Uptrend Intact

Came across this excellent gold chart that shows us that as long as we stay above the 50 Day Moving Average at $1099, we will be in fine shape. The Fast Stochastics is looking good and has formed a nice bottom.

I never used TA charts as much til after last years melt down. I am now of the mindset that more money can be made by playing the overbought and oversold TA peaks and valleys than to try and time the moves on basic fundementals alone. Note: I am referring to blue chip stocks with a healthy and steady volumes that gives the chart a true read.

Thinly traded juniors (like what I talk about mainly on here) are a different beast entirely ,and company news events/financings etc is what influences their cycles. Charts are reliable on them when there are breakouts after long periods of dead action.

When I look at the S&P 500 SPY chart I see a choppy range trade that looks very scary yet could burst higher in the new year but that will depend on company earnings. When I look at the gold chart above I can see a decicive line in the sand that helps me make crucial decisions that may ulitmately effect my junior picks as well as any blue chips or options trading.


You can't discount these crucial lines in the sand as all the hedge funds and institutions almost solely rely on them these days more than any other time I can recall. Propriarty trading firms amd black box institutions trading desks live or die by TA charts. It is a must to learn the basic skills and not rely on the latest stock picking site that seem to be popping up on Twitter and Facebook like a bad disease.

My concern with the gold chart is if that $1099 level is busted,what does it say about the state of the DOW and other world markets ? Will the US dollar shoot back like a rocket if this number is broken ? I would bet it would as the flood of dollar shorts covering will be frigging massive. Now is the time to watch the charts closer than ever but I don't expect the risk factor to rise til after Christmas.

On the bright side, the GLD chart I posted last night is showing very close to a bottom so if gold bounces nicely off this critical level, then the precious metals and the metals stocks may be ready to both launch into the next power upwave and take out the old $1220's high and that indeed would be sweet !