For all the latecomers who rushed into precious metals just because it’s what Everyone Was Talking About, they’re probably a bit shocked to see all the red. Gold has sheared off hundreds of dollars in just the past few trading days. Would that equities take a hint and do the same thing!
I had purchased the bearish on miners fund DUST on Monday with good results. I got an overnight profit of 20%. When I bought DUST, gold was at lifetime highs, and the Financial Times did a survey of everyone who decided it would be a really good idea to defy the mega-rally, and from their poll they divined that the population which did so was:
- men
- who were my age
- that were me
Of course, DUST continues to go up this morning, so even bigger profits will elude me.
My particular focus continues to be palladium, which I was quite fascinating to see respect the red horizontal drawn below:
Zooming in quite close, you can see how proximal last night’s bottom was to this line, but it didn’t break.
What’s up with that red line, you ask? It’s a crucial support level (formerly support, as illustrated by the arrows below). Hand on the Bible, I didn’t draw this after the fact. It was already there. The monster question, of course, is whether that support is actually going to hold.
It’s possible, but it’s completely at the mercy of what gold does next. It’s true, gold has backed away from total lunacy, but it isn’t exactly a screaming bargain right now. There’s still a lot of helium left in that balloon.
As for equities, those are so controlled and boring by the government (broadly speaking) that it’s hardly worth a look. Do you really want to scrutinize an /ES chart which is up 0.07% right now? I sure don’t. I will say, however, that the VIX has been pummeled back into submission. To me, the chart below strongly suggests something big bubbling under the surface that is just dying to get out.
Let’s enter the trading day with a favorite song from the 80s.
