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Manuel Blay

Manuel Blay
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  • UBS: Gold upside breakout hopes dashed; platinum too [View news story]
    Gold and silver have rallied without conviction in the last few days. And we should not forget that the primary trend for both metals remains bearish. On the other hand, SIL and GDX, the gold and silver miners ETFs may be providing some tailwind to gold and silver, since today, Jan 17, their secondary trend turned bullish according to the Dow Theory, as explained here:

    http://seekingalpha.co...

    So long term both gold, silver and their miners are in bearish trend, but something is changing as far as the intermediate or secondary trend is concerned.
    Jan 17 05:45 PM | Likes Like |Link to Comment
  • S&P 500 More Likely To Break 2000 Than Experience A Correction By Mid-2014 [View article]
    I agree with the author from a different perspective. The primary trend for stocks is bullish as defined by the Dow Theory. The average gain for each position taken according to primary bull markets as defined by the Dow Theory is 22.07% (here you have the details:

    http://seekingalpha.co... )

    If we consider that we are already in a secular bull market (I am agnostic as to whether we are in a "secular" bull or bear market), the average gain jumps to 53.37% ( http://seekingalpha.co... )

    The unrealized profit for the current position taken in July 2013 amounts to 9.37%, so it seems that the odds favor more profits and that the bullish run-up is not exhausted yet.

    Regards
    Dec 31 06:18 PM | 1 Like Like |Link to Comment
  • Dow Theory Update For December 30: Timing The Next Primary Bear Market In Stocks [View instapost]
    Yes, I can explain.

    The link I provided merely tells us that one fundamentalist investor threw the towel and joined the bullish wagon. It was just a new, which I happened to read on ZH, as I could have found it in any other website. Thus, the link I provided makes no calls about market direction.

    Personally, I am fiercely independent with a strong Dow Theory bias. So I take ZH, and any other financial service for this matter with a grain of salt or two. It is easier to write about money than making it (which also applies to this blogger truly yours).

    Happy new year and good trading.
    Dec 31 05:58 PM | Likes Like |Link to Comment
  • The Gold Floor Fallacy [View article]
    I agree with the author: prices can go lower in spite of producing costs. One shouldn't underestimate the power of bear markets. For one year now, gold has been under the grip of a vicious primary bear market as explained here on SA:

    http://seekingalpha.co...

    Bear markets don't die easily, in spite of the cost of production.
    Dec 24 02:23 PM | Likes Like |Link to Comment
  • When You're Right, You're Still Wrong: GLD Hits 115 Bear Target [View article]
    Good market call and I agree with the bearish outlook. While nothing is carved in stone, the odds favor lower prices, as the primary bear market of GLD is bearish. Furthermore, the primary bear market grew one year old last December 20, as explained here on SA:

    http://seekingalpha.co...

    Primary bear markets don't die easily.
    Dec 24 02:19 PM | 1 Like Like |Link to Comment
  • Dow Theory Special Issue: Visualising Drawdowns  [View instapost]
    Greeting NLO,

    This is what makes markets: diversity of opinions. Otherwise, we would be buying or selling or following the same investment technique at the same time.

    Readers should read all opinions and draw their own conclusions.

    Regards.
    Sep 23 04:53 PM | Likes Like |Link to Comment
  • Dow Theory Special Issue: Visualising Drawdowns  [View instapost]
    Greeting NLO,

    With all due respect, I feel your comments are off the mark.

    First of all, as the title clearly shows, the object of the post is to compare drawdowns; not returns. The point I repeatedly try to make in my posts is that investors seem to focus blindly on returns while ignoring drawdowns. In other words, greed (returns) clouds judgment and gives way to fear (drawdowns), which eventually decimate financially and psychologically the average investor.

    Thus, the appeal to riches by focusing on “returns” is a dangerous proposal in real life. We must first focus on the likelihood of losing. First, we have to take care of losses.

    If we focus on drawdowns, even the use of the DJITR would not have avoided the severity of drawdowns that plague buy and hold. I studied the chart you have linked. And I could see that on October 12, 2007, the DJITR hit a high of 23191.36. On March 6, 2009, it made a low at 11375.39, which amounts to a drawdown of -50.94%. Thus, the total return index could not spare investors of a severe drawdown. It can be argued that over time, drawdowns pale by comparison with total returns, but in real life, a 50% loss is a 50% loss, and if you are a retiree being forced to withdraw on an annual basis 4% of your capital to live, you will be forced to withdraw 8% the very year of the drawdown, since your capital will be cut by half. Then after withdrawing 8% you will only have 42% of your initial equity (50+8). And if you are a buy and holder, pray that the US remains the blessed US, because in most countries of the world stock markets have gone to cero or very close to it. More about this “survivorship” bias here:

    http://bit.ly/17X5AH4

    Of course, one can argue that over time, the total return index makes more money than the plain non return index. This is true. But this was not the object of the post. The object of the post was showing the real dangers inherent in buy and hold (whatever index you hold) versus timing the markets.

    Now let’s take a look at returns. The benefits (extra returns) accruing to the investor when using the DJITR should also accrue to the market timer using the same index. Thus, the Dow Theory (of any flavor whatsoever) manages to be invested ca. 70% of the time. So the Dow Theory investor (and even those following moving averages) would have been invested a significant amount of time and would have harvested a relevant portion of the total return index (while avoiding the most devastating losses; a good trade-off in my opinion). This is why, I repeatedly insist in my blog that, even though my main focus is loss containment, as a side effect, the Dow Theory (be it Schannep’s or even the classical one) manages to outperform buy and hold as far as return is concerned.

    It is true that by using “total return” you’ll get a higher end figure; however, the ride to reach this final figure is going to be as bumpy and scary as with the DJI. A 50% decline will be a 50% decline, no matter which index we use.
    Sep 23 11:35 AM | Likes Like |Link to Comment
  • Has Warren Buffett Nailed Another Market Top? [View article]
    Great piece. Even market timers have to acknowledge that Buffet is not the village idiot...
    Sep 20 05:04 PM | Likes Like |Link to Comment
  • Update On The Negative GOFO: Gold Has Finally Bottomed [View article]
    Good link and compelling reasoning, especially the reference to Nassim Taleb.
    Aug 14 09:45 PM | Likes Like |Link to Comment
  • Update On The Negative GOFO: Gold Has Finally Bottomed [View article]
    Great article. You connect all the dots. Negative Gogo, Vanishing inventories, commercials long COMEX position. From the article, I derive the following conclusions:

    a) The author does not believe in "system" meltdown or reset, as he feels comfortable with "securitized" gold, instead of the real thing (physical gold safely stored).

    b) For the time being, the status quo will continue (comex, GLD, etc.) and paper gold will continue trading together with physical gold. Many investors have been predicting the decoupling of "paper" from "physical" but, until now, have been proven repeatedly wrong. Will be they proven wrong again, and we will just see another bull market leg of "paper gold" instead of the demise of paper gold?

    Regards
    Aug 14 10:13 AM | 2 Likes Like |Link to Comment
  • Gold - A Final Push, Or Just The Beginning? [View article]
    Today the secondary trend for gold and silver turned bullish. However, the primary trend remains bearish. Until the primary trend turns bullish, we must remain cautious.
    Jul 22 05:26 PM | 1 Like Like |Link to Comment
  • Gold: Bulls Vindicated After Record Bear Short Run [View article]
    Today the secondary trend for gold and silver turned bullish. However, the primary trend remains bearish.
    Jul 22 05:24 PM | 1 Like Like |Link to Comment
  • What GOFO Is And Why It's Now Very Bullish For Gold [View article]
    Good insights. Thx for providing feedback.
    Jul 10 05:40 PM | Likes Like |Link to Comment
  • What GOFO Is And Why It's Now Very Bullish For Gold [View article]
    Good article. You managed to make understandable a complex subject. My only qualm, which is not a criticism to your well-grounded article, is whether paper gold will participate in the expected rebound or something more systemic (for example, example a decoupling of paper and physical gold, with paper gold going toward its low intrinsic value) will scare us all. Until now, TPTB could save the day in spite of a negative GOFO, and the paper gold markets continued to thrive. Will they pull it off this time?

    I've got the eerie feeling that this time things might be different due to systemic reasons. After all, until very recently GLD`s "puke" indicator was pretty good at timing intermediate bottoms, and since the beginning of this year it failed miserably, which seems to imply that "physical" and "paper" are about to part ways.
    Regards
    Jul 10 05:13 PM | 2 Likes Like |Link to Comment
  • Daily State Of The Markets: A Not-So Subtle Shift [View article]
    I feel you market savvy, and indicators have good odds of being proven right again. The Dow Theory signaled a primary bear maket signal last June 21. So technicals seems to strongly suggest lower prices in the days and weeks ahead.
    Jun 24 10:30 AM | Likes Like |Link to Comment
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335 Comments
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