“I’ll never get long gold again."
Coming into this morning and looking at the overnight action, once again I’m amazed at the feeble attempt at a late afternoon rally attempt in Asia / early morning Europe. That rally got sold so fast it should get a speeding ticket! Seriously, over the years these traders that consistently try and take gold higher in the Asian hours, 9 out of 10 times get it rammed up where the sun don’t shine once New York trading commences; you would think after years and years of getting high prices shoved up your donkey, that maybe … just maybe … you could take a fucking hint after gold has just gotten absolutely monkey hammered crushed by about 4% not even 48 hours earlier, that maybe this time might not be such a good idea to buy the stuff. Apparently not. [“I know, wait for Gartman to give a sell signal and then mortgage the house and get long. Please, don’t tempt me.”]
And so, any hopes of a rally today in gold [so far] get clobbered by the dupes in Asia.
“Continue drinking Mrs. Wantanabe, but for cryin’ out loud, stop buying gold while I sleep!”
As the market headed south from the New York open, it was simply a question of whether or not we could get an exhaustion “hit” at the aqua/red lines; again today, I’m a little surprised by the somewhat “orderly” move down in prices. No short term panic [which is what we want and see at the exhaustion lines], just constant selling pressure lower.
Tomorrow morning sees another “most important jobs number evahhhh!” [expected 151K jobs added in Sept.] from the political math hacks over at the Bureau of Unicorns & Fairy Tales, and from where I sit, if the number is strong in all likelihood we get a flush lower into the exhaustion lines followed by short covering rallies going into the weekend. If the number is weak, the market will blow a hole in the shorts of the shorts, and we will probably get some moves to the upper exhaustion lines. In any event, with what we have seen so far this week, prices have the potential to gyrate wildly.
As I write, the 1250 area is under assault; directly below the daily candlestick with Ichimoku cloud.
Now, I don’t have a clue if the low @ 1250.32 gets taken out later today, or the commercials wait for tomorrow’s NFP report. If/when this support gives way, what happens next is key for prices going forward a few weeks. Does it break support and keep going with feeble rallies, or does it simply clean out sell stops and climb back with a vengeance? We’ll see.
So far, the selling has been relentless, not only from Brexit longs [retail & hedge fund (hello Crispin Odey, how’s that billion dollar+ long bet on gold working out?)], but also from the hundreds of billions of dollars in “risk parity” funds, which when prices head in the wrong direction in one asset class, it very much leads to either panic buying or selling in another; right now, that “other” is gold, and until these quant guys are finished selling you can forget about any serious rally in gold.
The algorithm has not offered any buy signals so far today, so I have no trades to report. Yesterday, the dog and I got to the beach and it was better than I expected; even after 20+ inches of rain you couldn’t tell it rained an inch. I’m outta here.
Have a great day everybody!
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