We've now seen gold break out of the multi month consolidation and test that break out.
Gold should be fast approaching the momentum phase of this part of the C-wave. Actually looking at the longer term chart it's apparent gold is already in the beginning stages of the momentum phase. I expect this to last probably through most if not all of November to be followed by a consolidation phase in December and possibly most if not all of January to allow the 200 DMA to catch up a bit.
At that point we should see one more powerful momentum move as the second phase of the C wave completes to be followed by a sharp D wave decline into and through the summer months.
All in all it's probably not a good idea to lose one's position as we enter this phase of the rally.
Posts
37 comments:
I'm leveraged to the hilt (in my speculative portfolio) counting on $1000 as solid support.
For those who are paying attention, the break out from $1000 level provides an extremely advantageous risk reward profile. There is a very limited downside with practically unlimited upside.
Don't look now but brave, brave brave Sir Timmah is now shorting the precious metals.
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I have gold going to $1258
http://zstock7.com/?p=1843
"There is a very limited downside with practically unlimited upside."
I'm rather bullish on gold, but I'm really worried about everyone being so sure about the upside potential. I know, money printing, the C wave which lets nobody in, etc. etc. But there are very few opinions out there which are bearish on gold... Fundamentally, gold should move up and it will I guess, but is just to say that this kind of statements make me a bit uncomfortable...
I think the mistake that many contraians make is assuming that generally bullish sentiment is a sign of a coming turn.
Playing the contraian card tends to work best if one waits till sentiment reaches a true extreme.
We need to actually run out of buyers or sellers for contraian analysis to work.
At the moment sentiment levels on gold are just slightly above neutral.
The Blessings of the Lemming Leader are upon us.
(And there was much rejoicing)
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Tim Knight is getting wiped out shorting gold. He had a whole bunch of charts going on these last few days about how gold and the miners were going to fall.
Yes, but I'm sure his crew has got his back.
In the meantime, I'm very grateful for his assistance.
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I am getting really nervous with this fast break of 1100$ and than even faster retrace back to 1092 in gold. same do miners first up now down. i made good money this week and want to take some profits now, but like everybody else i am greedy and dont want to miss out on more gains.damn psychology.
What have we learned about trying to trade a C wave?
Saul,
There's nothing wrong (never!) with taking a little dough off the table.
Just don't take so much that you'll be mournful later. ;)
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i also had similiar concerns about everyone's bullishness, then I started talking to other investors, and no one ( but 1 other person I know) is buying gold, or has bought gold. The few people I know who have bought, have sold because " gold doesnt go over 1000$"
so, that made me feel better, so, I added some today, and will likely take a little off the table in a couple of weeks, since we still havent even gone back to levels from 2 weeks ago.
Peter
Actually sentiment levels for gold are just slightly above neutral. Contrarian analysis tends to work best when we get to extremes. Any sooner and you are usually just jumping in front of the train.
@Michael Vadon
Michael you need to read Tim's posts more carefully and with a more open mind. Tim has been making very short term tshorts on the GDX and taking profits quickly. He hasn't said that he believes gold will tank from here, he's simply making trades based on charts.
I'm long gold and think it will go higher, so I'm not a Tim lover, but you need to make sure you aren't making stuff up.
@Aurelien
May be you missed this:
http://slopeofhope.com/2009/11/watch-those-metals.html
Tim definitely has people's attention. Oh well, the trials and tribulations of becoming too popular. I appreciate his openness. He posts his trades, and knows he may be wrong, and will get flack for it if he is. For my money, I appreciate his analysis. I have made some serious coin off of some of Tim's calls. I also find it hard to understand the passion with which people bash the guy. He's a pretty even keeled dude. And, although he has leaned to the bearish side through most of the rally from March, he has managed to eek out gains over time. He seems to emphasize risk management. To me, he's a great model for a particular style of trading.
Can we pls stop making this a Tim comment site.thx
In friends circle nobody knows anything about Gold. Plus I reckon even those who are bulls (like me) aren't done buying and will continue to accumulate as this bull progress. God knows I need to buy a lot more than I currently own.
We have a long ways to go yet before the general public catches on to gold.
We will need to see at least one more devastating correction similar to last year and a quick recovery before we can look for the public to enter the precious metals arena.
Just look how long it took for the public to spot the tech bubble.
It wasn't until the near collapse and quick recovery in 98 that the public finally started to believe tech stocks were bullet proof.
We are going to have to see something similar in the gold market to scare everyone out then convince them that gold is going up forever.
Actually, I discovered Gary's site via Tim's, and maybe some others have too, which is probably why they post their Tim related grievances here (LOL!). It's not the first time - s--tty sites have led me to some excellent ones in the past too.
@fubsy_cooter:
You seem to be an awfully lot enamored with Tim. He's OK (read: average) but not THAT great; although given his tendency to fight the tape instead of reading it, obstinacy, hubris and preference for surrounding himself with like thinking lemmings (read: sycophants), I get the feeling he's probably WORSE than average. I wouldn't trust him with my money if my life depended on it.
OK Gary, I'm done - I promise I won't talk about Timmy again :-)
I think Gary has posted all these charts to provide us with a different perspective. Many blogs out there commit one huge mistake and that is fighting the tape. Every step of the way they fight and fight only making themselves look more foolish. However, there is always a diehard crowd behind certain bloggers that will fight the tape all the way up along with the blogger.
As for solvency and losses, I have no idea what other people have gained or lost as no account statements are ever posted on most blogs. I have lived long enough to know that I cant simply trust everything at face value especially when it comes to people involved in the stock market.
I will say the market will go higher making certain characters continue to look like fools. The crowd that follows them are simply drinking the "Kool Aid" much like Jim Jones followers.
Gary,
This is getting ahead of things a bit, but could you share any thoughts you might have about your strategy for the "devastating" D-wave correction you expect in the spring/summer 2010?
Considering that you expect a huge rally after the D-wave, are you planning to hold selected stocks, or a percentage of PM stock positions through the D wave?
No I will exit PM positions hopefully before getting cuaght in a D wave. I'll probably be a bit early and have to watch as gold and miners continue higher for a bit.
But then again I may get lucky and catch it pretty close. Usually we see an exhaustion move at the top. The problem is that sometimes we can see temporary exhaustion moves prior to the real top.
It is important that we not be a smartass and try to take profits too early. We MUST NOT underestimate the potential of the Gold bull this time. It's much, much stronger and angrier than it was in 1980 and has the potential to go a lot higher. It's time for accounting all the fiat promises that have been created over the past three decades and boy, there have been A LOT of them. Never in the history of mankind has the ENTIRE world been on a fiat money standard. The misallocations of capital are simply to huge to even imagine at this point. In fact, I believe that we'll see $2000 gold by next year (perhaps by the time this C wave advance ends).
Gary,
Great weekend report! I have really been noticing lately how many bloggers and analysts are so emotional in their opinions, your writings strike me as so calm and level headed. This is really teaching me a valuable lesson.
I have also noticed you have been making a few adjustments to your portfolio recently and I am thinking of doing a little of that myself. I am wondering what you use to guide your decisions. When I compare the charts of the main 5 silvers (slw, ssri, paas,hl,cde) over various timeframes, about the only thing I can conclude is that slw is the strongest in all timeframes. In the shorter timeframe, hl is the only one breaking to new highs, does that suggest it is the best to put available cash into, or does it make sense to pick the weakest? In a medium timeframe, cde has been very strong, but very recently seems weak to me. Their earnings report was a disappointment but it may be related to short term charges against earnings and a confusing financial statement that makes it hard for individual investors to evaluate. Currently, I am looking at kgc, there recent earnings report also disappointed, and am thinking of shifting to gg or gdx. I am also looking at cde, they have underperformed forever it seems, although the stars do look to finally be aligning for them, yet they seem to always disappoint come earnings time. What I really hope to be able to avoid is selling my kgc and putting it into gg only to watch kgc start to zoom ahead. I’m sure there is no easy answer here, just wondering what your opinion on the matter is, and what guides your decision making process. Thanks.
My decision to expand my silvers was based purely on wanting to spread my risk over more companies. I wanted my silver ETF to include more than 3 miners.
Miners tend to be extremely volatile. Many things can happen to effect stock price. A vein can run out, mine can flood, earnings miss, etc. ect.
If you want to play the majors I would highly recommend you do so with GDX rather than trying to get lucky with individual miners.
If you feel you must play individuals then I would do it with small call option positions.
That way if something unforseen happens you won't lose more than the price of your option.
I would also only use this tactic during C waves or when the COT hits a 100 Blees rating prior to the start of an A wave advance.
To Anonymous and Fubsy --
Were it only easier to make skeptical comments about Tim at his own site.
Unfortunately, Tim doesn't allow anyone to argue against his foolish trades, his pompous boasting or even his consistent lack of success.
Only here, ironically, on a site that doesn't mind taking on the contradictory comment from the crowd -- can anyone point out that Tim is leading his followers into further penury.
Until Tim man's up and allows a healthy sense of balance on his own blog, he's going to find the ridicule -- and the words of caution -- only multiplying.
More so (of course), here, when he is stupid enough to short the most raging pull of the present moment.
To Jesse --
I can only concur with your analysis of Gary.
I've actually been lucky enough to have met the man an I can tell you you are spot on. He's just as calm, mature and level-headed in real life as he is here on this blog. It's no act.
Being from a particularly obstreperous branch of NY Irish, I don't know many people like that.
Must be a Kansas City thing. I tend to like people from Kansas City.
Jake,
Why not ignore SoH? In hindsight thats the best advice Gary has given to keep away from distractions.
No use in trying to wake a man pretending to sleep than one really sleeping.
Hold on to C wave and stay away away from distractions
Does anyone here have a view on NAK. Most of my positions are Canadian and am looking at a U.S. based miner. Other suggestions are appreciated, as well.
back in 2007, i was thrilled to see the tim knights web site..but the thrill lasted only for 2-3 weeks as later i realized that he is trying to attract crowd and not doing the sound trading...I realized his presentation skills are very good but his trading skills are horrible and since then i.e. since 2007 i never bother to visit his site..even not during market meltdown last year...going there is waste of time, one never get to learn anything...
Hey everyone. Alex here. I just had to say something about that show "The View". I tell you, that Joy Behar is just something! She'll say just about anything! I positively cringe whenever she and that Hasselbeck girl start going at it. And Barbara! Oh my, what a delight she is! And in such a devious way!
Gary, do you mind that I'm expanding your blog into pointless ramblings about television shows? After all, it is so damn interesting to read other peoples reviews of other blogs. Why not turn SMT into a round table discussion focused on crap that's unrelated to your trading style and philosophy?
Would anyone like to comment on the equally relevant "Transformers 2" movie? What a pile of crap that turned out to be, right? Hey, it's just my opinion, but I think my opinion is a relevant and important topic of discussion. Lets hear your thoughts on this critically acclaimed motion picture!
Sincerely
Sarcastic guy who is sick of hearing about Tim Knight on Gary's blog.
@Alex , bravo bravo. thx a lot that comment of yours kept me laughing all morning. Its about time, we need to get some order in here.
I would really prefer not to censor the blog. As long as everyone remains civil I will let comments stand. If you don't like what someone posts I suggest you just skip over it.
But if I had my druthers I would prefer to keep the comments constructive. Thats not to say I don't welcome differing views.
I'm always open to debating the other side of my trades. Feel free to disagree with me anytime.
Rain,
I'd love to ignore him. Unfortunately, he's attacking my site and positions, and barred me from responding on his site.
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Here's a positive commment for Joy Behar's biggest fan, Alex.
Show up with more than an asshat's "sarcastic comment" -- maybe even bother to sign in -- and perhaps your complaints will be taken more seriously in future.
Oh, and that Fox chicken made up for how bad the rest of "T2" was.
;)
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