Gold

Gold took a pretty big beating today. Technically, it appears to be an interesting signal. There was a big expansion in volume and the market traded through its second daily support zone, and well as its 3 day pivot range. Typically, although there may be a bounce from such a dramatic one way move, the move set in motion lasts at least a couple days. I wonder if it doesn't last longer.

On the monthly chart, Gold has been a mess... a huge wide swing consolidation. It could really break either way. Lord knows, there are a lot of bulls right now. (Fundamentally, and over the long term) I am one of them. But this sentiment high has made me nervous for a while now. Not to mention Gold has lagged (relatively of course) the recent run up in 'risk' assets even while the dollar has been weak. It has taken out its June lows, turning the monthly chart down.

Now we have had a little rally, but today looks like it is a legitimate turn lower. How far it goes, I don't know. Maybe the market just keeps chopping around in this wide range and stays above 900. However, there are a lot of longs... and I doubt they are all strong ones. If we take out today's lows, we will trade through the 20 day average. After that, there are the July lows around 907 and then the 200 day average around 884.

Disclosure: Currently not short Gold futures... but looking at any bounce as an opportunity.