that's why it fell apart past couple of days.
The HUI is strong.
Here are some thoughts re the dollar, reposting here from earlier comments section:
ReplyDeleteI can draw a nice looking uptrending channel using the 11/3 low and today's low for the lower channel line and the upper channel line touches both the highs of 10/27 and 11/30. I would want to see the dollar break below this lower channel line (at least, better would be a break below the 12/14 low) before I'd give up on the dollar rally.
We can run a million what if scenarios and one of them is bound to be right.
ReplyDeleteIf one follows the plan, holds onto their core, then if we get confirmation the dollar is indeed headed down into the three year cycle low then we will add back to positions.
If one does that they will come out of this just fine and add significantly to the already huge gains we've made so far.
If one tries to analyze this to death they will probably talk themselves out of a perfectly good plan and miss the final move or at least more of it than they should.
I got a huge laugh out of this today.
ReplyDeleteNouriel Roubini bought a 5.5 million dollar apartment (recently)
He was on CNBC and says that housing prices can only move down!!!
LOL
Interesting read on The Reformed Broker website:
ReplyDeletecorrelation between shanghai index and S&P
Shows both sides of the trade.
http://www.thereformedbroker.com/2010/12/28/the-shanghai-divergence-a-low-probability-bet-on-the-repatriation-trade/
Gary, does this move qualify for the move to new highs before we dscend into the intermediate correction. As you posted about earlier in the month. The big boys selling into these moves on a quiet week?
ReplyDeleteBob,
ReplyDeleteThat already happened at $1430 several weeks ago.
The fact is that gold and the dollar are not doing what they are supposed to be doing. The stock market is just creeping higher like it's been doing for weeks.
ReplyDeleteThe stock market isn't really my concern. The dollar is what I'm focused on. We know the three year cycle low is coming and when it does it will drive commodity prices into a huge parabolic top.
The only question is whether or not the strange action in gold and the dollar is a sign that the decline into the three year cycle low has begun or not.
I'll explore all the scenarios in tonight's report.
Technically the S&P just took out the intraday high from last Wed. so we officially have a negated 4 day corollary. One could go ahead and trigger stops to cover shorts right here.
ReplyDeleteIMO I wouldn't be so quick to cover shorts right here. Volume is 1/5 normal today (yesterday too), the SPY is atop the SoS today with this small volume, and we're in the cycle timing band for an intermediate correction. Going to cash is not a bad option amongst all these contrary forces, but going long I believe, the markets, right now is the last place one should be.
ReplyDeleteWhat is so complicated for everyone just to follow the DXY plan of 78.82?
I didn't say anything about going long. I doubt anyone in their right mind would go long the stock market at this point.
ReplyDeleteWe have negated the 4 day corollary. So anyone selling short based on that signal should cover because the signal has failed.
I'm still in the doubter camp. Bull sentiment quite high, dollar up strongly from the lows, although I don't think it quite hit yesterday's high. I keep feeling like I've seen this picture before, with inexplicable rallies through the end of the year, then 5 down days to start the new year. I kept a core position and so today has been an up day overall.
ReplyDeleteIf this was easy, we'd all be retired, right?
Hi, my core position in gold is GDXJ. I entered this position few weeks ago and still in slight red excluding 'distribution'. Could anyone shed lights on the implication of coming distribution in terms of tax issues? I plan to hold this until Gary says otherwise, but it wouldn't hurt to know what's behind my position. Thanks.
ReplyDeleterobert, do you think regional bank can fall much from this level?
ReplyDeleteInteresting how the SPX came a hair's breadth away from touching 1260 late in the day and then turned down into the close...
ReplyDeleteClosed my slw positions. Not much gain and I don't like the overnight gap risk. (I bought a lot.)
ReplyDeleteClose gold futures too. Not much gain by end of day and I don't like to hold overnight if that's the case.
Silver futures position with very nice gains. Still open and holding.
We'll see where this week goes. Interesting action no doubt.
OT, but may be of interest re: silver.
ReplyDeleteMany months in 1981 or 82, on the slide off the backside of the parabola, silver was priced at $25-35. Instead of using the $50 parabola top, the inflation adjusted, opportunity cost included value of money then in today's dollars I'm thinking is $75-125/oz.
If the top, $50, were considered, that would price silver at $125-$200.
Either way, we're still a long way below the value of a price reflecting more robust speculative interest.
I always find it fascinating when a trend line that was drawn several weeks in the past shows current relevancy. See pink line that is based from Nov.17 @ ~1332 in gold, drawn 3-4 weeks ago.
ReplyDeletehttp://www.screencast.com/users/Mr.Mom/folders/Jing/media/d9ddf176-fd90-4709-9a6f-b99a827b7020
If you use a different spacing for your axis that line becomes meaningless. It's already been violated today if you look at gold on stockcharts.
ReplyDeleteYour fooling yourself if you think you are going to get any kind of edge by drawing lines on a gold chart.
I knew you would say that,lol.
ReplyDeleteSomebody is trading that trend line...
Gary you use lines on your charts.
But only has my final and least important tool. And I think a lot more people are using stockcharts. In stock charts that line you drew has no meaning as it was broken handily today.
ReplyDeleteLet me be the first to say that it is a mistake to use the dollar as the determinant of where the stock market is headed. Furthermore, even if we're to have a dollar crisis, nothing says that has to happen in the next 2-3 years. Nothing.
ReplyDeleteFurther, the dollar and market doesn't necessarily have to have an inverse relationship, nor do they have to have a positive correlation.
Also, nothing in the charts, economy, or political situation indicate to me that the market is headed lower, and definitely not to new lows in 2012, as the bears surmise. Unless there is another MASSIVE fraud going on like the mortgage fraud, this market is headed higher, much higher.
Cheap money can and will drive economies, much further and much longer than anyone can remain solvent (shorting the market). I don't know where you folks get the idea that the shit hits the fan in 2011-2012. No, the shit doesn't need to hit the fan next year or the year after. It could be 10 years down the line, and that's when I think it will hit.
Here is my short term trading for the last two days: Bought and still holding AG(=FR)@12.44 9:50EST today (It was closed at 13.6).Bought SLV' March calls and SLW/HL just before closing yesterday. Closed the option today and will most likely close SLW/HL/AG tomorrow.
ReplyDeleteWhat drove me to load up these positions yesterday was based on the following quote by Marty Schwarz at ‘market wizard’: “If the market is letting you off the hook easily on a position for which there was a basis for fear, there much be strong underlying forces in favor of the direction of the original position.”
I had few bleeding short term positions, but I was able to close them at small profit yesterday, which was rather surprising to me considering the fear I carried since the announcement of the rate hike by China on Sunday evening, and I thought that this is a good case of Schward’s quote and I decide to increase my long position. I am not sure if this was just pure luck from gut feeling, but I think Schwarz's call is simply amazing and worth to learn through.
Beanie,
ReplyDeleteThe shit doesn't need to hit the fan in order for stock prices to head lower.
Valuations are very high right now by historical standards. While that doesn't matter to someone trading the next tick, reversion to the mean guarantees that stock prices have to fall over the next few years. Either that or earnings have to explode simply to keep stock prices where they are.
Buying stocks for the long term represents a low-percentage trade right now, akin to picking up nickels in front of a steamroller. I was bullish in March 2009 and have been ever since. But as of now, valuations and sentiment have priced in the recovery and then some. We may have a few months of rally left, but at some point we will be on borrowed time.
Beanie,
ReplyDeleteShow me any year in the last 10 that the stock market was able to rise along with a rising dollar. I can save you the trouble you won't find any. That's because we are in a secular bear market. In order to keep the markets levitated in a secular bear market the Fed has to debase the currency.
The fly in the ointment is that this strategy will continue to spike inflation and that inflation will continue to destroy the economy when it gets too intense.
The dollar most certainly will have at least a minor crisis next year because that is when the three year cycle low is due. These have been coming like clockwork for 40+ years.
The stock markeet will most certainly fall back into at least an inflation adjusted new low and probably a nominal new low because the 4 year cycle is due to bottom in 2012 or 2013 at the latest. And that's what secular bear markets do. They bring extremely overvalued stocks back to extreme undervaluation so the next secular bull can begin.
For the technicians out there: XRA is on the verge of breaking a 6 month downtrend line. GRS is having a 50x200EMA crossover on the daily and 13x34EMA crossover on the weekly.
ReplyDeleteAdded my gold futures back just a few min ago with small stop (we've got a congestion pattern looking to break higher); appears to be some strength.
ReplyDeleteI still suspect today wasn't a fluke and this really may be starting a strong up phase. Thus, I'm willing to risk small losses with tight stops to establish a large position. It only has to lock on one time - and that isn't as hard as it seems.
ReplyDeleteIf I wait longer till gary's trigger is hit, then obviously I have more certainty, but conversely I have a worse risk/reward position to get in. My style is a bit more suited to more risk by assuming a direction and having a small stop if i'm wrong. I'd rather be in before the move starts strong corrections that make it harder to add.
ReplyDeleteI think one have to look at the concrete conditions in the society itself. The infrastructure - Excellent. Education, more and more capable people, progress of research -faster and faster yoy. Are the institutions breaking down? no, very capable run. The democracy is functioning.
ReplyDeleteSo it is the superficial paper-things that is out of order. Burn the paper, inflate a period to dilute the debts and revaluate gold. The concrete basics of society mentioned above will still be there. What about Zimbabwe, well in that country everything basic is destroyed. It is fundamentally not a inflation or paper-money problem. Germany after WW1 - completely destroyed, large part of the population killed. International trade-wars.
I'm laughing of the post-traumatic stress syndrom (cronic baby-whining) after Lehmann and 10years of stragnation.
And the sentiment too good, well that is biggest problem after many years of bull, when everybody are in. Presently most people are on the sidelines, and then positive sentiment is a RECRUITMENT-FACTOR. (Different from a mature bullmarket when there are not more to recruit). So don't use it as a mechanical rule without thinking.
I've been given the task of managing a portion of my in-law's portfolio. They have about 80% of their money in a bond fund (I looked it up and it's mostly UST's.). 20% has been in various stock positions (including a position in DUG and SH they have held since 2009!--both down 30-40%, and a position in a tiny drug pink sheet THTCF (around 15K worth) that is down 20%. These were put in play by their prior broker.
ReplyDeleteSo, they are finally seeing the writing on the wall and want some inflation/dollar stability protection and want me to position things. I was hoping we'd get the big intermediate correction so I could dump the SH and DUG. I'm ready to cut loose the drug pinkie now. They had small position in GDX that I took the profits on and will move that $ into GDXJ. Eventually, I want to get this 20% into SIL, GDXJ, SLW.
My parents just retired and have a sizable nest egg. Almost 90% of it is in CDs. My old man just bought a little gold and some TGLDX. I think he's going to start buying more, but they are also way under invested for what could be coming.
Any one else dealing with retired baby boomers who are not prepared for this? Any advice? Thanks.
It could be a bit dangerous to chase precious metals simply based on a failed dollar cycle. While a failed cycle on the DX would almost certainly indicate the resumption of the dollar's plunge into its 3-year low, it does not necessarily mean gold and silver will immediately rocket higher.
ReplyDeleteJust observe gold's decline into the July intermediate low. Our little yellow friend fell $100 even as the DX formed a failed cycle and plunged 4 points.
Personally, I have no intention of taking a big plunge into PMs without an obvious intermediate cycle low, but I will be more than happy to short the DX once we see a failed daily cycle. In this way, I have a well-defined trade and can control my risk.
Closed the GC futures for some small profit. I think better prices in morn.
ReplyDeleteGary,
ReplyDeleteThe dollar rose along with the market in 1995-2000.
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=%24usd&sid=0&o_symb=%24usd&freq=2&time=20
I believe the same thing will happen in the next few years.
Beanie,
ReplyDeleteThe market rose 2.4% for the year. I count that as sideways. Which is about the best the market can do in the face of a rising dollar.
Keep in mind that during this time we were right in the middle of the greatest real estate bubble in history. At full employment. And all the market could do was 2.4%
Doc,
ReplyDeleteI admit that is a tough one. If we go back to full exposure we run the risk of repeating last years mistake, although I doubt we are going to see another year long consolidation like last year.
If anything is going to drive the final leg up in this C-wave it will be the move down into the three year cycle low in the dollar and that is due this spring.
I will point out that the intermediate decline in 06 only fell for 8 days before taking off into the final leg up. That leg up did include a 2 month consolidation.
Gold has already gone through a 2 1/2 month consolidation though.
What I find hard to conceive is for the dollar to rally back above the 200 DMA prior to moving down into the 3 year cycle low. That is what would have to happen if stocks are going to correct to any significant degree.
So unless the dollar can do that, rally back above the declining 200 DMA, I have to wonder how the stock market is going to correct.
Despite terrible breadth & sentiment I'm prepared to see the stock market form a really stretched intermediate cycle. Probably not all the way into the dollar's three year cycle low because liquidity will continue to leak into the commodity markets and at some point surging inflation will halt the rally. But maybe all the way through earnings season and into the middle of Feb.
Gary,
ReplyDeletein the nightly report in the last paragraph it should probably say
Put a stop under $1361
instead of
Put a stop under $1161 ?>
Thanks it's been corrected
ReplyDeleteDoc
ReplyDeleteno disrespect , but
I'm not really sure that you are making a valid COMPARISON when you point out that the dollar in (June and July) went down and gold didn't take off , because the time prior to that doesn't match the time prior to where we are now...we just had an inverse dollar/gold relationship prior to now
-but-
In Feb to June...Gold & Dolar didnt have inverse relationships...so Gold was tired, needed a consolidation at that point...it doesnt need one now...
Back then, both went up together. they weren't in an inverse relationship like Aug to Nov...The dollar went from 78 to 88 , while Gold went from 1060 to 1280. THEN they both pulled back a bit and gold rallied, dollar dropped.
so on a 1 yr chart....gold was strong , rallied Feb to June, corrected a bit to the low , rallied hard again , now corrected a bit...now??
the dollar rallied , crashed , rallied a bit...now??
Bought my gold futures position back. Stop near the low earlier this morning. I think that might be the best dip we get.
ReplyDeletevolume still looking good, so holding positions in EXK, HL, REE, and GMO.
ReplyDeletebought URZ
Is it possible for PM stocks to rise here and the market to fall?
ReplyDeleteDG are you still holding your shorts?
How do you view the price of the dollar intraday?
ReplyDeleteGary,
ReplyDeleteOn 12/22, at the close, heavy buying came in on GDXJ. Then look at the heavy buying the morning of 12/23. GDXJ's low on 12/23 was the 38.2 Fibonacci retrace. Is that then resistance level if I was charting?
gary,
ReplyDeletesilver still price still lower than the price @ 1980 , why not just put everything in silver , forget about gold?
I have covered most of them. If I am shorting against the trend I don't give them much room (getting stubborn and fighting the tape is the best possible way to go broke!) , so I lost another sliver of the year's gains. Rats. I expect to be there is some size once we start down in earnest, though, as with sentiment as it is the drop should be significant. These "creep up with no down days" rallies trend to end in mini-crashes. In the back of my mind I have some concern that a dollar drop might just propel them higher and higher, but I don't think that's going to happen. We'll see. And sure, PM's can rally as the mkt falls. Correlations stay in force...until they don't. Very hard to know that stuff in advance. i just play the correlations until they stop because they tend to last a long time.
ReplyDeleteSLV facing resistance at prior high at 30 , any. Thoughts whether it would break above or fill the gaps below ? Before running high again ?
ReplyDelete92000,
ReplyDeleteI haven't been in gold in quite a while.
Silver, silver miners and junior miners.
DG, mkt fall has a inverse relation with dollar going up, that would cause metals to go down , not correct ?
ReplyDeleteI think SLV busts right through 30. Then takes a big fall and fills all the chart gaps and sweeps all stops everywhere. As soon as everybody is out, it races to new highs!
ReplyDeleteOr, it just fails at resistance!
Here's what I know.
ReplyDeleteGC1G reached 1407-1408. That completed the highest probability move up from the 12/23 low on the 60 min chart. Today, in the 5 min, the first strong reversal set up occurred at the high a few hours ago.
This means the market is facing down. There's a time value to the trigger, so no action above or below the high or low rather soon, like in 12 more bars, approx, will void the signal.
This reversal means it's explosive but only a short distance, with 3 pts being the unit of measure. Given the power of the 60 min, still facing up with a stretch to 24-33 within the power of the double bottom, and with this now new "fuel", I think we will see the current move to be a failed reversal and a blow out to 1422-23.
We already had a failure to decline below the 1410.2, which just ran the stops against the 1410.3 prior low.
Without doubt, we will see the 1413.2 penetrated. On a separate logic, the round number 1400 was tagged and we're off to the races to bang against 25 and maybe the high. I don't see currently the source for fuel beyond that range, however... yet.
My position is simple. I believe I can make money hedging my physical positions by avoiding the drawdown I experienced in '82-90 and a few years ago from 1000 to 685 or so. That phrase, "never again", rings in my mind. So, I've approached being here as a trader, not one who is dealing with core. I respect Gary's logic greatly. My dad would have benefited hugely from his advice. I'm just in a different flock, and I'm prepping to tank blast the highest probability trades, with the new software and hardware and the staff invovlement. If it works, great. If not, I'll end up with some new hardware.
Well, for what it's worth, gold will now form a weekly swing low as long as it holds above $1362 this week. Anyone who believes we will see a shallow correction could use this action along with a failed dollar cycle as a pretense for purchases.
ReplyDeleteMy vote says Slum will have some great slightly used hardware for sale soon!
ReplyDeleteI've always been a big fan of KISS.
ReplyDeleteAll these reversals this and time values that, etc. etc. sound like a great way to make something really complicated when all one has to do is just buy and put a stop under $1361.
How hard is that?
gary, "when all one has to do is just buy and put a stop under $1361. "
ReplyDeleteis that a mental stop?
No that would be a hard stop as it would mean an intermediate degree correction has begun.
ReplyDeleteGold is pausing at the underside of the downtrend line drawn by using the lows in nove and early dec. I would think we break through and continue shortly.
ReplyDeleteThis trade still looks good and I am leveraged long with stops that exit at breakeven (gold/silver futures).
So far I would say (like many here) that the market is not yet convinced this rally is real. We still have a 'recognition' point ahead of us if we were to rally today and, say, tomorrow. If the strength to the upside continues then there will be an 'oh crap...i'm missing it' pile in effect.
gary, "No that would be a hard stop"
ReplyDeletei don't think you can set a stop loss order as "sell slv,if gold under 1361", can you?
I really wonder whether following the dollar index so carefully in timing gold/silver purchases is all that useful. Apparently it is 56% weighted by the euro. I think following the Australian Dollar may be better. Gold has a habit of bouncing off the 200 dma and this provided useful entry points in late July, November and just recently (you can get it by keying in $GOLD:$XAD in Stockcharts).
ReplyDeleteI worry that we could wait several weeks before 78.82 on the dollar index is broken to the downside and we could see gold up to $1500 by then, silver up to $35 and the HUI 15% higher.
Personally, I sold down to core but wish I hadn't. Today, I bought back some of the stuff I had sold: ANV, AZK and SLW. What is annoying is that by selling in Dec. I will have a fairly hefty tax bill. There's something to be said for following Jesse Livermore's maxim: "the money is made in the sitting." Trading is a mug's game for the most part IMO. I will never again sell in December, that's for sure, C-wave correction or not.
Prasad: Yes it would (dollar up, everything else down), assuming the relationship holds and there's no reason I can see to think it won't.
ReplyDeleteYou can set a trade trigger to activate if GLD hits $132.50.
ReplyDeletemama,
ReplyDeleteYou weren't going to be able to avoid the taxes anyway because the C-wave should expire before you could hold a year.
oa92000,
ReplyDeleteyes you can sell SLV based on a condition occurring in another stock or even futures instrument. So you can sell SLV at the market when gold futures trades below 1361.
My broker is TOS and you can do enter these kinds of orders on their platform. You'll have to check with your broker to find out whether they have this feature.
To make this interesting I'll let it slip that I'm over 6x leveraged on my position. This is a *normal* trade and approach for me.
ReplyDeleteThe positions are well profitable now, the stop losses are at BREAK EVEN at this point. When I took the position this morning, the stop loss was LESS THAN 1% of my net worth.
The stop on gold was less than $2. Yes this is small. Yes it is possible. You only have to hit a trade once in a while for it to work out. Yes, in the meantime you will take a few losses while you get stopped out trying to establish the position. I've got it now (it seems) and holding to see where we go.
ReplyDeleteOh..and YES I will be following gary's approach more as well in the future, but for now we still don't have an INT low and the market is throwing various curves. So I'm running the game my way in the meantime till some kind of substantial low occurs for a more "Gary" type entry. For now (since we don't know the direction or if this rally is real; just look at the concern or debate...for example DOC) it means that any positions you take (if large) need to have small stops.
ReplyDeleteDollar getting smacked
ReplyDeletepimaCanyon,
ReplyDeleteMy broker is Fidelity, i am not sure i can do that, i'll have to check it out.
Are you happy with TOS?
TZ,
ReplyDeleteNow that you have your position you can reach strong hand status as long as you just honor your stop and don't try to second guess.
If you get nervous and take profits too soon then you will be right back trying to enter again.
If this is the begining of the final run and you just sit Old Turkey with this position you stand to make a huge sum of money.
Now you just have to have the discipline to sit and let it work.
92000,
ReplyDeleteI'm pretty sure Fidelity has a trade trigger feature.
OA, I use Fidelity and TOS. You can do conditional orders on Fidelity, but I don't think you can make it conditional on futures. That seems worthless anyway since you are trading an apple to an orange. Seems easier to condition off GLD and SLV.
ReplyDeletesomething definitely feels wrong with the dollar...is this a trap or is the IT in?
ReplyDeleteoa92000,
ReplyDeleteYes, happy with TOS. Was happier before they sold the company to TD Ameritrade. Their software upgrades seem to have a lot more problems now than before, I'm guessing TD laid off a bunch of programmers and support staff (gotta cut costs so the CEO can make as big a bonus as possible!) and as a result quality has suffered. But the last update went okay. Platform has lots of features, not always intuitive as to how to use them, but you eventually figure things out.
Some have complained that the platform is slow relative to some others. Not a big deal for me (or even noticeable), I think it might be if I were day trading.
I considered switching to Trade Station when TOS started having problems, but inertia set in and I did nothing about it.
Interactive Brokers gets high marks from some folks, but they are geared more toward folks with lots of experience (support may be somewhat limited) from what I hear.
whew! serious tankage on the dollar! broke below the 78 percent retracement of yesterday's impulsive rally off yesterday's low. Yesterday's low is likely to get taken out.
ReplyDeleteGARY,
ReplyDelete>You weren't going to be able to avoid the taxes anyway because the C-wave should expire before you could hold a year.
Unless you have futures - which get 60% long term gains rate no matter how long you hold.
Warning: Not tax advice. Please seek professional as necessary on this topic.
Does it bother anyone that gold is almost at the new highs and GDX is 5% off the highs?
ReplyDeleteWhat has this usually meant in past? I haven't tracked PMs for long.
5288 -
ReplyDeleteDo you know if that tax treatment also applies to options on futures?
GARY,
ReplyDelete>If you get nervous and take profits too soon then you will be right back trying to enter again.
As I mentioned a while ago, my historical problem was taking profits too LATE, not early. The recent silver smackdown caught me. But I've cleared up much of that problem by building in some new rules.
I'm actually pretty good at getting into an up phase and adding to the position as we go. I just overstay my welcome many times. (My performance and gains on the fall rally were horrible. Worst of 10yrs trading. It happens unfortunately.)
RtoR,
ReplyDelete>Do you know if that tax treatment also applies to options on futures?
No, but the google knows :-)
http://www.greencompany.com/EducationCenter/GTTRecCommodities.shtml
60/40 applies to:
"...Section 1256 contracts include: regulated futures contracts, foreign currency contracts, nonequity options, dealer equity options, and dealer securities futures contracts. For a partnership that's a qualified fund, Section 1256 contracts include bank forward contracts, foreign currency futures contracts, and similar instruments prescribed by IRS regs...."
Of course, you won't have any gains on your options anyway so how the profits are taxed won't matter much :-) (I include myself in this characterization). Options are a wonderfully exciting way to lose money. :-)
Warning: not tax advice. Reader beware.
Note that article seems to be using the word "commodities" and "section 1256 contracts" as two categories. As usual, the rules and regs are detailed and confusing.
ReplyDeleteI said 60/40 applied to "section 1256 contracts", but it may actually only apply to "commodities" which *are* "section 1256 contracts". As I said: warning. Seek professional advice.
Hi Gary,
ReplyDeleteThanks for the reply. I should point out that people who can trade within their IRA's can postpone their tax bills, but for those (like myself) who don't have them or aren't allowed to buy double etf's like AGQ in IRA's, we have to be aware of the tax implications before selling. So an item would have to go down at least 10% before you break-even after taxes. Now, that (and more) would happen in a D-wave, but it assumes one could cash in near the top and buy in near the bottom.
With the benefit of hindsight, the smartest thing one could have done is to put $50,000 into the HUI in 2002 (allowing two years after the bull market began) when it was 100 and just hold, no trading whatsoever. It's gone up 6 times so it would now be worth $300,000 (a similar investment in the S&P would be maybe $65,000 today). I wonder how many of those trading in and out of the pm stocks would have done better (though I appreciate your subscribers demand timing advice).
I find one of the hardest things to do is to buy back at a higher price something you've already sold. If you don't mind my asking a hypothetical question, Gary, if
silver is 10% higher from here when (if) the dollar index breaks 78.82, would you recommend buying back AGQ even though it's 20% plus higher than now?
Thanks in advance.
OEX options: more than 2 to 1 in favor of puts today.
ReplyDeleteMLMT,
ReplyDeleteDoes your comparison of gold to GDX include the dividend distribution that GDX should have received in December?
guys
ReplyDeleteI just got a pretty strong buy signal from my uraniums.
this is not a recommendation, but I am now in URZ as of this morning , and URRE is very good looking TO ME at this point.
still in my GMO, REE EXK URZ and now
URRE at 3.28
Mama,
ReplyDeleteSure I would. What does past price have to do with future price?
Until the C-wave is finsihed the trend is up.
Lets just take a conservative estimate and say AGQ goes to $300 during the final advance. Are you really going to pass that up just because you missed the move from $150 to $180?
and DNN @ $3.35
ReplyDeletethe movie Inside Job: I saw it yesterday evening. I thought it might get overly academic and end up being boring. Boy, was I wrong! Most riveting flick I've seen in a long time. Highly recommended!!
ReplyDeleteFWIW: AGQ has a tendency to pop out of the 2.0 Bollinger Band and then drop back in and fill gaps.
ReplyDeleteHave been whacked on the head a couple of times myself these past couple of months trying to chase it.
Another article on the 60/40 tax issue I randomly pulled up:
ReplyDeletehttp://www.gainskeeper.com/us/articles/Stock_Index_Options.aspx
Of course the proper approach is to go to the IRS website and read the rules and regulations yourself. They are in english :-)
Don't run your life off sketchy advice on blogs.
Gary,
ReplyDeleteDo you really mean it when you say conservative estimate for AGQ at $300 by the end of this C wave or was that just throwing out a number?
If you've ever seen a final C-wave advance then know $300 is a conservative estimate.
ReplyDeleteNick,
ReplyDeleteCan you elaborate a bit more on the AGQ bollinger band analysis as it relates to price now?
Many thanks!
Nick,
ReplyDeleteIs looking at recent history. If you look at Aug. and early Sept. you will see AGQ pushed above the upper BB and never looked back.
I seriously doubt anyone is going to successfully trade this with indicators.
Just watch the dollar if it goes then the odds are high the final move has begun. That's the best we can do in this business.
Thanks, Gary. I guess AGQ doesn't really care what price I paid for it:-)
ReplyDeleteInteresting observation, Nick. Looks like the middle Bollinger Bands are a buy zone, now around 145 or so.
Geez, you can never get a Tech analysis past Gary! :)
ReplyDeleteGary - am a newer sub - been on aboard since Aug - Sept this year and took me a while to get on baord with your analysis...Sigh! Should have found you earlier and trusted your work since the get go!!
Yes - I was looking @ recent history since Nov....if you look @ the 2.0 Bollinger band, AGQ travels above it for a couple of days and then comes back in around the mid BB line (20 dMA)
But yes, Gary is correct - since July Aug, AGQ kept KISS-ing the upper 2.0 BB.
Gary said...
ReplyDeleteI've always been a big fan of KISS.
All these reversals this and time values that, etc. etc. sound like a great way to make something really complicated when all one has to do is just buy and put a stop under $1361.
Gary, I completely agree with you, if I didn't hold the physicals position I have. I've ignored the fluctuations for 3 decades and 2 decades and again a few years back when it dropped significantly.
I'm not in a position to sell my holdings, emotionally. I got the goods. That's what this commodities rally is about. Paper is paper. Account holdings are paper. I want the real thing, and hold that in size.
And I can move all my wealth into more inventory for my biz; but it's a cash cow.
So, my position is probably different from others.
I want the physicals, in fact more, but I want to protect against the retracements.
Your world is different than mine. I've been retired and didn't have hobbies like you do. I've a hobby, "game playing".
So, I'm combining the hobby with knowledge I have.
It's not at all unreasonable to allocate a portion of the portfolio to track what you advise, too. If you're still doing this in a year, I'll probably be a camp follower as to part of the portfolio, as well. I come with some pretty singed wings having watched and trusted too many in the past. I trust "me". I'm reading the last year of your subscription postings (ugh) and when and if I trust you, I'll be a camp follower, too. Right now, it's me.
But for 95% of the people who are your subs, what I'm doing is nuts and a waste of their time. Your statement of KISS and your advice carry value; hence my subscription, too.
Regarding Bollinger Bands on AGQ: Double long and double short etf's are likely to give different results on charts than when charting the underlying. If you're going to mess with charts and TA, I'd stick with either silver futures or SLV etf and avoid charting the double (and triple) etf's.
ReplyDeleteFor those who don't know, friday is NOT a holiday or shortened day for US markets or precious metals (based on my information).
ReplyDeleteFor those who trade futures, there is a very rare event in action currently, the snp is red. Hurry and catch a glimpse since it wont last long!
ReplyDeleteAny guesses where gold and silver end the year on friday? My spider sense is tingling and I suspect it could be all time highs.
ReplyDeleteGary-- I'm trying to determine the timing on the intermediate cycle in gold. Do we have a new intermediate cycle and when did it start? OR, just a continuation of the prior intermediate cycle and a new daily cycle?
ReplyDeleteDoes anyone know if AGQ has a special dividend/distribution similar to other ETFs (like the one given to GDXJ shareholders recently) and, if so, when is it scheduled to be given?
ReplyDeleteGary,
ReplyDeleteWhat is your rationale for not just putting everything into AGQ? If the metals are what we think will take off why have any company risk (even if it is through an ETF or a royalty company)? Just curious.
Well to do that one has to be prepared to lose 50% or more of their portfolio if something unexpected happens.
ReplyDeleteAre you prepared to take that kind of risk?
AGQ isn't a basket of companies it is a derivitive of silver. Silver doesn't pay a dividend or distribution.
ReplyDeleteDollar is getting hit AH and creeping ever so close to our failure line.
ReplyDeleteI'm not quite following your logic on the "currency crisis" you are describing. So, the dollar dives into it's three year low which should bottom this Spring/Summer. Then we get a massive rally in the dollar out of this low taking all of our inflation hedges down big time. So the dollar is not going to collapse or anything according to cycle theory. We are just due to put in a hefty low.
ReplyDeleteAre you saying this 3 year cycle could get out of control and really plunge into the depths? (Like 60's?) If this "hyperinflation" that you are predicting comes to pass, a rally out of the low could be brief this time. (i.e. end game could be closer than most think)
Martin Armstrong often talks about the hyperinflation tipping point--crisis in confidence in the underlying entity backing the currency causing a massive fleeing and velocity to skyrocket. Just saying we could be looking at a point where things could very well get ugly on us.
I think there is a good possibility the dollar could drop into the high 60's.
ReplyDeleteThe 3 year cycle after that should also be left translated perhaps only moving back up to touch 80 this time before beginning the long slow slog back down to the next 3 year cycle low in 2014
Gold is triangling around the uptrend line (daily; drawn on lows in nov and early dec). I would say a break higher is imminent - prob within next few hours.
ReplyDeletetz
ReplyDeletewhat does your term 'triangling' mean? And are you looking at gold afterhours on a certain timeframe ( minutes? , 15 minute? Hrly?) thx
Gary,
ReplyDeleteAre you saying that AGQ is riskier than your other silver holdings? And if so then do you also think it has more upside potential?
Of course it is. Its an ultra fund that moves twice as much as silver.
ReplyDeleteBut the miners are also more volatile that silver and you previously said you expected them to do about the same. I'm just confused.
ReplyDeleteTriangling..... I like that!!
ReplyDeleteMiners typically move about 1.25 to 1.5 % for every 1% that silver rallies.
ReplyDeleteAGQ moves 2% for every 1% silver moves.
Very good synopsis of where Gold and SIlver have come from and where they are going into 2011/12:
ReplyDeletehttp://dragonflycap.com/2010/12/looking-ahead-gold-and-silver/
Gary and what do you think about CHF its third major player in currency game
ReplyDeleteGARY,
ReplyDeleteYour site doesen't use a popup at all so I'm unsure why your password emails always say "turn off popup blocker" unless you have some previous reason.
I believe the pssword screen comes up as a popup doesn't it?
ReplyDeleteALEX,
ReplyDelete>what does your term 'triangling' mean?
TRIANGLE-ing; congesting; putting in a triangle at a support or resistance point in anticipation of it continuing through that point.
I was looking at gold intraday (24hr) against a trendline drawn on a daily chart connecting the lows in gold in nov and early dec. We haven't gotten over that line yet (and the earlier break BELOW that line which is what started everybody on the "we're going down now" vibe).
J,
ReplyDeleteI don't really follow any other currency than the dollar. I know what the normal timing bands are for the dollar. For the most part risk assets move inversely to the buck. So the majority of the time we can get semi close to tops in asset markets like stocks and gold by spotting bottoms in the dollar cycle.
The dollar in my opinion is the critical currency. What the Fed has done to it over the last 10 years is the fundamental driver for a lot of the problems in the world today.
Gary,
ReplyDeleteDo you pay much attention to bolling bands during a time like this (i.e., C wave advance). The current silver futures contract is trading a bit over the BB which would normally be a time to at least back off a little but I was curious if you thought this type of indicator loses some / all of its value during this time?
Steven,
ReplyDeleteMarkets go up differently than they go down.
It's the reason why the Bollinger band crash trade works on the downside but not on the up.
More often than not a push outside the upper bollinger band is a sign of increasing momentum not a sign of exhaustion like it is on the downside.
Thanks Gary. Another quick question. DO you think the IT happened and it was just a very shallow one like in 07-08 or this cycle will be extremely stretched and it will eventually happen, hopefully at much higher numbers?
ReplyDeleteAlso, how stretched have you seen a cycle become?
Thanks
O.K. Gary. I am back somewhat in the metals. I didn't miss all that much, but have to admit your trading style would have been better for me than what I wound up doing. I bought a good chunk but have more I'd like to do so we'll see who this plays out. Thanks for the encouragement not to try to game the situation and just get some exposure (that is, if it works!) I can;t wait to see whether the insane level of stock bullishness can overcome a dropping dollar and get us a SPX decline.
ReplyDeleteI don't manditorily pick a cycle low just to make it fit in the "normal" timing band. If it isn't obvious then I operate on the "stretched cycle" thesis.
ReplyDeleteThe last daily stock cycle is a good example. One could have tried to rationalize a cycle low in the middle of Oct. However it wasn't obvious so I assumed we were seeing a stretched cycle. With the benefit of hindsight that was the correct assumption.
Currently we have nothing that even vaguely looks like a normal intermediate cycle low in either gold or stocks so I'm assuming we are again in a stretched cycle.
As I pointed out in last nights report the intermediate stock cycle in 06/07 stretched to 39 weeks because the Fed massively debased the currency.
Could that happen again? Sure anything is possible.
If the dollar doesn't start rallying immediately then there is definitely the possibility that stocks and certainly gold could continue generally higher until the dollar hits the bottom of the three year cycle low.
That's probably about 12-17 weeks away.
Now that metals have moved up enough over two days to suck people in or change strategies (including gary/me/others), it would be a good time to drop and fakeout *IF* indeed this isn't real. Many sideline or reduced people are going long again or adding up. Now would be the time to reverse back if this isn't legit.
ReplyDeleteI'm still holding my long futures with breakeven stops and just waiting.
as pointed out 2 wks ago...love the pattern / volume in ANO and held position,
ReplyDeletebought more today @$1,55 on volume surge. More volume at 10 a.m. than in an entire day. Breaking out of large 3 month flag.
still holding REE and GMO (getting frothy tho), and URRE and URZ as recent buys, bought more urre todaya , volume surging in also.
TZ---yes, exactly right. The PM's are starting to "look" better. If in fact a dip is in the near future, now seems like the time, especially with the SPX seasonal support ending. An SPX tank would hit the miners especially.
ReplyDeleteThere's a very nice crawling pattern (nice if you're long on PM) on the Dollar Index along its 50 SMA right now.
ReplyDeleteI'm showing the 50 is at 79. I don't see where the dollar has touched the 50 in over a month???
ReplyDeleteAGQ is riskier not just because it's a double fund but because it uses swaps to achieve that leverage, and swaps carry added counter-party risk.
ReplyDeleteHey Gary, did you buy already, or still waiting? Thanks
ReplyDeleteI bought
ReplyDeleteGary,
ReplyDeleteThanks for the BB crash trade comment!
Brave call on the 100% move up. I still remember last winter, very cold and bitter winter! But nothing can beat old turkey. My core being close to 100% anyways, I guess I will ride this train with you. I topped off my massive 5% missing from 100% with some silver maples today. Might as well take advantage of old turkey while it is easy...Gold at $2500 and silver at $100, then the turkey might start turning into a chicken, but I will deal with that when I get there.
ReplyDeleteGood luck to all. Hair pulling (being out) versus heart-attack (being in)…choose your fate! And don’t worry, in the short-term, you will be 100% wrong no matter which path you choose. :)
It's early yet, but the P/C ratio at CBOE is .39, and opened up at .26
ReplyDeleteCBOE Intra-day
Very low numbers no matter how you look at it.
And ISEE (Equity Only) shows, yet again, high level of call buying among retail traders.
Does anyone know of another proxy for AGQ. I'm asking because at some point I would like to hedge to get long term CG treatment. Shorting 2x SLV is too risky b/c it may not track especially if it is an up/down market.
ReplyDeleteKEYS why would you pay the extra premium for Maples instead of buying bullion bars/rounds?
ReplyDeleteTnx
Mr.Mom,
ReplyDeleteI do both...no real reason for maples. I am mostly bars, but chose something nicer to look at this time. Bars are real boring to look at. So not a real wise short-term move, but long-term either won't make a difference in my mind. I guess the best bet is to buy massive blocks of silver; use them to prop up the TV or lifts weights with.
I basically buy physical as insurance against my future stupid self. Gold and silver will be much much much higher in the future, and the premium I pay today for the metals, will be well worth the safeguards of forcing me to hold during trading moments. Even during this up-coming D-wave, I plan on holding me pot of gold. Miners and like are different. My views.
Cheers