Outside the box
I have received a few emails, concerning my recent article "gold stocks, what to do now?"
These folks insist that I'm wrong, because gold is in a bull market, trend is up, all sell offs in gold stocks are buying opportunities, etc etc...
Folks, I don't work for the "gold cartel," if there was such an entity to begin with. I am not bearish because I'm a short seller. My responsibility is to my subscribers, and my job is to guide them in and out of the markets, bull or bear.
If you have read any of my previous articles, you'll know that unlike many articles you read, I do not predict or forecast. I believe the markets are dynamic and subject to constant change, and just because we are clever with lines and patterns, the markets do not fit neatly in our little boxes. Those who are suggesting buying and holding are simply doing it on faith because frankly, my charts are not screaming buy.
How to draw trendlines
I don't intend to offend anyone, and I'm not the authority on technical analysis. But drawing trendlines is very basic and simple.
Support (S) trendlines are drawn connecting the points of support.
Resistance (R) trendlines are drawn connecting the points of resistance.
The $XAU chart is text book perfect for trendlines.
The four year uptrend was violated in April, and I reported as such.
Once support is breached, we are no longer looking for supports (bottom up approach) to be a buyer. Instead, we look for points of resistance (top down approach) to be a seller. But the chart above is a weekly chart, a rally from current level to "R" is a 10 point move, which I consider a tradable rally. Therefore...
We go to the daily chart and find set ups to trade with.
When "R" is breached, we buy.
When "S" is breached, we sell.
This is called "swing trading."
No predictions, no forecasts, no opinions, no BS. Simply trade, and trade simply.