GOLD long term entry? Day trade example.

Quick look at Gold, long term.  I made a video but got rushed short by a phone call.   Nevertheless, I think you get the gist.  Here’s a link to the video.  http://screencast.com/t/Fcoam1Fo

Meanwhile, for those of you interested in the day trading side of things, I trade the /ES with some frequency.  It’s pretty tough, but I think it’s more about patience and discipline than anything else.  One thing I find very interesting and useful about it is that it shows you the very principles that you should apply to normal daily charts for your investing, but in very fast time.  So there’s lots of information to learn from in a much shorter time.  I can definitely say that it has brought my weaknesses and bad habits into focus and very quickly.

In any case, I don’t use anything fancy.  Same stuff as normal for daily charts.  The normal assortment of MAs, sometimes look at the MACD and Stochastics, but more than anything, Price action in terms of trend and support and resistance.  Patterns are just as useful here as on daily charts too, I find.

Here’s a nice setup from today’s midday action.  After trading down to slightly below yesterday’s lows, a sideways range was established and then it was broken to the upside.  Since it wasn’t on huge volume and in the snoozey noontime hour, I wasn’t all that convinced.  So I waited for a retest and took it.  VERY NICE!  I’m going to try to let it ride as long as it goes, but the absolute sell will be on two closes of the price below the 8 EMA on the 2 minute chart.

(Sorry, the sizing is a bit odd on this capture.  Click it to see it larger.)

Update:  Sold with a Stop sell order dragged up because of the double close below the 8 EMA on the 2 minute chart.

GOLD making the long term turn?

I can’t blame you for if you’ve been sitting out of this market.  It’s been pretty brutal and even if the downward plunge of 2008 may be finding a footing, it has still been far from ideal for all but the short term traders.  But here’s something that even those solely longer term focused should be paying attention to.

Gold.  Long term chart shows a big flag pattern of sorts.  After pulling back above the 30 week MA some weeks ago, this past week marked what seems a quite significant break of the most pressing downtrending resistance.

Even on the daily chart, gold is uptrending for three months and recently gave three fresh green arrows for those who like that system. Volume on Friday’s break above horizontal and diagonal resistance was on very high volume.

The XAU does have long term resistance in the form of the underside of the old support from back in ’06/’07 and the support line from its bottom in October 2000. Nevertheless, like gold itself, the group shows three green arrows and a three month uptrend.

The Gold Market Vectors ETF, GDX, shows a very similar chart.

It is interesting to note that the Gold stocks have drastically underperformed the price of gold over the last year. Obviously, the entire stock market being hammered is a big factor in gold stocks being sold off. Nevertheless, the it would seem logical that if the price of gold moves significantly higher from here, the gold stocks could possibly rise even more so.

Here are a few strong looking stocks, particularly from the 3 green arrow perspective. They are in alphabetical order.

GG seems a favorite among talking heads on TV. Regardless, note the potential resistance here and the less impressive volume on Friday than some others.

KGC is under a significant resistance line that goes back to ’08 as resistance and support. What is interesting to me about this is that it has had very high volume for the entirety of last week. If gold and the group don’t follow through on the breakout higher, this one could be an interesting short.

Not surprisingly, Silver also had a big day on Friday.

Some silver stocks that look good.