You know, something interesting I noticed about market moves...it seems when a big move up goes 'parabolic' at the end of the rally...in other words, the moves are biggest at the end, and the market is way overbought, they seem to almost always crash, even lower than many days of upwards movement preceding the crash...
I think this is directly related to the '7-10' day rule where if a market has higher highs and higher lows 7-10 days in a row and then reverses eventually to lower than the low of last day of this rally, it is a strong sell signal...abnormally strong even...
A healthy bull market seems to maintain itself, stair-stepping up in a regular fashion, with regular pullbacks to avoid extreme overbought conditions...but a parabolic move higher (with that tell-tale signature curvature) seems to spell death at the end.
You remember this parabolic move twice with the big silver rally to $50? once at the end and then again around $42? both times the charts looked parabolic and then silver dropped like $15 within a few short days of the signal triggering...I traded these and made enormous money albeit I was not patient and took profits too early...
The last time I just missed making over a quarter of a million dollars from options that totaled about $1800 just a week earlier (the options were WAY out of the money and only a week from expiration)...I bailed with a 'measly' 30 grand or so just because I was a bit early lol! But I was distracted as I was breaking up with my first fiancee in Russia and was finding my way back home earlier than I had planned... alone in the heart of Russia and in the middle of my travels so it was very bad timing...
This is a crazy story...lol...one of many during a crazy time for me...I need to write a book, or at least a short story about these times...
Anyways this gold chart looks and feels just like those times again...
Either it will be $1000 or $1500+ in a month. Nothing in between.
I can't help but wonder if the big boys gave it a little 'push' to go parabolic so it will hammer down hard...and test that pesky 1000 level finally...
Way out of the money puts were cheap today....
