For those of you trading this bounce out of the daily cycle low in gold I would suggest continuing to hold positions for now, but I would sell ahead of next week’s FOMC meeting. Any large heavy volume sell off at this point, especially in miners, I would immediately take as a sign that the manipulation is ready to resume and the dollar ready to rally. Any kind of reversal similar to what happened on August 27 would be a strong signal to exit immediately.
For those of you sitting on the sidelines, and I am one of them, there’s no need to fret about missing this particular daily cycle rally. If the bubble phase in gold has begun and June 28 does turn out to be the final bottom, there will be months and months of time to make money. Missing one small little chunk at the beginning while we wait for confirmation that the decline is indeed over will be meaningless in the long run.
By Tekoa Da Silva, Bull Market Thinking:
Following a week of upwardly reversing gold and mining stocks, recent interview guest and technical gold trader Gary Savage shared some interesting commentary Tuesday evening regarding the markets and a potential return of manipulation in gold.
Commenting towards trading action on Tuesday, Gary noted that:
“Well today was a constructive day. But then we have pretty much known all along that as the dollar fell into its final yearly cycle low it would have a tendency to push gold higher. That has never been the concern. The concern is what happens when the dollar begins to rally out of that intermediate low.
In the short term gold and miners have pushed up against their 50 day moving average and the miners have closed well above the upper Bollinger band and have left a large gap below that’s probably going to have to fill at some point. The first test of the 50 day moving average is probably a likely spot for both short-term and day traders to take profits so I think we could probably see some backing and filling for the next 1-3 days.
(click to enlarge)
(click to enlarge)
For those of you trading this bounce out of the daily cycle low I would suggest continuing to hold positions for now, but I would sell ahead of next week’s FOMC meeting. Any large heavy volume sell off at this point, especially in miners, I would immediately take as a sign that the manipulation is ready to resume and the dollar ready to rally. Any kind of reversal similar to what happened on August 27 would be a strong signal to exit immediately.
For those of you sitting on the sidelines, and I am one of them, there’s no need to fret about missing this particular daily cycle rally. If the bubble phase in gold has begun and June 28 does turn out to be the final bottom, there will be months and months of time to make money. Missing one small little chunk at the beginning while we wait for confirmation that the decline is indeed over will be meaningless in the long run.
(click to enlarge)
Again I think the most dangerous period for gold is going to be when the dollar begins to rally out of its yearly cycle low. If the manipulation is going to resume that would be the prime opportunity. Right now with the dollar falling hard it’s too tough to keep gold suppressed. Manipulation attempts right now would probably be wasted. However, I’m very nervous that they are going to return once the dollar starts to rally.”
——
Special thanks to Gary Savage for his comments here. To learn more about Gary’s daily gold commentary visit: SmartMoneyTracker.