The first hit is always on the house.
Joined Aug 2, 2009
1,847 Blog Posts


Aside from myself, a few well respected traders/technicians came out last week to discuss the price action in Gold.

To summarize, those opinions were similar to mine stating that the only folks buying last week were of the retail variety. When you sense this crowd, or can see their footprints in the market…prepare to take their money.

I’ve stated this about the overall market, and the same can be applied to any instrument….when the pain trade becomes ‘lower’ it is because the market has left people stranded above. We discussed this at length last year, referencing the island of longs in both Gold and Bonds around this time last year. Today, prices gapped beneath all prices printed last week. In other words, late longs are now trapped – as I suggested in the gruesome comment exchanges last week.

As discussed in After Hours with Option Addict last week, I used the enthusiasm of Gold bulls to also initiate a LT position in $TBT and a few trades in a few banks. The timing of last week I felt was significant – and was why I built these positions leading into last week.

I’m still a little underwater in my $DGLD, but that happens when you build a position into a breakout or breakdown. I like my chances here.

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This morning I am humbled by this explosive move in Gold prices. As my alarm went off this morning, I knew I would have to face the music.

There would be feces cast about, comments made about family members and the size of genetalia….this I would have to endure being positioned against a highly sophisticated crowd of hamburger flippers, Walmart greeters, convenience store clerks and custodial arts workers.

Do your worst. Today I am prepared for all things.


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Despite the furious “Post-urbation” in my comments section over the weekend by a simple Silver-ton named Phil, I picked up my last tranche of DGLD, as planned, into this Gold breakout.

Doomed might I be, but I like the vocal opposition from the gifted’s POV.

Avg cost is in the $42’s.

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Yesterday’s AAII sentiment results shows the second highest tally of bears for the year at just shy of 40%. This is what I call the popcorn set-up.

As I’ve always said, happy to bet against pessimism and fear every day of the week.

With the FANG, Biotech and Semiconductor set-ups all in sync, hard to see much downside until we get a fast move higher.

Hope your week was as good as mine.


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Back in 2015, I talked a lot about the various asset correlations to 1998. Specific to the dollar, that pattern/correlation helped us bet against the dollar in Dec 2016 via an $FXE long.Here, we are close to the bottom for the greenback. That said, I thought that Gold would be my best bet to play this…especially considering the headlines.

After the bell, I’ll take you through some correlation analysis – specific to my reasoning on why this is the best play.

I still have one more batch to buy in $DGLD, but have enough on now to get rolling.


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