GOLD is still trading near its 50% Fibonacci retracement level in a realyl quiet manner. I am still expecting to see a bounce to at least 1170, so if you haven’t read my previous post, then you can jump into the trade right now.
As for SPX futures, it has formed a nice bull flag, and has just broken above the upper trend line trading at 1114 at the moment. I am looking to grab some longs at a pullback to 1111-1112 level.
The throat sighs!
We often see a lot of arguing what time frame to use while trading, some insist on using short term charts, while others suggest that short term price movements is just a noise and can’t be relied on. Although it depends on the strategy, whether you are a scalper or a swing trade, the combination of several time frames is still the best option of all. The reason for that is easy – while the longer time frames help you to determine the direction of the main trend, and major support resistance levels, the 1- or 5- minute charts will help you find the best entry point.
Here is an example with EUR/USD pair:
Even though the medium term chart has turned bearish, in the longer term we are still in the bull mode. So, you decide to go long EUR at some point. So, you start the analysis with a 4- and 1-hour charts.
On the chart above you see the first signs of a possible turnaround – a MACD divergence and that the price is testing resistance point. Being an experienced trader, you understand that if the price breaks above the resistance at 1.4680, then according to Wyckoff Schematics it can run as high as 1.4900. So, you don’t want to miss the train. You start looking for an entry point with the best Risk/Reward ratio and zoom to the 15-minute time frame.
The 15-minute shows us that a reversal is highly possible, and in fact the price has already tested the resistance at 1.48. Now it has pulled back to a 50% Fibonacci retracement, making 1.4650 a perfect spot to enter a long trade with a good R/R ratio.
The last step is enter the trade. For that you zoom to 1-minute chart and place a buy order somewere between 1.4652 – 1.4647. Then you place a tight stop of 15 pts.
The trade above has not only great R/R potential, bu it is also a stress free one:
In conclusion, I’d like to add that this is the type of trades you want to make each time – stress free, with high reward potencial. There is no need to rush in every trade you see, just be pacient enought to look for the best ones, and you’ll see your account growing expotencially.
Finally, after unstoppable rise up the GOLD has retraced to the more reasonable levels. Right now we are trading right at the 50% Fibonacci retracement level and any weakness in USD will spark a huge buying interest in GOLD. My suggestion is to start accumulating GOLD at 1110-1130 levels. Place stop below 1100 (NB! use position management carefully) and a target at 1250.
If you are trading stokcs and ETFs, then buying DGP at 28.00-28.50 is a good bet. 1st Target 30.00-30.50 (I would personally exit 1/2 there and let the rest ride). Stop belwo 27.50.
If you have missed my call yesterday, there has still been some good entry points to get in. Check out the chart below:
Here is a more detailed analysis why 1088-1090 was a good buying point
Gold is a pretty save bet right now. We have a strong support at 1020, which is a Fibonacci 50% retracement and a strong resistance turned support level. I would suggest accumulating full position in a 1020-1030 price range, using a 10 pt. stop. First price target is 1045.
The trading plan would be as follows:
Market looks quite heavy right now. All the action looks more like a bull trap. 870-375 is a very sweat shorting area, good for at least 20 points. Stop above 880.
Of course, need to keep an eye on FED, but what we see right now is a rice on low volume upward to 50% fib. resistance level and MACD divergence.
Here is ES (SPX futures) chart for more clear picture:
Still, I am a little puzzled though, as most of the stocks I follow have broken above previous resistance and forming bullish patterns. It would be interesting to see who leads whom, index will follow socks or the opposite.
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