The Story of Gold and Bitcoin: Bulls Make Money and Pigs Get Slaughtered - Mike Swanson (07/17/2017)

There is nothing wrong with being a bull in the stock market or a bear for that matter either.

Nothing at all in fact.

It's about seeing the trend and getting aligned with it.

But being a pig in a finanical market will eventually lead one to the slaughterhouse.

It's funny because when I started out trading in the 1990's the saying "bulls make money and pigs get slaughtered" was a really common phrase I would see on the internet stock trading message boards.

And now no one says it.

Today it seems like everyone wants to believe that the thing to do is throw all of your money into ETF's and just believe that they will go up forever so that phrase no longer fits with the spirit of the day.

But in the past few weeks we have seen SNAP IPO buyers get smashed and TSLA bulls who listened to "Fast Money" goons get burnt.

And today we are seeing the true pigs of the market and that is the Bitcoin bubble chasers of the past few months get vaporized.

Today Bitcoin is trading right on $2,000 after it went through the key $2,200 support level last week.

It's a disaster from its bubble top and it happened because people with no idea of the real worth of what they were buying (Bitcoin has no intrinsic value and the US Senate Intel Committee ordered the start of an investigation into it as a threat to the US nation state) and no game plan when they bought are now trapped with losses.

Big drops like you are seeing now in Bitcoin come after tops form that bring pigs into the market.

Now when it comes to investing in gold and gold stocks there are no pigs.

In fact the sentiment is the total opposite as two weeks ago the commitment of traders report showed that small fry traders who tend to be wrong at key moments went short 5,000 contracts!

The last time they did that was right as gold began to take off in January of 2016!

I don't care what DUST traders and the gold bears who keep calling for crashes say, because when this indicator turns up they will be ruined if they do not get out just as Bitcoin players are getting hit today.

Just take a look at the technical analysis chart of the GDX/GLD relative strength ratio:


When the leading GDX/GLD gold stock indicator breaks through this resistance downtrend line then the next bull run in gold and mining stocks will begin.

As far as the GDX gold stock ETF go resistance has come down thanks to the recent consolidation to around the $23.50 level.

And as for the stock market I'm worried about the valuations and patterns in many individual stocks, but I am not sure what is going to happen over the next few weeks.

The market might go up a little more here or it might stall out.

We'll see.

We live in very interesting times!

And keep your eyes on gold, because that is where the next big move up in something is likely to start.

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- Mike

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