It's pretty clear what I was expecting didn't play out. The recent market action is simply not consistent with my view, so I've exited the last of my shorts at $810, as I mentioned in my prior post. I am flat now except a few Jan puts which will probably expire worthless. I thought there was a big imbalance of longs in this market, but I probably overestimated how much. Right now, it does look pretty much like a sharp but not major correction in a bull market. I did think there were good prospects for a major dollar rally in the short/medium-term - 2 weeks later and I think I got the timing and direction fairly accurate, but I was wrong on the extent of the move, it was way smaller than I was expecting. Right now it looks as though the move is done for now and was just a moderate counter-trend correction, rather than the beginning of a more major selloff.
Ok, no worries - sometimes over the net the tone can get misinterpreted I agree with you about the recent action - it's a pretty decisive bounce off $775 and break above $800. As for the major collapse, I was expecting a move below $700 at least, and thought a 20% fall over 6-8 weeks was likely, that's a pretty big move for a low volatility commodity like gold. Anyway, right now I am flat and just going to wait for a clear breakout above $850 or below $775 before I make my next play.
Hmm...I did feel gold (and the other anti-dollar plays) was getting like that recently. The COT report and Gisele Bundchen news stories just smelled of "top". Well, oil and gold did reverse 10% peak to trough, but it didn't last long, and the Euro barely budged before making new highs, so I guess I overestimated things. This was more of a sharp short-term correction than a proper decline. Certainly gold is not up as much as oil was up in 2006 from its prior range. The rally is only a few months old, for one thing - perhaps that was my mistake, trying to fade a rally that simply has not lasted that long.
Very disappointing movement in Gold and Silver today. Instead of Gold challenging the $840 mark, it goes right down to $810. Same for Silver. With Oil inevitably going down its highs, is this a complete reversal in the precious metals? Or is it just a temporary correction?
I wasn't disappointed one bit. Oil was down over three bucks. You want gold to be <i>up</i> on a day like that? I put on a huge gold long position late this afternoon, will probably exit sometime this week for a $10-$20 gain.
And what makes you think that Oil will go back up again. Im not saying that it wont, I just want to know your analysis. Btw, oil and gold do not always move together. Lets not forget that.
Do you feel that gold will run in tandem with oil or do you see gold functioning independently ( short term )? OPEC's promising to do what it can to bring the oil price down and tomorrow we get the U.S. inventory numbers. Could be a bad oil day unless those inventory data are really low. Hans
Here's my analysis: <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1693969> That's it. An experienced trader just needs to look over that chart for a couple seconds to know that whatever is being charted, is far more likely to go up than down in the near term. Above 82 before the week is up- you'll see.
Hmm maybe I should abandon my long ZG position in gold since anytime someone says it is so clearly going up a blind man can see it, it usually drops which it did today so far about $7...
Whatever RM's style of presenting his calls, any time he makes a call it's more probable that he's right than that he's wrong.