OK. Here it goes :
Beginning October 2009 I did my buy gold now article. Gold was then still trading around 1010. Next days trade gold made a high of 1043….and continued going higher.
At the end of October 2009 I wrote G for gold and back with a vengeance article. Gold was at that time trading around 1040 and had just consolidated back to the second trendline. Next days trade gold made a high of 1066 and continued going higher.
Beginning of November 2009 I wrote my gold breaking out of upper trend channel article. Gold was at that time trading around 1096. Next days trade we hit a high of 1110 and continued going higher.
Now, I’m not trying to say that you can draw a trend line along YeOldGoldNugget but from time to time one has to contemplate and look back upon one’s own writing. Is YeOldGoldNugget full of crap, just plain lucky,…or can YeOldGoldNugget follow Gold Nuggets?
Well, that is not for me to decide, I’d probably just go with the full of crap.
So,…what does YeOldGoldNugget think now? Hm? I’m probably way too bullish for my own good but I see 1200 being doable…short term. However, I have to say my short term judgment is a bit clouded by me having looked at the weekly chart. The daily I’d say,…bit of danger here. Well, to me, and to the trend line I’ve drawn, we are again reaching a crossing point. Will we break that trend line and continue heading further up or will gold do a short term pullback?
Hard to say. Fundamentally I’d say we go straight to 1200 and more, however the daily chart tells me gold is due for a small pull back. If you look at the daily chart you’ll notice that gold does not stay for very long in the oversold zone, RSI wise then. So based on that, I’d say we could get a pullback in the very near term.
How far a pullback you say? Well, when we drop to trend line 2 then I’m looking at somewhere around 1084. This also coincides with the 30 Moving Average which together with the trend line can or will act as support.
Don’t forget! When we are in a strong uptrend its always a rather dumb idea to be betting against the flow. Same as jumping in front of a moving Silver Train like Orko Silver Corp, thinking it will stop just because you expect it to or so desire it to. That Silver Train, like gold, has left the station. So, in gold‘s case you’re thinking about going short gold then better make sure it’s a quick trade cause else you’re going to loose more than just your shirt.
On to the weekly for direction and confirmation of our trend. Up or down? Stupid question I suppose…well…for the intellectually challenged maybe a solid question?
Time to get the neon sig
ns back from under the dust again. One shows how YeOldGoldNugget feels about the weekly chart and the other gives a visual indication of the trend.
What more does one need to know?
OK then, MACD looks good and is making higher and higher high’s which is extremely bullish. Stochastics has been trading for a little over 2 months in oversold zone. As you can see from the chart, the last big rally got gold trading in oversold area for as much as 7 months! YOINKS!
RSI is not the best of indicators to use when looking at the weekly chart of gold, with that I mean, don’t go opening a weekly chart, seeing gold in oversold at RSI and deciding to dump your shares or something like that 🙂
Better is it to watch stochastics…when this goes to far towards 60 then I’d start contemplating about selling or taking profits. That is, if you’re riding the waves like I am.
So to round up :
Entering now, probably not THE best of idea’s, better wait to see if gold will break this trend line. If in the next days you see gold moving up to 1150, 1155, 1160,…then its a fair bet that 1200 will be knocked down in the very same breath. Remember also that gold could be finishing the Head and Shoulders pattern which has a target of 1350
If you from now see gold opening lower, closing lower, lot of red candles, bit of sideways trading without making new higher grounds than the air is out of the balloon and we need a refill. You’ll know and recognize it when it happens. This thus could indicate gold wanting to trade lower and possibly heading back to trend line 2.
Just wait and let the market come to you. Clearly the trend is up, but short term there could be danger ahead. Last thing, the dollar seems to be caving in under the enormous buying which has been going on in the gold market. A high gold price does not bode well for the dollar and looking at the weekly chart of gold and seeing where this could go…not a far stretch of the imagination to think what will happen with the dollar when gold is trading at 1350.
YeOldGoldNugget’s links of interest
- New Video: Two Major Forces Collide in the Index Markets
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- Free Email Trading Course Copy
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