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A kools tool primer for newer traders #2.. a look at gold


Ok , you read and studied the primer, maybe you even followed me on the es thread. But does this hocus -pocus stuff work on all timeframes? Or on all markets? Well, lets see. You know how to do da maff! Right? Lets look at gold (feb gold specifically) . Im a very short term trader (mainly cause i dont have a large amt of trading capital!), but lets look at the bigger picture.... heres a daily chart. You notice we peaked out Dec 7th and had a nice correction, YOUR STILL BULLISH, BUT THE REBOUND APPEARS TO FALL SHORT around Jan 3rd at 1424. Maybe it'll go back up, but just in case, you want to know where it MIGHT be heading... time to do da maff!...
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feb gold
So you would be watching roughly 1334.80(which was good only for a small reaction. Also since we went below it the day it was hit(to 1333.10)and down to 1321 the next day ,we gotta call this a miss. next number is 1308.40. In fact i told a friend a few days ago to wait for his long trade till then. Any way, after a nice bounce we (surprising all the gold bugs by the way!) continued lower...ALL THE WAY TO 1307.70 HIT TODAY!!! And began another nice bounce! Pretty good call if i say so myself! Now look at the cycle chart and you'll see the time frame is right also....
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feb gold cycle
Now look the purpose here isnt to show my brilliance(or even that of my methods). Believe me ,i have my share of failures too! (remember 1334?). But hopefully you see the potential at least, in using the method and at the very least, youll understand the reasoning and jargon! So im not trading gold right now but if i were i would have taken a long at 1308.40, but be very mindful of the fact that it could still be on its way to the next number at 1274.40 eventually! I find it interesting that last night on CNBC'S 'fast money' one of the traders said he'd be a buyer at around 1270.... hmmmmm
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thu