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Gold & Gold Stocks
Riding a Thin Line
by Chris Vermeulen
This week in gold we have seen
prices drop lower creating a lower low. This is generally not a good sign if we
want to see higher prices in bullion and gold stocks. That being said, a lot of
traders are now starting to short gold because is has filling its gap lower
which occurred Monday at the open due to over night commodity prices.
I am refraining from this short term
play because of several things:
1. Gold is still within its support
zone and could reverse any day
2. Although we have a lower low this
pattern could very well be a 1-2-3 wave retrace
3. Stochastic Indicator for gold is
starting to turn up indicating possibly stronger prices
4. Gold stocks are currently at a
short term support level
GLD Gold Fund Trading Chart
Gold Bugs Index (Basket of Gold
Stocks)
Technical Trading Conclusion:
The price of GLD has been retracing
since February after making its big run from $70 to $98. We all know the market
moves in zigs and zags and some bigger than others. And we all know that large
moves always require some type of pause whether it’s a sharp pullback, flag,
Pennant, wedge or 1-2-3 retrace before continuing in the previous direction.
Only time will tell what gold will do next. We simply must manage our exposure
and focus on trading low risk setups when the momentum is on our side.
If you would like to receive my
trading reports please visit my website:
www.TheGoldAndOilGuy.com
Chris Vermeulen
 Chris
Vermeulen is Founder of the popular trading site
www.TheGoldAndOilGuy.com.
There he shares his highly successful, low-risk trading method. For 6 years
Chris has been a leader in teaching others to skillfully trade in gold, oil, and
silver in both bull and bear markets. Subscribers to his service depend on
Chris' uniquely consistent investment opportunities that carry exceptionally low
risk and high return. Reach Chris at: Chris [at] theGoldAndOilGuy [dot] com
This article is
intended solely for information purposes. The opinions are those of the author
only. Please conduct further research and consult your financial advisor before
making any investment/trading decision. No responsibility can be accepted for
losses that may result as a consequence of trading on the basis of this
analysis.
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