Okay, so everybody thinks the world is about to end. Everybody and their cousin thinks the stock market is going to crash tomorrow. If you were a contrarian this would be a big signal in itself to do the opposite but that would be a silly thing to do as a professional investor. Now, I have reasons to believe why Gold is more likely to go down to $1,000 than climb past $1,300. I'm sure a lot of people would disagree with this analysis and maybe I'm wrong but we are just talking about probabilities here based on circumstantial evidence.
We are a long way from the next financial crisis despite what all the doomsayers on Youtube might have you believe. If you have been following the Fed's policies for the past few years, that would be enough to conclude what exactly is going on. They pursued an aggresive QT policy thinking the stock market was strong enough and the credit economy was ready for tightening. However, Trump refused to be bullied and started a trade war with China which resulted in the Fed backing off. Right now, it seems like the Fed's next course of action is to do nothing, but that is only temporary. They are going towards quantitative easing, quite soon. There is no other way.
If you have been following the S&P 500 for the past few years, you would know that we have never seen this kind of uncertainty before. I don't know about you but I got into trading after the financial crisis of 2007-08. You could have made money buying pretty much anything which made a lot of people too confident and in time they learnt their lessons. Now we have reached a point where everybody thinks the market has gone too far and it has got to correct NOW! Well, if it were that simple, everybody with a computer would be a millionaire now.
Just because the market has become over heated does not mean that there is no room for further rallies. In fact, let me tell you why I think we are going to see another rally. Everybody thinks the stock market is due for a correction. So, the bar is very low! The moment the stock market makes a few big moves to the upside, everybody is going to start buying again and act like the market is in good condition again. This coupled with the rising interest in cryptocurrencies especially Bitcoin (Gold 2.0) leads me to believe that we might see Gold at $1000 by 2020.
We are a long way from the next financial crisis despite what all the doomsayers on Youtube might have you believe. If you have been following the Fed's policies for the past few years, that would be enough to conclude what exactly is going on. They pursued an aggresive QT policy thinking the stock market was strong enough and the credit economy was ready for tightening. However, Trump refused to be bullied and started a trade war with China which resulted in the Fed backing off. Right now, it seems like the Fed's next course of action is to do nothing, but that is only temporary. They are going towards quantitative easing, quite soon. There is no other way.
If you have been following the S&P 500 for the past few years, you would know that we have never seen this kind of uncertainty before. I don't know about you but I got into trading after the financial crisis of 2007-08. You could have made money buying pretty much anything which made a lot of people too confident and in time they learnt their lessons. Now we have reached a point where everybody thinks the market has gone too far and it has got to correct NOW! Well, if it were that simple, everybody with a computer would be a millionaire now.
Just because the market has become over heated does not mean that there is no room for further rallies. In fact, let me tell you why I think we are going to see another rally. Everybody thinks the stock market is due for a correction. So, the bar is very low! The moment the stock market makes a few big moves to the upside, everybody is going to start buying again and act like the market is in good condition again. This coupled with the rising interest in cryptocurrencies especially Bitcoin (Gold 2.0) leads me to believe that we might see Gold at $1000 by 2020.
Order cancelled
Trade closed manually
Comment:
This idea was invalidated soon as the price broke the descending channel. We entered this trade afterwards:
