A couple of weeks ago, I pointed out that gold was beginning to look interesting in this
post. I think it's safe to say that gold got interesting, as it has continued to go up and make all time highs. So far, so good...this is what it's all about...you notice something interesting, buy it and it goes up. Now for what I consider the tricky part of a good trade...when to sell.
I must admit, my natural instincts of seeing a profitable trade in an instrument that's making all time highs started telling me to book profits. I even considered it on Friday. Then something interesting happend. I was watching CNBC and I kept hearing the talking heads speak about traders booking profits in gold or selling gold at these new levels. That's when my thinking changed back to how it should be. I realized that a lot of traders were feeling like me...looking at these high prices...seeing how far above the moving averages it's trading...thinking about the paper profits. This is when it pays to fade your feelings. Sure, I might see some paper profits go up in smoke, but I'm trading for big profits, not smaller profits and that's just part of the game. When "everyone" is selling out of an instrument that's making all time highs, it usually pays to hold on just a little bit longer because what nobody thought would or could happen sometimes does happen.
Will gold continue to go up? I don't know, but I'm willing to let a position ride on the premise that it could and that there has not been any good signal for me to sell gold. Sounds simple enough, yet many (most) traders don't step away from a trade and think about these things. You've got to ask yourself, "Why do I want to sell right now?" Then write that answer in your trading journal. If you do that over and over, and you're like me, you'll start to see a pattern of selling winners too early. That goes against Livermore's advice of , "Cut losses and let profits run."
Ok, back to gold..here's an updated weekly chart that I'm looking at:
The most important aspect of this chart, aside from the bullish trend in price, is the rising BB Width that's still at relatively low levels. I said in my earlier post on gold that I was looking for the BB Width to reach between 20 and 25...it's at 15 right now. It may not rise to the 20-25 range, but it's likely that it will. This would mean that volatility is still expanding (Bollinger Bands are increasing in width) which I know is a sign of a trend continuing to gain strength. So for now, my analysis says HOLD.
Hope everyone's having a great weekend.
TLT
As you can see, the position was nearly stopped out last Friday, as it approached its ATR trailing stop. There's been a lot of chatter about the dollar moving so far so fast...I don't listen to chatter, I just exit my position when my PRE-DETERMINED exit point is reached. 
The most important aspect of this chart, aside from the bullish trend in price, is the rising BB Width that's still at relatively low levels. I said in my earlier post on gold that I was looking for the BB Width to reach between 20 and 25...it's at 15 right now. It may not rise to the 20-25 range, but it's likely that it will. This would mean that volatility is still expanding (Bollinger Bands are increasing in width) which I know is a sign of a trend continuing to gain strength. So for now, my analysis says HOLD.
This chart represents the spread between XLV and MRK...as the price rises, that indicates that XLV is stronger relative to MRK and vice versa for the downside. As you can see from the chart, it appears that XLV bottomed and MRK topped back in January and now XLV is getting stronger relative to MRK. Right now the spread is roughly at -3 (XLV's price is $30.38 and MRK is 33.31). From this chart, I've set a price target of +1 spread...XLV would rise and MRK would continue to fall. 
I'm long the dollar (actually UUP via call options) so I believe that the pair's heading lower and that there's still room to go. We'll see.
A couple things to note, Russia is the strongest today and it clocked in an impressive 91 temp. score...that's cookin! What I think is really interesting on this sheet is how all of the Asian countries are at the bottom...concerns over China maybe?..I don't know. I'll have to keep an eye on this.
As you can see, the Trender nailed the exit on this one...sometimes it's a little early or late but every now and then it's spot on. So, obviously, short is the way to be for the time being but the big question is how much follow through will we see? Every sell short signal I've seen over the past year has been a very short momentum trade at best. One thing that I noted on the chart is that the Fisher Transform MA is still positive...until it gets negative, I am skeptical of the follow through to the downside. 
I'm not anticipating pulling the trigger and taking profits anytime soon with this trade (as in the next week or 2), but it is nice to see it going in the right direction. One scenario that could take place would be for the market to really sell off hard, harder than it is right now, and see MON tank down to $55. If this happens, which it could, I'll be ready to take profits quickly. This is probably the best trade that I have on right now. I still like gold but it's taking a little dip with the market...the dollar is probably the main driver affecting both of those. 
