The Motley Fool Discussion Boards
Investment Analysis Clubs / Liquid Lounge
|Subject: Re: Gold - Updated TA||Date: 6/15/2012 8:31 PM|
|Author: MDCigan||Number: 41111 of 41316|
Did you get stopped out of your trade?
Yes, I got stopped out 6/8 on the second short trade for about a $15 per ounce loss after making about $63 per ounce on the first short trade. I had another shot to cover at 1535ish, but the window was brief and I forgot to put a limit order in. Anyways, the daily price action had started improving in my view, and the candle on 6/8 with the long tail indicated to me to get the heck out of the short.
Actually, on a short-term trading basis, I went long yesterday at 1624. I'm looking for at least a test of the declining 200 DMA where I would be inclined to liquidate the long and flip back short again.
On a longer-term basis, the price action the last 20-25 trading days indicates to me that my initial thought of a much deeper correction is probably wrong, and that most likely gold has formed a triple bottom at 1525-1535 (Sep, Dec, May) and the May is actually a triple bottom itself. The way I see things is gold had every opportunity to just blow through 1525-1535 and it DID NOT. That is very telling in and of itself.
If you recall in one of my previous comments, I did mention one thing working against the notion of a big cecline was that gold sentiment was already excessively bearish. I haven't seen the most recent figures, but my sense is the consensus view is the bull market in gold ended in September 2011 at 1900. From a contrarian standpoint, that means it probably hasn't.
From a psychological standpoint and sort of that Soro's reflexivity concept, if and when gold finally takes out 2000, I suspect you could see a tidal shift. Every time gold makes a new secular peak, I think more people jump on the long-term bull market bandwagon when it becomes clear the drop was just another correction. There are still alot of empty seats. It still isn't a crowded trade especially at the big money institutional level. When the pension fund consultants finally capitulate and say every pension fund should have 10% in gold, we will know we are closer to the ultimate peak.
On a shorter to intermediate-term basis there are 3 huge overhead resistance levels that need to get taken out decisively before I'd think a major upleg was in force. You've got the declining 150 DMA, the declining 200 DMA, and the trendline that connects the 1900 and 1800 tops. That trendline currently intersects at 1710 while the 150 and 200 DMA are 1675 and 1659. Ideally, those would get taken out and then some consolidation with still negative sentiment. That would be my trigger to load the boat, and probably switch from trading 1 mini contract, to being long 2 full sized contracts.
In terms of the fundamental factors driving the recent price action, I suspect the market is beginning to anticipate and price in some type of upcoming central bank policy measures. I think for a moment there, the markets including the gold market was actually believing the BS that central banks could sit back and do nothing. Ultimately, there is no answer to the debt problems except print more money. Not sure what the next fancy name for it will be.
|Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|