Trading Gold? We Are...

02/26/09 02:50PM EST
While many market participants suggest that you can’t trade around positions like this, I refute that submission. Provided that you have a proactive risk management process, and you understand how to apply behavioral psychology to trading, you can trade around your exposure to an asset that remains in a bullish fundamental up Trend. We just did.

In the chart below I have outlined my playbook for trading gold. As prices change, I will… but right here and now I’m a seller at $1,008/oz (dotted red line), and a buyer in the range of $921-935/oz (shaded green). Massive support remains at the $840/oz line (thick green), and if gold bulls were to capitulate further from today’s lows, that’s where I suspect the real selling stops.

For now, given that I think global equity markets will come under further selling pressure from here (I am short Asia and the Dow), I am long gold again… at my price.

Keith R. McCullough
CEO / Chief Investment Officer
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