click chart to enlarge
We haven’t talked about Gold for quite some time. It has achieved all time all time highs as probably everyone who reads this is aware. Over the past year, since October 24 of 2008, it has gone from the low of 69900 (basis the December Comex/Globex contract) to its October 14 2009 high of 107200.
We have been watching Gold as well as many other markets and market groups, for signs of exhaustion to their bull market rallies. Much of it has to do with the value of the US Dollar, which we have talked about at times in our Trade Focus. We noticed, in the case of Gold, a top heavy look developing on intermediate time frame charts. If there was to be a correction or perhaps the start of something larger, we wanted to be prepared particularly if the risk reward was warranted.
We have included a chart of the 120 minute December Gold for illustration and the Section on December Gold from our most recent Trade Focus prepared October 22.
Gold (Dec.) – As in the Silver we will stay with our suggested long entry approach from last week which is to initiate long entries with intraday penetration of 107550 or with a close at or above 107330. Stop protection for this long entry approach we believe should be intraday penetration of 104170 or a close at or below 104270.
We also believe now that we can suggest a short entry approach with intraday penetration of 104170 or a close at or below 104270. Stop protection for this short entry we believe should be intraday penetration of 107550 or with a close at or above 107330. Retracement levels of support are approx.: 103820; 102770; 101720. The next series below this is approx.: 101680; 99980; 98280.
Today's action (Monday 10/26/09) in the December Gold contract elected the suggested short entry approach in our weekly Trade Focus. Stay posted.
Good trading to all
Jeff and Diego
CB&S Division
MF Global Inc.
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
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