GREED & FEAR
We all have many choices to make when trading the markets day after day. They say that it is Greed and Fear that often rule the markets at critical turning points. Thats why it is important to know who you are as a trader, and what your threshold of Risk is. With that in mind, I am going to make a recommendation, but the choice is yours to make, with the information supplied.
Everyone here should know what I have been waiting for, what I have been looking at , and what has been pointed out as a likely scenario. Patience has paid off for many, because I think we are now very close to a temporary bottom and a summer rally in Gold, Silver , and the Miners.
GOLD dropped overnight, and undercut the $1080 lows of Monday. It has now bounced back a bit over $1080 as I write. It too is starting to resemble last Novembers lows. A sell off, pause, and final drop to scare out early buyers.
Overnight, GOLD double bottomed and seems to be trying to recover. It may just drop again…
SHOULD YOU TAKE A POSITION? If so, how big?
Gold dropped hard this week, so you would expect that with another drop in GOLD last night, Miners would flush down again too. They already undercut their lows yesterday, but Barely did so, so today we will see what happens. If I see GDX / GDXJ gap down and then recover, I would consider taking a position. Maybe wait for the close? Here is where the choice is yours…
.
It is FRIDAY. Do you really want to risk holding over the weekend after seeing last Sunday night?
.
Gold should be extremely close to a low here, but I pointed out the $1033 area before. If we dont go there today, could we go there Sunday night? Yes, it is possible. How much should you own (if any) is based on your risk tolerance for losses.
The C.O.T. is probably going to show that Smart Money even cut their short positions again this week. It was already at prior ICL levels. Sentiment is horrible. I see fear in many of the reports on 321Gold about the foolishness of owning Gold. One article called it just a “Pet Rock” No value 🙂 These conditions are often seen at lows, it is the “FEAR” part that causes many to sell & go short, and that can cause a strong rebound when the selling is done.
Should you take a small position now, or is it better to wait for next week and not risk holding over the weekend? SO far, we have “lingered’ at the lows as I pointed out we often do. It has not hurt anyone to wait , but a time to buy is close ( for some it is here now ). The GOLD CYCLE IS DUE FOR A LOW IMMINENTLY in my humble opinion.
The CHOICE is yours – Do NOT let GREED OR FEAR make that decision, but think about how you will feel next Monday if Gold hits 1033 in 1 final slam. Can you be happy with a small position, or would that upset you? Or if Gold is at $1110 after next Sundays overnight trade and Miners gap open higher, will you be happy with no position and just add then? So far you didnt miss the train by any means , and a gap open to $1110 wouldnt kill anyone . Gold should run another $150 higher or so. Then again, would a small position now be best & add with confirmation?
Gold day 35. This may be the lows
Patience has paid off for many so far, but its getting late. The choice is yours. I own a starter position myself, and am watching to see how this trading day unfolds. As I write Gold & Miners are selling down. Patience has paid off. It is possible that we may have just seen the bottom overnight, so watch how this plays out today. A strong reversal may be a nice place to start a position, but Sunday trading is always a guess. Only you know your own risk tolerance and emotions. Choose wisely and have a great weekend!
‘
~ALEX
.
awesome alex… just awesome. thank u. 🙂
Ur welcome Maria. It’s hard to know what to tell people with the “risk’ of further downside Sunday night, but hopefully this information is helpful & timely.
While we’re sharing observations – and only FWIT – I’ve found that to be believable, a bounce needs to rise above a cross-line dividing highs & lows inside a channel. See the mustard-colored trendline in this current 1-Hour chart of gold futures: http://tos.mx/7l6u2k
(Think or swim makes us click on the chart after clicking on the link)
Thx Alex. Super post!!! Just when I needed it the most…going to hold on to my small, non-leveraged position over the weekend.
Thx Deshy, and me too. My position that I took on the close Monday is a little red, but I’m happy to know that if we drop further I have dry powder to add, if it rips higher in a short covering rally, I have a little skin in the game. I can sleep at night with minimal risk 🙂
Have a great weekend.
For What Its Worth: SILVER & MINERS are not bouncing like Gold. They remain at their lows. That is often an indication that Golds bounce may just be a temporary oversold bounce.
I want to see Miners & SIlver recover , preferably before Gold.
I was going to post the same thing! Gold coming back, but most miners, while off lows aren’t showing great strength. SLV new low this morning.
Without knowing anything else, bullish or bearish? Refresh.
What is it?
Thats the EURO ( or FXE) and I’d really need to see it re-gain some of those important moving averages to be more bullish, but its off to a good start 😉
Top man. Potentially bullish, more than bearish.
Daily. Refresh.
I do see a couple of Miners turning green with this sell off. Nothing too exciting , but a step in the right direction
IAG, MVG, NGD
Slight reversal starting in GDX / GDXJ
Agree……although I am going to be patient here and wait for the swing.
Looking a little better. At least have a few things green on my screen.
I have been tempted to jump in again and again, but I have also been through these drops into an ICL, and they are brutal if you catch them too early.
Patience will be rewarded ( though I do have a small position and will hold into the weekend).
Tried a little JNUG and NUGT both at tight stops. Looks like I will get stopped out with a small loss.
What I find is that you’ll see a lot of little rallies that look convincingly real. I think they are likely short covering, because some dont want to hold their short position over the weekend. Suddenly, a few of those rallies ( bounces) will stick and then even buyers will step in and push it higher. More shorts will then cover shorts and more will buy the rally and then….
you get that final bottom . And it could be later today, but we may have a few more ‘bounces’ along the way from shorts closing.
Thanks Alex. That makes a lot of sense and helps.
I probably cant point to that as a “Fact because of XXX”, but it is the way that I see things whenever this happens. And it repeatedly happens.
I always used to buy those false rallies & get stopped out , and catch myself wondering , “What was that, short covering?”
Again and again, and then it just seemed like BUYERS finally pushed it enough that shorts capitulate. It makes sense, and plays out that way, so I am sticking with it 🙂
excellent lesson from the school of hard knocks.Professor Cf …
#goodStuff..
Yes, the school of hard knocks in Miners for sure 🙂
Same!
I do like that double bottom on IAG so far. ALMOST a bullish engulfing , but it would need to close higher to feel right. (refresh)
Excellent Alex, many Thanks.
You know what’s in men’s heart. You think a bit for us.
Wish you a great weekend.
Thanks and Ur welcome Geurt. You always have kind things to say.
I was too early, knowing we’d longer at lows, thought I could dip some toes in. I liquidated all longs on the few rises we had this morning. Small GLD short as a hedge against final downside. But at this point, don’t see a good risk/reward for me to jump back in. So I’ll wait and see what next week brings. I really though reversal Tues or overnight Wed would stick.
Big volume AM for Friday and volatile, but I would imagine it will dry up shortly. COMEX pits close for the week in about half hour also.
And that risk of what could happen overnight Sunday is still out there.
My update last night pointed out the ‘outside possibility’ of a 4th Dcycle starting on July 7&8. I originally dismissed it because it didnt break above the 10sma, but I have to think in terms of how strong to the downside this has been and how weak the bounces are, and maybe that was a weak DCL? If so , the cycle count is mid range.
Best to be cautious.
BIIB
SOX, TRAN
Still looks amazingly similar – refresh ( Just an observation, please remain cautious with overnight Gold trading Sunday)
gdx divergence on the 2h chart with price and momentum…but me best thinks I’ll wait to see something on the daily or a swing low. Assuming any rally will be more than day or 2 so missing a bit off he bottom is ok with me.
This POP sucked me in early : ) My list of Miners all popped at the same time.
Pretty good pop so far! Let’s see if it holds. Gold up 10$ last I looked.
Volumes really picking up on GDX and NEM. I think the shorts are cashing in.
To all of the above… Yes you are a Miner Junky (tales one to know one, so I am too). Yes, its playing out right to script (so far, aye?). Gold up $10, but look at the move from overnight to now…yes, shorts are going to be too nervous to hold through the weekend likely.
giggle…. yup
… almost as if someone flipped a switch… or script aye?
lol!!! After my morning comment I succumbed too :-(..just a small portion…am I a miner junky?!?!?
And I sold at the lows again. Sheesh. I knew what was going on and still fell for it (I was convinced that we hung around just a bit too long). In my defense, if I had added/averaged down and we didn’t get the reversal today that would have been much worse!!
Cason,
I’ve done that before. Dont feel bummed out. I can see discipline if you sell right before it turns. It gets close to a ‘stop’ or you just want to exit and not risk too much downside in case Sunday dropped Gold to $1033. . Its a bummer at the moment, but not a big deal. We could still drop Sunday night and then rally again ( A final shake out) or we put in a SWING Monday and we will rally for possibly 2 months . It is possibly just starting the move up. NOT STRAIGHT UP….like the Nov lows, rallies and pullbacks, but you will be able to make money on the run higher.
Its very early ( Day 1 possibly) , we havent even put a swing in place . You’ve been doing well lately, you’ll do well in the coming weeks.
Some of the juniors look like they’ll possibly run 50 – 100 % (remember CDE did that last time, and I think IAG and GOO, SSRI, etc ).
Appreciate the comments. Tough not to go Monday Morning QB on yourself – especially when you point out the traps and still far for them! Just need to make smart plays from here. Even the rallies can be tough (no pullback to get in or drops as soon as you enter). I’ll be trading and getting trades ready. At least I kept some dry powder.
I did finish this Friday with more in my account than last week, at least.
Alex, thanks so much for your humble, personal touch; giving each one of your readers an opportunity to understand some of your significant talent. You are the best Alex, I haven’t seen them all but after many years and at least 8 so called gurus, you are worth every penny and more. Thanks, Mike
Mike, I’m humbled and I appreciate your compliments. Thank you , and I am most of all happy if the reports are helping readers here trade well. 🙂 Thx again.
yeah.. what He said!
(welll … for the first sentence anyway… the rest .. Ehhhh …. debatable. (smirk)
Keep that smile on your face cowgirl
giddyup … ;o)
say .. that reminds me of a story…….
Show them the picture maria…You on the bull. You know the one…I saw it on twitter 🙂
ohhh kayyyy … if u insist ;o)
https://uploads.disquscdn.com/images/6c739277212128068b06e7f6da7438438e9f45b9375a97e2ab9a0e0a48f8cdd9.jpg
i know .. i knowwwww… u luv how i’m ROCKIN that fannypack..
#stylin 😉
I hadn’t seen you on the bull, but I guess cowgirl is apropos. In some western times not so long ago, if you spoke to someone with words that can be taken more than one way— “you better be smilin’ Good pic, mike
Rally in PMs on its way. Unlikely to be more than a couple to few weeks and will come right back down again to lower than where we are now probably. Indicators will show pos divergence etc setting up bull mkt?
that fits with what I have as well in some miners-> beginning wave 1 now… wave 2 will then retrace up to 99% …
So, you expect the low is in M? Double bottom, not further to go down?
well… it does sure look like many are painting 1s … will have confirmation if/when? the lows get taken out ..some miners I have just completing 2 (this down move is a 2 on some) at least it looks that way to me. will have confirmation if they drop lower or run.higher –preferable the latter ;o)