*** Short *** Term Gold and Silver Trade Discussion - January
ProofCollection
Posts: 6,252 ✭✭✭✭✭
I have started this thread to bring together those of us who trade PM's on a short term basis: from a few days to a few weeks. No one is a PM bull or a PM hater here - we're just playing the short term trends. We don't care if you think gold is headed to $5000 in the next two years, we want to know where it will be in two days or two weeks.
Use technical (chart) analysis, news events, or whatever data to discuss when and where the next turn is going to be. Be sure to describe this to us - your projections are worthless unless we know how you're deriving your projections.
This thread is just to help traders collaborate and share viewpoints and interpretations since charts and news can be read in many different ways. That being said, I DO NOT advise anyone to use the information provided here for their investment decisions. This is for fun only.
I'll start a new thread every month.
Use technical (chart) analysis, news events, or whatever data to discuss when and where the next turn is going to be. Be sure to describe this to us - your projections are worthless unless we know how you're deriving your projections.
This thread is just to help traders collaborate and share viewpoints and interpretations since charts and news can be read in many different ways. That being said, I DO NOT advise anyone to use the information provided here for their investment decisions. This is for fun only.
I'll start a new thread every month.
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Comments
Today I would like to focus on the daily chart for February Gold going out 1 year. Even though the price of Gold held up relatively well during the past year, especially when compared to the performance of other commodities, it has made four consecutive lower highs! In addition, the Fibonacci retracement from last year's high to last year's low shows the recent highs were stopped almost exactly at the 61.8% retracement. These are both considered bearish signals and may set the stage for lower Gold prices at the start of 2009. However, Gold bulls would counter that prices still remain above both the 20 and 100-day moving averages, and that the 14-day RSI is above 50. Resistance is seen at the recent highs of 892.00, with major resistance at the October highs of 938.80. Support is seen at the recent lows at 837.40, with major support seen at the 100-day Moving Average currently at 811.60.
Recently I have been writing about the "cash bubble," where folks want zero risk. Treasuries on all stripes have benefited from this. It got to the silly season where 4-week bills had ZERO yield and ten year bonds were around 2%. Gold is a potential beneficiary of this kind of thinking. Perhaps some of the big buyers parked their money in gold thinking it to had some element of zero risk. This bubble in treasuries has begun to unwind, at least in the very short term, and gold has been following. Both have taken big losses yesterday and again this morning. Again the bigger market is treasuries, look to the bigger market as the leader, the smaller market as the follower. It will be interesting to see how long TLT and GLD continue to move together. It is an unusual pair of bed-mates.
the cash hoard bubble needs to be popped and will sometime in the future, i think it is part of the evolution of this economic cycle.
the Fed will be walking a new tight rope with a very unbalanced "balancing pole" when the bubble breaks.
Draw a parallel channel to the tops at the 70 low and it projects to 67 or so (about $680 spot gold) in mid-March or so. As always charts aren't predictive, more like driving using the rearview mirror and projecting that the past will be prologue. Still, there are times that the simple techniques like channels and trendlines do work.
If I had no metals, I might buy a little here. Otherwise, it is
still best to wait.
I have NOT covered any GLD or SLV SHORT positions. I hope
to do so, soon.