Traders Stampede Out Of GLD

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JAG's picture
JAG
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Traders Stampede Out Of GLD

Yesterday was the largest single-day outflow of capital out of the Rydex Precious Metals Fund in its 10 year history. Just a couple weeks ago, there were more assets concentrated in the Precious Metal fund than any other Rydex Sector fund, over 20% of all assets invested. Today, that percentage is down to 13% of all assets.

Such a significant move by the "dumb money" typically means that a bottom is close at hand. But if GLD breaks support at 106, we could see some more chop lower.

Bottomline: If your looking to buy more gold, the dumb money is selling at a good price right now.

SagerXX's picture
SagerXX
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Re: Traders Stampede Out Of GLD
JAG wrote:

Bottomline: If your looking to buy more gold, the dumb money is selling at a good price right now.

Would that I had a spare $10k lying around...

SteveS's picture
SteveS
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Re: Traders Stampede Out Of GLD

I've heard several talking head investors say how they were looking for a dip and would actively buy again at 1000 or 1050, so I imagine if it hits that low then we are going to see a lot of buying.

Johnny Oxygen's picture
Johnny Oxygen
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Re: Traders Stampede Out Of GLD

I posted about the PM drop yesterday. I think The-Powers-That-Be pushed PM's down most likely with paper gold. I ain't got no proof...I'm just sayin'.

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docmims
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Re: Traders Stampede Out Of GLD

gold dipped yesterday mainly in line with dollar strength.  It did the same today when the dollar spiked.  The DOW is weak and as the dollar gets stronger, carry trade positions will unwind driving the dollar higher and gold lower.  Yes, I know it doesn't make good sense, but that's what happens.

JAG's picture
JAG
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Conspiracy=Dumb Money

[Ed. note: Comment removed by moderator]

Johnny Oxygen's picture
Johnny Oxygen
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Re: Traders Stampede Out Of GLD

Ugh...

Sorry that my comment about 'grandstanding' upset you so much that you thought about it all night and now want to issue physical violence.

You were right and I was wrong.

rickets's picture
rickets
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Re: Traders Stampede Out Of GLD

Everything in the world is being sold this week (other than tbills and us dollars).  Look at China - and there are very serious reasons behind it.  If we cascade, GLD will take another huge haircut just like it did last march, and the previous sept - nov period.

There was no "paper gold" selling real gold down conspiracy.  The Chinese government is pulling in the reigns and doing so aggressviely regarding lending and speculation - - therefore, bubble ending.  Risk assets are tanking, and so cash mush be raised.  Cash to cover losses can be raised by selling gold.

This cycle repeats and repeats and repeats and is the reason technical analysis in a bubble will absolutely kill you.  Support and resistance lines are purely situational.  If you dont know what I am talking about, please, for your wealths sake, stop trying to time any financial instrument.

 

 

docmims's picture
docmims
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Re: Traders Stampede Out Of GLD

Yep the dollar is spiking, because dollars must now be raised to cover all the speculation.  I'm not saying DOW 6000 but it looks pretty wobbly and shakey.  Unfortuantely gold will plunge also as dollars are raised by selling gold.  However I wouldn't worry about owning physical gold, it will come back with a vengance after the sell off.

Johnny Oxygen's picture
Johnny Oxygen
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Re: Traders Stampede Out Of GLD

Hey Rickets

Good post.

...Cash to cover losses can be raised by selling gold.

So you think the Chinese are selling some of their gold to pay down debt? Iwould suspect they would sell the dollar to do that and keep the gold.

rickets's picture
rickets
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Re: Traders Stampede Out Of GLD

no, the Chinese government is tightening their grip on speculation by restricting loans and increasing reserve requirements at the banks.  This causes bubbles to pop, as it restricts capital.  This creates selloffs in financial markets.  Because financial markets are traded with big leverage, losses on big selloffs require assets to be sold to raise cash.  One of these is gold.

I dont think any government sales of gold had anything to do with this sell off in gold.

hopre this helps...

Johnny Oxygen's picture
Johnny Oxygen
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Re: Traders Stampede Out Of GLD

Ah...I gotcha.

Well when we finally have our blow out here there won't be any assets to sell off.Surprised

rickets's picture
rickets
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Re: Traders Stampede Out Of GLD

and, at that point, deflation will have ended.  haha

Johnny Oxygen's picture
Johnny Oxygen
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Re: Traders Stampede Out Of GLD

And we can all crawl out from under the rubble...or is that ruble comrade?

JAG's picture
JAG
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Re: Traders Stampede Out Of GLD

Rickets,

You don't think you can "time" a market?

And by "time" I mean using market sentiment to lower the risk on your trades. I'm not one for technical analysis, but market sentiment analysis has served me well.

rickets's picture
rickets
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Re: Traders Stampede Out Of GLD

Jag - I totally believe in market timing.  I have been a trader for 14 years (dont hold it against me!) so I totally know you can time a market.  My point was that even of full time traders who try to make a living on the profits they generate, only 5% really make it - - - and so if you dont have time to dedicate and research whats moves the markets - - -and in which situations certain strategies work and dont work -  - -then you should not try to time the markets.

 

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LogansRun
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Re: Traders Stampede Out Of GLD

As has been discussed already on this thread, we're seeing a repeat of what happened back in Nov-Dec 08' and Feb-Mar. 09' in which liquidity and cash are needed to backup mass speculation that's taken place.  It's called "de leveraging" and it's coming with a vengeance (hopefully).  

I was actually thinking of buying at $1050/$16.50 (physical of course) but I'm now believing that we're going to see a delev. close to what we saw in the previous 2 so.......Gold $850-900 and Silver $12-13 is possible IMO.  I'll be buying at $950 and below at this point.  

BTW:  The only reason I'm even speculating is that I'd buy at ANY price but figured I'll wait and see if I can get MORE shiny for my toilet paper.

SagerXX's picture
SagerXX
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Re: Traders Stampede Out Of GLD

And Mr. Sager's juuuust about got his next chunk o'change saved up for PM purchase.  

c. montgomery burns wrote:

It's all coming together...according to plan, Smithers!  Mua-hahahahaaaa!

I'd pounce on silver at 15.  But 12/13 is even better...

Viva -- Sager

dfuscocpa's picture
dfuscocpa
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Re: Traders Stampede Out Of GLD

I've traded Gold and Silver on margin in a Monex Acct, made money...lost money...lost money...etc.  Eventually I closed out my Monex acct.

I found a funny thing though, the metal I've been accumulating at various prices over the years, I still have....Point being for me, this is a tough market to trade, limit your size, I wouldn't trade on margin, and you can do Ok...but if you ultimalty believe we're in a currency crisis of sorts, than keep your core and don't lose it

Montana Native's picture
Montana Native
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Re: Traders Stampede Out Of GLD

I sold my miners a few days ago, but of course have physical in hand. Taking profits while not at the top but still high seemed like the thing to do. I have no idea where the market is going, but do know you cant buy a house and land with shares of Rubicon Minerals and Hecla.

SteveS's picture
SteveS
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Re: Traders Stampede Out Of GLD

Noticed something odd (to me anyway) this evening. I watch a few stocks and etfs, still learning.

Anyway I noticed in SDS afterhours a huge dip at 17:04 with relatively big volume. I happen to watch GLD too and noticed the same thing at 16:32. Didn't see it in other things I watch, like SLV or USO. So is that common to see?

 

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