168 thoughts on “GOLD – I MAY HAVE OVERLOOKED THE POSSIBILITY FOR A SHORT INTERMEDIATE CYCLE

  1. jacob2

    Pure guess, but frothy in gold bug land, so chop with a downward bias till mid December then modestly up. An outlying opinion but gold not ready for prime time … Summer 2018.

      1. jacob2

        Lack of insider buying in miners (lots of selling including NOVO resources the current must own hot stock), seasonal’s, COT, and pure guess. Pure guess my favorite.

  2. Christian

    Gary β€” I want your opinion on this..

    If everything we rely on – Cycles, Sentiment, technical analysis, intuition – becomes somewhat useless as cycles continue to stretch and charts continue to morph, then how do you stay one step ahead of the market??

    1. bginvestor

      I know you didn’t ask my opinion, but I feel like writing tonight..

      “If everything we rely on – Cycles, Sentiment, technical analysis, intuition – becomes somewhat useless as cycles continue to stretch and charts continue to morph, then how do you stay one step ahead of the market??”

      Actually, when one puts all of the above together, it provides a road map that gives an edge..

      For example, cycle analysis has (not only suggested), but confirmed an ICL and YCL in July. This has meaning in the cycle analysis world. This current daily cycle not only broke a multi year term down trend line, but will be right translated out of the YCL.. What does that suggest? Future cycles are going up!

      Think of the Elliott wave 1-2-3-4-5. 2 and 4 are the lows. 1-3-5 are the highs.

      Well, a new trend has started which means gold is in “1” right now. At the next daily cycle low, it will be “2”.

      Buying at “2” is a no brainer based on mass psychology on how trends work.

      Its really that simple. Low odds of being a perma- bear right now.

      There’s little secrets in cycles that maximize gains, but not going to divulge in this blog!

      Hope that helps.

  3. jake

    Everything is pointing to a top, might as well play the odds, certainty due for some kind of pull back in the markets.
    Retailers will have some good buying opportunities.

  4. Goild

    Assuming the currencies are driving gold then it is wise to take a look at the ratios
    gold:UDN, gold:$XEU, and gold:XJY.

    The last two have broken resistance, and the first one is about to break it.

    Based on this GOLD is continuing going up!
    We may have a minor retracement, to reverse and keep going up.

  5. Pedestrian

    Good stuff Gary. Possible cycle low in December sometime? Might give us a reasonable count and still be on the compressed side. That was a really great point about the Euro too. I had come to a similar conclusion but without noticing the resistance level there. Then had to kick myself for overlooking it.

    Where the hell have I been this past week!!

    I still see a little more room to run higher for gold though. I don’t expect any swan dives Sunday night or during Mondays session. I have had to do some chart revisions to account for golds recent strength and in the process made a chart discovery I had been unaware of in the past.

    As a result I am looking for gold to EXCEED the 2016 highs and send the metals and miners into serious oversold territory first. The slightly higher-high is a very bullish longer term signal though and supports what some other chartists have been insisting on which is that gold will make its final multi-year bottom over the coming months.

    In other words, we are heading lower for that final leg down but this one is THE bottom to buy at whatever level it lands on. It may not in fact be at a level lower than 1040 as I have believed all along. It should however be the last chance for buyers to get into mining stock at current depressed prices.

    The peaks we get next are really the determining factor for the future (2016 versus 2017 tops).

    If gold fails to exceed the 2016 peak before breaking down then we should expect a lower-low on the next cycle top which tells us a continuing bear market is in the cards. If however gold exceeds the 2016 closing highs of 1266 in the coming days then it warns the bears should take this impending price decline seriously as the last major decline of the current 7 year gold bear market and instead turn their attention back to the bull case for precious metals once it completes.

    Hopefully that makes sense the way I have written the thought.

    My money is on gold breaking out and holding above 1266 and I have an estimated target top on a closing basis of 1269 to1275 before we turn back down and finally get this long awaited correction going. So a small but significant newer high. I didn’t just pull those ridiculous sounding numbers out of a hat in case you are wondering. Its based on a reason I would rather not share but if it turns out correct somebody around here is buying me a Burrito!

    What I can’t get a good read on is how long this current topping process might take.

    We could be looking at a week or possibly even 10 days before gold finally takes its long awaited dive. The fall should eventually take us to the low 1100’s by end of December. During the consolidation topping period the market will no doubt bull-up even further in anticipation of price erupting as it has done in past bull market beginnings.

    The breakout higher will convince the majority that gold is the real deal (Hooray, the bull is back!) even while the professionals are unloading stock into a decline they know is coming. So this is still going to be a see-saw process of keeping everyone confused by the chart and the bears will likely be denied an easy cut and dried win.

    It will also allow enough time to get almost everyone on the wrong side of the trade. I want to see the Commercial COT positioning back near its prior record-short level (of July 2016) to know we have finally arrived. That will show up as a Commercial COT double-bottom on the chart I am linking (see bottom panel for COT positioning).
    https://finviz.com/futures_charts.ashx?t=GC&p=m1

  6. Pedestrian

    Just by way of reference. The last time gold hit these current price levels it took a full two weeks to make the point clear a top was in but then after that gold moved sideways for another 10 weeks before actually falling back below 1300 dollars. So the bears in the room (I was one) looked like complete idiots for the better part of 3 months as we waited for gold to make a damned decision. I was correct back then but did not expect to have to wait so long to be vindicated. Instead, if I recall correctly, I was vilified by the bull-tards and when gold finally did take a plunge it was hardly even worth celebrating since I was so tired from the wait.

    I am hoping this time around it will be a little more decisive!

  7. bginvestor

    well, the bases are covered again.. if gold goes up, its called. if gold goes down, its called.

    Personally, I think gold has been cycling pretty good, so I’m looking for this current daily cycle to be RT with a decent retrace.. maybe a pivot around the 50 MA, we’ll have to see.

    1. Pedestrian

      “Bases are covered again.. if gold goes up, its called. if gold goes down, its called”

      Typical non analytic response. Gold WILL go back down on a cyclical basis. What is not known is how long it will consolidate before that happens nor whether the secondary primary peak comes in higher or lower. If you KNOW with your crystal ball then by all means tell us. Besides it being a coin-flip answer I think you can probably just save your breathe and not bother responding.

      You bugs will never learn.

      1. Christian

        He kinda does have a point though..

        Gary covered his Ass just like his best friend Avi, so no matter what happens we’ll get to hear:

        “Well folks, looks like daddy Savage was right again..” which should lead right into..

        “When will you morons learn..” Lol πŸ™‚

        1. Gary Post author

          Nonsense. I told everyone what my trade was on Friday.

          I trade in real time unlike all the other analysts. Surf being one of the few exceptions. He makes real time trades as well.

          1. Pedestrian

            Yeah, sorry BG. I think I got you mixed up with the usual suspects from the peanut gallery crowd. I’m getting quicker on the “RETURN FIRE” button lately. Must be all those vitamins and fresh air.

  8. dboz

    Take a look at the hourly UUP Stoch and MACD. It’s going to bounce. Daily also shaping up in UUP. I think this week we see a dollar uptick. Not sure if gold will care, but we will see.

  9. Nada

    At the close I mentioned the 1b on SPY Friday.. wow, was hoping for a red spy in the morning to get long. Forget that pipe dream. Again you see why not to short the SM.

    1. Pedestrian

      The decline is not what it seems at first blush. What this looks like is the chart was bullishly recharged by the pullback which will allow it to move higher yet. So I would not despair quite yet if I were long as all this has done is catalyze the energy for a (final?) move to the top.

      Guess we will know about the final part soon enough!

  10. Christian

    I’m gonna tell you exactly what’s gonna happen.. You ready?

    GOLD 2hr chart is oversold and ready to bounce. No doubt we’ll fill the gap, produce a higher low and then..

    DOWN SHE GOES BITCHES Mouahahaaaaa 😈

  11. Gary Post author

    If this turns out to be the cycle top it may have been my best exit ever. Within pennies of the exact top.

    Of course the trolls will forget all about that trade and focus on a missed trade from last year.

      1. Gary Post author

        Put the Fib retracements on the GDX chart and that will give you some idea of where the correction might go to. Then multiply times 3 for the leveraged funds.

      1. Gary Post author

        One of the most dependable trades for the last several years has been to get long ahead of FOMC meetings.

        Maybe at some point it will fail, but until it does, might as well make money off it.

  12. Gary Post author

    Keep in mind that the short cycle scenario for gold is dependent on the dollar finding an intermediate bottom right here.

    I’ll need at least a week to see first, if the dollar forms a DCL. Then if the rally is powerful enough to qualify as a larger degree ICL.

    One definitely wants to at least be out of leverage right now.

  13. Gary Post author

    One other person timed a perfect exit in the metals besides me. He’s now in the lead in the challenge.

    And he’s only made one trade. His broker must hate him.

    1. MikeD

      πŸ™‚ I guess that’s me. Actually my broker sent me a message years ago when I hadn’t made a trade for over a year. They offered me lower transaction costs. It’s a long contest and I prefer to patiently wait for a favourable setup. It’s actually fun to measure how good or bad I’m among other traders.

    1. Pedestrian

      There is one thing about trading you need to appreciate better Primetime:

      When the market changes you need to change with it. And you often need to do so at a moments notice and without remorse. It’s a Darwinian concept. Those traders who are unable or unwilling to adapt quickly usually end of holding positions that work against them.

      Honestly, I appreciate people who just roll with the punches in this game and don’t apologize for doing so. Gary could have held of course. And if you sit tight long enough chances are the market will come back to you.

      But during the wait its no pleasure at all being in the red and hoping things will work out. Plus, you are not trading while you wait. My experience is that when you have a few key positions underwater it makes you too cautious afterwards so you end up with trade paralysis.

      So you just sit on your hands unwilling to take on added risk. How different it feels to have exited a trade at the top and be on the right side of the next move just to keep the flow going and your confidence up. Your kind of criticism makes no sense to me yet I read it all the time on this site.

      What it says in other words is “you made a mistake”.

      But I don’t see it that way at all. What I see is a guy who knows how to beat the game even if the first call came up short of the mark. And a win is a win regardless of how you got there. Hell, some of the worlds best traders cannot accurately forecast what any given market will do mere months in advance. And many are disasters on their year-end predictions for the upcoming year.

      You need to think more like the jungle, Caveman.

      When you see an obvious kill, you take it. Either that or go hungry for another day.

    2. Gary Post author

      I was never going to hold metal positions into year end. Even in the best scenario gold was likely to top in Oct. or early Nov.

      I realized I had overlooked the possibility for a short cycle. I don’t want to ride out an ICL if I can help it.

      So I’m watching the dollar for the next week or two. If it signals that a larger degree ICL is occurring then I’ll stay out of metal trades and wait for an expected ICL in 4-6 weeks.

      If the bounce is weak then I’ll put my leverage back on at the next DCL, probably after the FOMC meeting.

      This one I’ll just have to play it day by day. It’s still way too early to tell if the dollar is forming an ICL.

      I always develop a big picture expectation. But if the market throws me a curveball I try to dodge them. No sense getting beaned just for the sake of being stubborn.

  14. primetime

    Nada,
    Who is pissed off. Simple question, how do you state you will hold to end of year and sell several days later. Does that make sense? No.

    I think it is important to do as Gary does, not what he says he is going to do.

    1. Nada

      Was this something he stated on subscriber side? I am not sure I remember the specifics about him holding old turkey. I think I remember something about a core position. I dunno, lets let Gary answer.

  15. Jimsee

    when the gold dumps fail on a weekend in the face of hi OI ….we should be off to the races…running 6 mth long, 2 mth short option straddles here makes a lot of sense imo. Hoping for retest of 1315 or so…

  16. Bigdaddy

    My portfolio is getting the shit kicked out of it but i am still doing well because I haven’t sold any of my losers. Isn’t that how Gary’s game works too? Just record the winners.

    1. Gary Post author

      Well we knew there was never going to be a war with North Korea at least not anytime soon. So as soon as tensions eased we knew the stock market was going to go crazy. You’ve been warned at least a dozen times not too short the bubble phase of a bull market. I don’t know why you continue trying to push this losing strategy.

      You should be fine on your metal positions although if the short scenario plays out you might have to whether a four to six-week drawdown.

      1. Nada

        “You should be fine on your metal positions although if the short scenario plays out you might have to whether a four to six-week drawdown.”

        What did I miss? When were you expecting more than a DCL – which should find a bottom before or shortly after FOMC meeting which is 9 days away. 4-6 weeks, that sounds like the duration of an ICL.

          1. Nada

            From my understanding, you were expecting a DCL, a bounce and then ICL. So the statement about having to weather a drawdown for 6-8 weeks was odd, since there should be a bounce (new highs) before ICL.

          2. Nada

            OK, I see now. You were looking for a bounce out of the DCL (no new highs), failed cycle and roll over into ICL. Interesting. Who knows, strong support at 1316 on xauusd but dollar may becoming out of ICL.

  17. Pedestrian

    “So, now it is time to simply β€œsit tight.” All you need to recognize at this time is where the market cannot break below in order to keep the pressure to the upside. And, that is where you set your stops. So, again, right now it is simply time to β€œsit tight,” and enjoy the ride for which you have been so eagerly waiting all year. This now brings me to the support levels to watch in the coming week. As long as the GDX holds the 24 region, silver holds the 17.40 region, and GLD holds the 126 region, we will continue to maintain a strong expectation that we still have higher to go over the coming weeks. So, I would not worry so much about the micro count. Rather, I would simply give the market room to run. — Avi Gilburt
    —————————–

    See, I don’t get this at all. On the one hand Avi says to “sit tight” and then on the other he essentially says to cut and run if GLD, GDX and silver fall below certain levels. Well which is it? Sit tight or run for your life…?

    Point is, GLD is in the 126 region right now. GDX is in the 24 region right now and silver has fallen as low as 17.77 this morning. This is a pretty safe bet as far as advice goes. But its also completely useless. All of these are putting in topping patterns so a sell is prudent with the option to get back in if the trade unexpectedly breaks out.

    I think Avi doesn’t know what in hell is going on. This is why Elliot waves are so useless at turns.

    1. Christian

      How do you not get this? You’re the smartest man on the blog πŸ™‚

      Avi is telling everyone to sit tight and let the market play out, but if GDX breaks 24 to run for your life.

      It’s not great advice but it’s pretty straight forward, no?

      1. Pedestrian

        Sorry Christian. “Sitting tight” means holding through draw-downs and just waiting if you are in a bull market. It means by definition to not sell in and out of the market at every sign of movement that goes against you. What Avi wrote is pure drivel and I don’t need to be particularly bright to figure that out. His post is 100% contradictory. I could pull my hair out reading that kind of analysis. And no less because the sell points he offers are the same numbers we are seeing the day he wrote the article!

        That’s not what I call guidance.

  18. Goild

    Good morning,

    It was a no brainer to get JDST at JNUG’s peak near 10:00 AM.
    I had 4K JDST shares then.
    The difficult thing was to hold them for long.
    Siting quite is the most difficult prat in this business. The more money you have on table the more your
    judgment is impaired.

    1. Nada

      ahh, yes we will be having a nice lunch today, huh Goild? A nice ride in the BMW over the weekend, top down, the sweet melody of ones favorite music while enjoying the sites of hawaiian coastal highway. All for 4 dollars mind you.

    2. Bluebellkid

      This is what you typed this weekend:

      Kind of different thrill compared to having 8K JNUG shares on the table.
      Let us see how we make money tomorrow out of JNUG or JDST.
      Preferably out of JDST, to not getting trapped in a falling knife. Though, JNUG may want to get a little double top before falling.

      1. Pedestrian

        I don’t get it either. We just saw JNUG down 6% at the open which was a 13,000 dollar loss on 8000 shares based on Fridays close. There was a fast bounce back though which could have recovered much of the loss if timed to perfection. This is why its nuts to hold 3X funds over weekends. Six percent is huge when it goes against you.

      2. Nada

        I don’t think Goild was saying he was holding 8k shares of JNUG over the weekend. He was making a comparison of the thrill of opening up his BMW on the scenic Hawaiian coastal highways, while only spending 4 dollars for his gas. Very unlike the 10,000 he spends in commissions over a weeks time.

    1. Nada

      I hope you didn’t buy yourself a new car before your wife Goild? If so, don’t think that will not be used against you in the not so far distant future πŸ™‚

    1. Christian

      I hate to bust your balls Nada because you’re one of my favourite on the blog but.. those channel trendlines you drew are technically incorrect.

      Ps: I didn’t wanna say anything at first but you keep bringing this chart back every now and then, so now I feel obligated..

  19. Goild

    Definitely, luck is part in this business.
    Somehow I made two JDST trades by mistake, or I do not know how, on my swing account.
    Came back from breakfast to realize that account had a gain. Sold the JDST shares to add to $791 to todays profit.

    Rarely I am lucky, perhaps not, but today definitely I got lucky.

  20. Sassybabe

    Why am I holding SDS if the market is so close to all time highs? But, if I get out now my loss will be nearly $700. I don’t understand why corrections are of such a minor nature and very short lived.

    1. Nada

      700? I thought you only bought 100 shares of SDS Sassybabe? Its hard to short the SM and even more so in front of FOMC. I know you most likely followed someone in on the trade, but something you may want to try to do is hedge your position with options. If you have no experience with that, then do not attempt.

      I would hate to tell you to take the loss and then the SM reverses, but the probabilities suggest it moves North into FOMC.

        1. Pedestrian

          Not that you care what I say but you will get stopped out until you are broke if you place them them too tightly. Not saying they are not valuable but I use them less and less as the big players routinely run your stops to force sales and take your money in the process. It is almost a weekly ritual. Check any hourly chart to see how these sharp moves clobber stops both to upside and down.

      1. Pedestrian

        Wait! What? You went deeply short last week. Told us all to stay tuned for your next big call and then this morning said your account was being destroyed. I guess being a fighter pilot and playing the stock market are not the same after all because you get shot down every single week.

        1. Nada

          Ped, you screwed up the delivery. What you should of said was..

          “I guess being a fighter pilot and playing the stock market are the same after all.. because you get shot down every single week in the SM too”

          Sorry BD, I couldn’t resist. You owe me one πŸ™‚

    1. Nada

      LOL, I love that analogy. Dboz, I know you have been sidelined – you have a region you are looking to long, or has Gary’s new ICL scenario provided new caution?

      1. dboz

        I may start some metals buying this week. See how the next day or two goes. I think Gary may be correct. However, I think we could get a nasty pullback in the near future. I am not sold we are going ballistic here.

  21. Pedestrian

    Should be getting a gold bounce just about anytime now. Looking for a reversal (back up) in JNUG naturally. Gold has still not met my upside target which is that it must exceed 1366 so its still game on until that happens and I expect miners will play along with the direction as we slowly work our way to the finish line.

      1. Pedestrian

        Agreed. Its become so heavily long on the COTs with speculators though that the topping process and consolidation preceding the decline will probably drag out for awhile. Sideways trading until German elections perhaps? Looking for a trigger to make the drop happen.The trick is to not get sidelined by gold price pops and drops between now and then. Short term trades only in sideways markets. Otherwise stay the course.

  22. Pedestrian

    Sorry! Should have written 1366. That was the 2016 closing high for gold. Intraday it hit 1277 or something like that if I recall. Futures close and spot close are not the same incidentally. I used spot in this case.

  23. Bigdaddy

    Pedo, i may not be the smartest guy here but it is obvious that you are just Gary’s attack dog and not who you pretend to be. You have chased away a lot of good people from this site.

      1. Gary Post author

        It’s just like I said. During the advancing phase of an intermediate cycle Peds trades fail repeatedly and the bulls look like geniuses.

        Then once the declining phase of an intermediate cycle starts the roles reverse, Ped looks like a genius and the bulls get crushed.

        Markets go up and they go down. A perma view of anything is guaranteed to deliver periods of under performance.

      2. Pedestrian

        Yes BigDaddy, that is ridiculous. I’m just calling you out because of all your BS and bluster and all the crap you throw on me daily for no reason whatsoever. That has nothing to do with anyone else here so don’t pull that stunt on me. Do you even read the crap you write about me and others? It’s a glass house buddy.

        1. Bigdaddy

          I don’t lie about my positions so when I make a wrong play, you jump all over it as you do to others who reveal their positions. You , on the other hand, don’t divulge your positions and even though gold has been going up all the time you were saying it was headed down, you claim you are waiting for the right time to short. What a load of horseshit.

  24. Gary Post author

    Last week I noted that the energy stocks were getting a little too bullish sentiment wise and would need some kind of short-term pull back. I predicted that someone would come on here and tell me I was wrong again about the energy stocks during that pull back.

    Everything I predicted came to pass and now today the energy stocks are resuming their upward trend and not far from making new short-term highs.

  25. Pedestrian

    Looks to me like the Nikkei broke out of a 4 1/2 month long bull flag today and if that’s the case gold is in a lot of trouble. This is just a one day move of course and could be a throw-over. Will have to wait and see if it advances further tomorrow. If so then gold will get that decisive correction down I have been hoping for and stocks are on their way up again.
    https://finviz.com/futures_charts.ashx?p=d1&t=EX

    1. Gary Post author

      This is a tough call. There are a lot of signals suggesting we got the ICL a couple of weeks ago.

      The one missing ingredient was a break of the intermediate trend line.

          1. Pedestrian

            OK. I was in TECK but won’t buy back until the decline is done. My views on copper are fairly strong but you should know some very good technicians don’t see things the same way. I am in a small minority with my bearish thesis for precious and base metals. Does not mean I am wrong, only that most people don’t agree.

    1. Bigdaddy

      I am not panicked by a draw down. Remember when i was buying silver and telling everyone to do the same and the crowd here was buying DUST or waiting for Gary’s prediction for the miners to break their December lows? I took a lot of guff then from the chicken littles for the draw down on my silver purchases but it all paid off quite well. It will be the same for the SM. Just wait and see.

      1. Nada

        @bluelagoon For those profits, I spent 12k in options.. I still have 7k on table in the 124puts. I like what looks to be a close below the 10ema on spot (still 50 minutes to go before close), but I locked in early because I had too much on the table. I left the 124s to maximize leverage, but it would have been much safer to keep the 126’s running. Leverage is a hell of a drug

  26. Alexandru Popovici

    Surf, I also agree that gold has yet to see its ICH –> JPY has simply more room to grow and its current decline will only render commercials even more net long JPY thru FOMC.

    On the other hand, the DC retracements of gold and JPY are going to be significant (maybe to 1289) while EUR reaches its ICL next week.

  27. jacob2

    Oil picking a bid today. Long many oil stocks old turkey, no gold. If oil starts moving higher and closes above $55 all of the bears will panic and $60 to $70 by 3/18 becomes possible. One can never be certain but like the risk reward for this HATED sector. Oil stocks priced for armageddon. Regression to the mean. We shall see.

      1. Nada

        What is interesting is the speed of the decline. I don’t like that. The gap at the open pissed me off as soon we opened. It through everything off – another reason I closed a lot of contracts today. I hate gaps and this one leaves a nice upside target to be filled. The question is, do we roll over into the DCL at full speed or is it going be annoying as hell for shorts.

        1. Pedestrian

          I’ll go with annoying as hell for 500! (This is a game show right?)

          Seriously though, I wish I knew. When a lot of traders are getting all bulled up long at the top of a cycle the tension really builds and there is usually a period of pushing and pulling before a winner is declared. We will need an excuse of a trigger to change direction. I was thinking of the only two obvious upcoming events this month which are the FOMC on the 20th and German elections on 24th of September. But then there is Little Kimmy to contend with and he has no fixed dates for insanity. Kim is good for gold because he is bad for the Japanese stock market. We are clearly at a major inflection point but the outcome is never guaranteed. And the longer we trade sideways the better the odds begin to favour the bull camp. Somewhere there in the mix of politics, monetary policy and war cries we will get our answer. With luck it is the one we expect.

          COT’s definitely favor us bears though.

  28. Nada

    The rising wedge pattern with the structure showing 5 waves played out perfectly to the downside. The only problem for me was I originally read the structure incorrectly and miscounted – the subjectiveness of EW.

    However, being in November options permitted plenty of time and having faith in EW as a tool allowed the opportunity to add the 127 and 128 puts. Given it to do over, I much rather wait for the DCL vs shorting gold. It has not been fun todo with the geopolitical tension. I am not out of the woods yet, as I have sizable amount of options remaining, but the close is promising.
    https://i.imgur.com/yQzai4c.png

    1. Alexandru Popovici

      No. On the contrary: such a big figure at such a juncture reveals / underscores the opposite of its meaning.
      In this case, any upside in defensives will be shortable.

      PS: Remember that one of the reasons i mentioned in early July for the bullish case of gold/miners were the strong SOSs that you saw as downside foretelling at that time.

      1. Nada

        The BOW for GDX is 391m and GLD is 167 million shows one thing,; a bounce is gong to happen. Will that gap fill and then we roll over? I dunno. It is very difficult to read. Maybe we go up into FOMC vs down, maybe not. What I can say is, that the 391 million is the most I have seen in months. It has been capped to around 100ish million lately vs the 500 million I use to see with frequency on BOW before the July move.

        I don’t necessarily disagree with your statement that it will provide an opportunity to short, but the trendline is subjective, so what is going to qualify for a DCL is not going to be an easy read.

  29. dboz

    I did not go in quite that strong but will accumulate more tomorrow if we open weak, which I hope happens. This will be with tighter than normal stops also as I am using mostly 3X’ers. Starting small and working big if we keep dropping. Could just rebound like it did last week. Could be a bigger pullback like Gary cautions. One thing I do know, if it breaks out significantly, then should accelerate. I am not sure the pullbacks will be severe either. So gain, as I have said before, short pullbacks like today, lead to chasing. Also, I have to think that the gold and silver shorts keep piling up. A short squeeze of magnitude is going to be needed to shoot the elevator out of the roof of the chocolate factory.

    1. Nada

      The commercials didn’t increase their short contracts to levels we have not seen in 5 years for a 1 day drop. With what we are seeing with the flows, it appears we move higher short erm and then a bigger correction later.

  30. Alexandru Popovici

    IT is a large BOW because it mirrors strong recent-past short COT of comms in silver and gold: now those comms are changing hands w/ large specs and that is the underlying reason for the strong BOW. The same is happening w/ JPY which is now loaded back in by comms (to be seen in next COT).

    But inertia of pendulum is significant so that once large specs have embarked on the short side of defensives, it is there to last more than 1 day.
    That is the mechanics behind the above mentioned dichotomy.
    We will see shortly anyway this mechanics at work.

    1. Nada

      I am not following what you are trying to say. The BOW is large because it was institutional money, you can tell this from the block data. It was not a bunch of specs trading hands with commercials. Regardless of the end result 5-10 days from now, the short term move is a BOUNCE.

      1. dboz

        Agree, I think we see a rally here this week and then another pullback of more magnitude next week. That said, I still expect it to be somewhat short term. IF, we are in the bull charge here, we should see us just take off again. Smaller pullbacks and then run. It has to happen if we are going to advance to a higher mark. Short covering would sure help. Doubt the banks are going to lose that 700 million or whatever they are short.

  31. Goild

    BD,

    I suspect so too, our wives would get along very well….
    My wife likes expensive stuff.
    She creates some wonderful stories, the anniversary gift, kind for two, which is a car $45K plus,
    the Christmas gifts, and her birthday gifts. On top of that pay every month her credit card.
    As long as I make good money it does not matter and is a delight seeing her.
    I would be miserable without her.

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