Sunday, August 24, 2014


If one looks at a longer term chart of the last two years it’s very clear that gold is being capped at certain levels, and those levels are slowly forcing gold lower and lower. Each one of these manipulation zones are being defended successfully and that has some serious connotations going forward.
This all started right after the announcement of QE3. Gold was driven below $1700 and held below that level for 2 months. This got the ball rolling so to speak, it broke an intermediate cycle and started the bear market. Of course we all remember the call by GS to sell gold short followed by the premarket attack on April 12 that took out the stops below $1520 leading to a waterfall decline. That had to be one of the most blatant cases of manipulation in market history.

Without a doubt gold completed a final ICL (intermediate cycle low) on Apr. 16. The May retest was the beginning of what should have been a recovery from the manipulation and a resumption of the secular trend.
apr. breakdown
But then something happened. As gold tried to rise above $1400 we saw repeated attacks to keep gold below that level eventually leading to another waterfall decline in June down to $1179. In the process this created a 33 week intermediate cycle - a full 10 weeks longer than normal. 

The natural ICL occurred on week 23 at the April bottom. The manipulation to prevent a new intermediate rally above $1400 added a full 10 weeks to the cycle. 

And let me say that having observed these cycles for over 10 years I can say without a doubt that a failed intermediate cycle in decline never stretches an extra 10 weeks. Most of the time they bottom a bit prematurely as the selling pressure tends to exhaust itself quickly. 
1400 level
So a manipulation zone had been established between $1400 and $1430. The next intermediate rally out of the June bottom was capped right at that $1430 level. The zone had been successfully defended. This then led to another stretched intermediate cycle. Again having watched these cycles for years I can say without a doubt that two stretched and declining cycles in a row isn't a naturally occurring event. The powers that had created this bear market were trying to run the stops below $1179 and in the process they stretched a second intermediate cycle. 
first manipulation zone
The next blatant manipulation of the gold market occurred right after the September FOMC meeting. Gold was immediately taken down the very next day creating a daily cycle that topped on day 1. Never in history has a gold daily cycled topped on day 1.
Sept. fomc
This established another manipulation zone at $1375. The intermediate rally out of the Dec. 31 bottom poked above that $1375 level for 1 day before it was turned back down. Another manipulation level was being successfully defended.
march top
We now we have another manipulation zone that has formed at the top of the recognition day on June 19 at $1320. Other than just a few days above that level the zone has been defended and it has now broken the intermediate cycle.
new manipulation zone
What is concerning is that every one of these manipulation zones are being successfully defended when challenged. That would suggest that the next intermediate rally is unlikely to get above $1320 for more than a day or two before it too is turned back.
goldAt this point it has become painfully obvious that once a manipulation zone is established the powers in the paper market can defended them, and each one of these zones are occurring at lower and lower levels.
I think traders need to recognize this fact and adjust their trading accordingly. One can only go long the sector at an intermediate cycle bottom, and once that rally approaches a manipulation zone get out and stay out until the next intermediate bottom. As this pertains to the gold market right now it would suggest that we aren't likely to see $1320 recovered quickly.
I honestly don’t know what it is going to take to break this pattern in the gold market. If two ongoing wars isn't enough to drive gold through the $1320 suppression zone who knows what kind of black swan event will have to occur to trigger a resumption of the secular trend. 
For now I have locked up our gains in the metals and I'm going to continue to sit on the sidelines until gold gets into the timing band for the next intermediate bottom, and that isn’t due for another 7-12 weeks.
If we see a manipulation zone challenged and broken, that will be our clue that gold is ready to trade freely again. As of right now that would mean a sustained move above $1320. If that were to occur that would get me off the couch and back into the market. If not, then I will wait patiently for the next buying opportunity in 2-3 months.

So far the SMT has made good money buying these intermediate bottoms and exiting when gold pushes into a manipulation zone. But until the manipulation has been broken, a buy and hold strategy is no longer an option as each one of these zones is occurring at lower and lower levels as the powers in the paper market try to keep the bear market alive. 


  1. Gary,

    Why not trade Palladium instead? It continues to set new highs and doesn't appear to be manipulated, all while having very natural and normal corrections like gold did back in 2011 before the parabola collapsed. Plus it's easier to get a cycle counts on Palladium. They have all been very clear in my opinion.

    1. The problem with trading Palladium is that it's already up 28%. The time to buy Palladium was seven months ago.

      At the moment the two assets that have the potential to be at the beginning of a sustained move like Palladium was seven months ago are the stock market (at the very beginning of a new intermediate cycle) and oil once it forms a final intermediate cycle bottom.

      I had many subscribers suggesting we needed to buy positions in the stock market in July. I said we needed to be patient and wait for a correction. We did and then got in at the very bottom and our portfolio is now up 11% over the last two weeks.

      It's too late to buy Palladium now. We need to wait for a significant intermediate degree correction. There are other assets that are more likely to deliver a sustained trending move at this point then to expect Palladium to deliver another 20% gain after already missing a 28% gain over the last seven months.

    2. Fair enough Gary and I wasn't questioning your performance. I know it's been good lately. It looks to me like Palladium put in an ICL with the stock market, however, and already bac ktested the breakout point, so the trend should still be higher. I agree oil is the place to be when it forms an ICL.

      Would you ever trade Palladium, despite its low volume?

    3. I would like to see a recognizable intermediate decline before I buy palladium. With gold now on the downside of it's IC this could be the opportunity for palladium to correct. I would need to see at least a 38% retracement of the rally from $700 to $900.

  2. Wow. Excellent analysis. Most folks would think we are wearing tinfoil hats.

    Several years ago, the Presidents Working Group on Financial Markets was established by Reagan.

    The Working Group consists of:

    The Secretary of the Treasury, or his/her designee (as Chairperson of the Working Group);
    The Chairperson of the Board of Governors of the Federal Reserve System, or his/her designee;
    The Chairperson of the Securities and Exchange Commission, or his/her designee; and
    The Chairperson of the Commodity Futures Trading Commission, or his/her designee.

    These people, the Plunge Protection Team, have the authority to manipulate markets and they need working capital- capital which can only be supplied by banks. This isn't a theory- this is fact. Defending the dollar against precious metals is a mandatory part of their mandate. I am surprised gold clawed its way up to the 1900's.

    1. It is always interesting that when people tell me about my tinfoil hat and laugh at conspiracy "theories" I ask them how many counties there are in the United States? When they don't know I tell them there are 3140 counties in the USA. I then tell them that each one of those counties has a court house. And that every day Mon-Fri every week of the year from 8-5pm there are trials large and small going on. In each one of those trials there has been some kind of conspiracy perpetrated, one person upon another. When they then look sheepishly at me, I just shake my head and walk away. It is always "easier" to sit idly or call people names so not to be bothered than to take up the light of truth.
      People just do not want to be bothered with truth. They might have to "do something" if they know it. And in this country today, no one wants to be bothered with right and wrong.
      Down and down further we fall into the abyss, each and every day.

  3. Gary: Thx for a nice analysis.

    OIL & N.Gas will provide an awesome entry but we are just not there yet! Also corn/wheat/coffee appears to be near low risk entry, but will require tight stop.

    Gold will pickup during Indian festival season of lights (Diwali) which would be near your timing band of 7-12 weeks, however we will need a significant event suggesting HIGH instability either in geo-politics or financial industry for this ship to turn around quickly, otherwise this is going to be a slow churning process and could go through out 2015.

  4. Rob Carter Comments Gold is like any non-essential commodity, it is worth what someone is willing to pay to buy it at any time and place concerned. There is currently only one real permanent ongoing long term buyer that's PRC China that wants all it can get to screw USA economics completely on the future. They are using the reverse of Nixon/Friedman shock stupidity of 1971 releasing gold and USD peg as Gold is far more solid than USD which is due to fall 50% by 2016 latest. Keynes and UN and World leadres set the Gold Standard and Petrodollar USD/Gold peg t $35 whereas prior it had floated between $25 & $55 that was sanity, Nixon created the Sovereign USAD unbacked printed junk Fiat dollars that no one can trust it will fall 50% as should the unpegged Gold now or soon. How can Gold suddenly be worth $1800 and down to $1,000 when it was only worth $25-55 then? The dollar ony floats between AUD 80cents and $1.20 deepending on rigging and economics. That’s a 40% up or 33% down not 4000% that they want us to believe of Gold. Cost of mone to market USA is $900 they argye $1100 PRC Below $600 and even lower yet.

    USG fort Knox will buy optimal priced gold to replace the UK and Germany's gold they have stolen and sold illicitly. Then the Jewelry market, but they hold sufficient stocks to wait for the falls of official gold to top up stocks, or they sell other precious metal alternatives.

  5. Any chance gold could be putting in a stretched IC of 8 months? A price south of $1240 sometime soon would be a possibility (?)

    1. Well gold clearly formed a right translated cycle back in June and a weekly swing so I would have to say that qualifies as a completed intermediate cycle low.

  6. True enough. For the real story on gold, check out Gold Wars -

  7. Gary,
    Thanks for the analysis. One quesiton though - isn't a buy and hold startegy exactly how you take advantage of manipulated markets? Eventually Mr. Market will win out and we should have long term postions to sieze that day right. Do you have a longer term portofolio loaded with PHYS and certain gold shares?

  8. Well that depends on how much pain you are willing to suffer. Quite a few traders decided to do the long term hold strategy back in early 2013 when I suggested everyone exit. I would say they are very much wishing they had not done that. Who knows how long the manipulation can keep gold suppressed. It could be 2-3 more years before gold breaks free. Are you willing to tie up your money in a dead asset for that long?

    We've just been buying the intermediate bottoms and selling at the tops. Then moving on to something else while we wait for the next intermediate bottom.

  9. How often are your cycle models accurate? 50% of the time, 70%, just curious. If you get it wrong, manipulation seems to be your reason for inaccuracy. Summer doldrums = very little volume, equities have been king since 2009. Gold bulls got it wrong and have been paying the price since. Maybe its time to question your cycle theory.

    1. Just like every tool cycles analysis isn't 100% but it has allowed us to make great returns so far this year. If I'm correct about the stock market we should have a 30-40% year or maybe even better.

  10. Is this the kind of thing we have to sit and take or is someone on the inside going get off the couch and expose these bastards. They are basically stealing from all honest investors by corrupting free buying and selling of products. There has to be a confrontation eventually or they will steal everything we have while we just sit on our arses.

  11. Question : When gold goes up ( going up for years like from 2000 to 2011 ) was that manipulation as well ?

  12. In general, I have found analysts who practice cycle theory to have the worst performance records.
    Is your past performance monitored and rated by any service such as Hulbert.?
    I also think that all markets are manipulated some of the time by powerful interests and not just governments.
    However I see a lot of manipulation believers that use it as an excuse for poor analysis and poor performance.
    I trade futures and I am currently long palladium, platinum, gold, and silver.
    Palladium has been my biggest winner this year.
    Good luck!



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