In response to the comment on why we are short gold, the point of this blog is to be ahead of the crowd. Long gold is a crowded trade with lots of late comers to the paty. Our proprietary fund flow indicators are once again negative indicating that the smart money is selling into the strength. With the exception of the technical screen, all other screens of the ZYX Change Method are negative.
In our earlier post, we cautioned about hilding the short position overnight due to high gap risk. Lately prices in the elecrtonic trading after the floor trading closes have had a very high correlation to the next day g higher gap openings. Based on the price action after the close, the risk of higher gap tomorrrow is less than we originally thought. Aggressive accounts may consider staying short overnight in anticipation of a lower gap opening.
