My take on gold
Posted 08-24-2009 at 03:30 PM by freiheit
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Updated 08-24-2009 at 04:23 PM by freiheit
Updated 08-24-2009 at 04:23 PM by freiheit
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Hello folks,
many people shared their views on gold in the last week, and I want to continue that trend.
First, let's start with a longterm view on the chart:
(1) The real start of the bull market was in my view back in 2001. The bottom was already found in 1999, but the market was sort of ranging for 2 years.
(2) Since 2002 gold made new highs every year.
(3) In 2009 gold has still enough room to make a new all time high.
(4) In 5 out of 7 of the past bull years, gold was strong and made new highs at the years end.
(5) Even when gold didn't make new highs at the years end, it was strong.
(6) On average the 50 weekly MA was hit once every bull year. Last year there were three crosses. It was already hit once this year, maybe the last time?
(7) 200 weekly MA is pointing up all the time. This doesn't mean a lot though.
(8) 50 weekly MA started to point strongly up again.
Now, let's look into a medium term chart:
This is similar to what EKTrader and others have shown, I believe his analysis on this is nicer, and I also don't have the volume data.
(1) Bollinger band: You don't need the bollinger band to see it, but this is also (IMHO) a good example for which cases a Bollinger Band can be useful. The band is contracting in the last week. After a period of contraction follows a period of expansion, to the upside or the downside, we'll see.
(2) The lower trend line represents the "bigger" trend, so it's more likely to hold than the upper trendline.
(3) There is a long series of higher lows, that I tried to show using the up arrows.
(4) Everytime price runs into resistance (down arrows), the resistance seems to become smaller.
(5) Stochastics is nearer to oversold than overbought.
The trading range in gold was very narrow in the last weeks, so it was boring to follow the gold price. I don't think that can continue forever.
What could happen:
Scenario (1)
- The upper trendline breaks.
- Trading range increases, people jump on the bandwagon.
- Gold goes above 1000$.
- Gold makes new all time high.
- People become even more bullish on gold.
- Many new all time records until the year end, continuation of the strong year end rallies.
Scenario (2)
- The upper trendline breaks.
- Trading range doesn't increase that much.
- Gold barely goes above 1000$.
- Gold runs into big resistance.
- Fear enters the market.
- Gold returns to 50 weekly MA and below.
Scenario (3)
- The lower trendline breaks.
- More professionals enter the market short.
- Gold sells off, and tests support at last year's lows.
Scenario (4)
- The lower trendline breaks.
- Gold picks up new steam when falling below the 200 daily MA.
- Strong year end for gold, but not making new highs or barely reaching 1000$.
I could think of more scenarios, but these came to my mind first.
many people shared their views on gold in the last week, and I want to continue that trend.
First, let's start with a longterm view on the chart:
(1) The real start of the bull market was in my view back in 2001. The bottom was already found in 1999, but the market was sort of ranging for 2 years.
(2) Since 2002 gold made new highs every year.
(3) In 2009 gold has still enough room to make a new all time high.
(4) In 5 out of 7 of the past bull years, gold was strong and made new highs at the years end.
(5) Even when gold didn't make new highs at the years end, it was strong.
(6) On average the 50 weekly MA was hit once every bull year. Last year there were three crosses. It was already hit once this year, maybe the last time?
(7) 200 weekly MA is pointing up all the time. This doesn't mean a lot though.
(8) 50 weekly MA started to point strongly up again.
Now, let's look into a medium term chart:
This is similar to what EKTrader and others have shown, I believe his analysis on this is nicer, and I also don't have the volume data.
(1) Bollinger band: You don't need the bollinger band to see it, but this is also (IMHO) a good example for which cases a Bollinger Band can be useful. The band is contracting in the last week. After a period of contraction follows a period of expansion, to the upside or the downside, we'll see.
(2) The lower trend line represents the "bigger" trend, so it's more likely to hold than the upper trendline.
(3) There is a long series of higher lows, that I tried to show using the up arrows.
(4) Everytime price runs into resistance (down arrows), the resistance seems to become smaller.
(5) Stochastics is nearer to oversold than overbought.
The trading range in gold was very narrow in the last weeks, so it was boring to follow the gold price. I don't think that can continue forever.
What could happen:
Scenario (1)
- The upper trendline breaks.
- Trading range increases, people jump on the bandwagon.
- Gold goes above 1000$.
- Gold makes new all time high.
- People become even more bullish on gold.
- Many new all time records until the year end, continuation of the strong year end rallies.
Scenario (2)
- The upper trendline breaks.
- Trading range doesn't increase that much.
- Gold barely goes above 1000$.
- Gold runs into big resistance.
- Fear enters the market.
- Gold returns to 50 weekly MA and below.
Scenario (3)
- The lower trendline breaks.
- More professionals enter the market short.
- Gold sells off, and tests support at last year's lows.
Scenario (4)
- The lower trendline breaks.
- Gold picks up new steam when falling below the 200 daily MA.
- Strong year end for gold, but not making new highs or barely reaching 1000$.
I could think of more scenarios, but these came to my mind first.
Total Comments 4
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$979. Seems like gold is picking up steam!Posted 09-02-2009 at 12:12 PM by freiheit
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hi freiheit,
yes, seems like we had some correct calls here on informedtrades
will be interesting to see if it continues, of if we get a pullback. i would like to see this trend continue through the end of october, if that can happen i think we might see the next big leg up.Posted 09-02-2009 at 12:21 PM by Simit Patel 
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Nice work. It will be interesting to see what happens. I just closed 3/4 of my position aud/usd earlier today. If I see that it breaks through I will trade it by building on my aud/usd position again.
How are you trading it freiheit?Posted 09-08-2009 at 11:05 PM by mattman
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Thanks. Well, I have a conservative approach to "trading gold", I have some physical gold&silver bullion that I don't even think about, and I've some gold stocks, that have a nice leverage for gold. Check out my gold and silver watchlist on this blog.Quote:Originally Posted by mattman
Nice work. It will be interesting to see what happens. I just closed 3/4 of my position aud/usd earlier today. If I see that it breaks through I will trade it by building on my aud/usd position again.
How are you trading it freiheit?Posted 09-09-2009 at 03:21 AM by freiheit
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