Gold Forecasting with Quantitative Trading

May 5, 2014

If you have been following my analysis for any length of time then you already know I forecast gold and the stock market using my own method of quantitative trading. If you are not familiar with what quantitative trading is here is my definition.

Quantitative Trading Explained

Trading strategies that are based on a set mathematical numbers and rules like moving averages, oscillators, Fibonacci or any chart calculation that makes decisions either a yes or no (on or off) decision, and that is calculated either manually by you, or automated by a computer is a considered quantitative trading.

Gold Forecast

Last month I posted my exclusive Gold Forecast on Gold-Eagle.com. The report showed how a major currency was on the verge of breaking down and how commodities would start a new bull market. If you have not yet read is report then click the link above.

Updated - Four Stages of the Gold Market

Below is my updated Stan Weinstein stage analysis of gold. If my analysis is correct then Stan’s model is forecasting gold to be dramatically higher in the next 6-24 months.

As you can see, gold remains in a very large price range as sellers continue to hate the underperforming metal which drives the price down and waves of new gold buyers step in and accumulate gold when they think it is a bargain. Until the price of gold breaks above the yellow shaded area I remain neutral/bullish on gold.

gold forecast

 

Quantitative Trading Gold

I have always been focused on technical analysis because it provides us with the tools to create quantitative trading strategies using indicators and rules for precise trade entry, exits, and price targets.

The chart below of the gold ETF GLD shows how I use moving averages, Fibonacci extensions, and volume and trend lines. I have been able to forecast the next two price targets for gold where it will run into strong resistance next if this is an actual bottom.

quantitative trading

My Gold Forecast with Quantitative Trading Conclusion

In short, my quantitative trading gold forecast should be looked at from the big picture perspective.

Getting involved in any gold stock, commodity or investment which is stuck in a trading range carries more risk. This is because you can get shaken out of a positions several times before the new bull market actually starts. The lowest risk position is to wait for the breakout of the basing pattern only then gold market traders can get heavily involved to the long side.

Get My Weekly Quantitative Trading Gold Forecast FREE – www.TheGoldAndOilGuy.com

Chris Vermeulen

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Chris Vermeulen, founder of AlgoTrades Systems., is an internationally recognized market technical analyst and trader. Involved in the markets since 1997.  Chris’ mission is to help his clients boost their investment performance while reducing market exposure and portfolio volatility. Chris is also the founder of TheGoldAndOilGuy.com, a financial education and investment newsletter service. Chris is responsible for market research and trade alerts for multiple newsletter publications. Through years of research, trading and helping thousands of individual investorsaround the world. He designed an automated algorithmic trading software for the S&P500 index, which solves his client’s biggest problem related to investing in the stock market: the ability to profit in both a rising and falling market. He is the author of the popular book “Technical Trading Mastery – 7 Steps To Win With Logic”. He has also been featured on the cover of AmalgaTrader Magazine, Futures Magazine, Gold-Eagle, Safe Haven, The Street, Kitco, Financial Sense, Dick Davis Investment Digest and dozens of other financial websites. 
You can reach Chris at: chris@thetechnicaltraders.com.

 

Small amounts of natural gold were found in Spanish caves used by the Paleolithic Man about 40,000 B.C.