Gold, Silver, and Indexes Using Price Action

Price for GLD is showing strength again. This is in the context of price unable to go above the last swing high so far. Nonetheless, with tight stops it's a reasonable entry. It's not the best and price might retrace back down to support again and give a better entry, however, at this juncture we can't be sure if that's going to happen. So we take what we can and stay alert.

One doesn't need to go all in and can test the waters with smaller buys. If they don't pan out then one exits without much loss. If price strengthens then subsequent buys can be made.

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Gringo
 

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Price plopped down pretty fast. This inability of demand to hang in there, in the face of supply, is not a sign of resilience. I prefer to not be in situations where the expected doesn't come to pass. Here price is not showing the kind of strength I was expecting it to exhibit, and that is reason enough for me to become careful. Why sit there and hope? If strength returns, I can always rejoin the party. For a loss of less than 1%, I am pulling the plug on this long.

There are those who would have kept stop loss point below the support level. It's another way of keeping one's losses in check. My reason for exiting is that the drop was a bit too steep for someone who was expecting demand to overwhelm supply, hence, the reason for the original long. If that demand is so weak that it's just vanishes under the first sign of adversity, then I don't want to be betting on side of that demand. I would rather protect my principal than sit there hoping. I'll be keeping my eyes on the supply and demand dynamic for any signs of strength, in case demand does decide to assert itself later. It is here that personal preferences and risk tolerances are beginning to show up. Two people reading similar price action still can end up entering and exiting at different locations because of differences is risk tolerances.

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Gringo
 

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Since you are EOD trading, would is be possible to share more examples of 'springboard' situations? I realize annotating these charts in detail is time consuming. But if you throw up some empty charts, perhaps we could discuss our analysis of the balance.
 
Quote from game:

Since you are EOD trading, would is be possible to share more examples of 'springboard' situations? I realize annotating these charts in detail is time consuming. But if you throw up some empty charts, perhaps we could discuss our analysis of the balance.
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Realistically speaking, I don't know what a springboard is anymore. I just see price moving up and down. Straight lines are given much more importance than vol and s/r now.

Gringo
 
Quote from Gringo:

Realistically speaking, I don't know what a springboard is anymore. I just see price moving up and down. Straight lines are given much more importance than vol and s/r now.

Gringo
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How would you narrow down your options from the many vehicles available? What would the basis of vehicle selection be?
 
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How would you narrow down your options from the many vehicles available? What would the basis of vehicle selection be?
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I prefer cleaner signals. In practical terms this means there are fewer crazy spikes that go nowhere. I also prefer somewhat of a trend. It's fine to not have trends for some time, but the instrument has to move. Without movement there's not much profit to be had, for the kind of directional trading I prefer.

I mainly look at ETFs but Db suggested to have a combination stocks as another option. This is mainly when the ETF is not behaving cleanly and giving signals that need to be liquidated often. Usually high liquidity stocks that move and are part of an index suffice with there greater movement . I would say stocks are better in certain ways because they trend, mostly upwards though, but also have those unexpected news and earnings that get tricky to handle. It's better if the ETF also has a corresponding futures item. This allows for better analysis due to the extra data. Basically, by looking at the instrument and with some testing it's not hard to figure out what's working at what is not.

Gringo
 
GLD is zigzagging up and down and I am not clear enough which way it wants to go. Today we'll have a look at GDX (Market Vectors Gold Miners NYSE). GLD and GDX although are generally moving in the same direction but there are certain differences.

GDX is clearly stuck in the downward trend channel. Price made a lower low and is now close to the upper trend channel. The price actually is having some trouble around the 21.5 area which is the swing low from November.

I'll try to keep an eye on both and see when both get in sync again. I don't really need both to give a signal for entry to initiate an entry, but there's no harm in staying alert to that possibility. Just a cursory look seems to indicate that stronger moves were preceded by an entry signals on both, within a tolerance of one day. It's closer to the end of the year, and I am not sure whether the signals around this time are valid or not. Nonetheless, you can be sure that an eye shall be kept on these two ETFs, by your friendly neighborhood price man!

Here's the chart for GDX:

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Gringo
 

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Gold has shown persistent weakness for months now as is shown in the chart below. The trend is still down. We appear to be at a place that could be categorized has having the potential to offer some support. The materialization of that support is of course dynamic, and dependent on demand actually showing up, or supply withdrawing. One of these have to occur for price to halt its downward trajectory.

So we look at 115 area and just observe if price finds some reason to rise. Now just because a rise comes doesn't mean it's time to go long. This is a monthly view, and my decisions are based off of daily bar intervals or at times hourly.

On a side note, many years ago, at a time when I was still attempting to learn to read price, Dbphoenix had pointed out a hinge and alerted when price breakout occurred to the upside. It was an occasion, that taught me the value of paying attention to the bigger picture for perspective.

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Gringo
 

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May we all have a very Happy Holiday Season and a Happy New Year.
May the future bring more health, wealth, and happiness than we ever dreamed possible.
May the trading gods show mercy on those who have not yet been blessed.
May we all get the eyes to avail ourselves from the experience of those who have come before.
May we learn from our mistakes, and never repeat them.
May we learn to be humble, so as not to disrespect those trying to help us.
May we not squander precious moments in petty differences, and stay in touch with those who matter.
May we have the courage to express our feelings, and grant ourselves the freedom to be happy.
May we realize the beguileness of time - so limited in scope, yet so unlimited in appearance.
May we look back at our lives at the onset of our sunset, and leave it all behind peacefully, knowing in our heart of hearts, we lived a life staying true to ourselves, and not a life others expected of us.
May we experience the elation and the disappointment of love, and yet continue to love.
May we all have a very Happy Holiday Season and a very Happy New Year!

Gringo
 
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