April 14, 2024 - (Gold Market Wire) - These trapping spikes are getting to be regular occurrences now, and anyone trying to ride momentum is going to be sent to the woodshed for a "lesson". Vol. sellers have been decapitated, and, yet again, the late pile-in - along with the tag line "This is it!", metes out its punishment. The fact that it was a Friday shows how bold the 'trappers' are now. They are going to use the threat of weekend war to trap everyone in, and then beat them down.

We identified the closing level of $2350 as the key, and sure enough, we manged to end the day, just under it. We had our plan and we executed it. Massive cut in our length. A bounce on the opening on Monday will get us out of the balance. It's been a very profitable ride, but the odds now favor a reversal...and it could be a painful one at that. Even if the market recovers, we will take the sidelines for a bit to reassess. Why risk the hard won position, when the core covers the upside. That's why the two books should never be mixed.

A day for the pros, indeed. Day trading amateurs had their clock cleaned.

We stand by our assessment that we are on our way to $3,000. The only question is how we get there.

Trading is a zero sum game, and professionals live for these days. The roller coaster is where they make their killing... and feed off the carcasses of the short term leveraged fools. They thank you for your money. If you're one of those fools on some 50:1 trading platform, you will have spent the weekend staring at the ceiling, wondering how it all went so wrong. Can you not remember the fundamental maxim? "Never Chase Strength in Gold." Our recently departed leader calls from the beyond to remind you yet again. If you are going to sit at the roulette wheel, you better have a guaranteed trailing stop, because once the turn happens, as our first chart shows all too well, its an elevator shaft drop.

Now what?

Well, it's unlikely that all the weak length has been cleared out, so we'd expect some more downside. Wild eyed gamblers should get prepared for a (very) small spec short. But the real picture, the trading picture, and not the spec picture, is to see if we can follow through to the down side and prepare to buy, scale down. Obvious points are going to be around $2160 and, yes, even $2,000. The reality is that the bulls should be screaming for trade under $2,000, because that will be the place to start buying in earnest, and maybe even with some light leverage. Of course, if we get there - that will be right where everyone throws in the towel, which is what we want.

As a final note, you'd better have the cash on account to go all the way back to $1800, and the nerves to ride it. Opportunity is calling, but you're going to need strategy. That means avoiding big buys on the first sell-off. The price of $3,000 /.oz Gold is likely to be a nice big down draft.

Are you prepared for it? Financially and mentally?