Gold poised for a major correction. GET OUT NOW !

Written by Sam Chee Kong, Malaysia Chronicle

As we learn from Japan, owners of physical Gold in all forms are aggressively liquidating. From "Tokyo struggles to keep pace with gold rush" by L. Whipp from Financial Times, 20 August,

"Japanese families are rushing to sell gold jewelry, sake cups and even teeth to cash in on surging gold prices. The stampede to sell gold is so intense that shops buying the precious metal are struggling to cope and are even having to turn some disappointed customers away."

"In the past week, Goldplaza, which buys and melts down gold for resale, has been handling about Y100m($1.32m) of gold every day - about 15 times its daily average in July. The craze began in earnest on August 11 . . ." [Emphasis added.]

From strong hands to weak hands

As we have mentioned before, gold just went parabolic. Its price is going through the roof and NOW it is the RISKIEST TIME to hold Gold. Anything that goes up Parabolic will end in crashes and this time there will be pain in the streets.

When markets are approaching the end of a run, there is always transfer of ownership from smart money (investors) to speculators or rather strong hands to weak hands. This is the time, the masses are loading up on gold, while the smart money starts liquidating.

Gold is EXTREMELY overbought in almost all technical indicators like RSI, MACD, Stochastic, Moving Averages, Money Flow and many more.

On the Elliot wave, gold is now trading on the final phase of the 5th wave which began 2 years ago with prices way above the 200 day MA. So the odds of it going any higher is extremely slim AT THE MOMENT.

Buy back later

It seems like Gold is now the main topic of discussion be it in parties, wet markets, radio stations, mainstream media and even banks are capitalizing on this craze by offering gold plated banknotes and Ching Dynasty gold coins.

Volume on the options on gold futures is extremely high on the CME. Record open interest for options on gold futures in the CME hit a high of 126 million ounces. This shows that there is indeed a massive speculative bid on the gold futures. When Volume surge towards the end of a run, it means the masses are getting in late and almost at the top of the trend.

My suggestion is GET OUT NOW! You can always buy back lower when the dust settles !