Here are some thoughts from my swing trades in gold that day:
There was a mark up in price on the 25th of Jan 2011. This markup was an engulfing candle taking out the daily ranges going back to the 14th of Dec 2011.
This markup usually signifies the end of an accumulation phase, it was quite as almost no-one traded it. Gold continued to surge thereafter to close as the strongest sector for the week.
The surge was after the FOMC meeting that the Fed would keep rates unchanged through 2014, however, I believe that this news release was just a trigger that the buyers were waiting for after accumulating the precious metal. It probably would have gone up regardless because everyone knew what was coming.
We got confirmation on the validity of the move after we had a narrow day in our stocks on above average volume, this told me that the sellers were being kept at bay and that the buyers were participants with deep pockets (look at the pennant on the 5 minute chart of GG)
On Friday was got an open below Thursdays close where the stock was bought heavily to give us another engulfing candle that saw follow through to the upside to provide us with further evidence of the move.
Gold might churn a bit here, to pick up some breath. My bias is bullish gold and I would probably give it the most attention this week, with that in mind my stops will be present as my anything could happen in the market.
No comments:
Post a Comment