Today was quite a good day in the market's actually the past two days were quite good as we gained back almost everything we lost from Wednesday's huge selloff. I actually thought after Wednesday we would continue downward back into the old trading range because the selloff was so powerful with 99 stocks dropping for every 1 that gained. The bulls still have some fight in them as they wrestled back control of the market the past two days.
As of now, we are still in a trading range market albeit a higher range than we were earlier. On the SNP we got 1220 as the low end of the range and 1290 on the high end.
On the chart you can see our old trading range between 1120 and 1225 and our new one between 1225 and 1280 which we have been in for a couple of weeks now. The bulls are buying in the 1220-1230 area and the bears are selling up around 1270-1290. I don't see any catalyst to push us past 1280 right now although economic data is coming in good. As long as Europe is dysfunctional we will stay in the range.
My only position right now which I told you about last time I posted is in gold via IAU. This trade is working out very well for me as I have a 10% gain so far which puts my trading account in positive territory for the year. Gold has caught a bid on persistent eurozone worries and after it's nice technical bounce off the 150 day moving average which has been long term bull market support.
Gold is in a nice rising channel right now and if you were so inclined you could buy at the bottom of the channel and sell at the top. I'm not that nimble so I'll pass on that trade.
I have not been doing much trading recently as the market has been too headline driven for me to play. I am not nimble enough to trade the 60 point range so I'll just watch from the sidelines with my gold. If you put a gun to my head and said pick a direction for the SNP I'd say we are headed down and now would be a good time to lay out a short position. But with positive seasonality, the bulls are going to be looking to prop this market into year end so it is tough to short now.
I'll be checking all your blogs in the next few days. Sorry for disappearing.
Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!
