Well, today was one of those days that just felt draining. The main culprit, of course, was gold, in which I had (past tense) a big long position. This is now one ugly graph. The wrenching thing is that, as of Friday, gold looked poised to have a hell of a great week starting today. Umm, nope.
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Here’s today’s swing-trading watch-list:
Long US Steel Group (X)
I gotta tell ya, I am not happy with precious metals. If I get into a trade and it goes poorly, and I realize there was something really obvious I should have heeded, I am mad at myself. But at times like this, when everything through Friday looked rock solid, I can only blame my lack of clairvoyance anticipating the nearly $1.4 billion megadump of gold at today’s opening. All the same, there are still plenty of mining stocks – like Anglogold, shown below – that I think are solid bullish plays.
SPX retested the daily middle band on Friday and that held well. Now we get to the interesting part of the candle statistics that I was looking at on Friday morning, albeit with a sample size of only three similar candles over the last twenty three years. After the next day all three then moved to touch the daily upper band on SPY. One of those made a full touch and marginal higher high on SPX, and the other two touched the upper band on SPY but fell short of the touch on SPX while making lower highs. What was the really interesting part though, is that after each tested the daily upper band intraday, all three then fell hard to test the daily lower band on SPY within three days. It will be very interesting to see whether that is repeated here. (more…)