Bear Cave 2 (Bull Allowed)

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What This 19 Year Chart of the DOW is Saying

By: Marty Chenard | Fri, Dec 27, 2013

This morning I will show you a chart of the DJI and I won't make any comments about it because it speaks for itself.

If you don't get what this 19 year chart of the DOW is saying, do a search on "expanding wedge technical analysis".

Some like testing the limits on patterns, but the snap back on an elastic is never pleasant when pulled to far.

What This 19 Year Chart of the DOW is Saying | Marty Chenard | Safehaven.com
 
robo said:
What This 19 Year Chart of the DOW is Saying

By: Marty Chenard | Fri, Dec 27, 2013

This morning I will show you a chart of the DJI and I won't make any comments about it because it speaks for itself.

If you don't get what this 19 year chart of the DOW is saying, do a search on "expanding wedge technical analysis".

Some like testing the limits on patterns, but the snap back on an elastic is never pleasant when pulled to far.

What This 19 Year Chart of the DOW is Saying | Marty Chenard | Safehaven.com
Click to expand...

Looks eerily similar to a chart I posted a few weeks ago.
 
A comment from Kaplan:

The financial markets will repeatedly punish the vast majority of investors on a repeated basis.


In my opinion, this is the most important principle of the financial markets, and overrules all of the others combined. If you can figure out which market action will hurt the most people, then you know what will happen next. Now that U.S. general equity indices are trading at or near all-time highs, investors naturally are buying them at an all-time record pace rather than intelligently reducing their exposure. Whenever we are forming the next bear-market bottom, the same investors will be pouring money out of equity index funds at a rapid clip, thereby locking in their losses of half or more, rather than buying to take advantage of what will probably be some of the best bargains in two decades.


With so many recent stock-market buyers, indices including the S&P 500 are almost certain to experience a net loss in 2014. Many institutions have purchased portfolio insurance including out-of-the-money put options, so those investors have to also suffer for their actions. If the stock market must decline to harm recent buyers, but not retreat enough to reward those buying deep puts, then a net loss of 10%-15% would end up rewarding almost no one and is therefore by far the most likely behavior. You can apply the same principle to emerging-market funds which have mostly bottomed at various points throughout the second half of 2013--usually whenever the greatest degree of outflows from any given country or sector had just been completed. Each asset waits for the maximum number of people to be knocked out so they won't benefit from a subsequent rebound, and then it rallies strongly.

True Contrarian
 
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The Bears would should like to hit the stops at 1180....and maybe they will!



This is update #1958 for Tuesday early morning, December 31, 2013.


Additional higher lows were touched on Monday morning for many metals, with the most active gold futures contract sliding to a 3:40 p.m. low of 1193.30 U.S. dollars per troy ounce and silver slumping to a 3:45 p.m. intraday bottom of 19.460. This effectively knocked out all long-side speculators who had placed sell stops near 1200 and 19.75 or 19.50 respectively. Some were likely encouraged to add new short positions. Knowing how traders behave, the financial markets will always ensure that the fewest possible investors benefit from any significant move. Now that nearly all uncommitted bullish traders are out of the market, while stale bearish traders abound, a sharp short-term rally for all metals is increasingly likely to occur.


True Contrarian
 
CrabClaw said:
they're trying!!
Click to expand...

They are running plenty of stops today...I thought the miners would be much lower, but many of my limit orders still haven't filled. However, it's still early so maybe I will be buying some in the low 24.00's later today. I'm going to add a few more shares now in the low 25.00's, and add some more limit orders at lower prices. I will be buying GDXJ in my wife's Roth this morning.

12/31/2013 9:15:57 AM ET NUGT Bought NUGT @ $25.25 Executed


Trade only - Next limit order for NUGT @ 24.76....

Added GDXJ for an investment in Roth's.
 
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glad you were able to get some shares at lower prices this morning. nice pop in the miners so far, good to see.
 
CrabClaw,

I trade in the extended market sometimes at Scottade when we get large gaps down using limit orders. Lets see how this plays out, but the Bears still might have a trick or two to play. I added some GDXJ in my investment accounts at a nice price this morning. This could just be a short-covering rally, but I want to start the new year off long the miners. NUGT could head up to 40.00 real quick if we can get a rally going....The short Bus is full of those that are short the miners, and could really get things going if we can get some buyers.

Good luck on your trade.
 
robo said:
The Bears would should like to hit the stops at 1180....and maybe they will!



This is update #1958 for Tuesday early morning, December 31, 2013.


Additional higher lows were touched on Monday morning for many metals, with the most active gold futures contract sliding to a 3:40 p.m. low of 1193.30 U.S. dollars per troy ounce and silver slumping to a 3:45 p.m. intraday bottom of 19.460. This effectively knocked out all long-side speculators who had placed sell stops near 1200 and 19.75 or 19.50 respectively. Some were likely encouraged to add new short positions. Knowing how traders behave, the financial markets will always ensure that the fewest possible investors benefit from any significant move. Now that nearly all uncommitted bullish traders are out of the market, while stale bearish traders abound, a sharp short-term rally for all metals is increasingly likely to occur.


True Contrarian
Click to expand...

Right on cue. Nice big white candle after touching the double bottom. We've been expecting this.


gld.png
 
MrJohnRoss,

We sure have and lets hope this is it.......The key is we need that 1180 to hold, and we just might see some buying into the new year. Tax selling should now be over, all gaps are filled, so maybe we can start a nice move up.

I'm keeping my NUGT for now, but will sell some for Risk Management reasons if this rip continues. NUGT and JNUG are for short-term trading coming out of cycle lows, and GDX and GDXJ are for investing. It would be nice to see a High Volume day early in the New Year to get a bottom confirmed if we have one.....STBD.

Good luck on your trade.


Also, Nice chart.
 
Selling some NUGT shares that I bought in the premarket for Risk Management reasons. My position size is getting to large. Keeping all GDX, GDXJ, and JNUG shares.

12/31/2013 1:29:52 PM ET NUGT Sold NUGT @ $27.18 Executed
 
We will know soon if some of the selling of gold the last few months was related to year end tax selling.

I put in the transfer to move funds into my 2014 Roth accounts at Scottrade this morning from my bank account. My wife is still working so I will take advantage of it until she retires in the next couple of years. The funds are in the queue for now since the banks are closed today, and I will be buying GDXJ with all of those funds. Good luck to all in 2014.

I'm not a Big Follower of CNBC or Eric King, but I do follow Art Cashin and Rick Santelli and give them extra weight to any comments they make about the markets or indexes I'm trading or investing in.

A comment from Art Cashin:

Eric King: “With sentiment at historically negative extremes on gold, do you think that metal might surprise investors in 2014?”

Cashin: “I think it well could. We should find out early. I think some of the late pressure may have been tax-related selling. This may have given us this December down-spike that we’ve seen. We’ll know that rather quickly. If the selling does continue into next year, then we will have to take another strategic look at where you want to go. If in fact it is tax-selling, it should abate and gold should begin to firm up early into the (new) year.”

My Blog


I have NO IDEA if Art is correct, and as it points out, we will know soon.....
 
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CrabClaw said:
I see upside potential if 1220 holds.
Click to expand...

Looking good Brotherman....it would be nice to see a rip-your-face-off short covering rally for the miners. I'm currently up nicely on my JNUG and might have to reduce my position size due to the gains. Selling will be based on the rip going higher...if will sell off I will hold.


Total Mkt Chg ($|%): 13.27% Portfolio G/L ($|%): 35.46%
 
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just sold my NUGT Jan 10 calls for a 85% gain -- nice (only made like 2k due to position size though)

My regular NUGT position is up about 8% right now, getting close to my 10% bail point. will probably reduce by 1/2 when (and if) it gets there.

still have some IWM jan 10 puts out there, currently up about 50%
 
CrabClaw said:
just sold my NUGT Jan 10 calls for a 85% gain -- nice (only made like 2k due to position size though)

My regular NUGT position is up about 8% right now, getting close to my 10% bail point. will probably reduce by 1/2 when (and if) it gets there.

still have some IWM jan 10 puts out there, currently up about 50%
Click to expand...

Nice trade....and NUGT and JNUG are for trading only. I have 4000 shares of JNUG and want to reduce to around 2000 as we head up. I'm going to sell a 1000 shares if we hit 18.00 today. Most of these current shares I bought around 13.10 that's why I'm up so much. I will not be selling any GDX or GDXJ until I double my money.

Good luck on those small cap puts...IWM was ready for a pull-back for sure.

I'm starting to reduce my position size of JNUG.....


1/2/2014 9:59:50 AM ET JNUG Sold 100 JNUG @ $18.01 Executed
1/2/2014 9:59:44 AM ET JNUG Sold 212 JNUG @ $18.01 Executed
1/2/2014 9:59:32 AM ET JNUG Sold 100 JNUG @ $18.01 Executed

The above were sell orders that filled @ 18.01
 
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