Gold Trading plan, Buy the dip November 2015 – Los Angeles
With the world in a slightly precarious position with Russia and the US squaring off for Dog fights over Syria and Turkey, Europe invaded by refugees, and China in the US playing Chicken over an island with an air strip you would think that gold would be skyrocketing like all the closet crazy economists have been saying (for 3 years). But gold is not playing. Gold is not playing by the rules which everyone is expecting. In fact gold has just showed us the the Key resistance of $1200 is not where it is going and that there will be a squeeze and stop run to a lower support.
Today we started with just over a 2% sell off and have slowed as we moved into the Japanese open where the BOJ Bank of Japan has announced it will not be easing for this quarter. Boo hoo, the US has to get another patsy for stock buying and currency devaluation.
Needless to say, it does look like we could be consolidating in a $150 range that could be quite profitable if you can buy on the dips and sell into the resistance. Gold trading is very risky and you can have a lot of exposure defendant on your leverage and how you manage your risk. It is best you have a Gold Trading Plan.
$1132 is a major decision point for Gold. We can consolidate in this range or if sellers step in, we could see a move back to the psychological $1100 and possibly a move to previous swing lows around 1077,
Watch for slow periods, most traders get caught in a dull market. This is where we can see agressive buyers move in and blow out any short sellers. If we do break below $1077 then watch for a move for a full extension that could test to the $1000 area. I don’t see anything pushing the market this far. But be forewarned, when gold price action slows down, it is normally to break to new levels. The last two and half weeks have been slow. We are just approaching the resistance on this bearish trend so watch your risk.
US Dollar Index trading plan
The US Dollar index has a Death Cross (see previous article), this could be a turning point for the dollar or it could be a brief period of consolidation then a continuation to new highs. Presently, price is at 94.90 area and has been moving down breaking a supporting trend line. If the dollar index price closes below this area then we can look for a continuation to the next support at 94.255, the previous swing low, which could be support. If sellers pick up volume we could see price test to 92.60.
The volume on the Dollar Index DX 12-15 is decreasing with a slight bump up on the daily as sellers moved in breaking the supporting trend line. Take note that from the move down on August 21 we have large capitulation volume sell off. this topped 140,000 contracts. average volume this past week has been 26,704 contracts and has been under the weekly average drawing it down.
Dollar index Trading Plan for late October through November 2015
Sell side to support through October, will be selling the rallies and shorting in to any continuations if meets risk criteria. November, watching for a buy side opportunity after some sort of downside support or capitulation revealing the Market Makers levels. November is typically a strong month for the dollar index, although last year we saw mostly consolidation.
China is also back from vacation and it looks like they will continue their own Quantitative easing program. Their best interest seems to devalue the Yuan. More on this later.
Outliers to watch for: Ukraine has been quiet as the US has been played out of our unseating of Syrian Assad. This could be a hot point as many international player have brought planes, boats and missiles to the game. Europe, could see more unrest as immigrants fleeing the previously mentioned situation are thrown into the winter months and no place to live. Demonstrations could be on the social menu both for better living situations, and those opposed to the refugee numbers moving in. There are to many financial outliers to list as derivatives, ETF’s, credit swaps, and other financial products are soaring.
Next week, more on the catastrophe hedge, Gold.
Death Cross October Trading Plan October 2015. What is the death cross in Technical Trading?
The death cross is used in technical trading and occurs when the 50 moving average crosses the 200 moving average on a daily chart. This can some times show a reversal of the general trend. The implication of the Death Cross is that we are switching from a long term bull market to the beginning of the bear market Sometimes it can also show a correction for a further continuation of the major trend as we saw in 2011. Presently we are in the middle of this pattern and haven’t seen the break in either direction. In this chart it could mean that we are in a start of a Bear Market.
We’re focusing on a daily chart for the S&P 500. Price action on the S&P 500 is in a consolidating range from 2020 to 1830. There is an 80 point range which buyers and Sellers have been pulling price around. Price under the 50 MA has been very volatile.
In early September we experienced the “Death Cross” Where the 50 moving average has crossed the 200 moving average.
The Death Cross as a continuation pattern.
This happened four years ago, August 2011, where we had a similar pattern of a selloff with a consolidated range where buyers and Sellers were fighting for direction and then after 4 tests down on the daily charts we passed through the 200 Moving average and then continued in The bullish direction of the market. Once price broke through the 50 moving average and the buyers were in control price tested back to the point of control where support was found and then we continued back through the 200 moving average and on to new highs.
The Death Cross can be a reversal pattern or a continuation pattern. Joel Wissing
The Death Cross typically means the 50MA has crossed below the 200MA signifying the emergence of the bear market. This is where we will see a dominant selling of rallies until Market makers have flushed out the investors. This will give Market Makers a new base to trade from as they start to accumulate at the lower price levels.
Watch for support and volume at the approach of the support and resistance levels.