Daily commentary with Al Korelin
Still hanging on despite a wild whipsawing metals market. Quest up a little over 700% to $2244.
This is what I posted to the premium website this morning.
The more I look at this the more concerned I am becoming. It’s only natural to see day traders take profits after a huge momentum push like we saw on Wednesday. Usually a market will trade sideways for a day or two after that kind of move. But that kind of momentum doesn’t just get reversed immediately. Not in a natural freely traded market. It certainly hasn’t in the stock market.
The heavy volume selling in miners yesterday wasn’t in my opinion short term traders taking profits, and now this morning sellers are again trying to drive gold back below that critical $1350 support zone.
My opinion has been that the unnatural selling over the last three weeks was an attempt to drive gold down to $1000 by players trying to lower the starting point before the bubble phase begins. However after Wednesday’s rocket launch I think those players threw in the towel and probably realized that they were going to have to be satisfied with this leg starting at $1179.
So at this point I don’t think this has anything to do with trying to lower the starting point before the bubble. This appears to have other motives. I’m now prepared to entertain the idea that this manipulation could be coming from much bigger sources in the Fed or government.
Now this may just be options related and everything will resume going up next week. But I’m going to again heed the warning signs and exit all my positions and stand aside as the market isn’t acting naturally and I’m afraid the manipulation is going to resume, and they appear to have pockets deep enough to break even a rally as powerful as the one we saw out of the FOMC meeting.
If gold can be held down around $1350 or lower by the close it will again damage the weekly chart and mostly erase the constructive work that had been done on Wednesday.
At that point I will be back on the sidelines waiting for the weekly swing to be erased by a move above $1417 before I want to risk entering these shark invested waters again.
The following is what I sent out to subscribers this morning.
“The miners have refused to follow gold to new lows this morning. In my opinion this is a pretty good indication that the daily cycle low is imminent. Either on the FOMC announcement this afternoon or maybe tomorrow.
If gold were to deliver a $40-$50 rally today that would be a strong sign that the bull is going to overwhelm the manipulation.
We will have to wait and see what happens, but if it does surge hard on the FOMC statement back up to the $1350 resistance zone that would be an incredibly bullish start on day one of a new cycle.
If that were to happen the odds would be good that gold would break through resistance and break the manipulation. Brave traders could re-enter LEAP’s if this occurs this afternoon.
I think this scenario requires gold to rally immediately upon the statement. No sell off and reversal. This needs to be a rocket launch right after the announcement. There needs to be no doubt the market is reversing 180 degrees.”