Gold is once again trying take takeout 1800 February futures. For now, we will assume that it will fail. 1800 has acted like a magnet for the past few weeks; when it gets above it comes back down and when it goes back below it fights to get back there.
It is amazing how technical patterns in all markets play out repeatedly. However, since we are short, we will assume that 1800 will fail and Gold will fall back to 1780, 1760 and possibly 1720. Gold looks awful, although higher this morning, we expect the rally to fail.
The only drawback to us selling more is the holiday shortened week. The lack of action and volume will keep us holding our current short position without adding. If this pattern continues, we would expect Gold to trade much lower.
We remain short and would consider selling more, except for the holiday shortened week. Obviously, we could be wrong and forced to reverse. That is trading and our win percentage is 66%. The pattern the signal and the action suggest Gold is headed lower.
In all markets price action determines what will happen in the next day, week, or months. Keep the two strategies separate, the worst trade anyone can make is turning a trade into an investment hoping for a way out. Traders must learn to take their losses and move on to the next trade.
Patience, discipline, and money management always win the day. Let the map of the markets show you the way.
Todd Horwitz Chief Strategist BubbaTrading.com
Stop being a prophet and make profits
Monday Night Strategy Call Recording from the last call of the year on December 20th