Nothing is going to happen in front of the fed meeting and I think GDXJ which has been leading the whole move is looking bearish. Best to sit out right now and look for pullbacks to try and fish for some bottoms.
DUST seems to be showing some strength here. Lets see if weakness in gold develops or is just a blip. Gringo
DUST. It was good while it lasted, but I am too tired to focus. Maybe another day I'll target it. No harm done.
GDX is beginning to show some weakness. The price failed to make a new high and dropped hard. Today the price is attempting to not give up, for a trader like me this is weakness enough to attempt a short. If price goes above the high then I'll have to take a loss. This is the nature of the game, there are the quick and there are the dead. This would imply that gold overall even in the futures market might start to get weaker in the coming days. Price is there to let us know if we're wrong so I'll take the plunge and hope that my nose stays above the water. Gringo
Given the fact that we appear to be in a Up-trending TC, wouldn't it be better to wait for that to resolve? Just an Idea, perhaps the break will come in strong and there will be no actionable entry after the break and you will laugh all the way to the bank.
You're right Niko. I could have waited but looking at previous behaviour of gold, when it changed direction it just went for it without giving many chances to re-enter. The trend channel is a reasonable guide post but I have found that entries that are optimal generally come before the trend channel is broken. One needs to pay more attention to the demand and supply itself, hence, the demand and supply lines to gauge the strength. There are times when I would wait for the trend channel to clear itself, but this time around there's also potential resistance right above. For clarification on that I'll try to post the chart of GLD and you'll notice the downward sloping trend channel. This up move has been within that trend channel and one would assume that the downward pressure is actually greater and a higher probability of manifesting itself than the upward pressure. The reversion to the mean, plus the downward slope both might act in tandem. Now GDX is not GLD but gold is gold and usually both move in tandem. After all this wonderful justification price must just keep going up and there is nothing I can do about it. Price is the ultimate arbiter and we simply follow it. I have tried to ride a wave down and if it turns out the wave wasn't strong enough and there are stronger waves moving upwards I'll just hop off and attempt another time. This time I took the surf that was available. There is this chance that it might back up a bit and I am willing to take that risk. Gringo
If one wants to incorporate trends and trend channels into his trading decisions, he has to begin at the beginning, in this case the end of August. One can draw the line and the channel wherever he likes, but if he doesn't do it properly, he is likely to be looking at/for the wrong thing at the wrong time. In G's chart above, the more profitable strategy is to take the reversals at the extremes, most profitably the shorts in a downtrending channel. Yes the long reversals can be taken off the bottom of the channel, but they aren't as profitable because the channel slopes downward. One can, of course, wait for price to exit the channel entirely, but this is a far more traumatic event, like having your bus route changed without warning. There will thus be a lot more back-and-fill and wandering around in the dark with a penlite trying to discern direction. This requires extra patience unless there is clear and undeniable evidence of reversion. Note in G's chart that price has not exited the channel but rather appears to be reversing at its upper extreme.
GDX was supposed to get weak and that was the reason for the short. Price though didn't get super strong, but it has kept sloshing around a bit too much for my taste. I have closed the position with a small loss and will re-evaluate from the outside. For GDX, 24 is acting as resistance and there actually might be a hint of a hinge here. Price was making higher lows consistently and I am not shorting something that refuses to drop. GLD is again kissing it's trend line and playing around it. It does have a chance of giving a signal to short but it hasn't come so far. I'll be keeping an eye on it and GDX both to see how things play out. Price hasn't dropped much and so far is in an uptrend that started around the beginning of the year. Gringo