Thursday, November 30, 2023

Taking another look at this rally in Gold

 A 1 day short covering rally in gold, which was telegraphed by Fast Money traders - weeks ago - doesn't a bull market make, and any time I see the usual suspects pumping a rally on TV, I usually take the opposite side of that trade; at least in the longer term; so perhaps my opinion is overwhelmingly bias, but the fact remains, gold has NOT broken out. Talk of a breakout is just talk 

1. Is the $USD crashing? No, despite what the host of Fast Money falsely reported this week.

2.  Is the 4th time (testing the$2000 level) - in 4 years - going to be a charm? Maybe 

3. Could we see another false breakout  - like the one we saw earlier in the year? Possibly 

We know the rats of Wall Street will drive anything into a breakout, in order to squeeze a few short sellers, and especially on low holiday volume. 

Couple things in the charts; to add to what I pointed out yesterday: 

$USD - Doesn't look like a "crash" to me. 

$GOLD Weekly View - 1. Buying of the moving averages. 2. The slightly higher false breakout we saw earlier in the year. Does that count? Not in my book. Looks like a quadruple top; if there is such a thing. 

$SPX: Gold The rug was also pulled on the $SPX priced in Gold. Who does this? 

Another thing I noticed yesterday, was that Silver was also driven higher.... 

$SLV - Silver - another orchestrated 1 day short squeeze. Looks like a bearish zigzag pattern. If you know Elliott Wave Theory then you know....   

I think it's more likely that yields are about to spike, with the $USD, and that will likely crash gold, or silver, or both, so watch for that.   

What I can't figure out is, why did traders choose Wed. of this week to pull this stunt?  

Take care, AA 

Wednesday, November 29, 2023

Looks like I may have been wrong about Gold

 Trading has been really dull, minus yesterday's washout in Natural Gas, and the rally in gold, and gold miners.  

It was back on Nov. 6th, I covered the gold pump -  as I watched it take place on Bloomberg & CNBC simultaneously - linked here

Gold was predictably bought in early November - at the 50 day moving average - but it wasn't until yesterday that we saw any unusual moves in gold. 

$GOLD - breaks out on light holiday volume 

I'm not really sure what to make of that move, but one important thing to note is that it didn't happen until after the Dec. contract expired. 

I also noticed some unusual looking breakouts on several beaten down gold miners, including names like Harmony Gold. 

$HMY -  Obviously manipulated, in order to squeeze some short sellers. 

I wanna say the usual boiler-room crew is driving this rally, and Fast Money seems to be on board with it, but I would have expected to see names like Rio up more, if that were the case.  

It seems to me that this gold rally wasn't well thought out, and is being performed by a bunch of amateurs. I do however think these gold stocks will hold up into weekly OPEX Friday.

It could actually be weeks before we see a reversal in Gold, and gold miners. Just look at how long the broader market takes to form a top - weeks! - and especially on such light holiday volume.      

One thing to watch is the 20 day moving average on the $GLD: 

Homework - chart several gold miners, including the most important one - Barrack Gold - and see if you notice any obvious patterns. 

The broader market: 

$SPX - seeing st support around the 4400 level.  

I expect to get back to more normal markets when traders return next week. 

Hope you all had a happy Thanksgiving. 

Take care, AA |

PS I completed the new computer build over the weekend, and just in time to kill time playing some of the latest video games. 

Friday, November 24, 2023

Very unpredictable market environment could turn volatile Black Friday

Trading Activity Around Holidays

Seasonality often plays a part in any investor's trading strategy. Some holidays in the U.S. market provide periods of decreased trading volumes, as many investors and traders are busy with vacations and family plans. There tends to be little business news released right before a holiday, too.

 With volume so light, it's possible to see very unpredictable trading.  

This in part explains the low $VIX, which was hammered down over the past several weeks, just as it was around the time of the 4th of July holiday. It's almost comical that this is the only market environment, in which the bulls can seem to stage a market rally.  

Here's what I'm seeing on the $VIX: 

You have the majority of investors believing that this rally is based on AI, and a possible "soft landing", and every other ridiculous excuse the financial matrix media can come up with, and at the same time they are very careful not to report on how short covering - ahead of the holiday - has contributed to the rise in equities. That sets up a very complacent market environment. 

Watch the Bond Market 

It was not so long ago, that the financial matrix media were telling us to fear the bond market, and that was about the same time I sent out a newsletter, in which I informed my followers that I was piling (the 401k) into a bond fund, and that trade worked great as we saw the bond vagilanties cover their shorts, ahead of the holiday season.     

To refresh your memory: 

Bill Ackman covers a bond bet because there’s simply too much risk out there to not do so.

Black Friday 

Today is Black Friday, and the market closes early, so don't expect much market movement. It's not technically a banking holiday, but most traders are on vacation.   

But when trading returns to somewhat more normal volume in Dec., anything can happen, and I'm a little afraid of the possible backlash... I mentioned earlier (above).

I've already exited the (long) bond trade (on Wed.) and I'm planning to send out another newsletter, warning my people. 

Have a great weekend, and try not to run up your credit cards on this Black Friday, as I believe we may be looking at a very gloomy 2024, and beyond.  



Wednesday, November 22, 2023

Best Decision I Ever Made

 A few weeks/ months ago I blogged about how I was going to start trading commodities more, and that has turned out to be one of the best decisions I ever made! 

To give you some idea, I closed that trade up 25%, and by diversifying into some commodities trades, I'm up 50% in the past 3 months.   

Meanwhile: Fast Money has remained bullish energy all year 

Guy Adami didn't read my tweet on the show, but the very same day, he did own up to being totally wrong on oil drillers, yet, he still doubled down on $OIH, and that was good for a 3 day rally. 

You can catch the whole show at this link, if you're dumb enough to pay for CNBC Pro

One of the reasons Oil is falling off a cliff:  

Biden Breaks Campaign Promise in Allowing New Offshore Drilling 

I suspect another reason Oil, and Natural Gas are getting killed is due to the coming economic crisis, because copper is also falling.  

This morning, the broader market continues to trade like crap, yet Oil is falling off a cliff.

Oil futures - 1 min. chart view, as it's being reported that a decision by OPEX... may be postponed. Yeah, a lot of good these so-called "production cuts" have done for the price of oil! 

In related news, Carter Worth covered his oil short, weeks ago, once again proving he isn't the chart master, CNBC claims he is.  

You can catch that free video here: Chart Master: What's next for oil and energy stocks?

The reason Carter Worth gives for covering his oil short, is that oil was down $20. 

Word of caution: We routinely see big moves in commodities - in either direction - and that carries with it, added risk, and especially when trading on margin, or trading leveraged ETF's. 

Take care, and have a Happy Thanksgiving!