"...I am going to go short on gold for the short term with a target under $700, but I will be prepared to abandon this position if I see any weakness in the dollar appear..."
Even the pros who think gold is going to $500+/- are NOW covering their $850 to $950 GLD SHORTS.
I am a radical trader/gambler, BUT I would NEVER even consider SHORTing this thing at these levels. The ONLY reason that I did not cover TODAY is that I like the action and have BIG profits in the position even at MUCH higher levels.
IF you want to SHORT it - for fun - as a daytrade, that is fine. To hold it overnite could be suicide.
The news outlets are all reporting that the potential for "civil unrest" in America during the next few weeks is VERY high. If something unexpected happens, GLD SHORTS could get totally CRUSHED. Unless you have plenty of cash to support reversals, SHORTing now is risky behavior.
The easy money shorting this PIG has ALL been made. It is now FAR from obvious that gold/silver are going to be crushed.
The smarter play is to stand by and watch. If GLD tanks, start building a SLOW LONG position. Be ready to cash out on the next runup; whenever it comes.
Being late to a SHORT party is usually much worse than being early to a LONG party.
CAUTION.
+
PATIENCE.
=
PROFIT.
Folks Who Bite Get Bitten. Folks Who Don't Bite Get Eaten.
Thanks, I do agree and I generally only go short with very small positions in this environment. BTW, I do futures so I can trade around the clock. GLD options are dangerous because of the limited trading hours.
It's become obvious to me that at this point the price of gold is driven more by the strength of the USD (or weakness of other currencies) rather than anything else. IMO, this will change in the next few hours or few days as the USD must consolidate or retract a bit since it is overbought.
So the short play worked out. I was anticipating $675 but got out below $710 when I saw things turning around. I think that the pattern is fully consolidated and gold is free for another move - and oil as well - especially with an OPEC meeting coming up. With the USD index appearing to have topped out, I think this is a recipe for a BIG move in gold either Friday, Monday, or both. I'm calling for a recovery to at least $770's in the next few days. I anticipate that silver will tag along for a nice big move as well. My money is where my mouth is, I'm loaded up with futures at a cost around $720 and some tight stops of course in case gold wants to test the $600's one last time - but I don't expect that it will happen. Since the afternoon session has started, gold seems to have a lot of long support.
Comments
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Voice of Experience Speaking to You:
That is a VERY dangerous play at these levels.
The risk/reward is NG.
Even the pros who think gold is going to $500+/- are NOW covering their $850 to $950 GLD SHORTS.
I am a radical trader/gambler, BUT I would NEVER even consider SHORTing this thing at these levels.
The ONLY reason that I did not cover TODAY is that I like the action and have BIG profits in the position
even at MUCH higher levels.
IF you want to SHORT it - for fun - as a daytrade, that is fine. To hold it overnite could be suicide.
The news outlets are all reporting that the potential for "civil unrest" in America during the next few weeks
is VERY high. If something unexpected happens, GLD SHORTS could get totally CRUSHED. Unless you have
plenty of cash to support reversals, SHORTing now is risky behavior.
The easy money shorting this PIG has ALL been made. It is now FAR from obvious that gold/silver
are going to be crushed.
The smarter play is to stand by and watch. If GLD tanks, start building a SLOW LONG position.
Be ready to cash out on the next runup; whenever it comes.
Being late to a SHORT party is usually much worse than being early to a LONG party.
CAUTION.
+
PATIENCE.
=
PROFIT.
It's become obvious to me that at this point the price of gold is driven more by the strength of the USD (or weakness of other currencies) rather than anything else. IMO, this will change in the next few hours or few days as the USD must consolidate or retract a bit since it is overbought.