INTERMARKET ANALYSIS: Gold is churning. If you want to go long, wait for a bull (+) stair breakout. If you want to go short, wait for a bear (-) breakout. Right now gold is being pulled higher by euro FX (euro/$U.S. pair) and lower by crude oil. This action is good for day traders with tiger-fast reflexes. This action is bad for swing traders with tight stop losses: day traders are targeting tight stop losses: you will be chewed up.
11-DAY LINEAR REGRESSION CHART: The 11-day channel for gold is neutral (0).
6-MONTH CHART: Gold is range trading between its descending 20-period moving average and its ascending 50-period moving average.
Six-month chart for August 2009 GLOBEX gold futures (source eSignal)
Richard L. Muehlberg is an analyst and day trader. He uses the lines approach: a combination of intermarket, time-of-day and linear regression channel analysis. He offers a detailed daily diary covering gold, crude oil, euro FX (euro/$U.S. pair), eurodollars, bonds, the NASDAQ 100 and S&P 500 through his website at www.DayTradingWithLinesInTheSky.com.
