Apr 30 2008
Gold Looks Like It Should be Finding Support Soon
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Gold has been taking a dive of late - down from above $1000 to the lower $800s in the matter of about 6 weeks. I haven’t really looked at it from a trading perspective in a while, so here goes.
Below is the daily chart for GLD, the spot gold ETF. It’s worth noting a couple of things.
First, the Bollinger Bands got quite narrow a short while back, though not as narrow as back in December when the market broke out of a near two month consolidation. It means we’ve got a good directional move in place now that things have started going lower, but probably not a really big one.
Second, you can see the two lines I’ve drawn in just above and just below the $85 level. The one above represents the support line going back to the January pull-back lows which has been touched, or at least approached, several times now. The lower line goes back to that November/December triangle. The combined area of those lines should represent good support for GLD.
It would be no surprise at all to see GLD check up soon. That could make it a decent buy for a bounce back toward $90. If, however, that support doesn’t hold, the market will almost certainly take GLD back down into that high value consolidating around $80.
Here are some other posts which might interest you:
- Not So Much Deleveraging in Gold
- Did the Leverage Really Come out of Gold?
- Back on the Gold Standard Within a Year?
- Goldbugs, Please Do a Better Job Convincing Me!
- Aussie, Gold, and Stocks
Hi John,
It simply amazes me that how much time that you as an independent trader have to do the things that you really like - trading and writng informative blogs.
Just a few question : (1) What does The Essentials of Trading entails ?
(2) Do you conduct mentorship programmes for
people who are struggling in their trading ?
Thanks
Jeff
[...] the name of Jeff asked “What does The Essentials of Trading entail?” in a comment on a post about gold I wrote the other day on my Rhody Trader blog. Since this is the trading education blog and that [...]
Jeff - I’ve posted the answer to your first question on my trading education blog (which is more where it belongs) under What does The Essentials of Trading entail?
As for question #2, I posted on that a couple week ago - Do You Do Trader Coaching John?
Hope that helps