News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
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Gold Market Wire

News, analysis and commentary for gold traders and investors

Gold Market Opening

Gold Leaps out of The Gate

November 9, 2020 - (Gold Market Wire) - Gold has leapt spritely out into the market this European a.m., following through on last week's strong performance. As it stands now we are sitting right on the horizontal resistance of $1955, as shown in the chart below.

early morning "limber up" for Gold

Right now this is a market that is feeling its way higher. Our September low at $1850 didn't really touch down in October, as the buying came in quickly. That seems fairly secure in being in the past, and Gold looks prepared to power ahead. We have our markers in the horizontal and the resistance uptrend that we cleared on close Friday.

It is time to be long. Those looking for a power move should look at the $1950/2000 call spread to buy. Gold looks prepared to set up a new uptrend.

Trading is a never ending education, and a quick look back provides us an opportunity to expand our knowledge. Our downtrend line really did work when we see the touch points and the shape of the downtrend. By focusing on the Aug. 10/11 gap and then the August 18 retracement high (first) and then Sep. 1 and 16 retracement highs, we got the shape of things fairly easily. That line became our Nov. 5 low - - and was, indeed, our launch pad. Yes...its true...technicals do work!

If you tried to anticipate - on Wednesday or Tuesday, you, might have got stopped out, and are now cursing your 'luck'. Unless, of course, you did the smart thing and avoided margin, and didn't swing for the fences. By waiting for the weekly close, which, by any reasonable standard, was already apparent by Thursday's action, you probably gave up a lot of the big move (on Thursday) - but you got length on in the proper manner. The result? You are in the game, and not on the sidelines. If nothing else, with some half way decent execution, you were already probably $40 in the money this a.m. - which is no bad way to start a week.

As a secondary note: Take a look at the Gold/Silver ratio, and it is obvious how the rallies in Gold actually do shine through in the falling ratio. It couldn't be more plain: Gold's rise has, almost as a prerequisite, a falling ratio. October 23/4 was Gold's low, and the ratio's high. From there, the shapes of the two price curves are almost perfect mirrors of each other...especially on the action on Thursday and Friday. So - if you're bullish and want some alpha - Silver's case has been amply proven over the past 3 months.

When this ratio went to dizzy hights, just a few months ago, there were plenty of articles floating around about how the ratio is meaningless. They noted all the usual guff about "industrial metal" etc etc. and how the ratio was a meaningless barometer. Well, they have been soundly proven wrong.
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