26
Jan

Current Thoughts for 1/26/2016

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From the Trading Desk

Over the last three weeks, the 100 day moving average (currently at $1,106) has rejected gold’s advances on four separate occasions.  Yesterday’s equity market sell off finally encouraged enough safe-haven bids to lift gold over this hump though. Traders who were short gold ahead of the 100 day moving average were forced to cover positions which has allowed gold to reach three month highs this morning.  Should gold’s momentum continue upward, the next major resistance level is the 200 day moving average at $1,133, a technical indicator it hasn’t been above since October of last year. 

Gold’s inverse correlation to equities has been particularly strong lately.  The fact that gold is up today while equities are also moving higher is a good sign that it wants to challenge new heights in the near term.  Recent physical statistics also give credence to gold’s price action.  Chinese gold imports from Hong Kong surged to the highest level in two years in December, rising to 3.56 million ounces from 1.89 million in the same month a year ago.  Gold ETFs have continued to add to positions this year with the largest SPDR ETF currently standing at nearly 21.5 million ounces.  While not expected to cause too much market angst, keep an eye out for tomorrow’s FOMC meeting.

 

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About Doug Eberhardt

Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534

Disclosure:

Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.

All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.