Why July 24 Will Be A Massive Turning Point for Gold & Oil Prices – Bubba Horwitz

Key Concepts

• Put-Call Skew: A measure of the difference in implied volatility between out-of-the-money puts and calls; extreme levels often indicate market sentiment shifts.
• Parabolic Correction: A market phenomenon where an asset rises sharply in a straight line, typically followed by a significant retracement (often 50%).
• 24/7 Market Trading: The transition of financial exchanges to round-the-clock operations to accommodate global time zones and increase exchange profitability.
• Hawkish Fed: A monetary policy stance characterized by a preference for higher interest rates to combat inflation.
• Micro-Contracts: Smaller-sized derivative contracts (e.g., 1-ounce gold, 10-barrel crude) designed to increase accessibility and liquidity.

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1. Market Sentiment and Gold Volatility

The discussion centers on the recent pressure on gold, which has seen a decline from over $5,500 to approximately $4,000.

• Bearish Put Activity: There is significant volume in GLD (SPDR Gold Shares) put options, with over $130 million in premiums on deep out-of-the-money (OTM) strikes.
• Bubba Horvitz’s Perspective: Horvitz argues that this activity is not necessarily a signal of a total breakdown, but rather a sign of "panic hedging." Investors holding long positions are overpaying for downside protection. He notes, "When you get this much open interest at these prices... the boat is loading up on one side. And who’s going to be left to sell the gold?"
• The "Tonsils" Theory: Horvitz references an old floor-trading adage: "When you can see their tonsils, give them whatever they want. They’re wrong." He believes the current panic selling by the masses suggests a bottom is near.

2. The "July 4th Reset" and Monetary Policy

The video addresses rumors regarding a potential "July 4th reset" involving gold-backed 50-year Treasury bonds, a concept championed by Judy Shelton.

• Expert Stance: Horvitz dismisses the "reset" theory as "nonsense" and "noise." He argues that a true monetary shift cannot be forced by a government button-press; rather, the value of gold must be determined by the free market.
• Fed Policy: Horvitz maintains that the Federal Reserve will continue to hike rates unless a major economic catastrophe occurs. He highlights that the Fed is finally being forced to acknowledge market realities, as the 10-year note yields are rising despite previous manipulation.

3. Evolution of Market Infrastructure

A significant shift is occurring in how financial markets operate:

• 24/7 Trading: Starting July 24th–26th, the CME will introduce new micro-contracts for gold and crude oil that trade 24/7.
• Timeline: Horvitz confirms that equity and option markets are moving to a 24/5 schedule by September, with a full 24/7 transition expected by the end of the year.
• Impact: While this increases profitability for exchanges, Horvitz notes it "spreads out the volatility," making it harder for traders to manage positions, though it may smooth out the sharp "Monday morning" sell-offs caused by weekend news cycles.

4. Historical Commodity Cycles

The conversation references Jim Rogers and Jim Rickards regarding commodity behavior.

• The 50% Correction Rule: The consensus is that commodities which rise parabolically historically correct by 50% before resuming their upward trend.
• Long-term Outlook: Despite the current "painful" decline, Horvitz remains bullish on gold for the long term. He emphasizes that gold is a hard asset, not a company that can go out of business, and advises that for investors with stable capital, current levels represent a buying opportunity.

5. Synthesis and Conclusion

The main takeaway is that the current gold market is experiencing a classic "overdone" correction following a parabolic move. While the media focuses on a "hawkish Fed" and panic-driven put buying, experienced traders view this as a temporary psychological capitulation by the masses. The market is simultaneously undergoing a structural shift toward 24/7 global trading, which will fundamentally change how volatility is processed. Horvitz concludes that while the short-term price action is difficult to watch, the long-term thesis for gold remains intact, provided investors maintain a long-term horizon and avoid over-leveraging.