Here we have a weekly chart of the E Mini SP 500 with a graph of what the small specualtors have been doing recently. Notice last year where the first red arrow is how there was a quick sharp buying frenzy by the small specs right before we fell off the cliff. Then the next arrow indicates a very heavy short position right at the March low.
Now you can see why I harp on what this group is doing and maintain that it does not bode well for Gold right now. It does not always turn right on a dime like we see here, but we should be prepared for the next major move to be opposite of extreme positions in this group. As we move to the most recent arrow on the chart, we can see that they are approaching a very heavy short position once again. What this means is that if we do get a decline it should be a very good buying spot. Whether or not this leads to a short term up move or a larger one we can never know.
If the small specs keep adding to their shorts in the next few weeks, look for a market rally. Do not confuse this with my larger picture wave count from a recent post, we are talking about entirely different time frames of analysis. This is more for a shorter term move. It could well be that we get a dip which triggers a buy for the last run up. Then we get a larger picture downward move.