On March 7th, I published an article titled, "Correction Ahead in Gold" published here. We did in fact have that correction and it was a nice ride for those of us who got on the short side of the trade. JDST and DUST were two examples of rewarding trades for the move down.
After the last taper and following the down move, we spent some time going sideways, but now have confirmed a bullish trend in Gold and the Miners. In fact, Americanbulls.com now has long recommendations on JNUG, GDXJ and NUGT. Those charts have all confirmed bullish in the near-term.
Some of the collaborators on Robert Edwards forum have suggested that we might get a little bullish action and then reverse again for another downward move to the 1260-1270 region in Gold. While this may be true, I think it is a little early to make that determination. One thing we know we need to be on the look out for, is the next FED taper. Each taper so far, there has been at least a small push downwards in Gold and miners, before a recovery and run. The next FED meeting is April 29th and 30th, so we will need to watch closely as we approach those dates for where we are.
In the meantime, here is the latest Daily Gold chart:
The bullish view:
MACD has crossed over to confirm a bullish cycle.
It is trading above both the 50-day and 200-day Moving Averages, following the Golden Cross of the two just recently.
Volume is healthy, RSI is neutral and stochastics are neutral which should not get in the way of a decent rally.
The point and figure chart on Stockcharts.com, shows a bullish price objective for Gold at 1440.
At this point, I don't know whether we are likely to set up for some of the longer-term patterns some readers have suggested. This could come to pass. And, as always with Gold, I always hold a skeptical view as to the next move and when it will start. But, the daily charts have been good indicators for me successfully trading the Gold cycles.
As long as Gold stays above the 1312 level support, I see a bullish cycle for Gold and the miners. 1440 would be a very nice target to achieve if we can get there, but I'm going to watch the chart to see what it tells me. If we move upwards very fast, we may get to overbought levels that would push us down. Considering the price action has been moving relatively slowly, I think we could gain some momentum, especially with the markets pulling back, but expect the momentum to slowly build. Prior to the FED meeting at the end of April, I will be watching the charts for indication of when to take profits, or will take most profits off the table going into the FED meeting.
Disclosure: I am long JNUG.
Additional disclosure: I am also long GDXJ and JNUG calls. I may trade in and out of NUGT, DUST, JNUG, JDST, GDX or GDXJ as well as buy or sell calls, puts and spreads on any combination of these to work this correction, but prepare to go back long Gold and Miners once the correction is completed. The thoughts and opinions in this article, along with all stock talk posts made by the Author, are my own and are shared on the basis of helping others learn, to provoke other points of view that help us all on our journey to become better investors. My posts are never intended to provide investment advice. Investors should always view multiple sources of information in their due diligence process.