GLD reminds me a lot of the reversal in the oil bull market, an ascending wedge, a breakout above the wedge making it look like a failed pattern and 3c 60-minute chart nose-diving. Does it make sense? No, not really, neither did oil at the time of the dollar or any number of trades. In any case, below $125.50 and I'd start getting my toes wet on the short side.
This is how distribution works, (what 3C is showing via the negative divergence)-apparently someone is letting go a large position in GLD and t do that, they need demand, there's been great demand and talk of GLD at ridiculous valuations; that's a sign of a bubble it self.
Just keep it on your radar, if it falls, it falls fast and hard.
11 comments:
Interested to see how this plays out. I think short gold is purdent. No postion is purdent; but long gold is a fools game at least until overbought indicators are realinged in the market.
The reason gold will tank and tank hard is that this is the last thing 99% of people expect to happen.
I personally feel that the price of 'paper gold' (i.e. GLD) will fall as people realise it's a ponzi scheme not back by the real thing, but the price of the real precious metal will rise, there is just to much demand for the real 'hold in your hand' metal from governments. And there is still a lot of 'cash for gold' about to try and get gold off of the public.
The reason people want to buy physical gold is because it's been in a parabolic move up for nearly 10 years. If it starts to drop hard, I suspect the physical demand will disappear (other than for jewelry, etc.).
Alesund,
But central banks and governments such as china, russian, india have all bought gold recently... surely if governments aren't 'the smart' money, i don't know who is.
As far as i'm concerned, gold is a currency and one that can't be devalued by fresh printing. And it's the best currency to have in a 'currency crisis'.
As i said, i do expect GLD (paper gold) to fall though, it's a ponzi scheme and all ponzi schemes fail eventually.
Central banks buy gold, but not for investment purposes. They buy gold when they feel they need to, just as Gordon Brown sold gold when he felt he needed to. He didn't time things well. China does not buy gold on the open market.
Central Banks have a horible record....they buy high and sell low. Check the facts and you will see the truth.
Alesund,
Apparently, Gordon Brown sold gold (and openly told the market before hand he was going to) to help JPMorgan out, who had a huge short position that was getting squeezed, so they needed the gold price down and soon.
Well, the huge short positions are still there. Does anyone honestly think that all these short positions held by major players will be closed out at a loss?
Alesund,
As i've stated before, and has been published at places like zerohedge and gata.org, those shorts are there to purely suppress the gold price. Still hasn't stopped the gold price rising 5x in ten years. They are only using free printed money or naked shorting anyway.
Gold is the enemy of governments and JPMorgan/government are basically the one and the same thing.
Maybe they will try confiscating gold from the people like they did in 1930's or taxing it to get the gold price don.
Either way, i'd rather be holding physical gold than fiat currencies. I do hope to short GLD (paper gold) as a hedge.
Turns out that the FED pumped 10 billion into the market last week through the POMO program and anothe 10 billion behind he scenes. A total of 20 billion was pumped by the FED last week alone.
http://www.zerohedge.com/article/graham-summers%E2%80%99-weekly-market-forecast-hs-edition
In addition, the fed hired hundreds of brokers to invest their money. It would be my guess that this number of brokers can make purchases all day long to affect stocks that might be hard to detect. While the big boys want the market to go down based on the news and what they know, the FED is doing all it can to prevent this colapse.
Post a Comment