December 18, 2018 - Institutional Market Observations
Christmas is fast approaching and as it does it seems the #institutions are allowing the markets to settle. Most of the year we watched as they amassed large positions and then drove price to their target areas. This took most of the year to accomplish and while the vast majority of traders and trading firms performed poorly this year, the institutions did very well as we have been able to see with their recent profit taking.
So let's examine what took place this year and what will likely take place in the years to come as a result.
Gold ~ when examining what gold has done this past year we can see that leading up to it the institutions were accumulating a large long position in the 2017's right up until January of 2018 at which time they started taking profits on those positions.
Then in the summer of this year they began building a strong short position which they have been recently closing and taking profits on. As they are closing these shorts they have also continued to reduce their long positions.
This leads me to believe that they don't have intentions to push gold much higher than earlier this year, at least at this point. Previously, we've seen shorts at record breaking highs but longs were also at large size so what becomes a likely scenario playing out here is this:
The institutions are looking to build a large short position without the massive size they hold on longs. likely to push the price of #gold down to the 950's over time. A rally to the 1300's is likely where they want to push price to now in order to offload the rest of their long positions for profits. The the big drop!
If this plays out as suggested it would help cause a massive move higher in the #dollar which is what we are expecting. The dollar up to the 106's is our forecast. This now only leads us to wait for the move higher to produce itself on #gold. So far, price action is playing out very much aligned with this thesis. Let's see if it continues into the new year!
Kevin Araujo aka Magic Trader