Wow. Just when I thought I'd given a great compliment on wisdom and understanding what makes markets move!
Another hat tip! You guys are awesome.
I was one day early. Manage your trades accordingly as we are now at about break even. Fail safe stops may be placed under yesterday's low. Good luck to all and it appears that rallies should be shorted; but from what level? I'll stop talking to myself now. (:-) Thank you and cheers.
Excellent chart overlays:
I have no reasons to doubt the conclusion, the war has already started by invasion in Libya, and by election of Obama ( corresponds to 1932 in Germany) ..but i am not sure what forms this war may take initially as there as so many more weapons - both deadly directly and also cyber and Electromagnetic. Also, may be we understand that war is on full scale ( Poland has been invaded in 1939, September 1st) only after the fact. So far no one has really called Libya as start of WWIII seriously, but it could well be that is was. Last Country without CB was annexed. The setup was finalized.
Counter reaction- Egypt now and Russians coming with missiles to Egypt. USA withholding help to Egypt and antagonizing Israel by all possible means. Not a coincidence.
However, I am 100% sure that usage of financial WMD in financial wars between opposing sides ( redwood, you should understand it very well who are they-same nation, bitter enemies of each other) will lead ( and has already led in Syria) to usage of WMD in real wars.
BTW, about Syria- no one really cared ( I mean people at power) about usage of Chemical weapons. World has got used to so powerful weapons that - after Fukushima- a stray nuclear bomb would also not cause much noise or emotions- again, where it counts.
Masses have been made insensitive by video games and movies where nuclear attacks etc. are commonplace.
So while trying to preserve financial wealth.. may be that is not the most important , though useful, thing?
I believe with coming debt ceiling wars in February 2014 ( look at US foreign policy vs. Israel how that has changed in half a year more than in all previous ones) the pace of real military threats are accelerating in parallel. According to charts from ZeroHedge, we live in 1936. Next 2 years are 1937 and 1938. Read history about how during these 2 years the setup for WWII was completed.
As Monty Python would say " ... And now for something completely different! ..." (Python geeks can fill in the rest! ) : I bring readers of The Setup for the Big Trade forum a very long term chart, going back to the silver rushes and depressions of the 1800s, and it even has some long term cycles shown:
It comes from the book Financial Astrology, by David Williams, of the Foundation for the Study of Cycles.
And here is a link for a bigger chart: https://i1135.photobucket.com/albums/m638/Phisquared2618/silver1850-1950.png
How bizarre you should post that, as I read that book about 2 months ago and took a photo of that exact chart with my phone with the intention of posting it here and must have just forgot. The reason is that he posits a 31 year cycle (and the first edition is back in the 1980s) in Silver, which takes us from 1980 to... hmmm... 2011. My silver stack is getting less appealing as time goes by.
Hi Green Lantern,
While agreeing with the well reasoned content of your post, I appreciated T's post very much as well.
Argentus shares his work with us, but for added credibility it needs to be tested against well-articulated (and of course civil) challenge and a contrarian view, a role which T's post fulfilled nicely. Then the counter argument in turn, which clarifies what Argentus is providing and in light of that well articulated dialogue, then let the reader digest and decide, in light of both views.
It is good to revisit assumptions, and remind ourselves why we position ourselves re gold as we do. everything in the discourse above was done in civil manner, and was therefore both valuable, relevant and healthy.
T did a great job in articulating a challenge to bullishness that all bulls should frequently consider, and the responses to T's posts provided very relevant counter-point and context.
I'm actually still with T on this one, but in a deer-in-headlights kind of way; I still hold my positions.
P.S. good to hear from you.
Ive been following AM very closely and actually follow him off line as well. His timing was called weeks ago regarding the next pivot/down and was extermly accurate in the call and timing. He's indicated that gold could fall back down to the low but must be watched. So far in the last two years everyone has been wrong wrong wrong. AM has posted his chart from this summer and we saw the overlay..impressive. Ok AM is not 100% accurate who is, but he has told us of the next pivots. So far he's been dam close/right.
Has anyone noticed the range we've been in. Ok I can't say what will be, but I can say 99% of the folks have been wrong. AM and there's one other who was right, but I'll let you find out who that was. And it wans't armstrong.
I hope that Argentus does not mind this little philosophical detour, but in something as complex as the gold market, here is how I try to make sense of it all.
Expertise can be applied, from various disciplines, and we the hapless talentless readers, seek the guru who will lead us to the best outcome. Well, we might be without talents of our own, but we can apply a little structure to how we filter all the info.
My own, very emphatic approach, is that I give everybody a hearing, with open mind, and pointedly avoid writing any of them off. The TA guys (norcini, arensberg etc), the fundo guys (Turd et al), the cycle guys (Argentus, EW'ers), the bearish guys, the Austrian school, the firebrand preachers (Jim Willie, KWN), the historians, Krondatieffians etc. I listen to them all.
I add to the mix as a vital ingredient, the contrarians, some who might even have no ideas of their own as such, but who do a good job of challenging our assumptions, and our certainties. I have found SilverWealth over at Pailin's corner, to be proven as a wise and outstanding contributor. Anybody who is unaware of him, you probably lost money this year by not being aware of him. Likewise, though abrasive, I consider Rico to always be mandatory reading.
So back to this thread, the value of Argentus' work is that he is an outstanding exponent of a particular intellectual approach to the gold topic, i.e cycle theory, and we should appreciate all the various approaches (of which this is one). Is it the right approach? Hell I don't know, but only a total fool would ignore it.
Looks like traders are looking for gold to hold above 1274 which corresponds roughly to GLD 123.0. The HUI is moving proportionately with that target in mind. The only problem is that it might not be established until after hours. They always play it so fine tuned to just to keep you sharp.
I'll provide one more response also in hopes that I am not detracting from AM's work.
I have no problems with challenges and contrarian views. It indeed is important for healthy discourse and revealing.
Like Goldmania, I have seen some of AM's work beyond what he provides here and some of it is simply unbelieveable! Some of it borders on genius and while I was familiar with these concepts, I had never seen anybody write on these things in the metals blogisphere with such expertise. Stuff I wish I knew 3 years ago and stuff you can't easily find in the metals blogisphere. I don't easily make such praise but the little he has shown me beyond here took me down a very steep rabbit hole reading a bunch of authors and economists that are little talked about. I had intended to write more on the subject but for personal reasons had to take a sabbatical from my writing.
So based on my own research, I can find no support for T's arguement other than I understand his sentiment. Even the chart that AM just shared from David Williams in itself challenges T's sentiments. The French Assignat article I would have thought would have blown people's minds (it did mine) that in the light of heavy manipulation of currencies (both US and Assignant), the cycle's went undeterred.
In my role as a blogger on TFmetals, I was going to write some very indepth pieces on some of my findings but have had to take some time off to deal with personal issues. Case after case of some of the most profound manipulations in the history of economics didn't change the ultimate course of events. Other authors I've mentioned here have demonstrated the same.
I shared an article about 3 or 4 weeks ago before I took a break that was from Joseph's Farrells blog on some deep physics being explored on economic cycles. It pretty much comes to the same conclusion that economists and physicists are deep at work trying to find ways to interrupt the cycle because no amount of fiat manipulation, monetary policy, libors have been able to do it. So there are scenario's which the gold cycle could be broken but I'm doubtful it can be done. Not impossible. The totality of AM's work would suggest it hasn't been done yet and these levels are well within already existing cycles.
To date, I've not seen work that counters this other than pure emotionalism that says we (metal investors) are screwed until the system collapses. However, I have not yet seen anybody provide a strong fact based argument to support that thesis. I assure you I remain open and objective enough to hearing the counter argument but in general that arguement never is backed by the same expertise as what AM has shown and what he hasn't shown in public. .
I watched some work from some other cycle proponents a few weeks back on youtube that echoed these sentiments. Hopefully I can find them and share them. Once I dig out my other computer from boxes, I might be able to share some of my own research.
and therein the value of T's post; it first articulated the challenge, and has prompted some erudite and important responses, not least your post just above. You have just given us valuable new information, and also powerful personal endorsement of Argentus's work, all of it triggered from that initial challenge.
It's all good, all very welcome, and high octane stuff. This wasn't an ordinary night even by this thread's standards.
Well, well look at that nice after hours pop up. Looks like your prediction eclectic will bear some fruit tomorrow. WS. Sneaky bastards.
(I'm not going to participate in the other conversation going on here at the moment. Have at it folks)
But I can offer some extra about 15 and 31 year cycles in silver, like an up to date chart or two.
Please note these next charts are not trading information, the cycles are untested, and they are therefore to be regarded as some sort of cartoon illustration to extend the chart above, rather than make any conclusion about market direction.
So here is the basic model of market structure using a group of assorted waves that are averaged but not exactly of about 15 years and 30 years length.
First the basic idea, with underlying trend removed:
The 15 year cycle is shown, but it worked only two out of three times. Notice how the middle price high was suppressed. Did the government do that, or was it market cabals? All? None? What?
OK now here it is again with a 15% inflation and/or growth added:
First thing there is a gentle rise. We can debate if that is realistic, since the recent silver high was about equal to the high 30 years prior. Next thing: the 30 year cycle (a group averaging 30yrs) hit it's low and cancelled out the "missing" 15 year high.
Now if this was a precise chartm and it isn't anything of the sort, the reader might say" the next 15 year high will coincide with the 30 year low, so where is the upside now?" Good question! Take a look at the growth trend. It's a wild guess. But for 1980-ish to 2010-ish the highs are at the same price level approximately. Now look at the lows, (use real silver chart!) and you find a rise along the bottom edge of the chart. Is it accellerating? Maybe it is. This will raise the lows above what they otherwise might be. And the lows make the highs which eventually follow them.
As to when one should buy into a situation like shown in these two charts? They are not accurate, but just made to illustrate this pair of long term cycles idea with a price line on, so we can form some sort of idea if those long swings are still likely to reappear or not. And the shorter cycles would have more dramatic effect for trader-investors anyway.
just a question on the inflation adjustment;
should it not have made the 2011 silver peak, lower than the 1980 peak?
@Green L.....I appreciate everything you said. all good food for thought.
@Byz ....also much appreciate your thoughts.
I was expressing a stream of thoughts as they came to me , trying to put things together in some way, what small vision I think I'm seeing. Beyond that, I have no expertise or ability to do profound research.
First, I agree ,GL, its important to me to not distract or hijack Argentus forum, what he is doing here is very very good and needs to stay focused
I am actually very tuned in to his technical analysis, and find it almost identical to my own.
So there's never too much I can offer here that wouldnt be redundant.
I didnt think I was posting contrary points, or a different outlook.... I think my outlook is the same as his.
but maybe at the moment ,I've been thinking/feeling more oriented toward the concept of manipulation in markets being more powerful than Technical analysis these days.
I dont want that comment to open the can of peas about how " Elliott wave Takes All That Into Account" theory.
really just wanted to say something about the idea that these markets appear to be 'controlled' in some way. what else, ....that they appear to be controlled in a way that does not look good for the metals and miners right now.
That the technical chart picture is acting very accurate these days...right down to the precise penny....as an example....the last top price for miner EGO, topped at 7.20... the most recent bounce bottomed at precisely 6.20
The precision looks too precise to me.
like the way silk flowers look to perfect.
I listen to Jim Willie. Jesse, and a few others. They say we are in a global currency war/crisis....etc you know what they say. so the world is caught now in some storm, eye of storm, avoidance of storm, buildup to storm, who knows what is ahead. Willie says the gold will double overnight when the big reset happens.
I dont think the technical charts, no charts, not even Argentus, or Ivars, or my own, will show that ahead of time.
Willie seems confident in his forecasts, and he's been correct in most of them. But even he cant say when the timing will take place.
and in metals and miners, as I watch daily, all I can see is the 'top' zones and the 'bottom ' zones, where I might sell a bit and buy a bit.
I greatly value this forum, the title, 'the setup....' has a feeling all its own, that changes as more time goes by.... If we are all looking for the timing for the trigger moment, the set up, .... boy is that a tricky trick to play. good luck to all catching the timing. Currently, I dont see gold falling as low as 1000, is that what Ivars is now forcasting? I'm not there yet. But who ever foresaw the collapse from 1620 to 1180.
Thats what I mean by the force of power manipulation being stronger than any technicaql charting right now. or maybe always.
Show me some technical indicators that can factor in the Grande Manipulation by TPB ad I will add that to my chart analysis.
just a question on the inflation adjustment;
should it not have made the 2011 silver peak, lower than the 1980 peak?
should it not have made the 2011 silver peak, lower than the 1980 peak?
It would if the desire was to show real inflation adjusted values. but what I'm trying to highlight is how when price zig-zags (eg) upwards, some of that rise is a gentle constant increase, but it's hidden by the wild trading range that is wrapped around it.
The question is, how much underlying trend is there realtime, and is it enough or not enough to reduce the amount by which price falls to cancel out times when shorter term stuff like cycles or randoms push price down for a period? That's a judgment call of course and not science since the statistics are behind the market by 3-12 months.
He is for the moment somewhat optimistic for tomorrow given the aftermarket prices. No worries I won't be quoting him daily, just interested in the change of tune. And I also happen to agree with him.
Today is Yellen hearing. That counts a lot, short term. If she mentions tapering.which I would not be surprised to hear in current circumstances..then positivism in PMs will disappear instantly. As to stocks, who knows, they are in final leg of a bubble, in these stages market is cruising on its own until a crash.
I am all focused on pre-February, latest February lows in PMs and highs in Stocks and Treasuries. And I am waiting for signal from GDX that this will happen - GDX decoupling, or reducing correlation with gold- any day now...
I have may own picture of cycles, kind of different diameter cogs or balls that are friction coupled to other, different sizes. I will draw the picture later. But the basic cycle inside each cog or ball - as it interacts with others- is :
Money management ( medium, control, supply etc.) -> economics-> politics-> war/revolution or any crisis-> Money management -> economics-> politics->war/revolution or any crisis-> Money management etc.
Of all things in this cycle, money management is the most quantitative one and easiest to control. War/revolutions/crisis cause a slippage between cogs/balls. In between the cogs - you have viscous media that dampens the movements, but transfers also some small influence between cog movement by viscous drag.
The most powerful or big cogs have cycles that are difficult to change, and that affect everything. And they turn slowly, while the small cogs turn fast and are prone to regular slippage or resets. Depending where the asset sits in this system, its price will show influence of all these cog different cycles, in proportion to their strength. These all sit inside a big cog, which is the resulting movement of world cycle. But outside this big cog sit clever small mostly money management (with their own internal cycles ) cogs that drive it directly, slowly, but with big leverage to the overall world cog. Akin to David vs. Goliath. These ones in turn are driven by greed and fear and , conspiracy and whatever. Human stuff.
I will draw it later- will be clear, may be:)
Bitcoin 445. Getting closer to crash- i think 500, than back to 250-300. What i like about this bitcoin chart is that, if it drops down soon and recovers say in December, it will show the path of gold to come. Based on this simple analogy which is amazing in its accuracy-both USD and Bitcoin aligned since respective inception 1786 and mid 2009 after bug fix.
In this overlay, GOLD is in log scale, so for these chart to match, bitcoin now has to move approx 2 -2,5 times higher then in previous peak- hence 500 USD as minimum price before crash.
As i mentioned earlier, Bitcoin has about 70 times higher sensitivity to USD problems than gold does, so it will show things that will go unnoticed in gold.
e.g. the Spike in Summer 2011 represents the fight about debt ceiling in 2011. The spike in gold chart at 1860-1865 represents CIVIL WAR. So one can easily say that things related to debt ceiling battles are - 70 times weaker in effect- but of the nature of a CIVIL WAR. And that sounds very reasonable to me. There is a war going on, and administration Foreign Policy turnarounds to exert pressure on other side - or to put in place a longer term plan- just gives a glimpse of how serious that war is.
id like to see it hit 500$ then drop looooooooooow ;)