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Strategies & Market Trends : Dino's Bar & Grill -- Ignore unavailable to you. Want to Upgrade?

To: Goose94 who wrote (9100)	9/15/2014 7:17:44 AM
From: Goose94	Read Replies (1) \| Respond to of 202710

Gold: Momentum Traders Are In Control Of Gold: Stay Out Of Their Way When the momentum traders are running the show, sometimes it's best to either join them or get out of their way. Right now, in gold, the momentum players are gathering speed and the price chart shows a map of where they are heading. A big target lies back down at the December 31, 2013 daily low. But, first things first. What is the market trend? That is always the first question a trader or investor must determine when examining a price chart. Trends can be bullish (rising), bearish (declining) or neutral (sideways). For short-term and swing traders looking to ride a trend, it can be useful to consult moving averages and trendlines to identify the trend. The technical indicators reveal that the bears have been in control of gold in recent weeks as the market has been slipping lower within a bear channel drawn off the July price high. In recent days, however, the bears have escalated the trend to the downside, with a breakout below the lower channel trendline. Additionally, the bears sliced through important support from the June lows at $1,241.70. The moving average picture is solidly bearish, with the December gold contract trading below the 20-day, 40-day, 100-day and 200-day moving averages. That position generally keeps the trend following crowd negative on a market. The key takeaway is simple: the trend and momentum traders are running the show right now and that leaves gold vulnerable to a retest of the $1,185 zone in the days ahead. The bears have broken below the last bastion of daily chart support and they are gunning for a retest of the December 31, 2013 daily low. When the momentum players are in control, traders and investors have a couple of choices— jump on board the trend, or sit out on the sidelines. The current bear phase has to run its course and it's got a clear downside objective at the $1,185 zone. The monthly continuation chart for gold shows the market has tested that zone on two occasions —June 2013 and December 2013. It is a strong bearish target and important support floor. If gold does fall to that zone in the days ahead, there is likely to be some two-way trade. Longer-term bulls might step in and test the waters to see if that floor is going to hold once again. Will a retest to the $1,185-1,182 area provide a buying spot? Only time will tell. Markets do have a tendency to "overshoot." That zone is a big target and plenty of players in the gold world are watching that area. There could be stops under that zone, and short-term traders could look to push the market down under the floor to trigger the stops. It wouldn't be a surprise to see gold oversold that zone by $5, $10 or even $20 an ounce on the downside before the bulls are able to get a foothold. The dollar is strong and rising, there are expectations the Fed will begin raising U.S. interest rates in 2015 and the market is on edge ahead of the U.S. Federal Open Market Committee (FOMC) meeting and the Scottish referendum on independence on September 18. Pick your poision, there's lots of fodder for the gold bears in the near term. Keep a cool head. Long-term gold investors are best served by ignoring short-term market moves. Stay focused on your long-term investment goals. Kira Brecht is managing editor at TraderPlanet.