Gold Getting Ready To Make Big Move
Gold has had a monsterrally of almost $90 over the last 19 trading days. What looked like a breakdownturned into a great buying opportunity or a short squeeze. On Thursday, goldlooked like it had the final blow-off to the upside on heavy volume, making ahigh at $1,327.30 in the February futures. Since Thursday, gold has tradedslightly lower than the high but has stayed inside a $20 range.
Typically, when marketsstart to have consecutive inside days, the common theory is a big move iscoming and usually that move follows the prevailing longer-term trend. Gold should move 4%-6% from where it's trading now. The move can be either way asthe chart compresses as it gets ready to break out of this range.
We expect the move to be tothe downside; the rally was more of a dead-cat bounce and a test of the lows isin order. We are watching the $1,328 level on a weekly basis. Until gold closesabove that level, we will trade it from the short side. We are long-termbullish, short-term bearish.
By Todd 'Bubba' HorwitzContributing tokitco.com
Follow @Bubba_Trading
Bubba@bubbatrading.com www.bubbatrading.com/ Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.