- Gold has gone back and forth during the early hours on Monday, and I think this might be a little bit of a harbinger as to what we are going to do.
- After all the market had recently shot straight up in the air and broke well above the $2,175 level.
- It also tested the flash crash higher that we had seen on December 4th and has since pulled back. Now I think a lot of this makes quite a bit of sense that perhaps we got a little overdone.
So, the question now is what happens next?
Well, I think with this market we are likely to see a lot of back-and-forth action. I do think eventually we will make a bigger move and with that being the case I think what you're looking for more than anything else is either stability or value. Those are probably the two best shots you have at making money in this market. Now, the question of course is whether or not that actually plays out, but I do think that we certainly have a lot of buyers underneath.
Sideways Action is Possible
So, if we get more sideways consolidation, then I'm fine with buying. If we get a pullback, I'm fine with buying that as well. And in fact, I'm probably a bit more aggressive on the pullbacks than I am on the sideways consolidation. $2,075 underneath is a major support level. It has the 50 day EMA attached to it as well. So, I think that just makes it even more important and would be the ideal entry point for me. If we break the highs that we recently made, then we are more likely than not to go looking to the $2,300 level.
At this point, its impossible to short the gold market, it is far too strong. There are a multitude of reasons to think it goes higher, and the market is clearly one that a lot of traders are trying to enter at the first hint of value. This is a market that I think has done really well this year.
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