-- Posted Wednesday, 8 September 2010 | | Source: GoldSeek.com
By Warren Bevan
The Golden battle lines are drawn and the first day was a bloody one.
The forward line for the bulls are drawn at $1,254, while the forward line for the bears is now $1,263.
It’s nary a $10 difference, that on any other day would not concern myself, nor the large interests currently in the thick of battle. But for now, that very narrow range is in the midst of being attacked hard and fast.
This morning’s gyrations were nerve racking, but held on the upper and lower ends.
Right now long term positions are likely best held, while short term positions should have tight stops. I expect this trading range to be broken shortly and this may very well end up being the years most profitable trade if it’s played correctly.
There are several methods to trade this move, some risky, some safer. Personally I like to mix it up with stocks or ETF’s as well as options to leverage the move and really lather the icing on the cake.
The most traded October futures contract shows exactly how much volume there was at the peaks and valley of this narrow range on the 5 minute chart.
Charts tell a tale, and this one was epic!
The daily volume in this futures contract was very high. The 5th highest in three months actually. Funny enough, the largest volume day was the exact bottom near $1,160 in late July.
Please take note of the yellow highlighted areas and match it with the volume (also highlighted) on the lower portion.
It’s not hard to see the incredible battle between the Gold bulls, and Gold bears today at those chart areas. The fact is right now we have a $10 range that is being fiercely protected on both the upper and lower reaches.
It’s times like this that make the trader in me nervous, but excited at the same time with great opportunity just around the corner.
We need to see a break one way or another, and once that break is confirmed then that will likely be the trend for months.
My partial bet is already for a higher price, but that could change very quickly. The market is always right one way or another.
Gold will go higher eventually, and it looks as if it will right now, but even if we do see a correction it’s nothing more than another great sale on physical gold.
Taking a gander at the ETF GLD shows that the real battle was waged in the futures pits. The full days volume was mediocre at best which means there is no conviction one way or another, or people simply are steering towards the physical product instead of the ETF.
This was just a quick note, to note the incredible action today. If you’re already subscribed, be ready. There’s going to be some good money made soon, and if you’re not subscribed, it’s not too late!
Enjoy the show!
Warren
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-- Posted Wednesday, 8 September 2010 | Digg This Article
| Source: GoldSeek.com
