GS Trade Idea (short)

This is one I wanted to get to, but first let me say, be careful not to have too much exposure to any 1 industry group or related groups, for instance, you don't want to have a large position in GLD , SLV and GDX as they all tend to move together-if you want exposure to all 3 you are better off treating them as 1 trade for risk management purposes. That means if your risk management rules allow you to invest 8% of your portfolio per position (I typically like to have about 6 positions, over diversification can hurt portfolio performance) then you should divide the 8% between the 3 positions rather than have 24% in all 3 positions as they tend to have a high correlation.

OK, on to GS...

 GS in a small top-like formation, really GS hasn't done much of anything for the last 6 weeks.

 To the right of that formation is a very obvious resistance level, I personally would like to sell GS short in to price strength, so a break above this level would be the head fake move I would be looking to enter to reduce risk and get better positioning. A break back below that level is what traps bulls and creates the snowball effect.

 Even using a VERY wide 3 day trend Channel, GS broke the uptrend at the red arrow.

 The daily 3C chart has been in a relative negative divergence through February and has been leading since March.

 Here's the accumulation or cycle to run GS up, note the leading negative divergence as GS was most likely sold and shorted in to that price strength.

 The last run in GS had a leading negative divergence on this 5 min chart and fell fast, right now we have an intraday 5 min positive, this makes me think GS may be planning a head fake move above that resistance level mentioned.

The 2 min chart shows the same.

I'd set price alerts if you are interested, I will do the same. What I want to see is a break above the resistance level with a strong negative divergence in to the breakout, that's where I'd want to short GS.