Tuesday, September 3, 2013

Gold Day Trading Strategy

9:00am EST

News is released at 8:58am EST from PMI Manufacturing:
 *(US) AUG FINAL MARKIT US PMI MANUFACTURING: 53.1 V 53.9 PRELIM (lowest in 10 months)- Output index: 52.5 v 53.4 prelim reading - New Orders: 55.7 v 56.5 prelim reading (highest in 7 months)- SourceTradeTheNews.com

This news is lower than expected, and should be seen as bearish for the USD and bearish for Crude Oil Futures.

Gold Futures Analysis:
Gold 30-Minute
We can see price-action trading on top of the PHOD at the opening bell this morning.  If we look closely we can see the previous candlestick did not close above the PHOD so we unfortunately cannot define the long-term trend until we see where this new candlestick closes.  If we close above the PHOD we are now considered bullish and we are buying pullbacks with the wave-pattern-long with a profit-target up at 1410.9.  If we close on top of the PHOD we are going to sit-on-hands, and if we close at the lows of the candlestick (below the PHOD) we will then consider this market personality to be bearish and we will sell short down to the PLOD at 1387.4.

As we prepare for trading Gold this morning we have 2 hidden clues that remind us to be careful today and throughout the week.  First, we have Non-Farm Payroll news on Friday, and this is going to be pivoting point for the Gold traders who are worried about Fed Tapering.  Everyone has their eyes and ears on the Fed later this week, and we assume this concern over Non-Farm Payroll will directly affect the market personality on Gold.  Second, we see the big-round-number of 1400.0 which is screaming at us to beware that price-action may get stuck in the mud around this number.

Gold 5400-tick
The 5400-tick anchor chart shows us a strong bull price-channel, telling is the long-term trend is bullish, and we have support levels below us at 1372.0, 1352.9, 1338.8 and the lows of the price-channel itself.  This bullish price-channel tells us me to buy pullbacks with the wave-pattern-long and if we can, the high-percentage-trades will occur after we test any of these support levels below us today. 

We can see a big clue from the 1372.0 price level.  We know the buyers provided support here and the price-action jumped higher after testing this level so we know that this support level is strong and we know to use it again if price-action comes back to the 1372.0 area again.

9:30am EST

Gold 1800-tick
Gold is trading higher this morning on the 1800-tick anchor chart with many concerns of support and resistance above and below us at this time.  We can see resistance zones overhead at 1403.8 to 1410.9 and 1421.1 to 1427.1.  These resistance zones will be excellent locations to take a profit-target on our buying-opportunities or look for a price-reversal and a selling opportunity against the long-term trend.

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