The first "D"...Denial
Ecrie, re: your quote of ["the Gold ride from around 620 to 680 and Silver from 12.80 to 14.50 has been fun and profitable and so your rather infrequent "smackdowns" hopefully fell on deaf ears."]
Hi Ecrie. I'm not blasting you personally...and when I address gold bugs -- I don't mean "all" literally... just 98% of the doomed by their own DNA casino-junkies."
What you said above, would only be true...if the ride for the 'bugs began at $620 gold, or $12.80 Silver...AND another big -- "if" ... as in "if" they sold here and bagged those gains.
But, the bugs don't sell into rallies and buy corrections.
Bug's sell reality and they buy hope.
Always have -- always will.
...and hope's damn expensive.
Just ask the margin clerks -- since May.
All you need to do is to look at the boards on SI, or the editorials on Kitco, Gold-Eagle, or 321 Gold etc.
When have you EVER seen significant selling and table pounding/profit taking calls from them into ANY rally -- or near ANY top?
...how about -- never.
When was the last trading top that Sinclair, or any of the pundits on Kitco, Gold-Eagle, 321 Gold etc pounded the table on selling into -- and actually bagging some of the profits?
...how about -- none.
When was the last major Gold, or HUI correction that they got people to avoid?
...the answer once again is -- none.
The same pom-poms and the same cheerleading breaks out on each and every rally and soon disappears on each correction.
And in case no one has noticed -- this has been one helluva
whipsaw-rollercoaster ride of late for the 'bugs:
Hasn't exactly been "blown away" the broad market either...
The boards here on SI, along with the editorial commentary
on Kitco, 321 Gold, Gold-Eagle and the promo's from the
newsletter writers ALWAYS get's breathlessly bullish at the tops...and goes dead-silent on the corrections.
I just saw email promos from a major newsletter publisher -- in which they recirculated their old "Hi-Ho Silver" & "$2000 Gold" promo's... the same one's they spoon-fed the herd back in April & May 2006 -- directly into the top and the resulting rollover implosion in both gold and silver.
On every single gold rally -- ususally at, or near THE top,
these promo's always come pouring in - en masse.
When has there EVER been an accurate exit/profit taking
call from the newsletter pundit sector at large?
...how about never.
They stayed bullish 24 x 7 all through a near twenty year bear market - from the last precious metals speculative mania in 1980-81.
Here's reality Ecrie:
And the first "D" in my "Gold Bugs and the 3 D's" theme for tonights "Smackdown."
The first "D" is for -- Denial.
Reality Check for Gold since the May ’06 Exit Call:
3 Corrections:
$730 to $542 = $188
$676 to $570 = $106
$655 to $603 = $52
Total = $346
3 Rally’s:
$542 to $676 = + $134
$570 to $655 = + $85
$603 to $686 = + $83
Total = $302
Now go ahead and try to tell me with a straight face about how "fun" and how "profitable" this has been for the gold bug crowd?
...puh-leeze.
A pretty well known trader once told me that the single most profitable skill as a trader that I would, or could -- ever learn... was to learn to be as comfortable and confident in trading SHORT...as I was when trading LONG. And the reason that it is so profitable, is because in the hedge fund world there are 50 to 60 superstar long traders for every 1 superstar short trader...and 200:1 for those playing the home game.
He said if you could learn to set aside all the preconceptions about good:evil/bull:bear and just learn to shut off all emotion when trading short... literally being able to turn on your own mother -- on a dime....that you could write your own ticket.
...and he was right.
He used this line from an old Woody Allen movie to humorously drive home the point.
"Being bisexual doubles your chances of getting a date on Saturday Night"
In markets like this... where we had 3 brutal corrections following each rally - why "be" either a bull, or bear?
Be both... we've had 3 major moves in both directions averaging 100 points. That's 600 points of volatility in less than a year.
For about the 17th time... during *consoldiation phases (*more on this in the next post) - the trade isn't directional...it's on volatility itself.
...if it ain't broke -- don't go trying to fix it:
The second lesson that mentor taught me was this.
Anyone can identify a bull, or a bear market. A deaf, dumb and blind man can throw a dart and make money in a broad upcycle.
Traders are made during consolidations and transitions.
And the real money is made on "discrepancies between price and risk."
And that's what we have developing right here... right now.
Small spec's are at near record bullish levels.
And let me tell you all something about Oil.
This Oil trade was created and orchestrated by offshore traders who took Oil down -- hard and fast.
It was "they" who then turned on a dime and cranked it up to $60 where they've now started unloading to the mo-mo players.
...and gold followed Oil.
Didn't lead it... followed it.
And in case you didn't notice...
Gold led the gold stocks on this move and has for the last year. That's not a good thing...by the way.
Small Spec's have once again loaded up to near record bullish positions in Gold.
Margin interest is near the March 2000 highs of the Tech & Internet Bubble mania levels (and margin clerks & offshore hedgies are licking their lips).
Riddle me this: When has that ever not been a "discrepancy between price & risk"?
Just make sure you're holding tight sheeple... real tight.
Because the big boy's are buckling up here once again.
Next post...
"Would you even know one -- if you saw one?"
Slider |
