Wednesday, August 14, 2013
Gold Shares - Big Technical Juncture
A quick update on the mining shares - The strong performance on Wednesday has set them up for a real shot at beginning a trending move to the upside. They are right at the top of the range that has been containing them for a while now. Just like Silver was knocking on the door of the $20.50 level prior to its nice move above $22, the shares are at a technical juncture. If the bulls can hold firm tomorrow (Thursday) they have a real chance at flushing a fair number of short sellers out of this sector.
"So base on your study, if gold fell below 1280 is a sell and only buy if the price above 1350"
ReplyDeleteHi Preditor, I wish it were that simple, but it is not.
That's why I wrote I'd be a bit less active on the blog, because starting to describe precisely trading decisions and updates can take a long time.
In trading, buying / selling = taking a position must be considered imho with a defined strategy of target, stop loss, and confirmed by additional indicators than only the price. That's also, as Dan mentioned very recently, a question of "feel", and this is even harder to translate.
About gold specifically, Dan mentioned volumes not long ago. I'm not very good at reading them, but on a 2 hours chart below, it seems that volumes on the way down were stronger than on the way up, which is not really confirming yet that we are going to cross 1350 successfully. Please correct me if I misinterpret.
http://s15.postimg.org/p7qc1989n/gld.jpg
Also, on the same time unit, we may have the beginning of a divergence on the MACD, (if it keeps turning down), which is also not a great omen for bulls.
http://s22.postimg.org/5rm8rfh1d/gld.jpg
This means you may break intraday the 1350 $ only to revert back down.
If I were to buy stop above 1350, I think I'd put a stop loss not far below and follow the price action constantly. If I get stopped and prices attack 1350 again, I'd probably get back in the train again.
Also, a buy stop I would put during the open hours.
OVN, it's a bit tricky : market also tends to jump over obstacles with an opening gap. So gold may close just under 1348, and open the day after 1370. Risky to keep a stop OVN then.
Another strategy, if gold doesn't succeed through 1350 this time, is to try to buy close to the mlh inf of the upwards pitchfork near 1300 $, always for the same reasons : to try to have a very good risk / reward ratio every time you decide to enter the market.
It's like in poker : better raise preflop with a high pair than with 72 :)
Finally, the resistance of 1350 $ being identified on a daily time unit, I'll try to find confirmation of the uptrend on a smaller time unit, like the 2 hour candle chart I posted.
Things are rarely simple, unfortunately :)
Of course I don't know if that's the way Dan would trade or any other trader. Trading is a solitary experience and one must find the best way to trade, corresponding to one's own psychology. Your worst enemy is often...yourself.
P.S :
Delete- entering the market dépends also on your time horizon. Is it intraday? Swing? A few months?
Personally, my most common trades are on a swing, i.e a few days to a few weeks max to get in then out.
- the resistance I see now is an area starting at 1348 and extending up to 1360 $. If we break through it, my initial target is around 1470 $.
- contrary to silver, where I saw a probable acceleration of volatility due to a squeeze in the bollinger bands, we didn't have such a nice squeeze in gold.
Once more, intraday, one has to watch carefully the price action within the 1348-1360 area.
Hi hubert,
Deletethank for you time.
one thing a agree with you is "Your worst enemy is often...yourself."
Appeciated.
cheer
Hubert,
ReplyDeleteYou certainly are a "short term trader" that must have ALSO have the bug. I say this only because you have are here. You also have quoted Jim and appreciate his long term outlook. I came here 4-5 years ago after finding Jim and appreciating some of his views. Since then the bug bit me and I have been unable to break the fever. You and Dan are very pragmatic. I like the long term view and have learned that trying to guage these intradays will KILL ME. Too much firepower out there. Dan is equipped and you appear to be too. I would rather stay focused on the long term, and let some of his favorite bloggers show me the way by varying my cash outlays. I really appreciate your diligence. Maybe one day I will have the time, patience to jump in as I probably have the aptitude, but the patience for detail is something that can become overwhelming. I think Preditor has a similar predisposition. Looks like the Time Pendulum is nearing. But I am always looking at the exit nowadays as well as other commodities that may become very excited as well. Oil could get very interesting as well and there is a bit of "conflict" out there that could make it a fence clearer.
Thanks again all.
Hi White Wolf,
DeleteWell I'm focusing on gold now especially because I think that we are at a crossroad also for longer time units.
I don't want to be caught off guard buying a lot of gold just when the market is going to reverse.
But I don't want to stay out of the train if it keeps going up :)
And I'm planning to accumulate a bit more on the long-term.
So yes, I'm monitoring a lot the price variations right now because I have the feeling that 1350 is an important level for gold.
Anyhow, I liked T.A before I came to focus on MPs for safety reasons. Since then, I'm glad to focus on it, so yes, you can probably call me a "bug", though I'm still having a real life aside of it :)
Most important is outside gold prices and daily candles ;)
Long-term, I'm convinced we won't have to regret having bought gold at around 1300 $ in a few years from now.
Thanks for your posts,
I think you meant PM (Precious Metals vs. Military Police MP's, but then again, maybe you have a few of them you will need for safety reasons. LMBO (laughing my butt off!!)
ReplyDeleteTo me intraday volumes can be very misleading, then again,to me, the whole world can be VERY MISLEADING.
Perfect example of Misleading Headlines!!
ReplyDeletehttp://blogs.barrons.com/focusonfunds/2013/08/15/soros-2q-load-up-on-apple-drop-gold-and-miners/#comment-258735
Seems like he is dropping his positions in the overly leveraged and undeliverable GLD ETF's and into the gold in the ground when the undeliverable ETF problem becomes REAL.
SEE THE HEADLINE? I mean this is what I despise.
Gold just exploded through 1350. Finally. What is driving it?
ReplyDeleteInteresting:
ReplyDeleteDOW down 200+ and gold shares UP. This is the second time in as many days that this is happening.
Are we finally seeing the disconnect between the DOW and the gold equities?
White Wolf, you are right about all these misleading HEADLINES but imho, we are close to a big change on this front... Egypt crisis with:
+ the risk of higher tension in the area could increase the risk of higher oil prices (read inflation in an already weak world economy).
+ The possible increased risk of hostilities between Israel and Iran due to weakness of the Hezbollah Hamas and Syria and the strong desire of Saudi Arabia to get rid of both The Muslim Brotherhood and IRAN's Islamic leaders.
As I said before, this is sad because we never know how this will end, BUT it is definitely positive for gold.
Lastly, everyone knows how bad higher interest rates are for the Western world. So we should ask ourselves if the FED is really, really in control or if we are seeing the beginning of the end of the United States of America?
I have said many times here that the charts have no value when the market in manipulated or when fundamentals are forgotten. It is my opinion that we are witnessing a huge change on these fronts.
Hubert,
ReplyDeleteThanks for your charting. I think I am gonna go short Gold and short oil now. LOL
I think that is what my country wants me to do. Go broke.