Originally published by Chamber of Merchants
If you have been following me, you’d know that I invited the Dollar Bear for tea a few weeks ago.
I guess he received my invitation:
This is why I previously almost fell off my chair when the headlines in the media said “Buy the Dip”.
More accurately it would be “Buy the Dump”.
In yesterday’s post I mentioned that the VIX, the Volatility Index, is pointing toward a bumpy ride for stock markets. Well overnight we just hit pre-Brexit level bets on the VIX:
VIX | Volatility Index | 2nd November 2016
As I predicted, funds are being withdrawn from the Stock Market as a Trump victory appears more and more probable:
S&P 500 Stumbles 2nd November 2016
Nasdaq Stumbles 2nd November 2016
“That Escalated Quickly”
Yes it did, Patron. It escalated quickly to prevent the majority of retail traders like you and me from being on the right side of the trade.
As a Merchant, I take positions not based on what price is, but rather, what price will be, with a high degree of probability. I’m saturated in gold and silver miners since Gold became oversold. and today we’ll see some panic positioning in the precious metals sector.
As you may have noticed, I’m not a journalist:
I’m a Merchant. A positional trader that acquires commodity producers and sells them into strength.
But, “One day doth not maketh a trend.”
Today we will see Gold and Silver miners enjoy their first day of a true bounce.
First Day, I said. So don’t even get an inkling of an idea that I’m anywhere near an exit point for my portfolio transactions.
I’ve said it before, I’ll say it again, Gold is in a bull market, it will make higher highs. That means $1377+
“You’re just lucky, after the election gold will fall” – Isn’t that the same person who is still expecting $1200 gold before making a trade? Isn’t that the same person who Struggles to Buy and Struggles to Sell?
While that guy still struggles to figure out when to buy…let’s look at what the U.S Gold Miners did last night:
Gold Miner’s Index Market Vectors Gold Miners (AX:GDX)
Yes the Gold miner’s index is up more than 3%. Additionally , the GDX (NYSE:GDX) didn’t have any issues breaking through its resistance.
Below is a Gold index which made over 12% last night, the JNUG, a 3x Triple leveraged Gold ETF:
HUI also broke through its resistance levels:
Conclusion
As I said in the weekend report, some will experience chaos today as markets, starting with Asia, bleed red.
However, for those who positioned themselves accordingly, this will simply be expected volatility.
…Oh yes…Where is my mind?
I should probably share a chart of Gold’s Price action:
Gold 2nd November 2016
“Silly me,
I was distracted by Mr Bear,
Drinking Tea.”