Mike Swanson
I get lots of emails from gold bears and many from people trying to jump in and out of gold, because they are scared to hold it.
Gold is in a new bull market and yet so many people are not taking advantage of this properly.
Here is one email I got this morning:
after you got so excited this morning, as gold did pop, it promptly as has been the case and will be perhaps into next year turned right back under $1300. and of course the miners are continuing their fall from the high. in case you think i’m some kind of fool or slouch as i wrote you earlier i sold my mining stocks a couple of weeks ago that i bought in late december. my total gain was, and this is the absolute truth, around 200% on 7 positions. i will wait out the big dip headed in gold and not buy again until gold is safely over $1300. for now i will continue to sell oil short.
This person is referring to a post I made yesterday you can find here.
I am happy he sold a trade for a nice gain, but worried that he may have zero gold positions now and is in danger of missing out.
I feel he emailed me in anger, because I posted yesterday that gold is in a bull market and that I am holding my positions and refusing to sell them.
I do not think he is a fool though.
Unfortunately, what he is doing is simply typical at the start of a bull market when very few people believe it is real and the only people really buying are big insiders and people like George Soros.
Stock market small fries tend to simply chase moves AFTER they happen and believe what they saw in the past few years is going to continue forever.
There is a simple solution to their mistakes and that is proper money management.
This guy is missing the entire point of the post though I made so I am going to repeat it.
I wasn’t really trying to predict the short-term moves at all in it!
The point I was trying to make was that it is pretty much impossible to act on daily gyrations in gold and jump in and out and expect to hit each trade perfectly.
This will lead one to eventually making a mistake and losing their long position only to see gold go up without them.
It’s just impossible to predict things perfectly on the short-term over and over again.
So going into this week I did not think gold was going to go above $1,300 and then it did.
I thought it might pullback to $1,250 before really going up.
But it didn’t.
Then it went up above $1,300 the other day and then went down yesterday.
This didn’t matter to me, because I am simply riding nice core positions even though it freaked out many and emboldened those mistakenly bearish on gold.
So I got a dozen emails from people predicting a gold crash in the past 48-hours.
Martin Armstrong made a crazy post saying it topped and suggesting it was now going to collapse.
He claimed that George Soros may have even sold his gold and fooled people in a manipulation in a post he titled Gold Crashing.
I mention him because the gold bears I get emails from almost all of them follow him and hang on to his every word.
And this person emailing me is expecting this big gold dip that may never come.
What people need to do is own a core position in gold and mining stocks in order to profit from this new bull market that is big enough for them to make good money and small enough that they won’t be so scared of every daily up and down move in gold that they sell out in fear.
If you do that you can make a killing in gold.
If you trade in and out of gold you most likely will not do that well.
And if you try to play DUST you will likely end up destroying yourself.
So my suggestion to this email guy and to you is to use a core position in gold and mining stocks to profit from this bull market and just ignore people who keep calling for gold crashes over and over again and to stop trying to time gold perfectly, because it is impossible.
Ok if you have been jumping in and out of gold perfectly all year you can discount what I am saying. In fact email me, because I know of NO ONE who has done that.
And if you have been trying to do this and failing at it then STOP!
And if you are a gambling addict who simply craves the trading action and cannot stop trading own a core position and do your trading around that for fun.
Is this the same Mike Swanson that called Elliott Wave analysis “nonsense” and “demonic?”
Dunno, I will check Google. Errrr… yes he did. Wow, I am surprised at that.
I like Mike Swanson because he sounds easy going and has a nice local accent.
Too bad he opines about that which he has no clue. Not to mention he has been badly wrong in this market decline from 2011-2015.
He is a good level headed Analyst in my experience
Wrote this at the end of 2014 in response to Swanson’s statement that EW is “nonsense” and “demonic”
Many market analysts will soon join the likes of Louise Yamada, Carl Swenlin and Mike Swanson, and declare the end to the metals bull market. Even Eric Sprott just sold off 210,000 shares of PHY this past week. Brian Kelley of CNBC, who was long GDX for the last several months, and had been suggesting others be long GDX for the last several months, sent out a representative “chart” of his perspective on the gold market, which also happens to be quite funny – the vomiting camel. Clearly, he changed his perspective quite dramatically due to the recent decline, which obviously caught him by surprise. That is because he based his buy suggestion on GDX upon world events and fundamentals.
For those of you who feel that you are alone in allowing market sentiment to affect your investment perspective, I have a representative story for you, which will illustrate that most of the analysts out there also fall into the same sentiment trap as novice investors. Noted German gold stock newsletter writer Oliver Gross was quoted by The Gold Report on October 27th that he has been continuing to buy miners “when there is blood in the streets.” Yet, just 3 days later, he publically noted that he “had to liquidate the whole portfolio.” As of the close of the market on Friday, GDX was higher than the point at which he liquidated.
As another example, back in the summer, when I began shorting metals again, Mike Swanson publically noted his perspective that Elliott Wave analysis does not work – in fact, he called it “nonsense” and “demonic,” and he was going to prove it by showing that the metals and miners were about to break out in their next bull market. He was going on and on about how lower lows were just not going to happen, even though Elliottician’s, such as myself, were quite certain we would see lower lows. Unfortunately, his understanding of Elliott Wave was very superficial, and he suffered for it. Sadly, he and his followers have lost a lot of money – according to his most recent post – and he was forced to go to cash.
As an aside, it is for this reason that I caution people to learn about the true inner workings of Elliott Wave analysis, complimented by the Fibonacci Pinball method I came up with, before they attempt to opine about the accuracy which can be attained through using these two methods in conjunction. I often see too many opining about Elliott Wave analysis even though they have no real understanding of how it works. I mean, is it reasonable to provide an opinion regarding something about which one knows little, or even nothing? How reliable do you think such an opinion may be?
For those that have followed me for years, you will know how many of the micro turns we have called in this market, both up and down, in addition to calling the top in 2011 within a couple dollars of the actual top struck. While we certainly have not been correct 100% of the time, we have been told that we have correctly called the market turns over the last 4 years over 70% of the time. Furthermore, how many others did you see that correctly told you to short silver within 4 cents of its larger degree turn down in the face of QE3? Yes, that is correct. Our sentiment analysis called for shorting silver in the face of QE3, and it surprised everyone how correct we were.
As for the current state of the precious metals market, this will likely just be the start of stories like Mr. Swanson and Mr. Gross. Again, sadly, I think we will see many more stories like this, as I am hearing many stories of the amount of pain investors are feeling right now due to metals and miners positions that are significantly underwater. In fact, I was truly saddened when I read comments to two articles wherein the commenters noted that they just lost their nest egg because they believed in the gold and miner story sold to them over the last 3+ years.
This bearish sentiment will likely be culminating in the worst bullish readings we have seen in many decades. So, I will warn you right now; this is no longer the time to do what “feels” right, and begin to short the market. Rather, this is now the time to begin to take your profits on the short side, and look to the long term buy side. Yes, I know this is truly counter-intuitive, but if your desire is to beat the market and the rest of the players over the long term, this has to become your way of thinking.
So, as the metals and miners head to lower levels over the next several months, we will likely see more and more people terribly hurt, and others throwing in the proverbial towel. More and more bearish articles will be coming out claiming that gold is dead. More and more white flags will be waived by analysts and investors alike. The more of those articles you see, the more of your short side trades you should be cashing in, and more and more long side positions should be opened.
To Each his own Avi but I agree its not good to so easily dismiss the work of others without trying to understand it.
My Personal preference is Chartology
I have tried to follow your work and other successful Elliot Wavers but all I ever got was losses and a headache . Most of the EW I have seen has been 2 ways…always a second and third count. In hindsight the count is always obvious.
It is way too complex for me. I have decided I am just not smart enough to grasp the nuances .
I have tried many different TA disciplines and have firmly settled on the incredible simplicity and symmetry of Chartology .
Are You aware of Rambus Chartology Avi..? I have never heard your opinion of Rambus Work
This Post Summarizes Rambus Work…It is worth 15 minutes IMHO .
https://rambus1.com/2014/11/16/what-is-rambus-chartology-all-about/
You are relentless in pointing out your successes . Rambus too has had great Successes but he is a very
humble down home guy and would never publicly flaunt these.
I guess that’s why he needs me
🙂
To each his own Avi…I salute your work but when I see an EW Chart my eyes glaze over and I thank god for Chartology
RespectFully
Yes, I have a working knowledge of technical analysis as well, as clearly use it to support or invalidate an EW structure. We use many layers of analysis . . . but EW, from my experience, while complex, provides the most insight into markets that I have seen. It even provides advance warning when the standard TA will fail – such as a H&S pattern. Most often, the development of the right side of the H&S can be forecasted to break or follow through as it is developing depending on whether it is an impulsive pattern or not based upon EW.
So, personally, the more layers one has within their analysis, the tighter it is. For that reason I came up with Fibonacci Pinball to frame an EW count, which also makes it tighter than standard EW.
Again, its all about layers of analysis to support your perspective.
As far as Rambus, I have seen that he has a wonderful following, and there is a good reason for that. He is a very good technician. And, it will only help the investment community to have REAL technicians in the field rather than the many who pretend to understand markets.
For the record, I’m not Mike Swanson and I had no idea what Armstrong has been saying lately but I do think there will be a sharp pullback in the miners but I suspect it will present a buying opportunity once resolved. I think the GDX could head back to down to $20-$21 over the next month or so but most likely I will be loading back up when it gets there. There is serious resistance above $27 coming from fib levels and other targets of mine, plus the overall structure has taken on a bearish stance to my eyes. A/D and OBV, particularly on the weeklies suggests strong selling into the most recent run above $27. Additionally, although I don’t trade off the current COT, it is a data point that must be considered in one’s overall analysis and it’s not bullish either.
One more thing that I just have to say….being “in danger of missing out” or “This will lead one to eventually making a mistake and losing their long position only to see gold go up without them” should not be the focus of anyone’s investing or trading premise. Capital preservation is priority #1 period. You cannot knock someone for making 200% and sitting out until a better set up emerges. This is starting to sound like emotional goldbug speak which doesn’t necessarily tie into any technical backing. It is NOT a foregone conclusion that the correction in gold is officially over and it could easily make a lower low. I happen to feel the charts are suggesting the bullish odds override the bearish one long term but I’m not going to say this is definitively the next leg up in the bull market and we wont know until we view it in the rear-view mirror.
Mike Swanson had this fun conversation with Dave Skarica with their opinions on Marty and Socrates. Not my opinions but LMAO!
http://www.youtube.com/watch?v=wEFeyAXh-04&t=22m25s