Monday, January 5, 2015

And there goes gold....

Yeah, gold hitting $1200 on intraday trade is boring.

But this isn't:

That says gold has broken out of its long term range ex-USD.

Like this:

Now let me show you something neat. Compare the weekly chart above with this one below:

Since November 2014, gold's been going up for the rest of the world while Americans have been happily shorting the apparent multi-year USD$1200 support breakdown.

I like that because it might mean there's an opportunity to be on the other side of the boat to Wall Street Whitey. That might turn out to be an interesting longer-term setup.

Then again, maybe it'll make sense forever for Americans to stay long USD/short gold. Certainly long-USD hasn't proven itself to be played out yet, has it? Hell, maybe that trade can keep going for years - we haven't seen copper or EMs fall to pieces yet.

Then again then again, if the rest of the world goes long gold because of chart #2, that might print a longer false breakdown on chart #3, and American traders who follow charts might decide to get less short gold, and thus you get a nice positive feedback upwards.

We'll see. Not making predictions, just saying this is an interesting inflection point and I want to see what happens with this over the next few months.

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