gold bear trap

  1. 9,081 Posts.
    Sinclair sees a temporary bear trap in gold:

    "There is a high probability that what we are experiencing this morning is a very temporary blowout in the gold price from its march to the upside.



    Shorts are gunning for $423 on the close. Any close under $428 will encourage the short sellers. The long funds - or about 45,000 new long contracts purchased at an apparent average of $413.50 - have likely not participated in this morning's selling and will in all probability have mental stops at $423.

    All this adds up to one hell of a bear trap being set up next week. The only thing I believe can prevent a temporary and healthy decline here is a significant geopolitical event. No sane person would wish for that.

    This temporary downturn in gold will be short but could be a tad ugly. Insurance investors, investors, and modestly aggressive investors simply drink cold water and take a week off. Traders should easily have seen this AM's spike to be a blow off in the foolish news that the European Central Bank did not lower rates. Did you expect they would? If so, you have been watching too much financial TV.

    Have your rulers at the ready because a simple straight edge and measure of the angle of ascent was all that was necessary to profit handsomely from the run from below $390. You are going to have another great opportunity in a week or so. All you have to do is borrow a child's ruler and work 5 minutes a day to grab one hell of a lot of money."



 
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