Is Gold About To Crash?

“A trader’s job is to take losses. A losing trade doesn’t imply you did anything wrong. The hard part about trading is that you can do the right thing and still lose money. There is not a direct feedback loop that tells you, ‘good job.’ I only have control over the orders I place. I don’t have control over the outcome of trades.”  ~ Peter L. Brandt, via Unknown Market Wizards

Good morning!

In this week’s Dirty Dozen [CHART PACK]  we look at some fresh-off-the-press monthly charts, view oil from a number of angles, talk bitcoin and gold, and pitch the long case for a high growth tech stock with crowded shorts, plus more…

Let’s dive in.

***click charts to enlarge***

  1. Brent saw a strong close on the month. I’m bullish on oil’s long-term prospects but as I’ll show, it may be due for a bit of a pullback in the near-term.


  1. Brent’s spread from its 200-day moving average is at its widest point since 1999.


  1. Crude is also about to enter one of its weaker months from a seasonality perspective (note: March’s downside is skewed by last year’s fall).


  1. Though, longer-term, it’s supply and demand picture continues to improve. GS writes:

“Demand continues to accelerate the market rebalancing. The rally in oil prices this year remains driven by fundamentals, with a continued faster decline in inventories than even we expected (just like last month). This deficit remains driven by demand as we revise once again OECD demand levels higher as realized data in Europe, the US and Mexico for late 2020 exceeded our expectations (with EM demand for December comforting us in our recently raised forecasts). OPEC+ production in turn came below our expectations in January driven by sequentially lower exports from Saudi – even before its unilateral cut – as well as Nigeria, Angola and Kuwait.”


  1. The global vaccine rollout is picking up steam and driving the case count lower.


  1. The Greyscale Bitcoin Trust (GBTC) has traded at a premium to NAV for its entire history, until last week.


  1. This is a sign of souring investor enthusiasm which is confirmed by Sentix’s Bitcoin Sentiment Index.

Sentix writes “Bitcoin lost significant value over the course of the week. In the current sentix survey, we now measure a clearly gloomy sentiment, which is already close to a lower turning point. A stabilization is thus approaching. However, we have not yet measured a reversal in investors’ value perception. A rising value perception would be desirable for a trend reversal scenario.”


  1. Semis continue to be one of the strongest areas of the market and WDC is no exception. The stock looks near to completing a 6-year coiling wedge (you can read our bullish semi thesis here).


  1. Deutsche Bank (DB) just closed above its 50-month moving average (blue line) for the first time in 8-years. I think the most hated financial in the world is going to surprise a lot of people in the years ahead (we are long).


  1. We pitched Twitter in the Dozen back in August when it was trading sub $40 a share (link here). The stock has since doubled and is trading at new all-time highs. February’s large bull candle reflects a buying frenzy which means we may be nearing a local top but we’re still liking this as a longer-term play.


  1. Gold closed near its lows on the month but speculator positioning remains extremely long. That’s not a good look… Gold and PMs, in general, are susceptible to more downside in the weeks ahead.


  1. FuboTV Inc (FUBO) is wedging on a monthly, weekly, and daily basis. It’s in breakout mode on the monthly chart. The company has a hot product, is growing revenues at a fast clip, and has high short-interest. FUBO reports earnings this week. Keep an eye on this one…


Stay safe out there and keep your head on a swivel.

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Brandon Beylo

Value Investor

Brandon has been a professional investor focusing on value for over 13 years, spending his time in small to micro-cap companies, spin-offs, SPACs, and deep value liquidation situations. Over time, he’s developed a deeper understanding for what deep-value investing actually means, and refined his philosophy to include any business trading at a wild discount to what he thinks its worth in 3-5 years.

Brandon has a tenacious passion for investing, broad-based learning, and business. He previously worked for several leading investment firms before joining the team at Macro Ops. He lives by the famous Munger mantra of trying to get a little smarter each day.


Investing & Personal Finance

AK is the founder of Macro Ops and the host of Fallible.

He started out in corporate economics for a Fortune 50 company before moving to a long/short equity investment firm.

With Macro Ops focused primarily on institutional clients, AK moved to servicing new investors just starting their journey. He takes the professional research and education produced at Macro Ops and breaks it down for beginners. The goal is to help clients find the best solution for their investing needs through effective education.

Tyler Kling

Volatility & Options Trader

Former trade desk manager at $100+ million family office where he oversaw multiple traders and helped develop cutting edge quantitative strategies in the derivatives market.

He worked as a consultant to the family office’s in-house fund of funds in the areas of portfolio manager evaluation and capital allocation.

Certified in Quantitative Finance from the Fitch Learning Center in London, England where he studied under famous quants such as Paul Wilmott.

Alex Barrow

Macro Trader

Founder and head macro trader at Macro Ops. Alex joined the US Marine Corps on his 18th birthday just one month after the 9/11 terrorist attacks. He subsequently spent a decade in the military. Serving in various capacities from scout sniper to interrogator and counterintelligence specialist. Following his military service, he worked as a contract intelligence professional for a number of US agencies (from the DIA to FBI) with a focus on counterintelligence and terrorist financing. He also spent time consulting for a tech company that specialized in building analytic software for finance and intelligence analysis.

After leaving the field of intelligence he went to work at a global macro hedge fund. He’s been professionally involved in markets since 2005, has consulted with a number of the leading names in the hedge fund space, and now manages his own family office while running Macro Ops. He’s published over 300 white papers on complex financial and macroeconomic topics, writes regularly about investment/market trends, and frequently speaks at conferences on trading and investing.

Macro Ops is a market research firm geared toward professional and experienced retail traders and investors. Macro Ops’ research has been featured in Forbes, Marketwatch, Business Insider, and Real Vision as well as a number of other leading publications.

You can find out more about Alex on his LinkedIn account here and also find him on Twitter where he frequently shares his market research.