Merry Christmas!!!I hope everyone is having a wonderful holiday season so far. I'm in the office today wrapping up some loose ends and also still keeping an eye out for a good entry on my gold trade. Both gold and the Eur/Usd pair have been flat this week...I guess traders are already taking their Christmas break.
Since there's not too much going on, I thought I would post a little more in depth analysis on gold. You can see from the previous posts on gold that I first got interested in shorting gold after I noticed it bounce off the top of its linear regression trend channel on the daily chart. After I see that kind of reaction to resistance, I pull up some shorter time frame charts to look for a trade. Since the initial signal was on the daily chart, the 4 hour chart will be the next time frame to look at. Here it is:
Since there's not too much going on, I thought I would post a little more in depth analysis on gold. You can see from the previous posts on gold that I first got interested in shorting gold after I noticed it bounce off the top of its linear regression trend channel on the daily chart. After I see that kind of reaction to resistance, I pull up some shorter time frame charts to look for a trade. Since the initial signal was on the daily chart, the 4 hour chart will be the next time frame to look at. Here it is:
As you can see from the chart, both trend indicator lines are giving a sell signal (they are both red) and the Fisher Transform is in sell mode because the blue and red lines crossed below the dotted purple line. The only thing lacking is the BB width histogram...I generally like to see the bars break through the purple MA which indicates rising volatility. Only entering when volatility is rising helps filter out some of the false break outs.Since there is a signal on the 4 hour chart, I'll pull up the hourly chart next to time my entry into the trade. Here's the hourly chart:
As you can see, we've had a lot of sideways trading action for the past couple of days. The chart indicates that a sell signal is close because one trend signal is red and the fisher transform just gave a sell signal. Now I just have to be patient and wait for a sell signal on the other trend indicator and for the BB width to break out. Tight trading action usually leads to a nice breakout once it happens...we'll see if that's the case with gold right now.
It would be nice to get the gold trade on today and to hold it anywhere from 5-10 days with an exit target in the $725-750 range. There's probably going to be a little resistance around the $830 level...have to watch price action closely when it gets to that area.
Good luck out there and have a happy holiday season.
TLT
****Update****
Gold broke down about 2 seconds after I published this post and the sell signal was confirmed. I've got my trade on and my stop in place. Here's a chart that shows the sell signal.
I'll post an update on the trade later.
It would be nice to get the gold trade on today and to hold it anywhere from 5-10 days with an exit target in the $725-750 range. There's probably going to be a little resistance around the $830 level...have to watch price action closely when it gets to that area.
Good luck out there and have a happy holiday season.
TLT
****Update****
Gold broke down about 2 seconds after I published this post and the sell signal was confirmed. I've got my trade on and my stop in place. Here's a chart that shows the sell signal.
I'll post an update on the trade later.
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