Let’s ponder gold trading opportunities this week, shall we?
With all of the market stress and one nasty sell-off on Friday, is it a good time to sit on lots of cash and buy something shiny with the rest? I know, I know… late to the party, right? Everyone has been preaching gold love for months now. I have to admit that I’ve missed out on some great gold gains this year and I’m actually a little surprised at my lack of participation.
What’s wrong with me?
Gold is hyped daily and very few people really know why they buy it, but they continue to do so dreaming of the day it will be the next big global currency. We shouldn’t ignore these trends, rational, or not. It isn’t a trader’s job to know exactly why everything happens the way it does. The market is driven by emotion, after all. However, as traders, we should be hyper sensitive to trends and pounce as they accelerate.
Well, hello there Mr. Cup-and-Handle. If there was ever a time to think about GLD it is right now. Everyone is scared and the chart is technically attractive. Nice combo. Do investors really want to be left behind and watch gold go bazonkers? If GLD busts through this cup and handle and pushes north of $122, we could see a real bull run. Why? Well, think of all of the hype that would accompany a move to new highs. The market is nasty, so any breakout news will be front and center. This should bring in large group of chasers.
My plan this week will be to possibly trade GLD as a swing north of 120. I will add to the swing position above 122 and watch for that hype and buying hysteria to kick in.