This post is a follow up to our earlier post on gold stocks GLD and AZK. These are almost at the bottom of the trendlines, probably another 5% or so more correction is in order.
Link to the earlier post -- (http://maybeitsclarke.blogspot.com/2008/07/gold.html)
As expected, gold has been consolidating since. As shown in the post above, it is almost on the verge of hitting its downward trendline, which it broke out of. While we have been waiting for this opportunity since last week and as the charts have filled out, somehow the high sell volume bars in GLD and in gold stocks have put us off a bit. The trade probability is now down to 60-40 in our mind. There is also a bearish MACD divergence on the gold chart (as the line in purple indicates). While these don't always come to fruition, when we even see faint hints of "stop", we need to stop and re-evaluate, as the charts fill out in the coming week.
We will watch gold closely here into next week - should gold bounce off the downtrend line, we will catch its action, but we don't want to be the first one in on this trade. Another thing to remember is the line is a downtrending line, so everyday the support keeps descending and it could be some days, before gold actually gets traction.
As of for our commodity exposure, we own UNG, which we scaled in around the 200d and 50W. We did not expect UNG to go low after that, but we still like it here. Next week may be a totally different story though. Lets see!
2 comments:
I expect gold to pick up traction soon as the yen carry trade starts to further unwind.
Good point Richard. I am watching for that too. I just don't want to be the first person in & hold a position in my face. I made that mistake with UNG and may have to hold onto it for a while now.
Good luck to you.
Post a Comment