Welcome all Safety in the Market traders to this month’s dedicated newsletter. Last month we continued the unfolding story on Gold. It’s been a choppy sort of time since then, well, that was until about a week and a half ago. Our final diagnosis was that the next break looked likely to be to the upside, and so far so good. That being said, it pays to stay on your toes.
Chart 1 has the classic big picture milestone view on the monthly Gold chart that has been so influential over the past couple of years. The last few days of movement (in the green circle) clearly show the price is now through the tops of late 2010 and the 150% pressure point of $1,414.6 per ounce.
Chart 1 – Gold (GC-SpotV) Month Bar Chart – Major Bull Range Milestone Projection
click chart to enlarge
While the price remains above this level, the upside is the only way to see things. Of course that changes if price heads back under, for now, we’re above and that’s fact. Chart 2 has us zooming in to the daily bar chart where I’ll share a secondary range projection that I’m watching right now as well. Take a quick look and then I’ll discuss.
Chart 2 – Gold Daily Bar Chart – Secondary Range Projection – Danger Zone Broken
click chart to enlarge
On Chart 2 I have overlayed a two-week swing chart to help remove noise and to make the reference range easier to see. Here we have the late July 2010 low as Point A and the early December 2010 high as Point B. Projecting this range from the late January 2011 low you can see the recent tops in March were bumping their head upon the 50% Danger Zone. The past few days have see these March tops broken and in turn the Danger Zone penetrated.
This 50% Danger Zone level is at $1,446.1 per ounce and now represents a place to watch for some support in the short term. We also have the old tops around our 150% pressure point from the big picture to watch as support. Keeping an eye on these levels is critical in continuing to judge this market as strong, but also watch for potential support and trading opportunities.
This is all coming together nicely and has already provided some great profits with the late March low sitting on the 150% PP. Gold is a hot topic and the moment and that doesn’t look like it is going to change anytime soon. Those of you booked into advanced workshops over the coming months will be sure to find us talking Gold there.
Until next month...
Professional Derivatives Trader