Back In the Ring
The IMC blog reentered a hypothetical short position in the December gold/crude (x3) spread at -$14,430 (premium crude) on July 13th. Initially, the exit strategy is to liquidate the spread on a two-day close above -$5,480 (premium crude), which is $500 above the three-month high that was posted on July 7th.
The spread was reentered when it closed back below the 100-day Moving Average. This may have signaled that the recent run was a bear market rally and that it has reached its conclusion.
If we got it right, then a new leg lower should be forthcoming. A break below the June 8th low of -$32,950 would confirm it. If that happens, we will be looking for a place to add to the short position. After all, our minimum downside target for the gold/crude (x3) is -$78,000 and we could even see it head for -$148,000 (premium crude). This could prove to be a lucrative opportunity.