We are looking for silver to bounce near these levels around 28 $ This would be a good place to go long. But if we have a failure, this will break a long term trend putting gold in a questionable situation. The strength of long term trends may be questioned more if silver breaks one. This trend goes back to 2008/2005 And in my opinion has satyed intact since then. As gold and silver have both for the first time gone over the 50% channel line, this has thrown off alot of peoples trading systems that have been working for year.(buy and hold and profit) Since we retraced back to the bottom of the channel investors may feel as though gold has let them down and may be less inclined to buy at support. Seems like silver will be the first to hit its support (28ish) and then gold will follow. Ideally a failure in this support level would mean gold may fall off trend
what we very well may see is a big reaction to small news. Or no reaction to big news. Often we are given all sorts of excuses as to why a big reaction occurs to small news or vice versa. The truth is, reaction to news is 50 % the news and 50% when the news occurs. If we are in between channels then there are less long term players and day trader/short term swing traders will play the news and you will see big moves. But if we are near support and the general sentiment is to bounce up, then the bounce up will happen on the back of any insignificant news. If the general sentiment is the trend is over and to sell then that will happen regardless of what the news may be. The funny thing is once we hit this resistance,If there are not enough long term players, and mostly day traders are involved. then it may happen the the day traders will play the news and effect the chart and break our long term support causing long term investors to escape after years of consistent growth. We, the day traders need to respect this support line to keep gold on track and consistent. If we break the long term trend, all our trading strategies will need to be changed, and as we change them so do others, so it will be randomness for a while. If i could buy at that level I would. Naturally, we will all just run our programs with no regard for the long term trend and then we will complain. This support will have less reaction as even longer term traders may feel that gold has broke out of a channel at 1900 and now it may break out at the bottom. Since silver will hit the support line first, we will have an idea of what to expect. As for gold the support is lower then 1550 to 1600 for the time being.
Also we have re-entered our bearish channel. maybe watch some price action here and if it looks good it may be a good time to go short for 20-40$. The real trade would be once we bounce off the support. If we are wrong on that trade then we must question our existence in this metal
We have seen gold drop from 1639 to 1580 yielding ruffly 59$ This along with all my trades is reported in this blog. Sorry that there is so much blabbering in between my buys and sells. But may be it will be insightfull to some of you once my my track record is seen I think I will now take my profits and wait for the bounce up. Now, since gold fell much faster then I had thought it may reach our long term trend line much faster. It is impossible to know when it will hit the sloped line. Therefore please be advised that the lowest price we can now see is in the 1539 where we will buy with proper risk to reward ratios. But in general it was a great trade! We are still at a point where the TA is dominating and news is secondary. Hopefully we get some good news right when we hit our support line.
I know this article doesnt support my point about gold not following the news as it mentions some older news but just the title on its own backs up the news theory i presented http://www.kitco.com/reports/kitcoNewsMarketNuggets20120509.html
We are pretty much there, just milimeters away. Lets hope that this trade plays out We will enter on positive price action
Not quite sure what i was talking about I think i messed up a digit , but if you scroll up and read from 2 or 3 posts the idea is a bit more clear. I waslooking for a low of 1539. we hit an low of 1526 (it was a wick( the close of the candle surly enough was 1539 ! If I woudl of bought there there would of been no risk of being stoped out. So It was a good trade. Its been a while since I been on but here I am again and its nice to see that I left with a winning trade. (have to double check the take profit target but i think it was attained.( will be nice to see all the trades I called and see how they did. There have been a couple of changes in my trading since. Actually I currently I am enetering trades manually (got find a way around that ) and risk and reward is not set to be profitable. I just wana see if I can cover me fees. I am trading on a min chart testing out the theory. If I end up loosing less that the fees then I may try it with bigger targets on a longer time frame where fes will not be an issue. Also slipage is killing me. But so far there seems to be hope.