Done and dusted

We finally reached all the objectives for the year in Gold and have had the pullback. Now I would expect sideways action between the highs around £725 - £730s and the high £600s. Thank you for being with me on this journey and I hope you all took advantage and have been able to benefit from this analysis.
For the record I was able to be 100% long from £560/565 to £725/730 - a gain of 30% in 4 months! Not bad for a barbarous relic! I am now out completely and in cash waiting for the next oppportunity to present itself.
Good trading!

Market profile Gold update - targets MET

As this was originally designed as a market profile blog here is my take on the Gold profiles.
Nov 30 short term low target MET today $1218 ....Jul09 Upprofile target MET ...Nov08 Upprofile target MET...Aug07 Upprofile target met - all between $1137 and $1200 ....£POG also had £700-£725 targets . As all of these profiles are balanced (demand=supply) there should be a reversion trade lower coming soon. There are no more off side shorts to fuel more buying from these levels. ALSO : Gold has been 100% correlated with stocks, has outperformed silver and the XAU, so shows worrying signs of speculative blow off potential. Why if it is an inflation hedge do bonds rally strongly as well? and if there is a crisis coming why aren't stocks in the tank? Or has it just been a liquidity hedge fund fueled buyathon? Food for thought ........Cash is King (for a while) .

Eureka

Well here we are - £700 target for £POG reached - and a month early too ! So what now, do we sell and say thank you very much or stay with the trade? That my friends is up to you, hopefully you bought when it was cheap back in the summer and you have a nice dilemma now.
Personally I would sell half and sit back and relax.
Happy trading ...........

Sterling Gold breakout targets £700!

Sterling Gold is now rallying as predicted out of its congestion/consolidation range. It has a clear breakout and impulsive rally that targets the old highs around £700.

I hope some of you loyal readers were able to take advantage of the pullback to buy around the £560 - £570 area that I highlighted over the summer as the location for the expected autumn rally in to the year end.

Good trading !

Is this the start of the autumn rally in Gold ?

It has been a while coming but this could be the start of the Autumn rally in the sterling Gold price. We have a point and figure breakout at £585 after a long consolidation period.

Timing is good now for a rally back up to the highs over the coming months.

Good trading......

Is this the reflation?

A couple of weeks ago I joked to a friend after the Dow Jones had managed to reverse early losses & a possible breakdown, to close up 181 points "Here comes the reflation!" Little did I know that a fortnight later we would be 11% higher in Dow & S&P, 15% in the Dax, 11% in crude oil, 12% silver, 16% copper and 37% in Xstrata shares ! Gold is the laggard, only up a paltry 5%! Having said that Gold has built higher value and moved its longest line up so now this rally has a target of $988 moved up from $964, as long as $945/946 support holds. Stops kept at $943. happy trading.....
PS anyone know what happened on July 13th to change the world?

Gold support & resistance

Short term UPprofile from 17 July - support 948.5 , 943 (stop on long) , 937
resistance 955 , 958.7 (fib 61.8%), 964.5 (target for short move)
Gold still inverse steps with dollar and rises with stocks - slightly perturbing but reality nonetheless at the moment - as my Gold Fund manager friend says in his July update:
"Equities rally, yen weakens, dollar weakens, commodities and the precious metals sector rise. Conversely the opposite is true. We have a new theory for this, that economic classes around the world could embrace at the exclusivity of all others– MIMO theory. Money In Money Out – like the best theories postulated keeping it simple works."

Sterling Gold creeping higher £578

When the Dollar gold price is moving UP like now ($950) the sterling price (£POG) can go sideways, lower or higher depending on the exchange rate. Now that may seem obvious but
it makes a big difference if you are a sterling based investor. I wrote an article for the Technical Analyst magazine on this topic recently, discussing the recent trends in Gold and the GBP/USD exchange rate. In the short term the timing is crucial, but the longer the time horizon the less important the timing issue. £POG has underperformed $POG over 6 months ( -6.9% vs +9.5%) but over 10 years its +260% vs +269%!
Currently most of the Gold moves are dollar inverse moves, so the Sterling price is less volatile than the $Gold price, but all my recent analysis holds true- the technicals have turned bullish and I believe the correction low is in, with the price rally beginning that targets the old high near £700 .

the objective analyser

PS I would like to display more charts but I am having trouble with corrupt files ? Any ideas?

After the pain, comes the gain

Well that's the idea, "You've got to be init to winit", "no gain without pain", "risk it for the biscuit" -
all phrases designed to be helpful for the risk taker. So after the decline in gold from 940 to 905 comes the rally from 905 to 940 - so where does that leave us? Still long and looking for the next leg up to take out the 1000 dollar highs. I said before as long as 900 holds the market remains bullish in the medium to long term, targeting $1137 and that still holds true. Sterling gold has been very quiet between 560 and 570 but has developed some bullish divergences in RSI readings and MACD indicators that suggest the consolidation phase is ending. £700 is my target there. The end of 2009 is my timeframe, so now is the time to buy - "speculate to accumulate" as the City boys are wont to say.
Good luck!

Gold update

Gold is still in my buy zone $920 area, having been up to $940s a couple of times in the last week.
It feels as if some Gold bulls are losing heart, but the technical picture hasn't changed in the longer term. The only caveat to that is the April/May rally has lost its imbalance and is now neutral centered around $930. Price needs to get above $955 to turn shorter term profiles bullish again.
Sterling Gold price has started to slowly rise and looks good technically, I will have a chart on that tomorrow. As you know I have been pushing buying Gold against sterling for a while now.
happy trading ......

All Systems Go Part 2 - Gold

Gold fell into the solid longer term buy area this morning in London time. We are currently $923 -
recovering with a potential spike low from $918 to $913.2. Let's see how it pans out from here. I am long at $919.7 looking for the longer term profile NOV08 to assert itself (target $1100). The SEP05 profile is also very bullish, having just moved its longest line up from $663 (target $1400).
When we get the confirmation that we are embarking on the next leg up we can refine the trade etc.
One of the problems with markets is that they don't always do what you want WHEN you want!
But I find these market profiles are excellent at achieving timing with good location.
Good luck!

Update -

Update on positions - flat in everything now, out of gilts, RRS, NXT & my short in £/$ - concentrating on starting to buy Gold which has a potentially very good set up. (see earlier post All Systems Go from May15). Have bought $921 and working $918 buy order.
At this point I would like to clarify something very important - the other day I had the pleasure of attending an on line webinar with a US trader describing his daily routine, set ups and trading style. I was very struck with the notion of time frames on trades - every trader has a different personality with a preference for a a different style which suits different timeframes. I tend to look at trades which develop over days and weeks, rather than intra-day. This US trader was very excited about trading the Russell 2000 on a 3 minute chart, which obviously is a very short term & focussed timeframe. It suits a jumpy, aggressive in and out personality - ducking & diving, bombing & weaving, you've got to be in it to winit! Now this might seem obviously different from the longer term fundamental investment manager type approach, but you would be suprised how many long term views are expressed with short term pain thresholds! I have been guilty many times & it was probably my greatest breakthrough as a trader to finally understand the importance of timeframe to all trades. You have to match your personality & preferences with the market's action and run risk /reward scenarios that make sense in the timeframe of the trade.
happy days ...
the Objective analyser

TA perspective on sterling gold price

Sterling gold has some potentially positive technicals:
1. Yesterday it held the 200 day moving average
2. £565 low was a 49% retracement of Oct08-Feb09 rally - very close to a fibonacci 50% support level
3. The rally from £427 to £698 was impulsive & 1.63x which is another fibonacci multiple. The correction has been a 3 wave overlapping slow move
4.There is some bullish RSI divergence over the last few days - a sign of lack of downside momentum - and a possible reversal back up
5. From a market profile perspective the mathematical average of the Oct08 profile is £562.5, the market's longest line (where the market thinks the average should be ) is around £600 - so if the market is right, the gold price would have to rally to £773 to balance the demand/supply creating a balanced distribution with new mathematical midpoint at £600. I would expect this to be a fast, impulsive upmove taking the dollar price up to my $1100 objective.
happy trading.........
the objective one

Sterling Gold - is it a BUY yet?

The sterling Gold price has been falling as sterling has rallied 22% against the dollar, so we have been in a correction phase which I expect to come to an end soon.
The chart support comes in from £570 to £550 which
should be great location for resetting longs, looking for a move back to the highs around £700 as Gold rallies & outpaces the currency drag effect.
GBP/USD 1.6660 was a 50% bounce from the Aug08
down move - a short covering rally that should be complete now. Any problems going forward for the dollar ( and there are plenty) should be replicated with the UK as well, so I expect the big trend moves in cable are over and 1.40 - 1.65 range is a realistic consolidation range.
happy trading ..........

quick review of my trading world

Current positions :
FLAT in Gold , waiting for longer term levels to get long again $930 down to $918 level.
SHORT Randgold Resources, overbought & completed Up-profile from Oct 08 > target 4150
SHORT Next : met short covering target at midpoint of selloff 1660 > longterm trade targets 1100
as long as stays below 1635. Short term Profile looks balanced at 1520 , I am looking for a new distribution to start from this high volume midpoint.
LONG Gilts : This is more a RSI divergence bullish stochastic trade than a profile set up. JUL08
profile is bullish though.
I am fundamentally disposed towards an equity selloff starting again, and bonds having a retracement rally; far too many bears on bonds at the moment.
An interesting aside: I am watching GM trade on the pink sheets - I have a small short position
and it has been fascinating to watch it rally by 100%+ on high volume against all logic. Reading
the posts on google is a lesson in market dynamics & psychology- the emotional level of passion and self-righteousness that stock trading brings out in people! On one side you have the logicians who point out that GM will go to zero because debts far outweigh assets so under bankrupcy law common stockholders will get nothing! On the other side are those who are buying the stock because its going up! For those who wish to live on the edge, you can get your kicks, make money & pick apart the logicians - brilliant! I love markets........
Good trading-

the objective analyser.

profit taking in Gold

I took some profits last night in June Gold as it hit first targets in the $945-$950 area, I have some offers in just below the $960 and $970 levels - the May 1 UPprofile has been in control and still targets $970 for this move. Upside may get sticky now though as daily stochs & RSIs are getting high & potentially overbought -$955 looks like good resistance. There could be a pullback to $935 before $970 is hit. Keep the powder dry and look to reset longs for longer term move to $1100 - remember medium & longer term Gold is very bullish above $920.......

short NEXT

I am short NXT shares from the high 1500s looking for a distribution lower below 1400 to 1386, then 1367 & 1309. Stop is well defined - building value above 1535 to 1550 area. This is part of my general theme - sell stocks espec retail, housing, banks & buy miners, precious metals .........
I wax & wane between inflation taking all stocks higher in nominal prices which is the end result - inflate or die & stocks getting crushed first.......gd trading.

The May 1st Up profile in June Gold continues to act bullishly. Yesterday's brief spike down to $913 was perfect ( Luckily I didn't experience the temporary pain of feeling long & wrong!) because it hit the TPO point exactly & bounced! Now we watch $926 to see if the longest line will move up - another 2 hours or so needed, so after London go home.... I am off this afternoon to umpire & score my U13 cricket team so Happy trading & still long Gold and looking for higher targets ........

the objective analyser

BTW later I'll tell you about the short I've got in NXT and the profile set up there.........

Just a quick update on the bullish June Gold profile - good support comes in between $917 and $913 - a break below for > an hour or two would be of concern - otherwise it's just shaking of the
tree, getting some bulls off the ride - still on for $936, then $945, then $956-$960 for this move.
Also support is we have had the average $15 range for the day already. So day traders can buy $921-$918 and sell $926 and $930.

good trading

the objective analyser

All systems go for Gold

Some very interesting things are happening in the Gold market. The short, medium, and long term are all slotting into alignment in a bullish set up. This is an unusual situation as it is far more normal to have one time frame working in the opposite direction of the others. It is also favourable that the news coverage has abated and gold has taken a back seat to the equity rally, bank stress tests etc.
Nevertheless from a pure profile point of view, just looking at the demand supply imbalances, the short term as represented by the April 20 date for starting the profile is bullish above $913 with a target at $960 .
The next timeframe is the bearish move from the Feb09 top -this profile is now bottom heavy and bullish above $919 with a minimum target of $936. So the recent correction is seen as over. Medium term Nov08 up profile is also solidly bullish with a target of $1111 - probably within the next 6 months. The move since November has also served to turn the bearish profile from the Mar08 high bullish, so the big correction from that first move above $1000 is also over. That now has a target of slightly above $1100 as well.
Finally, the biggest battle at the moment in the Gold market is close to resolving itself. The long term Sept05 profile has been developing 2 competing longest lines - at $663 and right here $920. If $920 takes over which is happening (and will be confirmed by June), then it lifts the lid on the upside, with a target of $1400 as the Sep05 profile becomes an unbalanced profile rather than a balancing & mean reverting one.
Happy trading .

the objective analyser