Everything got killed again today. We are glad we side-stepped the last few days. These are the facts:
Since Yellen:
1. Rates are going down - not up.
2. The dollar is weakening slightly.
3. Gold finally hit the $1300 level- A level that the gold bugs have to support or their whole gig is up and they can kiss off any more business this year.
4. We called the huge correction in momentum stocks 3 days ago. We tried desperately to get shares to short and there were none available. Too bad, we would have made good money in a hurry.
5. All the technical indicators are in perfect sync.
6. Everybody lost a lot of money except -bond buyers and gold shorts.
Why a perfect day?
We knew 3 days ago that gold would hit 1300, there would be massive buying in bonds, and that the top momentum stocks would get crushed. We did not place any trades despite this prediction because we wanted to catch the final battle in the gold trade We did!
We loaded the boat to 75% on leveraged gold index bull plays at the close because the short gold traders have made a killing the last 9 days. They would be absolutely crazy not to take profits at this level. Most made 50% or more during this period. That's right- only nine days!
There should be a very high probability (80%) of at least a strong technical bounce here. We were thinking about joining in on the gold bashers at the open and making some quick cash ; however, with those odds, we decided against jumping on The Gold Bug killers team ( the shorts) and bet " The Ranch " on the Gold Bugs team (the longs). Let's see if these cockroaches fight back tomorrow. If they do not, we will dump them at a very small loss.
