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The reaction that I witnessed from some of you last week, after suggesting that gold can drop as deep as $1,450, may almost rival the reaction I received when I suggested gold was going to top at the $1,915 region almost two years ago. But, interestingly, I am actually seeing more and more people in agreement with this perspective at this time.

Yes, I know that sentiment is bad, and that there is a lot of support below the market right now. In fact, I did not see a single analyst paraded on CNBC this past week that is bullish gold. I also know that almost everyone believes that if we see the $1,450 region, the long-term uptrend in gold is likely over, at least based upon their perspective.

Even Peter Schiff, Mr. Gold-uber-bull himself, believes that it was likely going to be headed lower. But, he reiterated that he still believed that it was in an uptrend.

Again, I will reiterate that I view that movement in the metals is based upon market sentiment. Furthermore, we need sentiment to bottom before we will see an upturn in gold. But, of course, it begs the question as to whether sentiment is bad enough to signal a bottom.

Last weekend, we saw that the commercial traders added to their short positions in gold. And, even though I am writing this article before this week's report comes out, I would not be surprised to see if they are adding to their short positions with any further rises in gold.

Furthermore, based upon my technical perspective, it does not seem as though sentiment is yet bad enough. As I have reiterated several times already, until GLD is able to move through the 158/159 region, we will likely see lower levels.

But, this does create a bit of a conundrum for me. While everyone I see is bearish and even shorting gold, that is usually a sign that we are nearing a bottom. It is for this reason that I am suggesting that shorting gold is very dangerous for the average investor. In fact, this rubber band is stretched so tightly, that when it does snap back, it will likely be breathtaking, and will rip the heads off of most of the shorts in the market.

So, for now, I will reiterate my view that the 142/144 GLD region is not out of the question, and is, in fact, my long-term target for a bottom in GLD which I set even before GLD topped. But, as I have also noted before, we have a cluster of Fibonacci support between 146-151 in GLD. But, if we are able to break down below 146, then the 142/144 region should provide us with a very strong likelihood for a major bottom.

So, over the next week, I still believe it is possible to see one more rally towards the 158/159 region before we head down towards a final low. But, under all circumstances, I will be in search of a 5-wave decline which has confluence with one of the Fibonacci bottoming targets, which I will adopt as my ideal target for a long-term bottom in gold.

Source: Did I Really Say $1,450 Can Be A Target For Gold?

Additional disclosure: I have an intermediate term straddle on GLD.