Things to like
1) a series of higher lows
2) the trendline of lower highs has been penetrated
Things to see for confirmation
1) any pullback is bought
2) price prints over October 2008's highs, signaling the end of "lower highs"
This was what the chart looked like at the time
Now?
Without benefit of the orange line - you can see condition #1 has been fulfilled - we "backfilled", tested the area we broke out of and people were eager to buy. On that, an aggressive trader would be buying. A reader mentioned this outcome yesterday.For someone more conservative in orientation you want to see #2 "a price point over October 2008's highs" - then we end our half year of lower highs. We are withing spitting distance here with GLD @ $91.40 and the October intraday high at $92.
It's hard to get behind gold fully because there is no "earnings" behind it; it's all about sentiment. But the theory is as all the world's troubled countries race to devalue their currencies (print print print) to "save the system", a hard asset should retain it's value. Silver is likewise breakout out - although silver has a lot of industrial uses as well.
I hate to chase a move but from a technical set up, a lot of institutional money could be set to finally jump in here....
Now the question of what instrument to use - keep it simple or go with a miner, etc.
No position
5 comments:
The closer we get to passing stimulus part 2 the closer gold gets to an upside breakout. Coincidence?
I think not.
But CNBC is jerking us around again.. Charlie G out about an hour ago apparently saying Bad Bank 2.0 up in the air
it makes me sick knowing we are going to do this song and dance again... CNBC says this, stock market up 4% in a blink. CNBC says that, stock market down 3% in a blink.
Sick of it.
Mark, I notice you charted the wedge on Gold that broke out to the upside.
Well the S&P has a wedge about to break too.
If you connect the Sept 19th high, the Jan 6th high and the Jan 28 island high, and then the Nov low, and the Jan lows of 804, then you get a wedge like that of gold, and since gold broke up, i'd think market would break down. Just something I thought i'd mention for next week. It could get ugly. I spoke to a few other technicians and they concur about the wedge ;)
I've been waiting for the breakdown. CNBC stopped it Wednesday. We'll see what the government has up its sleeve next week.
Just sitting on neutral until the real move begins.
Well I hear from a few traders that the MM's are screwed now with imbalances AND they'll do everything in their power to prop the market up early next week (with help from CNBC) lol.
maybe the lows from oct, 840ish should be the upper limit.then down we go perhaps.
I see you were well hedged this year. market is down like 10% already....i think this next down move with scare the casual person who was looking for the bottom/recovery and has CNBC guaranteeing him it is here.
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