IT JUST DOESN'T GET ANY BETTER THAN THIS
I can scroll charts going back as many years as I want to and I will never find a better setup than what we have going on here in Gold. We have a double top, with the Commercials strongly defending that level by heavy selling. We have the Small Specs incredibly bullish. We have Open Interest skyrocketing and all due to small fry buying not big boy buying. We are at a seasonal period where a decline typically occurs. We have a 4 year cycle due right about here. We had a trend break last week and now we are forming a short term retracement.
Folks, they don't cook em any better than this for a good sized decline. Will it be the bubble bursting decline, or just a tradeable move down? I have no idea, and do not care. If it does get going on the down side, we know that this long trade is full of uneducated individual investors who have been sold a bill of goods. The exits will be incredibly crowded at some point in this market when it crashes, and I just hope that I am short when that happens. I do not know where that point is where the people who are trapped in a bad trade will realize it and run for cover. I suspect it is quite a bit below current levels, so it is not really an issue to worry about at this point. Gold bugs, don't bother with the attacks on this, the comments won't get posted. I am tired of the skit of going back and forth with you folks, and won't engage in it anymore. If you don't like my views, don't read them. Go get a room with G Gordon Liddy, I hear he is a good kisser.
I was amazed how long the people in Real Estate were able to keep it from falling off a cliff before it finally did. If you recall it kind of stalled for about a year and a half, then fell off a cliff. This situation is identical to that except I think it is even more over done on the up side. I am looking for sell signals here obviously.
The above chart is the ES. In situations like this where the Commercials are pegged in the sell zone all the way up, this is not considered to be a bearish situation. Here we have the Large Specs driving the trend, with a big long position. This is normal. Commercials by their nature are hedgers, so when you see their first attempt at selling fails, and they maintain shorts, the ensuing sell signals are to be ignored. It is true the Russell is far weaker than this, but when I see two of the three major indexes sailing along like this, I ignore the sells in the one that is weaker. I did learn from a friend who is never right, that you should always play the laggards because they "catch up." I would suggest doing the research yourself, but to give you a hint, that could not be more wrong.
No sells for me here at this point even though I have mentioned my concerns about these markets at these levels. There is a pretty good sell in terms of COT stuff for Sugar right here but the daily price action is still in a bull phase, so I don't see anything immediate there it is just something to watch this week.