Paul Mosgovoy's  Instablog

Paul Mosgovoy
Send Message
Truth is timeless: “Markets never change” – Jesse Livermore, 1923 The early masters, Livermore, Wyckoff and Loeb isolated themselves from the crowd and crowd thinking. None of them ever graduated high-school and yet they each became legends in the market. Their techniques have been time-tested.... More
  • Gold: Are We There (At Capitulation) Yet? 0 comments
    Jul 14, 2014 10:06 AM | about stocks: GLD

    Starting around late March of this year the idea was proposed that the gold market may have one more down-leg that would effectively trap the less informed and drive the price of gold and the miners into a capitulation event.

    The gold rally over the past four or five weeks may be the final set-up to the beginning of that event.

    (click to enlarge)GLD-Weekly

    Chart by TeleChart

    Gold's sharp thrust lower in the overnight futures session and the lower SPDR Gold Trust ETF (NYSEARCA:GLD) open today was forecast in full if one looked at what the professionals were doing.

    "The gold and silver markets are displaying a classic example of the interaction between commercial and retail traders. Another way to look at this is the battle between professional and amateur traders." Andrew Waldock (formerly of Lind-Waldock)

    The point that Mr. Waldock was making referred to the fact that the commercial traders were selling (short) into this market at a level that has not been equaled in over ten-years (silver contracts).

    The amount sold short was significant and it was done quickly within a few weeks.

    The professional traders have taken the stance that this rally is a trap and they are in position for a decline in the gold price.

    We may be at the start of that decline now.

    As always, there may be one more high (to test the top of the wedge) in gold. If so, the market has already had its price-shock and if the rally were to occur, it may provide another opportunity to position short.

    • Editor note: Waldock quote used with permission

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: GLD
Back To Paul Mosgovoy's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.