The signs come in fast and furious now. The gold analyst talking in December about a February upside explosion to above 2000/oz., now talks about money being made on the short side for at least the next 6 months. Large speculators have been reeled in significantly on the CoT, the public opinion of gold – sorry, I pay for this service and cannot reproduce the data here for free – is good to go, and then there are the technical downside targets, which NFTRH has had loaded for weeks now, coming into view.
Trend followers are doing what they always do and for some reason, when people read things on the internet with titles like 'Gold Loses Critical Support', they get their pants all bunched up. A topping pattern appeared in gold back in December. From this pattern, there were several downside potentials, none of which – including the remote prospect of a test of the massive support at 1000 – should be causing heartburn right now.
In the precious metals sector, you operate on a risk vs. reward basis, strap in for volatility and as I have long said, let FEAR RIDE SHOTGUN. Embrace it. Don't be a sissy, as Jonathan would say. This is the only way to make long term gains and out perform the herd. Be brave when they are sucking their thumbs.
You have no idea how often I am negatively reinforced, like when the intelligent deflationist took a well spoken exception to my bullish stance on oil in early 2009. When I was told by a financial professional and former subscriber, why treasury bond yields were going down and my 'rates rising' stance was incorrect in Q4 of 2010. And now with gold, we have the ultimate contrarian opportunity in the asset that is contrary the vast, inflated mess of global assets.
Year after year it's the same market, same players, same dynamics, same herd. The wash, rinse, repeat cycle whirring away. Winners and loser to be sorted out soon enough… again. http://www.biiwii.blogspot.com