This post was just published on ZYX Short Sell Change Alert
Option players are flocking to making bullish bets on gold. Now bullish bets on gold by option players are near a four-year high.
BUllish bets at extremes are negative. However, gold has been under the control of momo crowd for less than two years and historical options data during this two-year period is does not provide enough data to draw and firm conclusions.
In our analysis historical data on gold options prior to the last two years is useless because control of gold market by the momo crowd has changed the character of the gold market over the past two years.
Smart Money was aggressively selling gold yesterday and is continuing its selling today.
Interestingly momo crowd was a big buyer yesterday.
Bernanke speech in Jackson Hole on Friday can move gold substantially in either direction. For this reason, we are changing our rating on gold in the very, very short-term to neutral but keeping very short-term rating to neutral with a negative bias.
Subscribers may recall that our rating on gold was neutral with a positive bias for the very, very short-term and neutral with a negative bias for the very short-term. Please see Trade Management Guidelines for definition of time frames.
The previous rating has been spot on. Gold went up and is now falling.
When you see a rating with a negate or positive bias as opposed to a buy or sell, it means it is an opportunity for accomplished short-term traders and is not an investment opportunity for conservative investors.
When there are medium-term opportunities for investors or short-term opportunities that do not carry excessive risk, then you see buy or sell ratings.
Subscribers may also notice that we recently officially initiated a short trade on silver in ZYX Short Sell Change Alert.
