Tuesday, January 11, 2011

Important day for Gold

Since I posted about the bearish volume pattern in gold last week, gold did in fact break the MA(50), and on relatively high volume at that. In the last couple of days, gold has moved back up again and closed just below the MA(50) today, printing an interesting doji in the process. But notice the relatively low volume of this move up in the last couple of days. A failure to break the MA(50) tomorrow could signal a further, and stronger, down move and provide a nice shorting opportunity. If gold does indeed fail at MA(50), a break of 133 could provide a nice entry point for a short or one could take half the normal position size here, with a stop above MA(20) and add on a break of 133. Personally speaking, I would rather wait to see how it actually deals with MA(50) tomorrow rather than anticipate the move. The gold futures show it is doing just fine right now. Will gold be able to fight the bearish volume pattern once again? That's what makes tomorrow such an important day for gold tomorrow in my opinion. Even if you don't plan to trade it (I actually don't), it should make for some fun watching! Moreover, days like this can sometimes provide good learning opportunities.

 Take care and good luck!

1 comment:

Carolina said...

Besides the moving average, GLD seems to be holding to a support line coming from the october lows.