November 21, 2013 | By Tekoa Da Silva
Following a day in which ‘taper-talk’ forced gold through the downside level of $1251, recent interview guest and technical gold trader Gary Savage shared some interesting commentary Wednesday night to subscribers.
As a recap, Gary articulated a market thesis here last week, in which he stated that gold appears primed for a short-term crash to the $1000 level.
While just a thesis of possibility, Gary notes that small signs in the gold market suggest another round of short positions have been built, which will profit wildly from an overnight smash. Whether or not that occurs remains to be seen. Following this potential smash, Gary expects a near-immediate run to the $1500 level and beyond, as hedge fund managers flip short positions to the long side.
Commenting towards trading action on Wednesday night, Gary noted that:
“The manipulation is still alive and active in the market. I’ll say it again, they didn’t come this far to just give up. Now that gold has broken through $1251… the odds are very high that we are going to see a full test of the $1179-$1200 zone sometime in the next 5-6 days.
Once that happens the gold market will be set up for a final manipulation to break the June low and trigger all the stops below that level. It will almost certainly come premarket just like it did this morning. Maybe even in the middle of the night so traders wake up to massive losses. This would cause the selling to cascade into a waterfall crash.
I know there are a lot of traders and analysts who think we can’t see a move that big that quick but I’m telling you the manipulation is setting the gold market up for exactly that:
(click to enlarge)
This has been a large and very lengthy consolidation. If it is broken on the downside the selling pressure is going to be huge.”
To review Gary’s short-term crash thesis in its entirety, his last interview is available by clicking: HERE
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Tekoa Da Silva
Bull Market Thinking