This post was just published on ZYX Short Sell Change Alert.
Gold plunged through support at $1565 on really bad news from Greece. This shows that trading in gold is still in the hands of the momo crowd.
Long term investors tend to buy gold on bad news not sell. Clearly selling by the momo crowd is overwhelming buying by the long-term investors. Our data shows that momo crowd has incurred huge losses in gold and silver this year and now they are in the stage where panic may ensue. It panic ensues, $1450 is the next target.
The track record of the momo crowd is that they buy on good news and sell on bad news which is contrary to the behavior of long-term investors in gold. There has been a lot of bad news over the last 10 days. It is not unusual for streak of bad news to be broken by good news. If there is any good news, momo crowd will start buying gold again and can easily run gold up to $1620 area.
What To Do Now?
Those short in gold and have been taking partial profits as we have been recommending may stay short on the remaining position.
Those who are short and have not taken partial profits may take partial profits here in gold at $1560 or $151.49 in GLD.
Those who are not short gold at this time may wait for a signal on the Real Time Feed.
