Gold appears to have topped out. Yesterday and today’s decline has brought gold down to my first sell signal at the $1,322 level. If it closes below that any trading day it will confirm that the post Brexit high was a simple and single cycle inversion.
Moreover, the next few months for gold, silver and miners does not look pretty. Here is this week’s AI forecast for gold. As you can see, we should be starting a decline all the way into October. Clearly it won’t be a straight down affair, there are bound to be bounces.
As I have said all along, the rally you saw was just the first leg up in gold and it should be deeply retraced. It is during this retracement that we will use to get long at a later point. In the meantime, if gold closes below $1,322 today, I will recommend a short position as early as tomorrow morning.
Your other positions are finally mustering up some strength. In particular, I recommend taking profits on the ASHR calls, which stand at about 38% right now.
Hold all other positions and related stops. Now, on to today’s trade …
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For ALL Members: SELL, to close ALL of your ASHR $24 October 2016 calls, symbol (ASHR161021C00024000), at $1.63 or better, good till canceled. Alternatively, if you did not buy the ASHR options, sell all of your Deutsche X-trackers Harvest CSI300 China A-Shares ETF, symbol ASHR, at the market and cancel your protective sell stop at $20.50. |
Lastly, the Dow has crossed the 18,500 level. For it to start its next leg up – which will ultimately bring it to the 31,000 level – it needs a MONTHLY close above 18,500. So at this time, we cannot say a full breakout is in motion, and there is still the chance for a major correction.
Best,
Larry
