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Gold's Wyckoff Price Road Map

Date: Friday, August 24, 2018 7:56 PM EDT

Applying Richard Wyckoff and Richard Ney logic. 

Question: Is there evidence to suggest an accumulation within gold?

First, we must understand gold is controlled large positions of futures longs, futures shorts, futures calls buy and sell, futures puts buy and sells. Each of these will be large and must be positioned before a powerful move higher or lower can occur.

1) The sharp sell-off during 2013/14/15 allowed the shorts to profit, short covering occurred late 2015/16/17. The short trade from 2011 high is done! This is good news for bulls as these positions are mostly cleared.

2) The two very sharp sell-offs in 2016 and 2018 (from $130 to $110) allowed large professionals to accumulate futures longs positions during a downswing. This is important as the professionals do not want to build a position when the price is making new highs, well they can but the average cost basis will be poor plus they would have to compete with unwanted public demand. Professionals use bad news to buy from the weak hands. Plus these sharp sell-offs are well timed to benefit from futures options trades, nice! Buying gold using cash secured puts is good business.

3) Early 2018 the gold price did not make a new high (ie MSOS), it was held under $130. Therefore gold did not create break out news headlines in the media which would have attracted the public masses. The informed do not want the public to build up a position, they wish to do this for themselves. New 5 year highs attract the public and professionals do not want this yet. The public is used to build positions against or move price to a target cheaply.

4) The opposite to (3), if the professionals really wanted to build up a large futures gold short position it would have been very beneficial to get to gold break out to at least $145 early 2018 to attract the uninformed public masses, thus allowing the professionals to take the other side and crushing the public long positions when price fell.

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