It’s going to be a strange two weeks ahead. On the one hand, portions of it are going to be like watching paint dry, as market participants cling to the sidelines, afraid to make any kind of commitment ahead of binary events. On the other, when those events take place (or not), all holy hell will break lose. What is it they say about battle? “Long periods of boredom punctuated by brief moments of terror.” Something like that.
As of this writing, gold is continuing to slip lower. The only options position I have at the moment is GDX puts, so that’s fine by me. I’d say medium-term support is around 1325.
Longer-term support is around 1250 to 1270. Given all the global chaos we’ve seen lately, and the fact that gold has barely registered a pulse, echoes to me the idea that the metal’s role as safe harbor and haven appears to have markedly diminished.
Weirdly, what has seem to have assumed that mantle is the cryptocurrency world, with $BTC in particular shown below. In a mere week, this critter has roared from $7500 to almost $2,000 higher. It’s quite apparent that there are some serious money flows pushing into crypto, perhaps from the Chinese. It hardly matters from where – – the fact is that Bitcoin is approaching a 200% gain in just a few months from its $3200 bottom.
In case it weren’t apparent enough from the charts above, here’s a comparison of how bitcoin (black line) is doing versus gold (blue line) on a percentage basis. If you didn’t know better, you’d assume the blue line represented a passbook savings account at your friendly neighborhood bank.
As for crude oil, it’s kind of the same story as gold. You’d expect it to be going stark raving wild right now, considering the mayhem in the Middle East. On the contrary…………slip slidin’ away (incredibly, a local gas station where I live has the temerity to still be charging $5/gallon). The measured move on this is around $48, with stronger support near the $42 low from Q4 2018.
As for me, I feel very, very lonely. I’m not talking about on a personal basis. I mean more specifically with my positioning. Of all the permabear lunatics out there – – they have ALL turned bullish. Elliott Wave, having spent a decade declaring the market was doomed, has now done a 180 and is calling from a 4-digit rally on the Dow to lifetime highs. xTrends, who is sometimes even more bearish than me, has warned off any short-sellers away from the market this week. So……..it’s just me. And maybe I’m a fool for being short. If, in the end, we fall, I suspect I’ll mention this again.
Current positioning is 54 shorts with a 189% commitment. As of Friday’s close, 45 were profitable, 9 were losers, with the most severe loss being 1.12% – – so……….not too terrible. I do not regarding the balance of June with rock solid confidence. Far from it. I’m probably scared to pieces, but too proud to mention it here. Whoops.