Gold: I smell a trap

[cypherdoc]

Todays trading volume of GLD, /YG, and DZZ already exceed that of the avg for the last week and a half.

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[foggyb]

This is great!  I was thinking of buying......but where's the bottom?

[MatthewLM]

http://www.youtube.com/watch?v=31IYm0gQS_A

[cypherdoc]

so today you're seeing for the first time the relationships of how gold/silver move compared to the major stock indices change.  why?  because gold/silver were in a parabolic blowoff and its time for them to come down irrespective of what happens in stocks.

gold is the final bull that will capitulate to a rising USD.  the selloff should be at least as brutal, perhaps worse, as it was in the Dow to trap as many ppl in at the top.  we've topped at one end of the pendulum swing.  the crash won't stop until sentiment is at lows (<2%) and all the selling capitulation completes itself.  this is the characteristic of markets we live in:  boom/bust, high volatility.

[cypherdoc]

This is great!  I was thinking of buying......but where's the bottom?

there isn't any; now that Bitcoin is on the table.

[foggyb]

 

[cypherdoc]

so what if all the USD's coming out of gold, silver, miner stocks, the Dow/S&P, commodities goes into Bitcoin?

[miscreanity]

The short-sighted perspectives are raging across the newswires and people are believing them. It's astonishing.

Let me get this right:

Gold falls 8% from it's recent record high and all of a sudden, it's the end of gold? Meanwhile, the S&P plummeted almost 19% and that isn't even from a wild run up. The dollar continues to muddle around at record lows, showing no sign of genuine strength or an impending retracement and being down over 17% from it's 3-year high. Treasuries have hit a blistering 13% rally that looks exactly like the 25% rally at the end of 2008, whereupon almost that entire gain was puked back up over the course of the next six months.

Am I to believe that the rally in treasuries is sustainable, but gold isn't when treasuries are backed by supposed reserve of what... gold? Is the suggestion that the dollar is going to find the fuel for a 20%+ rally? And the equity markets are going to be left to languish when they're the most visible indicator of wealth in the country, even though it may be illusory?

Reason and practicality demand attention over desire and whimsy. One day does not make a trend, nor does one week for that matter.

[foggyb]

Yes, and don't worry about the stock market freefalling:

Its a good time to buy.  

The pattern is clear.

[cypherdoc]

The short-sighted perspectives are raging across the newswires and people are believing them. It's astonishing.

Let me get this right:

Gold falls 8% from it's recent record high and all of a sudden, it's the end of gold? Meanwhile, the S&P plummeted almost 19% and that isn't even from a wild run up. The dollar continues to muddle around at record lows, showing no sign of genuine strength or an impending retracement and being down over 17% from it's 3-year high. Treasuries have hit a blistering 13% rally that looks exactly like the 25% rally at the end of 2008, whereupon almost that entire gain was puked back up over the course of the next six months.

Am I to believe that the rally in treasuries is sustainable, but gold isn't when treasuries are backed by supposed reserve of what... gold? Is the suggestion that the dollar is going to find the fuel for a 20%+ rally? And the equity markets are going to be left to languish when they're the most visible indicator of wealth in the country, even though it may be illusory?

Reason and practicality demand attention over desire and whimsy. One day does not make a trend, nor does one week for that matter.

can't you see the parabolic blowoff you talked about has happened?  its right in front of your face.  how many more years do you expect this 11 yr bull to run?  infinity?  this is linear thinking.

the waves of bad news for gold will keep coming over the coming months.  it will start perhaps with the lack of any meaningful QE from Jackson Hole.  then next months Comex opex will disappoint.  then the USD will start ramping.  then even (get this) an announcement from Ben that the Fed has decided to RAISE interest rates despite what they said. 

you've been set up.

[miscreanity]

This is great!  I was thinking of buying......but where's the bottom?

Buy the blood.

The gap by $1680 is the target for the shorts to breach. If the gap is filled before the end of the month, there will be a rally of unbelievable proportions. If it isn't filled this month, there will be a large run up before the hammer falls again to push it back down into the $1600s. This is no different from previous battles at much lower numbers. Same game, more players.

Metal holders must be enticed to sell in order to supply Venezuela-style delivery demands from the bullion banks. Venezuela is not the only entity requesting physical delivery. It's the equivalent of a bank run, only silent and behind the scenes. If the banks don't deliver in a timely fashion, the game is over and the price of gold immediately will rocket to tens of thousands.

I think the game will keep going for at least several more months, if not years. That doesn't mean gold will capitulate; it will simply continue its gradually-accelerating ascent to a multi-decade parabolic blow-off. These daily and weekly runs are nothing.

For the rest of this week, the battle will probably be contained between $1740 and $1880. Any intraday spikes are irrelevant to big money - the daily closing numbers are the minimum relevant values.

[cypherdoc]

This is great!  I was thinking of buying......but where's the bottom?

Buy the blood.

The gap by $1680 is the target for the shorts to breach. If the gap is filled before the end of the month, there will be a rally of unbelievable proportions. If it isn't filled this month, there will be a large run up before the hammer falls again to push it back down into the $1600s. This is no different from previous battles at much lower numbers. Same game, more players.

Metal holders must be enticed to sell in order to supply Venezuela-style delivery demands from the bullion banks. Venezuela is not the only entity requesting physical delivery. It's the equivalent of a bank run, only silent and behind the scenes. If the banks don't deliver in a timely fashion, the game is over and the price of gold immediately will rocket to tens of thousands.

I think the game will keep going for at least several more months, if not years. That doesn't mean gold will capitulate; it will simply continue its gradually-accelerating ascent to a multi-decade parabolic blow-off. These daily and weekly runs are nothing.

For the rest of this week, the battle will probably be contained between $1740 and $1880. Any intraday spikes are irrelevant to big money - the daily closing numbers are the minimum relevant values.

i guess there is nothing more to say.

[miscreanity]

how many more years do you expect this 11 yr bull to run?

you've been set up.

At least four more years before stabilizing.

I'm starting to suspect that you are not yet capable of projecting out that far. Any further explanation from me will be pointless.

The GLD short puts that I bought at the beginning of the week are now closed and additional Jan '12 long calls have been opened. Bullish vertical put spreads due to expire in September are maintaining neutral Theta. Now, I let them sit and patiently wait because the daily gyrations are largely irrelevant.

[cypherdoc]

how many more years do you expect this 11 yr bull to run?

you've been set up.

I'm starting to suspect that you are not yet capable of projecting out that far.

Oh my, the anger has set in.  Watch the gold bug "beg" for more QE.

[cypherdoc]

Volume (capital flows) on all gold related instruments (both long and short) is soaring and will breach the levels of yesterday.

[miscreanity]

At this point the Fed is simply waiting to pull the trigger on Quantative Easing round 3, the only bullet left in their arsenal in the fight against recession. When that happens, gold will go crazy.

THIS is your investment thesis?  Depending on what you think the Fed will do? 

the waves of bad news for gold will keep coming over the coming months.  it will start perhaps with the lack of any meaningful QE from Jackson Hole.  then next months Comex opex will disappoint.  then the USD will start ramping.  then even (get this) an announcement from Ben that the Fed has decided to RAISE interest rates despite what they said.

"THIS is your investment thesis?  Depending on what you think the Fed will do?"

Whatever you do, don't sell your physical gold.

[miscreanity]

http://www.youtube.com/watch?v=31IYm0gQS_A

Priceless! Thanks for sharing.

DZZ ramping.

DZZ does not lead the gold price, nor other leveraged instruments any longer. Physical does now.

the carnage has only begun.

100% accurate. A comparison of the 1980 gold rise to today from Gene Arensberg.

Volume (capital flows) on all gold related instruments (both long and short) is soaring and will breach the levels of yesterday.

Volume alone does not dictate direction. This is an obvious transfer of wealth from new entrants and/or weak hands to interests recognizing gold as money. Like taking candy from a baby.

[cypherdoc]

http://www.youtube.com/watch?v=31IYm0gQS_A

Priceless! Thanks for sharing.

DZZ ramping.

DZZ does not lead the gold price, nor other leveraged instruments any longer. Physical does now.

the carnage has only begun.

100% accurate. A comparison of the 1980 gold rise to today from Gene Arensberg.

Volume (capital flows) on all gold related instruments (both long and short) is soaring and will breach the levels of yesterday.

Volume alone does not dictate direction. This is an obvious transfer of wealth from new entrants and/or weak hands to interests recognizing gold as money. Like taking candy from a baby.

facepalm

[miscreanity]

facepalm

Don't hurt yourself, I know logic and math can be hard for some people.

I'll explain: the chart shows that the very rich are buying while you and anyone else listening to the media are selling. Like taking candy from a baby.

I'll even go a step further and provide direct links to the source information:

About the CoT reports
Disaggregated Commitment of Traders Historical Data
Disaggregated Explanatory Notes

If you choose to rely only upon the data available from thinkorswim, that's your choice. The information is available for you to do your own due diligence. When you're shocked by gold's continuing strength, you have none to wonder at but yourself.

[cypherdoc]