Gold, Silver, and Indexes Using Price Action

[Gringo]

I don't like my stop to be picked so I choose not to place it for ETF. If I were expecting to be busy or unavailable I'd place it. Huge drops aren't rare but generally for ETF a few percentage points gap is not beyond reasonable.

 

[k p]

Ah.. gotcha... thanks! My goal was to always trade NUGT or DUST in my TFSA since us Canadians can almost trade tax free (although that is up in the air at the moment), but it makes sense to learn how to trade first.

 

[Gringo]

You're right about TFSA. Even though it's supposed to be tax free if a person makes too much money by trading or luck the tax man comes knocking at the door. It's one thing to tax and another to declare something tax free and then show up to collect tax from it.

 

[k p]

Tell me about it. Those stories came out in early January, but I haven't seen any updates. Some people were apparently bullied into paying the taxes which they did! I suspect this will eventually go to court and the government will have to make very clear rules. What I like about trading ETF's is that at my Canadian broker, buying them is free... only selling them costs money... so you're already reducing your commissions by half!

 

[Gringo]

Nothing beats the futures though. Small commissions, high liquidity. Open a lot more. Minimal gaps.

 

[k p]

I couldn't agree more, and honestly, doing this on a higher time frame with a separate account and holding for weeks seems like a great strategy as well. In due time...

 

[Gringo]

I wouldn't call it a shakeout unless there's a float. More likely it's just a test of selling interest. Since buyers stepped in, that was that, tho there's no guarantee it won't be tried again.

Test of selling interest was tried again and once again demand showed up. Although I was perilously close or the danger point and will be looking at exiting earlier and re-entry next time around. Nonetheless, last year I had noted that I missed a lot of good entries because I wouldn't give price much room to maneuver before bailing out.

In EOD trading these up and down gaps do happen and the slowness of the passage of time and gyrations all day make it appear like a long day. I didn't have much of unease and have accepted the loss in case trade doesn't turn out well. I've never felt this calm before. The emotions were a bit like small waves and not overwhelming this time around.

My outlook is still positive. I did realize that Gold Miners were showing greater strength than Junior Gold Miners. When I looked at Gold Miners the LH became evident and so did the higher RET. I am going to stick with this now but will have to be more attentive to these small differences. On the weekly my eye didn't pick the strongest vehicle correctly.

For comparison I have added GDXJ and GDX. For GDX notice how price RET is above 20 and the around the LSH, whereas GDXJ has price dipping below the LSH of 29.5. This clearly was a mistake on my part.

I am keeping an eye on gold futures below as they show overnight activity as well. The gold futures appear to be changing character and are showing signs of some strength. Price is halting it's downward move and appears to be turning. There's a bit of sideways movement still and may take some time, and may even fail. The future isn't known and all we can do is enter at locations we believe to have higher probability of one thing over another. The 1200 area seems to attract demand and we need to have an eye on the proceedings here.

Below we zoom into the retracement from 1300 down to 1200 area. Notice the double bottom around 1190 in the 5H bar interval. Notice demand pushing price above the LSH and retracing. So on the 5H bar interval we also have a buy signal after this retracement.

It is worth repeating again that the future is unknown. Price may continue to gyrate here for days to weeks or drop down. That magic of price going either up, down, or sideways still applies. I am holding my long position and letting the waves tell their story.

Gringo

 

[Gringo]

QQQ are also at the upper TC. This has happened before and it might happen again. The price dropped somewhat harder today. Demand wasn't willing to chase offer and chose to withdraw. The Monthly -> Weekly -> Daily -> Hourly combo is shown below. The hourly is showing DL break and I'll be closely watching from here for a retracement.

Gringo

 

[Gringo]

GDX is showing demand on the weekly as re-asserting itself. This I would constitute as a positive signal. Demand around 20 was solid enough.

Those who are familiar with this SLA should be able to see what I am talking about on the weekly. This weekly thing is a larger ship and might take some time before it rights itself if ever. So it might take a bit of patience.

Gringo

 

[bmwhendrix]

Gringo, Does this look reasonable to you. We have a bounce off of a hinge mid point and a hit on the demand line which is also a pullback to the trendline that was broken. Seems like this is a lower risk area for establishing a long position.

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