Each Week Lo
ngleaftrading.com will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.
Weekly Gold Report (March 4th through March 8th)
I don’t know about all of you, but if I never hear the term “sequester” for as long as I live, I will not complain!
As expected, the US Government did a fine job of hyping the event and waiting until the eleventh hour to make a decision. And as usual, no compromises were made and stock indexes barely flinched. In fact, most global markets seemed to be following scheduled news as if the “sequester” debate was not even an issue.
With that non-event behind us, the market moves ahead to a week with very few US numbers until the Non Farm Payrolls at the end of the week. We begin this week under a bit of pressure after China reported that it is taking steps to cool off a strong Real Estate Market. Traders will be looking ahead to Interest Rate Decisions from Australia, Canada, Great Britain, and the ECB. I highly doubt any major changes in Economic Policy, but it is important to follow these decisions in case there are any surprises that would affect the Currencies.
April Gold Futures had a peculiar five days of trading last week and still leave me recommending shorter term trade recommendations only. Take note of the four closes below the long term trendline (arrow #1). Price action like this usually signals further pressure on the market, but Gold Futures ignored the action and spent two days closing back above the tredline (arrow #2). We now begin this week below that same line again, and at the lower end of a $40 range.
Looking at this type of movement in Gold would suggest to me that the best way to trade the Gold Futures would be as a day or swing trader. Early technical indicators and a strong US Dollar suggest selling into rallies, until resistance levels are violated.
If you would like to speak with me directly about shorter term idea in the Gold, please feel free to call or email me directly. You can reach me at (888) 272-6926 or by email at [email protected].
Thank you for your interest,
Brian Booth
Senior Market Strategist
[email protected]
888.272.6926
** There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data contained in this article was obtained from sources considered reliable. Their accuracy or completeness is not guaranteed. Information provided in this article is not to be deemed as an offer or solicitation with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this article will be the full responsibility of the person authorizing such transaction.
You have to be brain challenged, with fewer than two brain cells, to LOGICALLY conclude that NOW is a great time to sell gold (and the other precious metals) and load up on worthless paper: cash, bonds, treasuries and stocks, considering: "the cliff", "the sequestration", Fed money printing/pumping (2013-Jan.: M1 $2469.5 billion; M2 $10444.6 billion), budget deficit, foreign balance of payments, $16.694+T U. S. base debt today, $54-$57 trillion in stock market derivatives and, in real terms (GDP - inflation rate), a contracting GDP economy (including the latest quarterly report)!!!!,
Logic went out the window in precious metals markets years or perhaps decades ago due to the incestuous relationship between governments and banking cartels (see J.P. Morgan, Goldman Sachs, HSBC et. al. playing games on COMEX). No, I am not a "conspiracy nutter", it just took me a while to accept that these players have considerable influence on the short-to-medium term price swings in the price of gold and silver, which is what the author is talking about.
So, to play devil's advocate for a moment, perhaps it is good to remember the old axiom that good investors "buy low and sell high". This necessarily implies that bad investors buy high and sell low. However, since this is a trading blog, the rules are quite different: good TRADERS buy high and sell higher or sell low and buy back lower (repeat if they get stopped out). The latter is what the author is referring to from a technical basis I believe...
If you are an investor, then yes - now is a very good time to add to your long positions in gold IMO, but in tranches to cost average.