The dumb money confidence level has now reached a rare level of euphoria. Retail traders are at 80% bulls. Retail traders are always on the wrong side of the market at turning points.
This kind of complacency almost never ends well when the profit taking event begins.
Gold on the other hand is seeing more bearishness now than at last years bottom, yet gold and miners are still holding well above those lows.
The contrarian trade is getting better and better. Keep in mind I would never short stocks, but no way I want to chase with retail traders at 80% bulls.
Gold on the other hand is building the fuel for a very powerful second leg up once the yearly cycle low is complete. Virtually no one believes in the bull anymore. Remember the time to buy is when no one wants it, and the time to sell is when everyone has to have it.
Watch the volume on the triple leveraged funds next week. We will probably get a stop run just like last year and that should allow big money to accumulate their final positions before the cycle bottoms and we turn back up. A couple of huge volume days on NUGT and JNUG should signal the bottom.
Heck if you can’t be a contrarian now, then you’re never going to be one. 🙂