We waited in vain yesterday for the mood change that would have made the day even remotely interesting. Instead, the broad averages spent the day scratching little sores, so to speak, creating in the process a six-hour stretch of airless tedium for bulls and bears alike. Although we found relatively few trading opportunities worth sharing with subscribers, there were reasons to think it will be bears who come out ahead on the next move. Way ahead. Why so? Besides the obvious reason – that all bear rallies must end eventually – there is the psychological one that we discern in our own desire, of late, to get ourselves good and short on some giddy spike. Haven’t you been feeling the same way?
It almost seems as though everyone is waiting for that last, brainless head-fake, eager to get short at prices juicier than those that may have obtained on the previous day’s close. Instead, Mr. Market has delivered little more than a series of opening-hour grunts – hardly the kind of spikes that bring exhilaration and instant profits in their wake.
Tsunami Scenario
For what it’s worth, we can recall several instances in the past, during otherwise quiet summers, when a slow, steady erosion of prices gave way to a precipitous collapse that caught Wall Street with its pants down. And that is why we are telling subscribers to remain alert to the possibility of moderate selling that gathers tsunami-like power as the day wears on. We have a hunch the day will begin, not with a well-accustomed flurry of uninspired buying at the opening, but with a gap lower that draws in the those who have been accumulating shares on dips. One of these days, we suspect, they are going to experience the kind of dip that will recall what secular bear markets are all about. The Dow will shed a thousand points in just a few days, and all of those green shoots will turn into tumbleweed.
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Personally Rick I think there is a fair amount of money waiting to time this market on the long side. They got caught with their pants down by the ferocity and irrationality of the current market, and Mr. BEAR Market smells an easy meal.
I think we gap down to the high 7000s, draw in the sucker money that got into cash at exactly the wrong time and mutual fund managers who if they tried to time this market, may be parking cars at the end of the quarter. We get back to 10 grand maaaaaaaaaaaaaaaaaaybe even 12 then watch out, especially if we get to 12,000 it will be biblical.
My synopsis then is euphoria followed by exteme equity revulsion.
Well Aug Gold jumped during the 1st few minutes when Globex open last evening and after that it is mostly treading water and now we are back below 940, the bears won’t give up so easy, so use Rick’s number instead imo.
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We looked at August Gold’s short-term charts during this morning’s briefing, Albert, and concluded there was organic weakness in the decline that followed the head-fake you’ve observed. This is different from the kind of weakness we might have seen if it were simply a consolidation to shake out premature or cocky bulls. RA
I think we will see 6000 by fall. In fact by winter, I think the only people holding stock, will be the crooks at Goldman Sucks and Jerk P Morgan that issued them in the first place.
And how how HOW big can the PAPER shorts that JPM and HSBC get before it breaks in silver and gold. How big indeed…….
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