Making my broker happy, I blew out of my gold position Friday. Had I not sold my position on Friday, November 27, I still would have sold it anyways.
Gold was down 5.7% intra-day. One difference Friday compared to the Friday over Thanksgiving was that volume was huge. This is worrisome. Another big difference is that there was no intra-day reversal as there was over the Thanksgiving holiday.So I blew out my position. We bounced a little at the close, but we ended the session near the day’s lows, which is usually a sign of more selling to come.
I don’t think this is the end of the gold bull market. I think that we are going to get to $1500-$2000 eventually. But I might be dead wrong. This may be the top in gold. Large declines on huge volume after a parabolic run is not a good sign.
If you study past parabolic moves, there is often a correction and a period of consolidation. This may be such a period. If gold behaves in a similar manner, I expect a period of backing and filling for 2 to 6 weeks and then another move higher. However, when you trade, you have to be intellectually flexible. If we run immediately back up on light volume, then begin to roll over, that might signal the top and a shorting opportunity.