INTELLIGENCE: SMART MONEY STEPPING INTO GOLD AHEAD OF ITALIAN REFERENDUM $GLD $SLV $GDX $FXE $FXY $NUGT $ABX $CDE $HMY $PALL $PPLT $QQQ $SPY

SMART MONEY STEPPING INTO GOLD AHEAD OF ITALIAN REFERENDUM $GLD $SLV $GDX $FXE $FXY $NUGT $ABX $CDE $HMY $PALL $PPLT $QQQ $SPY

This post was just published on ZYX Buy Change Alert.

For us to recommend, a security must pass at least four of the six screens. We prefer a stock to meet all six screens. Our rigorous criteria has led to enviable performance over a long period of time. We periodically provide intelligence on trades that we do not recommend, but our subscribers may be able to take advantage.

The Merit

There is merit to consider buying gold or a gold miner today ahead of the Italian referendum.  The risk reward is asymmetrical in favor of buying.  In plain English, if the referendum is a ‘no’, there is a $40 to $80 upside potential but the downside potential is $10 to $20 if the referendum is a ‘yes’.

If the margin of victory of ‘no’ vote is large, the momo crowd can drive gold up  $150 to $200 over perhaps a week to 10 days.

Chart shows the first target zone and the second target zone if the vote is a ‘no.’

Please click here for an annotated chart.

Smart Money Steps Into Gold

From today’s Morning Capsule made available to Arora Report subscribers every morning,

In a rarity these days, smart money is lightly buying gold.  Perhaps the reason is to guard against a negative outcome in the Italian referendum. If the outcome is a ‘no’, gold can easily jump up $40 to $80.

In another rarity, the momo crowd is selling gold.  It appears that the reason for selling is that the momo crowd has incurred huge losses in gold and now they cannot take the pain.

Over the years, The Arora Report has refined its highly specialized algorithms that detect footprints of smart money in precious metals using trading data from across the globe..

The Fly In The Ointment

The reason we are not able to give an official signal to buy  is that there is no good way to calculate the probability of a ‘yes’ vote or a ‘no’ vote.  As our long-time readers know, our ZYX Change Method and ZYX Allocation Model are rigorously analytical and depend on data.

What To Buy

Most investors may consider buying GLD today in the zone of $111.00 to $112.36.  GLD is trading at $112.09 as of this writing.  For those using different instruments, gold equivalent price is $1177.

Aggressive investors may consider buying NUGT.  NUGT is a triple leveraged gold miner ETF.  The gain in NUGT in the event of a ‘no’ vote may be about 500% more compared to buying ETF GLD.  As a matter of caution, think about the flip side before buying NUGT.  The flip side is that your losses will also be about 500% more than if you bought ETF GLD.

Based on your own risk preference, a good compromise may be buying silver ETF SLV.  Please note that the risk reward in SLV is not as favorable as GLD.  SLV may see about 40% more upside than GLD but 100% more downside than GLD.

Investors may also consider gold miner ETF GDX. GDX is has about 100% upside compared to GLD but only about 60% downside compared to GLD.

As a full disclosure, in totality we have large short positions in precious metals and miners with large unrealized gains. These short positions include GLD, SLV, SLW, ABX, HMY, CDE, PALL, and PPLT. We are hedging these positions 100% with GDX before the end of the day. It is simply prudent to control risk.

Italian Referendum Details

Italians will vote on a constitutional referendum on December 4th.  If approved, expect the most extensive reforms in the Italian government since the end of monarchy. Italian Prime Minister Matteo Renzi is the architect of the referendum.  For months the polls had been in the ‘yes’ camp and the consensus continue to be a ‘yes’.  However, four polls published on November 18th show the ‘no’ camp was leading.  Under Italian law, these were the very last polls allowed.

After Brexit and Trump, it is simply not prudent to 100% believe the polls or the consensus.

If Renzi loses, it may indirectly start a sequence of events leading to disintegration of the Eurozone.  There are three opposition parties in Italy, all favor exiting euro.  As a full disclosure, we have a position in inverse euro ETF EUO and also short position in euro ETF FXE.

At least in theory, if the ‘no’ camp wins, it should have a major negative impact on the U. S. stock market, and major positive impact on U. S. bonds and dollar.  In plain English, you could wake up on December 5th to see complete reversal of trends in place since Trump’s election.  Watch out for downside in ETFs SPY, QQQ, IWM, TBT, and TBF as well as upside in ETFs TLT and TMF.

Caution

Please keep in mind what has come to be affectionately known as Nigam’s Second Law of Investing, “No one knows with certainty what will happen next.”  Be aware of cross currents.  Before buying please see prior posts related to India and China actions on gold.  The key point here is that those negative actions are not likely to happen before Monday.

Here we are providing intelligence for those who can take advantage of it.  This is not a regular trade and there may not be a follow up on this blog even though there may be a follow up on ZYX Buy Change Alert.  For this reason, even if profitable, this trade will not be included in performance.

You are receiving less than 2% of the content from our paid services …TO RECEIVE REMAINING 98%, TAKE A FREE TRIAL TO PAID SERVICES.

Please click here to take advantage of a FREE  30 day trial.

Check out our enviable performance in both bull and bear markets.

FREE: SUBSCRIBE TO ‘GENERATE WEALTH’ NEWSLETTER

Related Posts

TRUMP’S TAX PLAN SETS THE STAGE FOR DJIA 30,000 $CAT $MCD $AXP $SPY $BAC $EXPE $FB $INTC $JPM $TMUS

  Lower corporate taxes could supercharge the economy and boost company earnings Investors who have written to me are excited about President ...

TAKE PROFITS ON THE LAST SHORTED TRANCHE OF GOLD MINER BARRICK GOLD TAKING ADVANTAGE OF WEAK EARNINGS $ABX $DUST $NEM $GDX $NUGT $GDXJ $GLD $SLV

This post was just published on ZYX Short Change Alert.  The last  short sell  tranche of gold miner ABX is from $20.18.  It ...

ASK ARORA: OPPORTUNITY TO REDUCE GOLD AND BUY BLUE CHIP STOCKS AT A BIG DISCOUNT IS HERE $EZU $HEDJ $SPY $SLV $GDX $TLT $FXY $FEZ $IEV $HEZU $EWQ $EWP $EWI $EUFN

I’m regularly receiving messages from investors who think U.S. stocks are too high. On Friday I wrote: “Ask Arora: If you ...

ASK ARORA: IF YOU THINK STOCKS ARE TOO HIGH, GET READY FOR AN OPPORTUNITY MONDAY $EZU $HEDJ $FXE $VGK $EWQ $EWP $EWI $GLD $NUGT $EUFN $EEM

If you think U.S. stocks are too high, you are not alone. I have been getting questions from smart investors who ...

WEEKLY MARKET DIGEST: TRUMP RUNS STOCKS, OIL CRUSHED, OPPORTUNITY AND GOLD ON FRENCH ELECTION $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO $LBD $XOP

  Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights ...

GOLD NEW HIGH, 2 COMMON SENSE FACTS SHOW THAT SAFE HAVEN BETS POPULAR NOW MIGHT BE WRONG $SPY $GLD $SLV $TLT $FXY $GDX $GDXJ $NUGT

Investors are running headlong toward safe-haven assets. Gold, the ultimate safe haven, and bonds are in high demand. The most common ...

WEEKLY MARKET DIGEST: TRUMP INTERVENTION RUNS GOLD HIGHER AND STOCKS LOWER $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights ...

ASK ARORA: WHY CHINA SURRENDERED TO TRUMP WITHOUT USING ITS $1 TRILLION WEAPON $TBF $TBT $GLD $SLV $TLT $GDX $SPY $NUGT

For years I’ve received questions from investors about China’s $1 trillion-plus ownership of U.S. debt. After I wrote “Stocks will crash ...

PREDICTIONS FOR GOLD AND SILVER AFTER THE U.S. STRIKES SYRIA FOOLISHNESS OF THE MOMO CROWD $GLD $SLV $GDX $GDXJ

After the U. S. struck Syria with missiles, the momo crowd has been buying gold and silver aggressively.  I will ...

PREDICTIONS ON STOCKS, BONDS, GOLD AND OIL AFTER THE U.S. STRIKE ON SYRIA $SPY $DIA $QQQ $IWM $GLD $SLV $GDX $XLE $XOP $OIH $TLT $TBT $YCS $RSX

The U.S. on Thursday launched missile strikes against Syria in retaliation for chemical attacks on the Middle Eastern country’s own ...

WEEKLY MARKET DIGEST: IMPACT OF SYRIA AND CHINA ON STOCKS, GOLD, BONDS AND OIL; OPPORTUNITY IN RUSSIAN STOCKS $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

   Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying ...

TIME TO PROTECT THE PORTFOLIO, INITIATE OR ADD TO INVERSE NASDAQ ETF PSQ $PSQ $QQQ $VXX $QLD $QID

This post was published on ZYX Buy Change Alert. This is for those who think the market is too high and VXX is ...

STOCKS WILL CRASH IF TRUMP KEEPS HIS PROMISE IN HIS MEETING WITH CHINA’S XI $AAPL $AVGO $IBM $NKE $MMM $NVDA $SWKS $WYNN $UTX $YUMC $SPY $QQQ

The high-flying U.S. stock market will crash if President Trump keeps his promise of trade protectionism against China. Please note that ...

WEEKLY MARKET DIGEST: TRUMP XI SUMMIT THE NEXT MARKET MOVER, OIL HIGHER ON KUWAIT, SILVER BUYING $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

  Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights ...

ASK ARORA: PROFESSIONALS EATING MOM AND POP’S LUNCH AS DOW JUMPS 340 POINTS $VXX $XOP $IBB $DUST $NUGT $GDX $GDXJ $SLV $GLD $SPY

Many investors have seen their “stops” — orders to sell securities to protect from losses — triggered only to see ...

UPDATE ON GOLD MINER TRIPLE LEVERAGED ETF NUGT TRADE $NUGT $GOLD $SLV $DUST $GDX $GDXJ $GLD

This post was published on ZYX Buy Change Alert. Please note change in very, very short-term rating on gold and silver, please see ...

MARKET’S REAL PROBLEM IS OBAMA BUT TRUMP MIGHT STILL PREVAIL $UUP $NUGT $DUST $WFT $MU $BAC $JPM $FCX $XME $AKS $MT $X $CLF $JJC

The stock market’s real problem is Barack Obama. Let me explain: For eight years the Republicans were united in their dislike ...

UPDATE ON HEDGES, REVIEWED DAILY AFTER THE ORIGINAL PUBLICATION DATE $VXX $GLD $GDX $SPY

This post was just published on ZYX Buy Change Alert. Those who do not hedge and are using cash as their defense may ...

TRUMP PULLS HEALTHCARE BILL, PORTFOLIOS PROPERLY POSITIONED, REDUCE VERY SHORT-TERM HEDGES $GLD $SPY

This post was  published on ZYX Buy Change Alert. Trump has pulled the healthcare bill.  All our portfolios are properly positioned. Reduce very ...

INVITATION TO SHARE YOUR OPINION ON “WHEN WILL AMERICA’S DEBT RIDDEN HOUSE OF CARDS FALL?” $SPY $GLD $SLV #NATIONAL DEBT #USA DEBT

Greetings, We have been receiving a number of questions basically asking, "When will America's debt ridden house of cards fall?" We are ...

Follow

Get every new post delivered to your Inbox

Join other followers