Gold

[Steve Griffiths]

Hi Everybody.

Here is a reminder for people who follow Futures, that it is always a good idea to perform some additional "advanced" analysis on your charts, to find trade opportunities "above and beyond" just the automatic set-ups

A great example is on Gold.

If you look at the chart below, can you see how there was standard stochastic divergence going into the Jul 15 high. And the rally into this high was automatically found as a "minor degree" 5-wave rally (using the Elliott wave module in MTP v6.0), with the high reversing at the typical Wave 5 WPT.

So the combination of these signalled that a top was unfolding, and a new short trade should be considered. As you can see, this got you short as Gold started to decline sharply over the last few weeks

Steve

[d-day]

Hi Everybody.

Here is a reminder for people who follow Futures, that it is always a good idea to perform some additional "advanced" analysis on your charts, to find trade opportunities "above and beyond" just the automatic set-ups

A great example is on Gold.

If you look at the chart below, can you see how there was standard stochastic divergence going into the Jul 15 high.

Great example, Steve.

I know this is now nearly a month "after the fact," but I caught the same set up on the GDX (Marketvectors Gold Miners Index) - Note the TS3 on the daily signalled on 7/1/2008 would have resulted in a -1R, BE, or +1R depending upon how one trades the daily set-ups. However, I did not take the TS3 as stochastics made a new high, signalling that odds were high that GDX would make a higher high in price, or at least double top after a pullback.

On 7/14, GDX rallied and closed within the DP, and on 7/15 GDX gapped open higher (still within the manual DP zone) but notched a key reversal day, closing just off its lows for the day. I have been using mostly options to trade equities lately, so I took a position in the September 45 puts the following day and currently contemplating closing at least half for 4+R as momentum loks to be trying to put at least a short-term bottom/bounce.

Best Wishes,

d-day

[d-day]

Here is an updated daily chart of the manual DP short on the GDX - momentum easing up on the downside and we've retraced 88.6% of the Big Bull Swing from August '07 through March '08 - so this is a good place to book profits, at least partials, or else tighten stops. Right now this sideways action of the past week or so is as likely a continuation as it is a reversal formation. If we do not continue down from here, then a rally back to the 42 level looks likely.