Saturday, August 13, 2011


"Liquidity will eventually find its way into undervalued assets" Gary Savage

I think it's time for liquidity to drain out of gold and flow back into a severely beaten up stock market. Depending on how quickly the market tests the 200 day moving average will likely determine whether or not it can make marginal new highs before resuming the cyclical (and secular) bear trend.

More in the weekend report...


  1. Just exactly how much 'liquidity' is in gold? Every day I read about how the 'average' investor is totally oblivious to gold and therefore there can be no gold bubble. With everybody and their brother ridiculing and disparaging the US Dollar wouldn't the obvious contrarian 'trade' be to cash (ie. US Dollars)? I think there is a great deal of confusion with the state of the US economy and the 'value' of the US Dollar. I also think it might potentially be a grave mistake to conflate the two at this particular juncture.

  2. I hear corrections are coming in gold. He may get his wish.

  3. I think this is an amazing quote.

    I concur that Gold can decrease, as you mention the price of gold is increasing vertically which is never a good sign.

    It reminds me of Silver when it increased vertically a few months ago and look at what happened to it now.

    If you have the belief that Central Banks will print money then the fundamentals for Gold are obviously strong none the less the price can still correct by $100-200 easily.

  4. Undervalued assets are still be gold and Silver...

  5. Overvalued and overbought are 2 different things.

  6. So since you've sold gold and bought stock last week, Im curious which stocks you bought?

  7. JPD,
    I told subscribers to sell stock positions last night. The inability to hold onto the early morning gains despite a weak dollar yesterday was a warning sign that something was wrong.

  8. "I was right 100% on all my calls"

    "At this point I would rather put capital at risk in a severely oversold stock market than a parabolic gold market."

    "I told subscribers to sell stock positions last night."

    So Gary,since the time you've given your reccomendation to buy "oversold" stocks instead of "overbought" gold, gold has moved 8% higher, thank you very much.
    So much for your 100% calls.

    How did you do with stocks?
    Where did that liquidity you were talking about go?

    To "oversold" stocks or "overbought" gold?

  9. We got out with a small gain yesterday.

    Almost every single trade I've made in the model portfolio has been profitable this year. Even missing the top of silver was still profitable because we entered back in Sept when it broke out.

    I got everyone out of stocks in their 401k's. That call alone would be worth 10 times the price of a subscription.

    Yet you are worried about missing a move in gold? You can't be serious.

    At this point we are just playing chicken with a gold parabola. Yes I know everyone is greedy to is make as much money as possible off of the parabola. But the correct strategy is to make sure you don't get caught when parabola collapses.

    It's the difference between trading in real time, (what I do), and trading in hindsight, (what you do).

  10. ERI,
    give it a rest. I do not have Gary's subscription but why are his calls bothering you so much? If he is wrong his subscribers will leave him,if he right he will get a ton more. Obviously the fact that his subscribers re not arguing with him in droves, suggests that he has kept them happy enough. Whether he gets 51% or 99% right they must be making money, no?

  11. I'm not going to argue this on the basis of fundamentals but gold is clearly pushing into extreme territory for traders (and guess what, these are the folks who make real money, not the one's who treat it like a religion). The Dollar on the other hand, despite all the terrible things happening to the US economy is not at new lows and has not yet come close to breaching the late April early May lows. If I was a trader where is the upside in anything, unless you believe in the never ending story of gold? Sorry but the contrarian trade (if there is any such thing) is cash and that cash is US Dollars. An even better speculation would be shorting the US indexes in grossly overvalued currencies like Canadian, Australian, or NZ dollars. These currencies are going to absolutely swan dive when Toto pulls back the curtain on the China 'miracle.'

  12. Well maybe so for some. But I am holding onto my two outstanding gold investments that are doing great. NGD, & PHYS.

    I still believe the destruction of global fiat currencies, is what continues to drive the precious metals gold & silver higher. And I don't see that ending anytime soon with the poor government management across the globe.

  13. James,
    As long as one isn't leveraged then simply holding their position is a perfectly acceptable strategy as this bull market still has to go through the bubble phase before it can finish.

    That being said gold is obviously in a parabolic move and those are never sustainable. D-Wave declines typically retrace 50 to 62% of the preceding C wave advance. At current levels that would be a move back to somewhere between $1250 and $1350.

    This has nothing at all to do with fundamentals. A D-Wave decline is a regression to the mean, profit-taking event. Those occur no matter what the fundamentals are.

    As long as you can weather that kind of correction and hang on to your positions you will be fine. If however a six or 700 point correction would cause you to sell at the bottom then hanging onto positions into a parabolic top isn't the best strategy.

  14. "Whether he gets 51% or 99% right they must be making money, no?"

    Exactly saif, but you see i am only responding to his claim that 100% of his calls were right. Which is BS. That's all.

    As we can see now he was so wrong on gold it isn't even funny.
    At 1650$ Gary called bublle in gold and recommended not investing in gold but in equities.

    Gold is now at 1864$.
    And where exactly are equities?

    Gary has made one amateurish mistake which i would never expect of him.
    He forgot that in the bull markets surprises are always on the upside and he forgot that when something is making one after another ATH there is no technical or any other analysis that one can use to determine whether something is overbought and call the top.

    It's called "uncharted territory".

    But the good thing is that even people like Gary are sceptical about gold.

    And that means much higher prices ahead

  15. Show me one time anywhere on the internet that I said gold was a bubble. I said it is now in a parabolic rise and we are now just playing chicken with the parabola.

    We had several high volume reversals lately along with a severe divergence in miners and silver.

    Gold is in the topping phase of a 2 1/2 year C-wave. parabola's always crash there are no exceptions.

    So you tell me. Are you going to be able to spot the exact top and avoid the crash?

  16. Nothing lasts forever so yes gold and silver are in a bubble. As long as this country is in a crisis it should continue to do good but you never know what the government will do. I don't plan to be greety and ride out to the top. But I still think we have a long way to go since Europe affects us and we have no good news. Be careful it is really using your good judgement and stay on top of what is going on here and in the other countries. I don't see anything getting better, in fact, I see things getting worst.

  17. Why so headace to argue about who's right or wrong?

    For all of you to enjoy a peaceful mind. From today, for the next few days, stock market offers the best opportunity to enter. The market is due to a solid rebounce for a month. Good luck fellows!

  18. Gary, you have expertise in Intermediate cycles. From the Intermediate Gold cycle bottom, in early July, you simply can not call for other the a one or two week gold correction here but, even then with a higher high then today as this cycle tops in late November. A strong pullback ok. An Intermediate Trend reversal invalidates your prior gold cycle work.

  19. If I was certain that July marked an intermediate degree bottom then yes you would be right.

    But the correction was ambiguous enough that I'm not certain that was a intermediate degree correction or not.

  20. Gary, Thank You for your response. Gold has made a higher high then the previous cycle high. This indicates that the early July low was indeed an Intermediate Cycle low. The fact that Gold did not bottom at its normal trendline low indicates great strength going forward in this cycle, imho, Just as in the prior Intermediate Cycle Silver refused to bottom near its trendline low, and then exploded. Your people may do quite well to be on the sidelines right now...The question is: with a 1 or 2 week Gold decline...will you pull the trigger and get them back in...or loose this Trend move?

  21. In regards to intermediate degree corrections I like to be able to see them from the other side of the room.

    I can't say that about the July bottom, so at this point I'm conflicted as to whether July was actually an intermediate bottom or whether we are just in a very stretched intermediate cycle that began in January.

    The real opportunity isn't going to be trying to catch the last couple of percentage points of a parabolic move. The real opportunity at the moment is going to be catching a violent bear market rally in stocks. We are starting to see some of the signals needed for me to take another shot at the stock market. Right now we just have to wait and see if those signals hold through the close today.

    I will cover this in the weekend report.

  22. David,
    Once were sure the intermediate bottom is in one can take a large position in the stock market and probably make almost as much as they would have if they had ridden the entire parabolic move in gold.

    You are assuming a missed opportunity will never be recovered.

    There will always be another opportunity.

  23. I am going to go over what I think could unfold if 1100 is breached next week, and I think it will be, in this weekend's report.

  24. ERI-I thought you promised last week to get lost( lol)- seems like you can't stay away though- come on man- subscribe to Gary and really enjoy these discussions every night and you might even make some money-I made more this year then I did in the last 5 years ..

  25. Well, I heard August was gold. Looks like that was true. So look out September, here comes silver.


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