The gold bulls are trapped and the market is eroding away.
The weekly chart of GLD (farther down), shows this past week was the opportunity for GLD to move higher.
It didn’t happen.
Some of the YouTube sites that are monitored, have caught on something’s very wrong with the bullish picture.
However, there are literally millions positioned (or at least thinking) on one side of the trade. Without neural plasticity to switch gears and re-position, at low risk no less, the pain is likely to be severe.
The same goes for the overall market.
Steven Van Metre, in his Friday update stated, ‘retail investors are all-in at the highest level in market history’.
Yet he says, the market did not move significantly higher. That’s the clue. It’s likely we’ve seen the highs.
There’s more middle class destruction on the way with shutdowns and restrictions; all under the guise of the speck.
If the speck is so bad, where are the bodies?
Take a trip to your local graveyard … you’ll probably find the caretaker asleep on his back-hoe … waiting like the Maytag repairman.
There are no bodies except for the odd duffer that died while on a ventilator … ah yes, the ventilator, that topic is for another time.
Those flexible enough, the entrepreneurs, picked up on this scenario long ago and have responded accordingly.
The only way out is self-employment; separate from the crowd. Even that’s no guarantee but at least it provides some time and flexibility.
Getting back to the markets, we see the S&P and Dow at their highs (possibly topping-out) while gold and the miners have already rolled over.
Senior miner index GDX, has now posted an outside down (key reversal) on the monthly chart.
We have one more trading week to go (plus one day), but it’s likely the key reversal will stick.
As always, even with the lower action just passed, upward movement next week (if any) could happen but it’s likely to be halting and laborious.
If the overall markets head lower, the uneducated public once again and by their own actions, have set the stage for their financial destruction.
Only this time, it’s over. There will be no recovery.
As the downturn sets in and jobs continue to disappear, the calls to ‘make it stop’ will become ever so shrill.
The masses will be desperate enough to line up for government assistance and allow (even beg for) the catch … be injected first; No matter who is in office.
There’s a reason, professional, seasoned hard as nails (even profane) market traders are quoting Biblical scripture.
Charts by StockCharts