Some News Items

• Nikkei closes out the worst year ever!
  

• Time to buy Double Long Crude?

• World markets gain from energy...haven't heard that in a while.

• Tough times for Gazprom

• GMAC gets $$$

• Obesity tax in NY gets support

• FED orders Florida bank to stop paying dividends!

• Potential triple bottom for GBP/USD, or just setting up a trend extension?
  

• Dr. Steenbarger on the market's potential reverse head and shoulders

I hope everyone is still having a good holiday season. As an FYI, I normally will not post links to news items like above because there are plenty of others that do a fantastic job of sorting through and posting links to news items (Charles Kirk, Trader Mike...). I posted these links today because the others are on vacation and not actively posting, so I thought what the heck.

The game plan for today is the same as yesterday...short gold and short the pound. I've seen several articles that speak of the coming strength of the pound, which makes me think that there might be a little more room to short the currency.

Gold is still showing some good signs of falling and it will probably fall pretty quickly if the Israel and Hamas skirmish comes to a halt...although Israel doesn't seem to be in any hurry.

Only two more trading days left in 2008, lets make em' good ones.

TLT

The Set Up Looked Good but...

Just as gold looked like it was setting up for a great trade, Israel and Palestine (or Hamas) broke out in an "all-out war" and gold shot up like a bottle rocket on the 4th of July. This is one of those events that reminds us why stops are very good to have...namely to keep us in check when we're wrong and secondarily to lower losses. Here's an hourly chart of gold...notice the big gap up.

You can also see how gold has formed a flag pattern and any break from this pattern will likely be a significant move...so keep an eye on those levels.

Besides gold, the Pound is on my radar screen right now. The GBP/USD pair has been falling for quite some time and today it has fallen below a support level that has been previously tested 2 other times. The past couple of times prices poked through the support line (the red line), they were rejected rather quickly, as indicated by closes above support.
It will be interesting to see how both Gold and the Pound fair this week...maybe we can catch a good trend to bring in the New Year. Supposedly, currency traders are beginning to bet on the pound instead of against it...see this article. As always, I'll believe it when I see it because all of the significant time frames (monthly - daily) within my system are giving the pound a sell signal.

Good luck out there.

TLT