Nov 14, 2012

Wow what a day! There's been lots of screaming, cussing, and folks thinking the market is going to crash and their lives are over. The white flag has been waving..

So tomorrow I buy.

We've always been told to buy high and sell low. But does anyone stop to ask, "What is high and what is low?" Such a silly question.. but isn't it the most important?

This is low.

First off GDX. Miners got HAMMERED today! I sat back watching in joy as others spent their day wiping sweat from their forehead from anxiety. I didn't buy near term options on purpose. My GDX options are for March. I mentioned a couple of weeks ago that my target price for those March 54 options would be $2. I instead got anxious, broke my own rules, and bought in early. I only ended up with 7 of the intended 10 call options and paid $2.70 for them. Today they traded at $1.30. I'm in the red.. but I'm not worried. Time is on my side and I'm still confident in the fundamentals. Miners are grossly undervalued at this point in time.

What happens when you stretch a rubberband?

What happens when you stretch it really tight?

GDX found perfect support on the 50% fibo today. This is a decent step below the 200 DMA. I'm still not worried.. weak hands are being flushed by the dozens while smart money steps in to scoop up the cheap prices. This is the name of the game.

Watch for a quick snap back into the trading range very soon..

Gold did not fall today. It held strong. This strengthens my confidence in the miners.

The Dollar created a swing high today. It's also began to break out of the ascending wedge we I have been talking about.

Here's a look at the long term dollar. You can see on my chart of the obvious declining yearly cycle trendlines. IMO, the dollar has already printed it's yearly high. It's now right up against the declining yearly cycle trendline. A break below $78 will signal a failed yearly cycle.. which creates lower lows and lower highs in the coming months.

The current intermediate cycle is on week 8 and has already topped. The normal intermediate cycle runs 20 weeks.This means as long as this declining yearly cycle trendline is respected, we have many weeks of downside to come.

For stocks, they continued to decline today looking for their ICL. This was a huge contributing factor in the big decline in miners as well. Yesterday I mentioned $1360 was in the cards, and it was broken today. No big deal.. more of the same. 

Money flows into the S&P today were huge. The BOW numbers have appeared several days within the last week.

DAILY				TOTAL MONEY FLOW				BLOCK TRADES
Company	Price	Chg	% Chg	1-wk % chg	Money Flow	Tick Up	Tick Down	Up/Down Ratio	Money Flow	Tick Up	Tick Down	Up/Down Ratio
SPDR S&P 500 (SPY)	$135.93	-1.86	-1.35	-1.61	$325.83	$2,724.79	$2,398.96	1.14	$337.78	$537.92	$200.14	2.69

I plan to finish off the buying of my GDX calls tomorrow. The super cheap prices and major decline will put in at an average lower cost of my original goal and I'll have double the position than I originally intended with 20 calls.

Hang tight.. and don't let the bull buck you off. The trend is up no matter which way the short term wiggle shakes you..