Some important changes in our long-term trading position

2018年8月1日

At the moment of writing this alert our full 200% net short position in gold 0.79% , silver -0.26% and mining stocks are well justified from the risk and reward perspective.

In other words, for the first time ever, we are increasing the position size to 250% of the regular position.

Not much happened in the precious metals market at first sight, but this time the first look is misleading. Just because not much happened, it doesn’t mean that nothing changed. Conversely, we saw new signals that were important enough for us to change our current trading position. But it’s not something you’ll read about in the popular financial media.
The thing is that the very subtle signs are visible only to those who know where to look. And financial journalists (who are not experienced analysts) generally don’t know where to look. If there is a major move in any direction, they try to find something that might have caused it and describe it in greater detail – but this is retrospective and doesn’t have significant (if any) predictive power.
What does have this power are signs that have been proven to work over and over again that are confirmed by many other similarly effective signs.
That’s what we saw yesterday. In the previous Alerts, we described the bearish implications coming from days when silver outperformed gold while miners underperformed it
We saw it once again yesterday and the strength of this bearish signal is now very substantial.
That was also the third consecutive close below the 61.8% Fibonacci retracement level in the HUI Index and this means that the breakdown is fully confirmed. This makes the outlook strongly bearish for the short- and medium term.
The new and clear signal that we saw was gold’s very weak reaction to USD Index’s daily decline.

The USD Index declined and it would be natural for gold to rally in this case. But it didn’t manage to form even a small rally. To be clear, there was an intraday move higher in gold, but nothing more. This move was quickly erased and ultimately – based on kitco.com’s prices – gold ended the day lower than on Friday. This is a very bearish confirmation that comes on top of multiple bearish signals and breakdowns.
This means that yesterday’s session provided us with yet another very important indication of what’s to come. The clarity increased and the risk therefore declined, improving the risk to reward ratio. This is the cherry on the precious metals’ bearish analytical cake and – as crazy as this may sound – it seems to make an even greater short position justified than we had up to this point.
Not much more happened and what happened was not particularly important, so we don’t have much more to add today except for the above.

The conclusion-our outlook for precious metals is very bearish for the medium and long-term, we will keep you informed anyway,
many regards-Neeraj Pandey

Our existing positions
ASSET--XAGUSD

Sell Limit Price: 15.500

Take Profit: 12.80

Stop Loss: 15.700

ASSET-GOLD

Sell limit Price: 1231

Take Profit: 1080

Stop Loss: 1275
( It doesn’t, however, mean that we won’t adjust (limit, close or even reverse) the position before this price level is reached. If we get enough confirmations other than gold’s price level itself (for instance, mining stocks show strength and silver -0.26% -0.19% -0.06% reaches a very important support level , while the USD reaches a key resistance), then we might do it, just like we’ve done previously (which ultimately caused the short position to be more profitable).