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Technical Notes on Gold
Waiting for the new Trend Channel
by Alex Stonehouse
Feb 18, 2006
I like to keep things simple. Lets look at a
three year chart. Clearly the long term trend is up. Leg
2 of the bull market is definitely underway.
That being said where do we go from here.
I see we have several options. One, gold
declines in a normal pull back fashion does its Fibonacci
retreats, and worse case scenario for the longs, you test the three
year trend line around 470. Another way we can go is we
can pull back and consolidate for several months before we start the
next leg up. Third we can have a very short correction here and find
support off this 50 day moving average and move higher through the
green upper trendline going parabolic. Lets face it ..
its gold, anything is possible.
My view is that Gold goes much higher from
here in the long term.. three plus years. So what to do now.
That depends on what you hold now. If you are leveraged your
on your own (I assume you're leveraged because you are an expert and
you know more than I). If you don't have a position I would sample
soon, knowing you could pull back and you have to understand you have
to start entering sometime. The more gold corrects the larger
position you should take, up to the percentage of the
portfolio you feel comfortable with.
Sometime this year I believe these green
trendlines are not going to be valid and that gold is going to take
on another channel much steeper. It could happen sooner than even
I expect.
Stay tuned..
contact: alex@leg2capital.com
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