I totally agree Chris. I am watching the 1000 level as well. As you can see from Clocks chart (showing 1000 as a solid demand zone), there is probably a lot going on at that level. Here's what supply (resistance) and demand (support) theory says about that level. Price moved away aggressively from the 1000 level. Why did it leave that level so violently? Because there was an imbalance between supply and demand (more buyers than sellers, i.e demand was greater than supply). Because the move was so violent, most traders were looking for a pullback to go long. It never happened, price tried to pullback and then took off before reaching that initial breakout level. Now what we have is a stake of buy orders that were left at that point. Remember, there are more buyers than sellers at this level. So when price returns to the level, all those buyers are going to get in pushing price back up again (because demand is greater than supply at that level). Now that price has given us a target at 1200, most of these orders would target 1200. What's happening at 1200? Supply is greater than demand at that level (more sellers than buyers to prices don't stay there for long).
Basically my game plan when gold gets back to the 1000 level is to buy and hold for 1200. Will this happen this exact way? Probably not, but this is a high probability play. Recall what Dr. Alexander Elder said in his esteemed book, TRADING FOR A LIVING, "Innumeracy - not knowing the basic notions of probability, chance, and randomness- is a fatal intellectual weakness in traders." You just have to flip the odds in your favor.
Just be patient and wait for the high probability/low risk entry. And for this gold chart, like Chris has mentioned several times, the 1000 level is that area.
Again, supply and demand (support and resistance) trumps all in trading.
Kulu
Basically my game plan when gold gets back to the 1000 level is to buy and hold for 1200. Will this happen this exact way? Probably not, but this is a high probability play. Recall what Dr. Alexander Elder said in his esteemed book, TRADING FOR A LIVING, "Innumeracy - not knowing the basic notions of probability, chance, and randomness- is a fatal intellectual weakness in traders." You just have to flip the odds in your favor.
Just be patient and wait for the high probability/low risk entry. And for this gold chart, like Chris has mentioned several times, the 1000 level is that area.
Again, supply and demand (support and resistance) trumps all in trading.
Kulu
DislikedHere's a chart of gold, showing a few places you could have gotten hurt trying to blindly buy on dips.....The next chart shows what I am watching out for.....major support. The $1000 mark is obvious, and the $1030-50 area would included the massive break out we had. Only time will tell, but this chart shows a great example of waiting and being patient......waiting for the right spot to "fire your torpedoes."
ChrisIgnored