Saturday, November 30, 2013
Thursday, November 28, 2013
Wednesday, November 27, 2013
Wednesday Morning Report
Because it's my birthday today I'm going to publish the Wednesday morning report.
It's time for a pep talk.
Folks bear market bottoms are the single greatest opportunities one ever gets in investing. The initial move out of a bear market bottom is where the really big moves occur, and occur fast. Look at what happened as miners came out of the last bear market.
Considering that this bear market has been artificially induced and has severely damaged the physical market this bottom has the potential to be even more aggressive than the 08 bottom. Throw in a dollar crisis next year, and a bubble phase that's due to start anytime and it gets even more bullish.
Folks we've got everything on our side. We have an intermediate cycle that is 22 weeks long. That is smack in the timing band for a bottom. We have a daily cycle that ran long at 29 days. We have sentiment that is at levels typical of intermediate bottoms. We have a dollar cycle that has rolled over in a left translated pattern and a three year cycle that has topped. We have a massive volume spike in NUGT. A sure sign that smart money is positioning for an impending bear market bottom. And now we have insiders buying. All of our tools have lined up to give a buy signal.
This is why we sat on the sidelines, so we would have the mental capital to pull the trigger when the time came. The time has arrived. It's time to pull the gym bag out of the trash can and get back to work.
Gary
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Tuesday, November 26, 2013
BUY, BUY, BUY
The buy signal for gold triggered today. Every down day should be bought from here on. This almost certainly takes $1000 off the table.
I will elaborate in tonight's report.
I will elaborate in tonight's report.
THE NEXT CRISES
I see many analysts lately wondering what the next catalyst will be to send gold higher. Isn't it obvious?
Without fail throughout history, every crisis eventually occurs in markets where excesses developed. From 1990 to 2000 the misallocation was in the tech sector. We all know how that bubble ended.
In order to halt the tech bubble implosion and economic recession, the Fed cut rates to 1% and held them there long enough to create a bubble in real estate and the credit markets. Not surprisingly this is where the next crisis hit.
Panicking at the 2009 bottom the Fed again resorted to the only game plan they know and begin printing money at absolutely mind-boggling rates. This has continued nonstop ever sense and along the way virtually every other major economy in the world jumped on the printing train.
Isn't it obvious where the excess is? It's in the currency markets. And just like every other time in history when the crisis hits it's going to hit where the excesses occurred. The next crisis is going to be in the currency markets.
It began last year with the Japanese yen.
The next in the line to get in trouble will be the US dollar at its three year cycle low, due in the fall next year.
After that I expect rolling currency crises as one after another of the major global currencies begin to collapse under the strain of insane Keynesian monetary policy.
At the moment it seems to be fashionable to use the commodity markets has an indication that deflation is taking hold in the world. Nothing could be further from the truth. As a matter of fact we have massive inflation right now. It's just that it is being stored in the stock market, bond market, and to some extent in the echo bubble in real estate. Once the inevitable currency crises began, inflation will start to drain out of stocks and bonds and into the commodity markets.
Let's face it, it's obvious where the next crisis is going to occur, and currency crises are not deflationary. They are massively inflationary.
Without fail throughout history, every crisis eventually occurs in markets where excesses developed. From 1990 to 2000 the misallocation was in the tech sector. We all know how that bubble ended.
In order to halt the tech bubble implosion and economic recession, the Fed cut rates to 1% and held them there long enough to create a bubble in real estate and the credit markets. Not surprisingly this is where the next crisis hit.
Panicking at the 2009 bottom the Fed again resorted to the only game plan they know and begin printing money at absolutely mind-boggling rates. This has continued nonstop ever sense and along the way virtually every other major economy in the world jumped on the printing train.
Isn't it obvious where the excess is? It's in the currency markets. And just like every other time in history when the crisis hits it's going to hit where the excesses occurred. The next crisis is going to be in the currency markets.
It began last year with the Japanese yen.
The next in the line to get in trouble will be the US dollar at its three year cycle low, due in the fall next year.
After that I expect rolling currency crises as one after another of the major global currencies begin to collapse under the strain of insane Keynesian monetary policy.
At the moment it seems to be fashionable to use the commodity markets has an indication that deflation is taking hold in the world. Nothing could be further from the truth. As a matter of fact we have massive inflation right now. It's just that it is being stored in the stock market, bond market, and to some extent in the echo bubble in real estate. Once the inevitable currency crises began, inflation will start to drain out of stocks and bonds and into the commodity markets.
Let's face it, it's obvious where the next crisis is going to occur, and currency crises are not deflationary. They are massively inflationary.
Monday, November 25, 2013
GOLD: BRIEF PAUSE, OR FINAL BOTTOM?
Something may have changed today in the gold market. For one I think gold probably formed a minor daily cycle bottom today. But what I'm really talking about is the complete recovery from another middle of the night attack. For most of the last year these late night attacks have worked wonders for sending gold crashing through technical levels and triggering stops. Today however it simply didn't work for the first time.
It's been my opinion for months now that the forces behind these take downs were trying to push gold back down to the 2008 C-wave top at $1030. At which point I expected they would flip sides and go long for the bubble phase of the bull market. After watching gold fight off the manipulation today I'm starting to wonder if gold has been pushed as far as it's going to go.
At some point all artificial markets finally say "enough is enough" and the fundamentals regain control and take the market back in the direction it was meant to go. Usually more aggressively than would have happened naturally. We saw this in spades in 2008/09.
If gold is finally ready to break free of the year long manipulation then we may have printed a final bottom today. The next couple of days should tell the tale. If gold can rally $40-$50 tomorrow or Wednesday, and the miners 5% - 10% on heavy volume that would in my opinion be a strong signal that today was more than just a minor daily cycle low. If gold can deliver a powerful follow through surge off of this reversal then we may just have a final intermediate bottom, and maybe, just maybe, the bubble phase of the bull market is ready to begin.
I told my subscribers this afternoon, miners have the potential to form a 2b reversal (a technical signal that sometimes spots an exact bottom or top of a trend). One could take a long position at the open tomorrow and put a stop right below today's intraday low. If the 2b reversal is valid then the low will hold and the stops will not get triggered. If nothing else it's a low risk setup with a minimal loss but huge upside potential if we did print a bottom today.
If the manipulation is going to continue it will probably try to regain control tonight. If we see another premarket hit tomorrow then step aside and wait to see if gold can fend off the attack again.
As of 7 O'clock this morning the attack on gold has begun. The intervention is going to try and hold gold below $1250. If gold can fight off the attack two days in a row, that would be a strong sign the daily cycle has bottomed and maybe the bull has finally broken the manipulation.
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It's been my opinion for months now that the forces behind these take downs were trying to push gold back down to the 2008 C-wave top at $1030. At which point I expected they would flip sides and go long for the bubble phase of the bull market. After watching gold fight off the manipulation today I'm starting to wonder if gold has been pushed as far as it's going to go.
At some point all artificial markets finally say "enough is enough" and the fundamentals regain control and take the market back in the direction it was meant to go. Usually more aggressively than would have happened naturally. We saw this in spades in 2008/09.
If gold is finally ready to break free of the year long manipulation then we may have printed a final bottom today. The next couple of days should tell the tale. If gold can rally $40-$50 tomorrow or Wednesday, and the miners 5% - 10% on heavy volume that would in my opinion be a strong signal that today was more than just a minor daily cycle low. If gold can deliver a powerful follow through surge off of this reversal then we may just have a final intermediate bottom, and maybe, just maybe, the bubble phase of the bull market is ready to begin.
I told my subscribers this afternoon, miners have the potential to form a 2b reversal (a technical signal that sometimes spots an exact bottom or top of a trend). One could take a long position at the open tomorrow and put a stop right below today's intraday low. If the 2b reversal is valid then the low will hold and the stops will not get triggered. If nothing else it's a low risk setup with a minimal loss but huge upside potential if we did print a bottom today.
If the manipulation is going to continue it will probably try to regain control tonight. If we see another premarket hit tomorrow then step aside and wait to see if gold can fend off the attack again.
As of 7 O'clock this morning the attack on gold has begun. The intervention is going to try and hold gold below $1250. If gold can fight off the attack two days in a row, that would be a strong sign the daily cycle has bottomed and maybe the bull has finally broken the manipulation.
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Saturday, November 23, 2013
A MAJOR TURNING POINT MAY HAVE OCCURRED
Something happened on Friday that I didn't expect. And it has the potential to signal a major turning point.
On Friday the dollar continued to drop. Why is this important you ask? It's important because it probably confirms that the daily cycle low has now begun and we are not going to get one more push up in the dollar index like I was expecting. We needed that next push up to clearly form a right translated cycle. As of Friday the dollar cycle has topped on day 10. That isn't blatantly left translated, but it's certainly not right translated. Let's put it this way, it has the potential to become a left translated cycle. And I needed to see a clear right translated daily cycle out of an intermediate bottom to confirm the strength of the rally. We are not getting it.
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Friday, November 22, 2013
Thursday, November 21, 2013
Wednesday, November 20, 2013
Tuesday, November 19, 2013
Friday, November 15, 2013
Thursday, November 14, 2013
GOLD: WILL IT DROP TO $1000 OR WAS THE BOTTOM FORMED THIS SUMMER?
The blogosphere seems to have gotten the idea that I am predicting $1000 as a sure thing. Nothing could be further from the truth. I've said many times in the past that I think there are parties trying to push gold to that level. Will they succeed is anyone's guess, but I think they are clearly trying. I also believe that the bear market this past year was an artificial and manufactured move.
If gold does drop below $1251 in the next few days it will confirm that the current intermediate cycle did not bottom in October and is still in progress. If this scenario comes to pass then the odds are going to go up significantly that gold will have a full test of the June low at $1179.
I also think if gold gets anywhere near $1179 we will have another one of those middle of the night attacks where 200-300 tons of gold are dumped on the market to run stops. Traders will wake up to positions already underwater, and the selling pressure will cascade until gold reaches the next major support zone. That support zone is the $1030 level that I have been talking about for months.
On the other hand if gold can rally back above $1361 then that would make a higher high and a higher low. That would reverse the down trend and it would also confirm that the low in October was a higher order intermediate degree bottom, and not just a minor daily cycle bottom. If gold can recover $1361 then I think that is the all clear signal and it's time to jump back in the pool.
As it stands today there is just no compelling reason to trade gold either short or long. The correct position is to sit in cash until we see which line is going to break first.
$1250 = bad times continue, and high odds of seeing $1030.
$1362 = the good times are here again. The bull has broken the manipulation.
Any directional trade while gold remains between those two lines is just a coin flip in my opinion. It could go either way. I just don't see any reason to risk capital on a coin flip when all one has to do is wait patiently for 5-10 days and they will have an answer with a high degree of certainty as to which way gold is going.
I've been very clear. On Sept 3 I recommended everyone exit all long positions in the metals and go to cash until gold either confirms that the bottom was formed on June 28th, or it makes it back down to $1030. That is the point where one could back up the truck so to speak.
In order to confirm that the bottom was made on June 28th gold needs to reverse the pattern of lower intermediate lows and lower intermediate highs. So far it hasn't even come close to doing that yet.
The first step in that direction would be for gold to form a higher daily cycle high. It had a chance to do that during the last daily cycle if gold could have moved above $1375. That cycle failed when it was only able to reach $1361 before the daily cycle rolled over and began moving down into its daily cycle low.
At this point the door is now open for gold to make another lower low if it drops below $1251.
The first step in that direction would be for gold to form a higher daily cycle high. It had a chance to do that during the last daily cycle if gold could have moved above $1375. That cycle failed when it was only able to reach $1361 before the daily cycle rolled over and began moving down into its daily cycle low.
At this point the door is now open for gold to make another lower low if it drops below $1251.
If gold does drop below $1251 in the next few days it will confirm that the current intermediate cycle did not bottom in October and is still in progress. If this scenario comes to pass then the odds are going to go up significantly that gold will have a full test of the June low at $1179.
I also think if gold gets anywhere near $1179 we will have another one of those middle of the night attacks where 200-300 tons of gold are dumped on the market to run stops. Traders will wake up to positions already underwater, and the selling pressure will cascade until gold reaches the next major support zone. That support zone is the $1030 level that I have been talking about for months.
On the other hand if gold can rally back above $1361 then that would make a higher high and a higher low. That would reverse the down trend and it would also confirm that the low in October was a higher order intermediate degree bottom, and not just a minor daily cycle bottom. If gold can recover $1361 then I think that is the all clear signal and it's time to jump back in the pool.
As it stands today there is just no compelling reason to trade gold either short or long. The correct position is to sit in cash until we see which line is going to break first.
$1250 = bad times continue, and high odds of seeing $1030.
$1362 = the good times are here again. The bull has broken the manipulation.
Any directional trade while gold remains between those two lines is just a coin flip in my opinion. It could go either way. I just don't see any reason to risk capital on a coin flip when all one has to do is wait patiently for 5-10 days and they will have an answer with a high degree of certainty as to which way gold is going.
Wednesday, November 13, 2013
Friday, November 8, 2013
Thursday, November 7, 2013
QUEST UPDATE
Well the crazy metals managed to whipsaw us for another loss. As I suspected it's going to be very hard to make money in this environment.
Current total $2167 up 700%
Current total $2167 up 700%
Wednesday, November 6, 2013
Tuesday, November 5, 2013
GOLD AT A CROSSROADS
At the moment gold is at a critical crossroads. If it can move above $1375 it will confirm that an intermediate degree bottom occurred last month at $1251, and start a pattern of higher highs. If however gold continues lower and breaks below that $1251 level it will confirm that an intermediate degree decline is still in progress and the recent bounce was nothing more than another bull trap to work off the short-term oversold levels.
Actually based on my cycles analysis I think we can even narrow the band a little tighter. If gold can move above the October 28 high at $1361 over the next several days it would confirm that this daily cycle has become right translated and complete a new pattern of higher highs and higher lows.
If however gold moves below Friday's half cycle low of $1305 it would confirm that the daily cycle has topped in a left translated manner and the odds would then be very high that the October low at $1251 is going to be broken over the next 2-3 weeks.
Until one of these lines in the sand get broken, there is just no compelling reason to place a directional trade in the precious metals market.
More in last night's report.
Actually based on my cycles analysis I think we can even narrow the band a little tighter. If gold can move above the October 28 high at $1361 over the next several days it would confirm that this daily cycle has become right translated and complete a new pattern of higher highs and higher lows.
If however gold moves below Friday's half cycle low of $1305 it would confirm that the daily cycle has topped in a left translated manner and the odds would then be very high that the October low at $1251 is going to be broken over the next 2-3 weeks.
Until one of these lines in the sand get broken, there is just no compelling reason to place a directional trade in the precious metals market.
More in last night's report.
Monday, November 4, 2013
Saturday, November 2, 2013
WEEKEND REPORT: DOLLAR SURGE
Dollar:
A rather interesting development occurred on Friday, and one that I wasn't really expecting. The dollar sliced right through its intermediate trend line on its first attempt. I thought for sure we would see some kind of pullback from that trend line before a break. In my opinion this signals that there are a lot of people caught on the wrong side of this market.
The ferocity of the first five days out of this yearly cycle low has me wondering if the megaphone pattern isn't still in play and we're about to see a test of the upper trend line area over the next 1-2 months.
If we take a look at the euro chart we can see that the daily euro cycle is only on day 12. That implies it still has another 8-13 days before finding its next daily cycle bottom. The dollar should have those same 8-13 days to rally before this daily cycle tops.
Originally I thought we might see a test of the 200 day moving average over the next 4-6 weeks. But the explosive nature of the first five days, and taking into account this daily cycle still has another 8-13 days to go before topping, we could see a test and break of the 200 day moving average over the next 1-2 weeks. I think we would then have at least one more daily cycle higher before the intermediate cycle tops. Two daily cycles of this kind of behavior could definitely send the dollar back up to test the upper megaphone trend line over the next 2 months.
I'm starting to get the feeling that this rally out of the yearly cycle low is going to be a lot more powerful then almost anyone is expecting, including me. In order to turn this back down it may require a fundamental change in the market such as an increase in QE. I don't believe that is politically feasible at the moment unless the stock market really starts to tank in front of the Christmas holidays.
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Friday, November 1, 2013
QUEST UPDATE
Another step backwards yesterday. I thought gold would at least test $1375 before the cycle topped. Alas it was not to be. Current total dropped back down to $2650. Up almost 900%.