As you know I have been tracking gold again recently for a variety of reasons. Its close correlation with movements in the USD/JPY are worth noting but it’s also exhibiting price behavior indicative of a possible low. So the obvious questions that needs to be addressed is whether or not a medium term low in gold may have been reached and if it makes sense to start accumulating long positions.
It’s relatively quiet morning thus far which gives us time for another exercise in tape reading. This time we are going to take a more in depth look at equities and cover a few tell tale signs that tell us if and when the market has transitioned into another distinct phase. Let’s start with the Zero:
A final reminder that equity futures have now rolled into September, which is the official front month contract for the next three months. Time flies indeed! Before I know it I’ll be shopping for Christmas presents again and bitching about the cold weather. In the interim we’ll have to earn our keep, so let’s see if the brand spanking new ESU7 contract offers us a decent entry opportunities:
Another difficult lesson to be learned as an aspiring trader or investor is that trending markets are either the easiest or the hardest to trade. Clearly it’s great if you got in early and your positions are flashing bright green. Otherwise it very much depends on your trading style and of course whether or not you managed to get a seat on the bus. You may prefer to wait for a confirmation retest before hopping on an unfolding trend, you may not get filled (it happens!), or perhaps you simply got kicked off just before it took off.