Gold may be on the verge of a major price collapse

Acronym & QQQshort, thank you both for your gentlemanly responses. After all, I <i>did</i> make a horrible call here (in a cocky tone, at that), and I probably <i>do</i> deserve a bit of 'bashing' in this case.

I do have flaws and weaknesses in my trading- The worst one by far is my tendency to overtrade dull choppy markets, putting on size when I should be sitting on my hands or at least going small. Getting 'married' to positions, however, is not something I have a problem with. I'll flip my bias 180°, the instant my gut senses trouble. I did take a loss on that gold trade, but it could have been many times worse.
 
"Given that we have record gigantic speculative long positions in gold, according to the last COT report, there is the potential for huge waves of margin call and stop-loss selling."

The same can be said of oil: huge speculative positions and current appreciation in oil is contrary to seasonality.

What could excacerbate the situation is if the FED doesn't lower by 1/2 pt 12-11-07. Additionally hedge funds are exposed to unknown and opaque subprime risks.

At any point a cascading affect could occur where selling in one market triggers selling in other markets: commodities => stocks => bonds for example much the result of progam selling.

Keep in mind that LTCM is a drop in the bucket as compared to today's hedge funds and LTCM threatened the entire world financial system back in the 90's.
 
Europe and UK is slowing down, may force sell off in the EURO, thus $USD bounces back all of massive wave of profit taking...gold will follow.

If $USD pulls back, expect stocks to boom, as European rush to buy stocks with there buying power while they can. Short lived boom, I must admit.
 
I've just joined this forum, so that is why I am a bit late in responding. I agree that gold is headed lower. I use Elliott Wave, which is predicting around $700 if not lower. Also, the USD capitulated recently, and many institutional investors are now long the USD.

The price of a gold option was mentionned as $25...are you talking about the gold minis?
 
Reckon you might want to reconsider the use of the Elliot Wave stuff Sumosam, at least based on your Gold call. Try a strategy thats reacts to whats happening, not that one tries to predict or forecast. Its a mugs game trying to predict or forecast. Now don't get me wrong I know people swear by Elliot wave or Gann etc, but strategies that react to market action generally work far better
 
Thanks for the reply. Not sure what you mean by strategies that react to market action work better? EW and Gann also do both.
 
Well, if you haven't figured it out yet, it was a terrible call.

So that means EW theory doesn't work?

Or was it your interpretation of them that was bad?

Whatever.... I sure wouldn't consider putting my money on any of its predictions in future if I were you.
 
Quote from sumosam:

Thanks for the reply. Not sure what you mean by strategies that react to market action work better? EW and Gann also do both.
More...

Don't take it the wrong way, plenty of people swear by EW and Gann, but they are predictive approaches, rather than reactive approaches. Trying to predict the future (to me) seems a mugs game. A strategy based on things like, volatility breakouts, price breakouts, volume analysis etc, indicate its time to get into a trade based on the current action, ie you react to action, rather than predicting or forecasting the action.

Just trying to help
 
Also EW and Gann approaches are more for the experts amongst us as they take years and years of dedicated work and research to even begin to understand them properly
 
Your reply is abit late...I am a short term trader. Went short when the usd capitulated, held til the current uptrend was over and am now long.

Interesting you state that volume has nothing to do with EW since volume is very important in EW and Gann.

Adwebster, you are clearly out of your depth.
 
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