The Safe Havens
Wow, what a lousy day for just about everything. Crude down $4. Corn down nearly the limit. Dow down 178. The only things higher were the "safe havens" of the PO$, gold and silver. Yikes! And if you think that's scary, wait until you see the gold chart. More on that later.
First, take a look at this incredible rally in the POSX. It should encounter some tough sledding between 76.60 and 77 but, who knows? If the euro continues to fall apart, anything can happen.
My main concern tonight is the shape of the gold chart. It is forming an almost perfectly symmetrical, rounded top. As you know, I think the summer doldrums are here and that gold will now be rangebound between roughly 1460 and 1550 until late August, so I'm not expecting a drop to 1200 or something like that. What does concern me, however, is the prospect for a sharp drop in the next few days. Gold needs to move decisively through 1535 and continue toward 1545 or it risks a sharp and sudden drop toward 1500, maybe even 1490. This concerns me enough that I just sold the rest of my August calls, which leaves me with no position in gold for the first time in recent memory.
Please allow me to reiterate: Be cautious out there. The games on the Comex are serious and ugly and tptb will fleece you if you give them the opportunity. Raise cash. If you must play, make only very small bets. Be patient. By Labor Day, we will be on the cusp of another, great fiat-making opportunity in the PMs. Don't blow yourself up before then.
Have a great night. Thanks again for all your support and well wishes for the new site. I'm glad you enjoy it. TF