Gold is telling a story

Technicals

Just saw this chart today and what a surprise.

It is oscillating in a symmetrical triangle and in a general uptrend, is a bullish sign for gold.

A clean breakout above 825-830 will likely to see Gold targeting 900 potentially. This is the target price projected by the width of the triangle.

Implications:

Despite a strong USD recently, Gold didn’t buckle under and in fact, looks like rallying from the recent low at 775. It could be reflecting the inflation pressure that we are seeing right now or risk appetite is back or we could see a weakening USD soon. Could be a combination of these three factors but this is definitely one interesting development going into the new year.

Will update when I see changes. Till then, have a good and prosperous New Year in 2008

US Stock Takes: Consolidation (Sell into rally)

I decided to expand my model, which trades on S & P 500, further to diversify the risks and enhance the returns. Total returns to date since start of 2007 is pretty good (43.96%) and beats a buy and hold strategy on the S & P 500 (5.5%).

The 3 models are:

Model 1 (Trend): + 22.77% (81.8% positive trades)
Model 2 (MACD): + 15.49% (44.4% positive trades)
Model 3 (STO): +5.7% (+52% positive trades)

As of now, Model 1, Model 3 are flashing sell and model 2 is on buy.

Using the percentage of positive trades in each model and divide over the aggregate positve trade percentage, out of every 100 bucks, 45 bucks will go to model 1, 25 bucks to model 2 and 30 bucks to model 3.

Will update when there are changes.

Happy belated Merry XMAS and have a prosperous 2008.

US Stock Takes: Maintain buy

After FOMC meeting on Tuesday, US stock markets closed much weaker despite a 25 bps cut. And for the past few days, have been fairly up and down.

So far today, we have seen US stocks still weak and with Citibank's decision to put the SIV on the balance sheets, we will not know how this will impact Citibank and whether the rest of the financial companies will follow suit or not.

In any case, I have seen anything fundamental changing yet and the buy signal generated on 29th Nov is still intact.