Deutsch: Goldbarren mit einem Gewicht von 12,5...

Our algorithms show that mom and pop momo crowd who were mainly responsible for the last run up in gold and silver are not selling during this swoon.  As we reported this morning, our algorithms show aggressive selling by institutions in Asia.

In the U.S. market, selling by Smart Money is dwarfing buying by mom and pop momo crowd.  In our parlance, Smart Money means collective actions of ultra-sophisticated investors who know more, who know early, and who have more analysis power at their disposal than most of us.

From a traditional technical analysis point of view, in the very short-term, gold and silver are oversold and may attempt to bounce.  On the other hand, mom and pop momo crowd is not known for its resiliency and is known to sell close to the bottom of a swing.

We will continue to monitor and keep you informed.  When mom and pop momo crowd sells, that will be the bottom of the current swing.

Those short gold may continue to hold short.

Those not holding gold short may wait for a bounce to short.

Those holding gold long as an insurance policy in a well diversified portfolio, may continue to hold if the time horizon is very long-term.

Those who are holding gold long simply as a speculation or a short-term trade, may consider lightening the position on a bounce.

Those interested in a balanced view on gold and silver, may consider reading an excellent column by Jon Nadler here.