Last week was an incredible week for trading the intraday charts. With rising volume and volatility prices began to move up or down for extended periods of time allowing traders to profit from these powerful short term price swings.
Gold Market Analysis
Technical analysis to forecast and predict the future price trends of gold and other precious metals, as well as the US Dollar and the Euro.
Gold performed as predicted in the last update, rallying up to the top of its Descending Triangle before reversing and crashing support at the bottom of the Triangle on Thursday.
The information revealed this past week suggests that the US's problems are slowing and possibly about to take a turn for the better. At least that's what the establishment would have you believe.
THE GOLDILOCKS ECONOMY REVISITED
Stocks and metals have been on a steady rise this week. The US Dollar drifting lower has helped to add fuel to the oversold bounce in equities and metals we are seeing.
Stocks - NYSE 65 Minute Chart
Over the last couple weeks, gold and silver stocks have been clobbered. The flagship index that tracks this sector, the HUI, hemorrhaged nearly a sixth of its value in just 8 trading days!
A great disconnect exists in the gold market between the exchange futures contract price (the paper price) and the gold bullion paid price for transactions (the physical price).
The past two months have been tough on the precious metals sector. We saw precious metals lead the market higher all of last year until December 2009 when prices plummeted as the US Dollar started to bounce.
In this Gold Market update we are going to "cast our net wide" and consider the outlook not just for gold and PM stocks but also the dollar, other commodities and the the broad US stockmarket.
I thought I would put this more detailed report on finding and trading low risk setups for gold, silver, oil indexes etc....
Let's ponder for a minute. What is money? Looking at an older 1986 copy of The World Book Encyclopedia tells me that money is three things. A medium of exchange. A medium of account.
The stock indexes have been trading very choppy making it difficult for swing/trend traders. It's during times like this when seasoned traders rise above the herd of average traders.
On Friday Goldman Sachs and J P Morgan broke down decisively from their Head-and-Shoulders tops, a development that we predicted before the open based in large part on the huge downside volume in these stock
It was a heart pounding week on Wall Street as traders and investors locked in profits during 2010's first round of earnings season.
The only walking done this week was by Martha Coakley as she exited stage left, embarrassed and shocked. Everyone else ran out of every market and most commodities as the political talk raged on.
The monthly chart of the Dow Jones Industrial Index below (courtesy BigCharts.com) shows that the Index:
"IRRATIONAL EXUBERANCE" It has been my contention since September that we are in a period that looks nothing like the past, but I was wrong.
It's been a crazy week for stock and futures traders as the market moved up and down like a yoyo, finally closing down sharply on the week.
Seasonality, the tendency for prices to consistently move in the same direction at particular times in the calendar year, is always fascinating.
For the past few weeks I have been expecting the market to correct.
Whether you are trading stocks, ETFs or futures, technical analysis is the preferred choice for short term traders. Technical analysis in short is the study of price and volume movements on charts.