The only reason I can think of is that everyone already owns gold and there are too many gold commercials on TV and Radio. Other than that…..have at it!

On the same subject, I saw Kudlow tear apart poor little Diaana Olick (One of the better CNBC hacks IMHO) for daring to point Sir Lawrence in the direction of understanding seasonality. The ensuing tirade was embarassing to say the least. You would think that, as an economist (Reportedly) would understand seasonality? Of course, he probably does but it doesn’t suit his Agenda?
Does anyone still take this clown seriously?

That is an interesting thought. Fwiw I’m real bearish on gold. Maybe not as bearish as AT but 680 looks like the next major stop for gold.

Thanks for the post. it almost seems to easy to call and end to this current downtrend at 880. Everyone is watching that number. I thought Art Cashin (spelling?) made a smart comment today saying that the market will probably fool everyone and go down more than that before the final push up. In any event, you might be able to squeeze out some more money from SDS. Then again, I’m the one that said just yesterday it’s best to take your profits and get out of dodge on the ultra’s.

Good luck to you.

The main thing on my mind is that the US National Team has a great R/R at kicking the snot out of Spain tomorrow. What can I say? I love being an underdog. Finals baby, finals.

Second-

After adding to FAZ, SRS, QID, and SDS today…
I might be looking to close those positions if we get a cliff dive down to 880 on SPX tomorrow and bounce.

Note that in the spirit of good R/R, a close of the Ultrashort positions at support levels isnt necessarily a statement on the trend breakdown, but moreso an effort to reduce risk. I would like to see a bounce at these levels tomorrow, another lower high take shape, and then re-enter shorts again for the next wave down, should it occur. There is always the risk that the old Admin will come out and say something ridiculous to send the markets up well, ridiculously. Just below support would be a great place for them to do something like that.

The H&S top that looks to be in play on SPX is what got me thinking on this strategy. Since I have been short from the top, might as well cover at 880, expect a bounce up to 915-920ish, and then give em hell. That way, at least I know my boundary on the upside. 956 feels like a long way from here to ride a short position.

Here’s my tentative support levels for the Ultrashorts I have in play…

QID- Close position @ Q’s 34.

SDS- Close position @ SPX 880

SRS- Close position @ IYR 30

FAZ- Close position @ XLF 10.75

Re-enter short positions at the exhaustion of the bounce off of those support levels.

Of course, if we blow through those levels and dont look back, this strategy is likely out the window… but given the resiliency of this rally to date- I highly doubt that there wont be a bounce off those levels. Too many dip buyers still in the house.