Gold Accumulation and Bull Markets
Trader Scott’s Market Blog
October 23, 2016
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Contrary to common wisdom, the public is actually right much of the time. It’s at the big turning points where the public/weak hands goes wrong in a big way. And it’s the strong handswho “make them do it”. The strong hands/”manipulators” get the weak hands in a frenzy by allowing and also creating very “bullish” conditions which seemingly are taking over. So naturally what does one do when the conditions are “bullish”. Well, of course, we buy – that just makes sense – right? One problem though – markets rarely make sense, at least as far as common wisdom goes regarding markets. When I started in markets, they never made sense to me – they seemed to usually be doing what they “shouldn’t” be doing. And today they often still don’t make “sense” to me, it’s just that now, I’ve learned to wait patiently and to pick my spots to enter when they do make “sense” to me. And as to gold currently on a very big picture, we are in a massive area of accumulation concurrent with the beginning stages of a new bull market. This phase of the bull market began at $1043 gold last December, and I gave my first ( investment basis) buy recommendation in 7 years, with the focus on the miners.But it’s a weird situation currently, where you have the strong hands attempting to finish up most of their buying, while at the same time the overall supply/demand situation is very bullish and the line of least resistance naturally wants to go up. So you have the strong hands trying to rein gold in, but the supply/demand forcing it up. It’s why these situations are very volatile. But use these situations as a buying opportunity when the strong hands allow the shorter term distribution to take hold, and thus make it easier to force the market back down again. So I took my own advice to buy, when gold went below $1250 a few Fridays ago. In other words, it made “sense” for me to buy it there. Even though the lower levels (marked on the chart) make even more “sense”. But in a bull market, what makes the most “sense” often does not materialize. And when the market does get into a full fledged bull market, it will be very tough to buy. My belief is the $1435 area is the area where we’ll start seeing that.
About
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day.Scott returned to markets over fifteen years ago where he continues as an independent trader.
'Trader Scott’s Market Blog – Gold Accumulation and Bull Markets -October 23, 2016' have 5 comments
October 23, 2016 @ 9:31 pm Randal Magnuson
On the note strong hands(manipulators)…In watching an interview with munger(?) berkshire hathaway guy on coka-cola, he spoke about how they accumulated 30% of the daily volume of the stocks traded in that company for months. Nice example of how strong hands engage in calculated campaigns to execute their outcomes over extended periods of time. Good lesson to learn from. Seeing the opportunity, picking your price and allocation and then executing…
October 24, 2016 @ 11:58 am traderscott
They trade in such huge size, so that they always leave their footprints Randal. We need to learn to recognize when they are working their “magic”.
October 24, 2016 @ 10:01 pm David Parker
You have talked about liquidity flow which I agree can be quite nuanced and tricky. Personally I struggle with interpreting volume in deciding whether the strong hands are accumulating or distributing so I have to mostly rely on price, various indicators to decipher oversold/overbought conditions, and the support/resistance areas for my entries and exits. You have talked at length about all these topics at length in your earlier posts and a lot of what you say does make a lot of sense.
There is something else you talk about frequently but don’t go into a lot of detail. TIME. How do you ‘know’ when a particular stock or commodity is likely to bottom? If Gold topped in 2011 it seems from your earlier missives that you had some idea that it isn’t likely to bottom until late 2015? How could you know that? You have also hinted that you expect PMs to bottom sometime next month? Do you also do cycle analysis work on top of using the wcykoff’s method for your entries and exits?
thanks in advance.
October 24, 2016 @ 4:55 pm David Parker
You have talked about liquidity flow which I agree can be quite nuanced and tricky. Personally I struggle with interpreting volume in deciding whether the strong hands are accumulating or distributing so I have to mostly rely on price, various indicators to decipher oversold/overbought conditions, and the support/resistance areas for my entries and exits. You have talked at length about all these topics at length in your earlier posts and a lot of what you say does make a lot of sense.
There is something else you talk about frequently but don’t go into a lot of detail. TIME. How do you ‘know’ when a particular stock or commodity is likely to bottom? If Gold topped in 2011 it seems from your earlier missives that you had some idea that it isn’t likely to bottom until late 2015? How could you know that? You have also hinted that you expect PMs to bottom sometime next month? Do you also do cycle analysis work on top of using the wcykoff’s method for your entries and exits?
thanks in advance.
October 24, 2016 @ 8:06 pm David Parker
You have talked about liquidity flow which I agree can be quite nuanced and tricky. Personally I struggle with interpreting volume in deciding whether the strong hands are accumulating or distributing so I have to mostly rely on price, various indicators to decipher oversold/overbought conditions, and the support/resistance areas for my entries and exits. You have talked at length about all these topics at length in your earlier posts and a lot of what you say does make a lot of sense.
There is something else you talk about frequently but don’t go into a lot of detail. TIME. How do you ‘know’ when a particular stock or commodity is likely to bottom? If Gold topped in 2011 it seems from your earlier missives that you had some idea that it isn’t likely to bottom until late 2015? How could you know that? You have also hinted that you expect PMs to bottom sometime next month? Do you also do cycle analysis work on top of using the wcykoff’s method for your entries and exits?
thanks in advance.