I’ve been trading Gold since 2008, ever since I told Marc Haines we could see $1300-$1500 when it was trading around $850. Every step of the way we managed the trade based on the pattern and composure. There were always technical signs to see to keep you out of harms way and also clues when we should be in a heavy position.
On June 18, 2010 Gold tried to break out and failed at the $1260-$1265 area. Then again on June 28 Gold tried to break out again and failed.
Those were two days to take notice. That was poor technical action, so the next move was to be ready to prudently lighten up if it broke the uptrend around $1,220. On July 1 Gold sliced through it, if you were prepared with the level to act quickly, you saved yourself a lot of emotional distress.
Those that acted fast were able to sit on the side lines while Gold corrected down to $1,155. After that pull in, it made new highs but you had to manage your position in order to stay with the trade.
Recently Gold had two days to take notice November 9th and then again December 7th. The Commodity tried breaking out and failed. Yesterday intraday Commodities were first to sell off as it failed to take out the Recent highs. So right there, you could have lightened up. Active traders went home short gold based on that type of failure.
Now Gold is breaking the recent accelerated uptrend. I would recommend you getting down to tier one at best if any. We need to figure out the composure moving forward. It can still make new highs this year, but from what level? Next big support level is $1,315-$1320 area. It’s better to be in less and opportunistic vs. sitting still and in harm’s way.
This year will be for the disciplined market participant, one that doesn’t chase moves but rotates in and out based on the right pattern and composure. There are lots calling for a huge correction in Gold, at this point we don’t have to know that answer, but we will figure it out along the way.
*DISCLOSURE: No position
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