Some of us still have open Call positions in GLD March $150 which was purposefully taken out on a longer expiration than has been the norm recently to allow for just this sort of thing. We also have some people interested in new trades in GLD, at this point I want to stress that anything in gold right now is a trade, there's no evidence for anything longer.
GLD's price pattern did exactly what Technical Analysis says it should do, which should raise some eyebrows for us as we know it is often manipulated. I found the lowering on maintenance and initial margins for Gold and Silver at the COMEX about a week or so ago interesting and thought that Gold would be knocked down to be accumulated.
Note the volume patterns of an initial run on stops followed by capitulation volume and yesterday was certainly a capitulation day, the TICK and many other indications suggested just that. The last time was the initial break of stops and capitulation forming support, today we also have an inside day, which is bullish and could end the day as a reversal set up called a Harami, it may do even better.
Here we have the $USD in red vs GLD, in the green boxes the correlation is as it should be, inverse, at the yellow boxes it is out of the norm, the 15th for example saw no movement in the $USD, but gold dropped significantly, why? We'll see in a moment and today with the $USD up a bit, gold is as well, not the norm.
We had support at the hammer to the left (white arrow) and again at the right, wouldn't you know that the 15th was the red day that broke support and triggered stops as well as short entries? Interesting huh? Now we have that second volume spike, capitulation yesterday, if gold was going to be accumulated, this was the place they would have done it not only because of price, but because they need large supply to fill large orders and it was available.
My 60 min Trend Channel (my first custom indicator I won an award for, inspired by the Trend trading "Turtle Traders" shows the trend holding perfectly, not a single stop out, not even at the yellow arrow, but $153.75 is a stop out of the shorts and a near term , significant change of character.
The Trend Channel is self adjusting to the individual asset according to its most recent10-bar average and ATR, I added a standard deviation formula to create the width so any break of the channel means that trade is significantly different than not only the recent norm, but by "X" magnitude represented by standard deviations, this is an indispensable tool when you are in a trend as it removes the arbitrary stop and replaces it with an objective formula, what may have normally been a 10% trade may last long enough to make you 100%, I once took 25% out of an oil Royalty Trust because of what i thought to be a decent area to take profits, I could have made 200% more plus a healthy 12% dividend
The 5 min 3C chart has a large relative positive divergence right where the volume is.
Here's a closer look, yesterday's lows were accumulated.
The faster 2 min chart shows the same.
And the 1 min chart.
A close up of the 1 min shows a likely intraday pullback in GLD coming, for new positions this is where you might want to consider a long, on a pullback.
According to a few of my thoughts on the subject, the 5 min 50-bar average looks to be a good area and my Trend Channel too, so somewhere in the $152 to $152.15 area as of now, that may be asking too much, but there's always another bus.
As for my intraday momentum indicators, the MOMO indicator at the top went positive yesterday, it is suggesting a slight pullback, my 6 period RSI went positive yesterday and is also suggesting a slight pullback and finally my long 50 period Stochastics is what I use to help define the trend, I want to see it embedded in the green for a long and in the red for a short so as long as it remains embedded (whatever timeframe you are trading), it has good momentum.
Patience, for those with Call, again I think patience, I believe we have a very good opportunity to make some money here.
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