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A little more down in the conventional markets and watch out!

August 12, 2015

Gary Savage has some thoughts that the markets could be entering a bear market phase that could result in a 20 to 30% decline. The US dollar could also be under some pressure… Watch out for the Fed and QE4 to be on people’s minds shortly.

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spx trend line

Discussion
123 Comments
    Aug 12, 2015 12:42 AM

    Oh…What a beautiful morning………
    Oh…What a beautiful day. Dah da da da…………. Da, everything is going my way!
    Treat yourself: https://www.youtube.com/watch?v=9LdIL5WCso8

      Aug 12, 2015 12:05 AM

      WERE ARE THE SHORTS……………………..

        Aug 12, 2015 12:12 AM

        getting squeezed today 🙂

      Aug 12, 2015 12:12 AM

      Agreed Silverdollar. This has been a very positive morning in a number of stocks in the PMs up 8-12%. It’s refreshing to see the August pop continuing on, and as mentioned last week as the preferred scenario that would play out.

      In addition, I posted quite a bit yesterday on the extreme low volatility levels, and made a nice 13+% profit in UVXY from afterhours yesterday to premarket today.

        Aug 12, 2015 12:51 AM

        Shad:
        Happy for you on yesterday’s results. Hey, wanted to ask if you ever use the technical Parabolic SAR (stop and reversal indicator)? I’ve begun to apply in to the charts I follow and really like what I see. Looks like a great way to pick a low and high if you’re into swings. S signal to buy many times coincides with a positive cross-over on MACD. Not an exact pinpoint but when the standard deviation narrows, it certainly implies one should pay attention! I wish I had used or looked at this indicator on NUGT. I would have held off for several days in the $4 region and waited for the narrowing in the $3 area to scale in heavier. I also think for me it seems something I can use much better than Bollinger Bands, which I find almost useless except on long term analysis. I believe this will show a low and high developing much better so one doesn’t buy too soon or sell too soon. Would like your comments when you have the time. Keep the faith!

          Aug 12, 2015 12:00 PM

          Man, that is great advice Silverdollar.

          I normally watch RSI levels, MACD, ADX, 50 & 200 day Moving Averages, Exponential Moving Averages, Trend lines, Fib levels, prior peaks & troughs, chart patterns (head & shoulders, cup & handle, wedges, triangles, pennants, flags, etc…). I agree that many times the Bollinger Bands are not as useful for me but sometimes is indicates a bounce, or support or resistance level, or most importantly a severe narrowing of the BBs.

          As for the SAR (stop and reversal indicator), I am aware of it, have looked at it before, but just never took the time to figure out how this indicator works. Your explanation is very helpful, and I am may go take the Stockcharts class on it and start using it as well, and watch for the MACD confirmation in conjunction.

          Thanks so much Silverdollar for another arrow in the quiver. I really appreciate sharing good investing ideas with like-minded folks.

    Aug 12, 2015 12:47 AM

    Serious declines in stock markets around the world, kicked off by the Chinese devaluation (a Black Swan?).
    … QE4 coming. Schiff will be right again :).
    When greed turns to fear, people turn to gold.
    The party is over. Time for BitGold ?

    http://youtu.be/ZRqCOcs4GiA

      bb
      Aug 12, 2015 12:02 AM

      There are advantages to bitgold, but really, the gold price should have no affect on the shareprice. (other than psychology).
      The price of the shares should be determined from financials.
      Maybe that’s why it down about 5% right now as gold goes up.
      I like the idea of bitgold tho.

    Jay
    Aug 12, 2015 12:48 AM

    Amazing interview. Wow. Thank you Gary for sharing your market insight.

    Aug 12, 2015 12:52 AM
      cfs
      Aug 12, 2015 12:03 AM

      I Agree. That’s why I bought SDS last week.

      I’m getting close to shorting junk bonds, now.

      I’m thinking the closer we get to collapse, the more expensive money becomes.
      (not only gold, silver = money, but the cost of money i.e. interest rates.)
      I’m steering clear of government money,i.e. treasuries, however, because that comes out of thin air.

      Aug 12, 2015 12:14 AM

      AGREE………………………………………………..THE CLAW

    cfs
    Aug 12, 2015 12:09 AM

    I have no proof of the following statement:
    Just looking at currencies markets in Europe, it looks to me the Federal Reserve just did a swap and eurodollars were sold.

    Aug 12, 2015 12:09 AM

    Oppps….something is really wrong with printing money to gain prosperity…..boy I wonder why?????..:)

      Aug 12, 2015 12:15 AM

      🙂

      Aug 12, 2015 12:03 PM

      tragic comedy SD Marc. : – )

      Hope all is well!

    Aug 12, 2015 12:13 AM

    JNUGernauts ….

    Interesting 5-day trend: JNUG has a 3.5x factor over GDXJ. I did not know this could happen with all the decay 😉

      cfs
      Aug 12, 2015 12:27 AM

      GDXJ is INDEX based, and the index contains some good stocks and some crap.

        Aug 12, 2015 12:23 AM

        Agreed CFS. I actually like the makeup and weighting inside of (SGDJ) much better, but like the liquidity of GDXJ. Normally I only trade the JNUG and JDST for leveraged short term sector moves in the Jr and Mid Tier miners, based off GDXJ.

      Jay
      Aug 12, 2015 12:55 AM

      Any good references on how the decay in the 3x ETFs works?

      I’m in NUGT and JNUG and would like to hold, if things play out as Gary thinks.

      However, I’ve tried to read up to understand how the decay works and haven’t found anything that’s very clear.

      I held DUST from around $11 to $13/14 for a few weeks (sold early 🙂 If I had held for a few more weeks it went into the high 30s and I don’t see how decay would have hurt me since I would have been on the right side of the trade.

      Any insights to help understand the impact of holding these 3X ETFs for longer periods of time (few weeks to few months) if you’re comfortable you’re on the right side of the trade and don’t want to sell?

      Thanks for any help here.

        Aug 12, 2015 12:20 AM

        The decay is really a non issue in these 3x leveraged funds because they are so volatile to begin with, and rarely just stay put treading water. Yes, if you hold them for long periods of time in a sideways market then there is some erosion. However, more than likely they are going to go screaming up or crashing down over short periods of time, and then whipsaw back (because the underlying mining stocks are so volatile to begin with, before the 3 x leverage).

        In a nutshell if you hold JDST, JNUG, NUGT, or DUST for a few weeks and make 10-100% returns, then who cares about decay? How many shares offer that kind of swing on a regular basis week in and week out? I just approach it from the vantage point of crazy volatility + swings of 5-20% daily, and they are not for the risk adverse or faint of heart.

        Good luck to you in your investing.

          Jay
          Aug 12, 2015 12:46 AM

          Thanks Shad. That’s been my philosophy as well, but wanted to learn some more to make sure I’m not missing something big. I tend to only trade them at “extremes” of highs/ lows to take some of the risk out and with the potential gains (if I’m right 🙂 i don’t worry about decay so much either.

            Aug 12, 2015 12:04 PM

            Good thoughts Jay, and good luck to you in your investing in these wild markets!

        cfs
        Aug 12, 2015 12:25 AM

        SeekingAlpha.com had a number of articles on decay, and financialsense a couple of years ago also.

            Jay
            Aug 12, 2015 12:48 AM

            Thanks Brian! Haven’t experienced the medical symptoms you mentioned in trading the 3X ETFs, but close 🙂

            Aug 12, 2015 12:00 PM

            Yes, I would take difference to the authors comparison of NUGT to the Amex gold miners index (apples and oranges). Why didn’t he just compare NUGT to GDX, which is what it is correlated to. JNUG is correlated to GDXJ. If you look at those correlations they are more in harmony. He is trying to illustrate a point using 2 different baskets of assets and then blaming the under-performance on decay.

            Then he compares the 3x leveraged to Gold, but again, and blames the under-performance on decay. What really happened is that the miners sold off much harder than the metals did, so that is, again, a poor example of decay.

            Aug 12, 2015 12:07 PM

            That was a much better article on decay and actually did a good job of covering the topic. It also mentioned it was referencing “The effects of a relatively “long-term” investment in a leveraged ETF”.

            Again, when it gets into ETF fees and decay, that would have scared me away in the past if I hadn’t just started trading it and making outsized returns (and a few outsized losses : – ) compared to normal equities I trade. My advice is not to hold for long periods of time, and I usually day trade it or trade it over a short time period. However, holding on for several weeks to lock in a gain of say 15-30% is fine by me, and is the bottom line anyway – did you make a good percentage return? If so, who gives a flip about the decay. Sometimes people over-analyze things to death instead of just taking some action and having a plan, and entry point, and an exit point.

            Good luck to all in their investing!

          Jay
          Aug 12, 2015 12:47 AM

          Thanks for the suggestion CFS

        Aug 12, 2015 12:31 AM

        Yeah … I concur with what Shad wrote. The volatility takes some getting used to. When I first traded NUGT, my testicles tried to move back into my abdomen.

          Aug 12, 2015 12:15 PM

          Hilarious. Yes I’ve had a few hand-wringing, nerve-racking, kicked in the pants sessions with a number of the 2x and 3x leveraged ETFs (NUGT, DUST, JNUG, JDST). SPXS and TZA can be like that some days. Same with RUSS and RUSL.

          However, if you watch for a turn or catch a trend on them, they can make for a great trading session in compressed time periods. I have a hard time watching assets that barely move a fraction of a percent each day. If an asset is not moving up and down then nobody (shorts or longs) are making any money, but they are obviously “safer”. A money market is really safe or a CD at the bank is really “safe” but it doesn’t do anything at 1/2 or 1/10 a percent. I like moves of 5-20% in a day because their is a enough of a swing to get in and get out with a nice profit without waiting for months or years, but it is much much riskier.

            Jay
            Aug 12, 2015 12:17 PM

            I’m of a similar mindset. It seems that, IF you catch a leveraged ETF at or near a top/ bottom in price, for a TURN, then buying and holding for several days, even a few weeks, negates a lot of the issue of decay.

            Had I held the DUST shares I bought back in June (if memory serves) at around $11.50 and held until say $36 last week (again, assuming I was smart enough to time it both ways, but isn’t that always the question?), I would have made some excellent lunch money and not given a second thought to decay.

            Aug 12, 2015 12:24 PM

            Bingo Jay. Good thoughts and that would have been some nice lunch money : – )

      Aug 12, 2015 12:15 AM

      Good work Brian! As discussed yesterday when you mentioned you had made over a 100% return earlier this year but held on for weeks. Again, if you make those kinds of returns, then who gives a flip about the decay. 😉

        Aug 12, 2015 12:35 AM

        The daily finish for JNUG will be fascinating to watch. It rallied at the close past two days. Remember last March? We had five (5!) straight up days in the junior miners. I only caught a small portion of that JNUG trade.

        Safety tip: If you trade JNUG/NUGT, wear your athletic supporter (and maybe an adult diaper) 😉

          Aug 12, 2015 12:24 PM

          Yes Brian, we’re on the same wavelength here. Frank from Moscow and I are developing a line of Precious Metals Depends, for traders that may do a laundry drop. Here’s was our idea last week:
          ____________________________________________
          On August 7, 2015 at 3:18 pm,
          Frank from moscow CCF says:

          maybe you could get TURD, to donate some money to your new company METAL DEPENDS

          On August 7, 2015 at 4:10 pm,
          Shad says:

          Yes, I can see it now…..

          Precious Metal Depends spokesperson Turd Ferguson says:

          “Expand your wealth at every blow off….In case you have a blow out!”

          For the investor that is easily surprised by the wild swings, or just doesn’t want to leave their easy chair during normal trading hours….

          Don’t dirty your drawers on a big bounce. Wear Precious Metals Depends!”

            Aug 12, 2015 12:43 PM

            I did not see this before. Very funny !

            Aug 12, 2015 12:56 PM

            😉

    Aug 12, 2015 12:13 AM

    gary what makes you believe that gold has hit the intermediate bottom and that this is not just a retracement targeting the 1130-1140 level.

      Aug 12, 2015 12:16 AM

      You don’t get a 14% rally in miners in 3 days if this was just going to be a short term bounce.

        Aug 12, 2015 12:18 AM

        Gary

        Is this similar to the Dec14/Jan15 and Mar/Apr15 patterns? The sequential, large up day pattern at the beginning looks much like the past 3 days.

        Brian

        Aug 12, 2015 12:53 AM

        Gary imho I hardly doubt that bottom in Gold would be called on CNBC.
        Since it was that makes me think commercials are preparing for final kill of bulls and 1033-1000 will be hit soon when this daily cycle rally tops like this week. Let me know what you think but i know CNBC is bullish on tops and bearish on bottoms and that is not what just happened here. I still like your other scenario better Gary. Don’t get your followers killed at almost the bottom. 🙂

        Gartman: The bottom is in for gold
        http://video.cnbc.com/gallery/?video=3000404958

          Aug 12, 2015 12:31 PM

          stewie………….I have to agree with you on CNBC comment….

    cfs
    Aug 12, 2015 12:16 AM

    In case no one noticed, North American Palladium, PDL on the TSX is up 40% today.

      Aug 12, 2015 12:37 AM

      wow…………

      Aug 12, 2015 12:27 PM

      Yes I did notice and it sold off hard last week and yesterday after the reverse split. I almost bought some on Monday and Tuesday but held off because I don’t fully understand the financial restructuring and was worried it would fall further. Wow, what a snap-back rally though.

        Aug 12, 2015 12:58 PM

        Here’s a short synopsis on North American Palladium management change up, and a number of other miners that broke interesting news the last 2 days:
        _____________________________________________________________________

        North American Palladium Names New Senior Management
        Wednesday August 12, 2015

        Sierra Metals Posts Record Silver-Equivalent Output In 2Q
        Wednesday August 12, 2015

        Kirkland Lake Gold Announces Record Quarterly Gold Production
        Wednesday August 12, 2015

        Alamos Gold Reports Rise In 2Q Gold Output
        Wednesday August 12

        Tahoe Resources Reports Adjusted Profit In Second Quarter
        Wednesday August 12

        Silver Standard Resources Acquires Property Next To Marigold Mine
        Wednesday August 12

        Centamin Reports Year-On-Year Rise In 2Q Gold Production
        Wednesday August 12

        http://www.kitco.com/news/2015-08-12/Tahoe-Resources-Reports-Adjusted-Profit-In-Second-Quarter.html

      Aug 12, 2015 12:46 PM

      Wasn’t that after a 400 to 1 reverse split coming out of chapter 11?

        Aug 12, 2015 12:07 PM

        Yes. They have done that now, and of course, after the split people sold off North American Palladium very hard. I don’t understand what percentage of the company the shareholders now would own, post-restructuring. That was why I couldn’t pull the trigger (lack of knowledge), but if anyone understands how the post-restructured company is set up, and why the snap-back rally today?

        thanks!

          Aug 13, 2015 13:18 AM

          North American Palladium up another 22% today. Anyone know what the deal is?

          PALDD (PALDD)  Watchlist
          5.0945 0.9245 22.17%

    Aug 12, 2015 12:18 AM

    I really liked Gary’s comment at the end about people trying to get the bottom and, if they do not get that exact bottom, feeling that they have missed out on things and not buying.

    I felt very much like that last week when Gary, pointing out all the indicators for a bottom, said that if you can’t pull the trigger now then when are you going to pull the trigger… so I put some orders in for Monday and, of course, the silver stocks I was after opened higher than my order and so I missed out. Being have a sulk since 🙂

    Gary’s article on his blog this morning, combined with his commentary on where we are in the markets whilst talking with Cory, is nothing less than superb.

      Aug 12, 2015 12:25 AM

      Agreed. +++1. Numba one as the Vietnamese children used to say, many years ago! Numba ten was their adjective for the opposite.

      Aug 12, 2015 12:42 AM

      Great points Bob UK on how psychology around bottoms and value seeking, can at times cause people to get frozen in analysis paralysis.

      Yes when I heard Gary point out all the indicators for the bottom I was about 25% in my mining positions, but after thinking through all the various data points, I thought – “Gary’s right, if one is going to take a contrarian position, then the odds were never so stacked up”…..and I went to 50% into positions. After a discussion with Matthew I got even more confident and got even more positions on last Thursday and Friday, and was about 60% into some mining positions in about 8-10 companies.

      It is interesting to note that I couldn’t go 100% in mentally, even with the data showing the turn was there, and the many smart investors making the case for a bounce. It’s funny that I couldn’t pull the trigger on 100% “all-in position” even though my own thesis was that I had been posting most of the year [that we’d have a summer slump in June, July, and early August, followed by a counter-trend rally in Aug into September]. We were teetering on the brink of a breakout or breakdown and it wasn’t a clear set up for anyone. Both Gary & Doc & many other pros saw the 2 different paths things could unfold, and so to be conservative, I kept some powder dry. I’m still thrilled with the gains I had, but am sad I left some profits on the table. However, if the bottom had dropped out, I would be in less pain now than people that went all in, so it’s a trade-off.

    Aug 12, 2015 12:21 AM

    As sure as he was when he thought gold would bounce 2 weeks ago. Bound to be right eventually.

    Aug 12, 2015 12:24 AM

    11:45
    GARY: “Let me make one more quick comment …”
    In my opinion, one of the most important comments on KER in months.

      Jay
      Aug 12, 2015 12:32 AM

      Yep, agree.

      Aug 12, 2015 12:45 AM

      That’s a very interesting point about how the 14% move up in stocks may end up being more than just a short rally. Gary mentioned that this may not be short lived and pull back in the near future, and that it may have some time to run. This lends credence to the views from Avi Gilburt, that we’ve posted and discussed a few times lately, about this being a counter-trend Wave 4 up for 3-5 weeks, followed by the final Wave 5 down to make the new lows and Major bottom later in the year.

    cfs
    Aug 12, 2015 12:25 AM

    Darn! Missed this one.
    On my watch list is CERE,Ceres Inc is an agricultural biotechnology company. The Company is engaged in developing and marketing of seeds to produce crops for bioenergy and other markets that utilize plant biomass.
    It just got a patent approved, and I was going to buy after approval…..but it just shot up almost 200%.

      Aug 12, 2015 12:41 AM

      that should be a good one to follow……………..bioenergy……if the govt does not come in and stomp on it……..put a tax on the excess emissions

      Aug 12, 2015 12:51 AM

      Thanks for posting CFS. I follow some of the Agricultural sector and was not familiar with Ceres Inc.

      Here’s a list of Feritlizer/Agricultural stock and ETFs who I swing trade or follow closely. Please let me know if you have any thoughts on any of these companies sir:

      INCZY INCITEC PIVOT LTD
      NUFMF NUFARM LTD
      ICL ISRAEL CHEMICALS LTD
      IPI INTREPID POTASH INC
      AGRO Adecoagro S.A.
      SOIL GLOBAL X FERTILZERS/POTASH
      URAYY PJSC URALKALI
      POT POTASH CORPORATION OF SASKATCHEWAN INC
      JJA iPath® Bloomberg Agriculture Subindex
      MOS MOSAIC COMPANY (THE)
      FMC FMC CORPORATION
      YRAIF YARA INTERNATIONAL ASA
      MOO Market Vectors AGRIBUSINESS ETF
      CF CF INDUSTRIES HOLDINGS INC
      SYT SYNGENTA AG
      CMP COMPASS MINERALS INTERNATIONAL
      AGU AGRIUM INC
      TNH TERRA NITROGEN COMPANY L.P.

        Aug 13, 2015 13:05 AM

        CFS – Do you following any of the Agricultural or Fertilizer companies above?

        If anyone invests in this sector or has any thoughts on these they would be appreciated.

    Aug 12, 2015 12:26 AM

    GDX just filled the recent gap down. Let’s see if it continues down for new lows from here (still could be needing a wave 5 down before the retrace).

      Aug 12, 2015 12:31 AM
        Aug 12, 2015 12:12 AM

        Brian, the thing about McHugh is that he has had a terrible track record calling golds bottom and the stock market top. His articles have been pretty repetitive for the last couple years. I was following the guy for a long time until I realized I was a far better timer than him…..and that was the last time I read his stuff.

          Aug 12, 2015 12:16 AM

          Good to know. Thanks.

          I am NOT a fan of EW analysis … I much prefer learning technicals from Doc and Cycle Theory from Gary.

            Aug 12, 2015 12:39 AM

            The Doc is great. Much better than most and yet he offers advice no charge. Funny how that works. I think McHugh would run you a couple thousand a year just on his basic plan. Not that the guy is all wrong. He makes some good calls too but gold is not his strength in my opinion.

      Aug 12, 2015 12:45 AM

      I am of the same opinion wiseguy.gold has to drop one further leg down before I could say that it has reached an intermediate bottom.jmho

        Aug 12, 2015 12:32 PM

        I’m looking at it a similar way Don Corleone. As we discussed about a week ago, I like Avi Gilburts and Doc’s analysis that we have a move up (Wave 4) and then a final move down to $1033-$1044 or maybe $1000 for the major bottom. (Wave 5)

        I went in heaviest last Thursday and Friday morning, and have played this bounce with about 8-10 mining stocks and 3 different mining ETFs, but I still think the final washout is still yet to come. For now though, it is fun to see some growth in these mining shares, and I’m watching which ones are making larger percentage gains than their peers, so that if we do get the final washout, I can position into the companies with the most spring in their step.

          Aug 12, 2015 12:40 PM

          Hope you sold toady Shad hehe good luck Jnug is up 82.3% since it’s bottom

          good job. I wish i pulled the trigger but i think it’s way too late now

            Aug 12, 2015 12:14 PM

            Ha! Thanks Stewie. Yes I’ve been busy lately and definitely positioned before the bounce in PMs for the August bounce we were expecting (but only about 50-60% in at any one point). I still have money in other sectors like Fertilizers, Uranium, PGMs, Oil, Lithium, green energy, and general market plays that have been wild, as well as other ETFs in bonds, foreign markets, volatility, agricultural sector, and energy.

            I counted 33 trades (buys + sells) just since Wednesday of last week. 5 losses, and 28 wins. 16 trades were just from today, and of the 7 positions I closed out, 6 were profitable and 1 was a stinker loss. It’s been a little chaotic as normally will do 2 or 3 trades in a day or many days nothing at all or maybe just 1 buy or sell. This has been a blast though, but hectic. : – )

      Jay
      Aug 12, 2015 12:51 AM

      Thanks a lot for sharing this Gary.

      Aug 12, 2015 12:14 PM

      Well 3-4 weeks would line up nicely with the Shemitah on Sept 13th, so maybe that Friday the 11th or Monday the 14th? We can wipe away all the debts on the 7 year cycle and crash the markets like in 2008 and 2001 cycles past. We are getting into a crazy window of time the next 2 months for all markets and assets, and things are going to get funky!

        Aug 13, 2015 13:58 AM

        I am also very curious what will come out of the 70th of the UN meeting this September. Will debts be forgiven? Will the globalists push for 1 world currency to stop these petty “currency wars”?
        ___________________________________________________________

        Opening of the 70th Session of the UN General Assembly (UNGA 70)

        The 70th Regular Session of the UN General Assembly (UNGA 70) is scheduled to open at UN Headquarters on Tuesday, 15 September 2015. On 25 September 2015, His Holiness Pope Francis will address the UNGA, and from 25-27 September the Summit for the Adoption of the Post-2015 Development Agenda will convene. The General Debate of the 70th Session of the UNGA will take place from 28 September – 6 October 2015.

        Date: 15 September 2015 Venue: UN Headquarters Location: New York City, US

        www: http://www.un.org/en/media/accreditation/UNGA70.shtml

        http://sd.iisd.org/events/70th-session-of-the-un-general-assembly-unga-70/

        Aug 13, 2015 13:00 AM

        I am also very curious what will come out of the 70th of the UN meeting this September. Will debts be forgiven? Will the globalists push for 1 world currency to stop these petty “currency wars”?
        ___________________________________________________________
        Opening of the 70th Session of the UN General Assembly (UNGA 70)

        The 70th Regular Session of the UN General Assembly (UNGA 70) is scheduled to open at UN Headquarters on Tuesday, 15 September 2015. On 25 September 2015, His Holiness Pope Francis will address the UNGA, and from 25-27 September the Summit for the Adoption of the Post-2015 Development Agenda will convene. The General Debate of the 70th Session of the UNGA will take place from 28 September – 6 October 2015.

        Date: 15 September 2015 Venue: UN Headquarters Location: New York City, US

        www: http://www.un.org/en/media/accreditation/UNGA70.shtml

    Aug 12, 2015 12:29 AM

    Wondering what everyone thinks about shorting the conventional.

    I am really hesitating before I start shorting the NASDAQ (SQQQ 3x Bear). I have gotten burned many times – only lost a couple %-points, but it has NEVER worked out. Is this really a time to consider these Bear Market ETFs? Or is it just safer to stay with the bull market in PMs/Miners (which I think I understand) and occasionally buy JDST on pullbacks?

    Just wondering what other people’s strategies might be.

    Brian

      Aug 12, 2015 12:40 PM

      I like using SPXS and TZA if I feel we have a downleg in the S&P or the Russell 2000. As I mentioned yesterday in a huge amount of detail with about 7 articles on Doc’s blog, I have been trading UVXY for volatility when I think the markets are about to get roiled.

      I made a quick 6 % yesterday on the volatility trade, and 13% getting back into it in the after-hours trading and selling in the pre-market trading. That 19% in 2 days and I figured it was another strategy to play the China/Euro mess. Volatility is at very low levels and if we get a massive correction, it will be another way to play the sell-off in the general equities. If we get a snapback rally in the general indexes tomorrow, then I may deploy a similar strategy.

      That’s my 2 cents worth. Good luck to you Brian.

    cfs
    Aug 12, 2015 12:36 AM

    Chacun son goût, old chap.

    Hyper-Shorting NASDAQ can be dangerous, because of un-expected technological breakthroughs. However, I believe we are NOT in a bull market at the moment, so the trend is your friend.

    cfs
    Aug 12, 2015 12:37 AM

    Aagh, Missed out an “a” above.

    Aug 12, 2015 12:48 AM

    Gary,
    great stuff. It shows that you are a nimble thinker and not stuck on theories of the past. Thanks!!!

    Aug 12, 2015 12:05 AM

    I would be pretty shocked if this is the final bottom in gold, Gary. Judging by the look of the monthly chart there is plenty of room to fall yet and I very seriously doubt the general downward trend has yet ended. What we have here is a really strong bear rally that will change the bull / bear positioning back to something favourable enough for the next declines.

      Aug 12, 2015 12:09 AM

      Good to see you are finally coming around to the idea the dollar is not going anywhere near 1.20 …..sorry to say but I never agreed with that idea you and Rick seemed so certain about. This current decline did not come as a surprise to me at all.

      The dollar is in a long decline back to .79 at the minimum (which is good for gold btw).

      Aug 12, 2015 12:14 AM

      I agree listener.Gold has not reached neither the intermediate nor the ultimate bottom at 1076.Far from it.The intermediate bottom is yet to come at 1050 minimum and the ultimate bottom at 950-800.

        Aug 12, 2015 12:18 AM

        Then you guys stay out. I am in.

          Aug 12, 2015 12:42 AM

          No no….I am in Lawrence. This is a great bounce. It has legs. I am only saying that the “final” bottom is not in. I think Gary is just getting a little carried away with the excitement of moment by wondering aloud if this is it. A quick look at the long charts would dispel that notion.

            Aug 12, 2015 12:52 AM

            OK. You are right.

            Aug 12, 2015 12:03 AM

            For those who follow Armstrong, he has predicted a pop to 1155 (a week and a half ago) but is still bearish.
            http://www.armstrongeconomics.com/archives/35597
            This looks like a C-wave top to me before resuming downward move again. This is exactly what is expected after way too much sentiment was on the bear side of gold. This rally could stop at 1150ish. Time will tell.

            Aug 12, 2015 12:51 PM

            Good thoughts in this thread. I tend to agree that this is just a counter-trend rally, and that there will still be one last wash-out phase down later in the year. I’m not convinced $1076 or $0172 depending on which platform you are using was the final low for Gold, and I believe technically that we need to retrace at least to that $1044-$1033 zone, or possibly $993 (prior peak from Feb 20th, 2009).

            The sentiment has been pretty bearish, companies have started to go bankrupt, and Mergers & Acquisitions are increasing, but we never got that final cleansing wash of despair, where even the most hardened bugs throw their hands up in the air and check out. We are getting much closer to that point though, and a good bull trap rally will be required to get the energy needed for the fall to the downside.

            I’m playing this Wave 4 up, but am prepared it may pause near $1131, $1150, $1180, 1200, and $1225. If any of those resistance levels gets tested 3 times, then I’m back on the sidelines.

      Aug 12, 2015 12:07 PM

      Listener,
      It all depends on what the stock market does. That will determine if gold has bottomed or still has another leg down.

        Aug 13, 2015 13:13 AM

        I will have to disagree with you there because the stock market does not dictate to gold prices except in the most general way. We have seen gold rise with stocks and we have seen it decline versus stocks.

        It is not all that different than people claiming rising rates will ensure falling gold prices without taking inflation into account. But if you are wanting to establish a connection like that between stocks and gold then just a quick glance at the gold chart would inform you the equities bull is far from dead.

        And even that is based on an assumption that if stocks fall then gold must rise. We know that is not a safe bet to make though if timing is your interest and you think that a switch going off in one market will make a switch immediately go on in another.

        Just stand back and look at gold with fresh eyes.

        Have you EVER seen a bear market terminate looking the way this one does?

    Aug 12, 2015 12:22 AM

    Gary,
    Your interpretations of the markets and cycles are great.
    I’m thinking the conventional a reverse ( as they are right now ) and the markets hit new highs in late August or early September, and then the crash starts.

    Gold should keep going up this week and then start it’s washout phase. This is definitely not the bottom of metals. The dollar might have one more small run up, but I agree with you, it’s seen it’s highs for the year, and many to come.

    Question: I think this is the bottom of commodities this week, the CRB. I oil still needs to have it’s final washout. I’m thinking that’s any time now.
    What are your thoughts on oil and the CRB?
    Thanks, great commentary today!

    Aug 12, 2015 12:28 AM

    Good calls Gary. Especially interesting times ahead.

    Aug 12, 2015 12:31 AM

    Gary,
    One more final thought. The emerging markets are hitting bottom and ready to start going up. The CRB is hitting bottom and looks like it’s going up starting next week. IMO, we are about to see a liquidity event globally which causes the dollar, gold, and oil to drop. And creates the run on commodities and emerging markets.

    Anywho…thats how I see it.

      Aug 12, 2015 12:48 AM

      What do you mean by run Charster – I assume you mean a run UP in prices?

      Not as in a run on the bank when everyone is trying to get the heck out?

        Aug 12, 2015 12:02 AM

        Bob,
        Gold and oil are priced different than commodities now. Times are changing.
        The financial structure is changing.

          Aug 12, 2015 12:03 AM

          The run on commodities is dollars chasing goods.

      Aug 12, 2015 12:58 AM

      Gary:
      Guess I don’t understand after listening to today’s interview and which sounded positive for gold and shares for at least a month then you include gold in the liquidity event which will bring the dollar and oil down. Obviously miners would follow gold so exactly where are we going……..? Please clarify.

        Aug 12, 2015 12:02 AM

        Woops! Guess it was Chartster who said what I attributed to Gary. Sorry.

    Aug 12, 2015 12:43 AM

    NUGT and SPXS are my Market crash plays.

      Aug 12, 2015 12:46 AM

      Thanks Jason, I was thinking SQQQ.

    Aug 12, 2015 12:45 AM

    Many of my stocks touching/breaking the upper BB on the Daily Chart today:
    Alexco
    Kirkland Lake
    Klondex
    Pretium

    Hope Doc is on today; maybe he can discuss this from TA perspective.

    I mean … it seems really good, right?

    Aug 12, 2015 12:47 AM

    OK. I have turned into today’s Blog-Hog. Gonna go outside and play …

      Aug 12, 2015 12:24 PM

      Blog Hog! Hahaha…. I never heard that one before. Sure applies around here some days.

    Aug 12, 2015 12:18 PM

    Gary,

    Why does every body focus on 8 year cycle and not the 11 year cycle, apparently silver has 11 year cycle: 1993, 2004, 2015 major low?

    Do you see new lows in gold in 2016, or will final bottom be in 2015?

    Aug 12, 2015 12:16 PM

    So, they managed to close the conventionals near even for the day. Have they saved it for one more day? Are Gary’s thoughts negated………..??

      Aug 13, 2015 13:39 AM

      Great article Jay and I agree. This is one example of where the herd has all got it wrong in my view and where Martin Armstrong will be caught on the wrong side of the market. He is insisting that the dollar is an a great bull but that does not jive with anything I can see. Factually though the dollar is now in decline. I am just amazed how so many keep insisting it is somehow in its bull market though. Everywhere you go on the web its the same story. People talking about the dollar bull as if it is still alive. Sorry to say but ALL of them are going to be wrong.

    Aug 12, 2015 12:34 PM

    Jnug up 82.3% damn it !!! lol

    Aug 12, 2015 12:53 PM

    Courageous call from Gary. Another one of your great team. Where is Rick, Mr Ackerman?

    Aug 12, 2015 12:56 PM

    Does the USDCNY chart (select 10 year or MAX period) look like the possible end of a bear market and start of a bull market?

    http://finance.yahoo.com/echarts?s=USDCNY%3DX+Interactive#{“range”:”max”,”allowChartStacking”:true}

    Aug 12, 2015 12:29 PM

    Cory and Al do the best daily update on the market
    Fantastic job guys
    Nick from Australia

    Aug 13, 2015 13:08 AM

    Just a note from the other day Gary where you mentioned stop losses…….I agree with you. The thing about stops is that once you have one initiated it seems odds are pretty good you will be assured that loss whenever the yahoos get a price spike moving against you. Much better some days to just ride it out if you are at all confident of the general trend and try not to worry about the little ups and downs that are just inconveniences in the bigger picture.