Anticipating The Market’s Next Move
Most of the overall market is caught in a
trading range formation resembling the Slim
Jim pattern. For the afternoon
we’re keeping a close eye on this formation, looking for entries out this
consolidation pattern in any one of the major ETFs (we’ll look at the SPY
below). The longer the pattern, the more explosive the potential, so we have an
excellent opportunity to play either side out of this one, but remember to
wait for price confirmation. As we wind down the holiday week, the odds might
favor continuation of this volatility contraction, so don’t
overtrade the pattern.
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Investors have continued to take a shine to
gold stocks. While the broader indices have remained relatively quiet,
digesting yesterday’s gains, gold stocks such as Anglogold
(
AU |
Quote |
Chart |
News |
PowerRating) (shown
below) and Royal Gold
(
RGLD |
Quote |
Chart |
News |
PowerRating) have continued their impressive daily
run, with more upward momentum in today’s session. The stocks have been trading
higher on good relative volume and make excellent choices for continuation plays
as price patterns set up. This group also has a tendency to trade contra to the
broader market, so cues to trade reversal setups such as 1,2,3s might be
considered if the ETFs start to show an upside resolution out of their Slim Jim
patterns.
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