INTERMARKET ANALYSIS: It's Groundhog Day for the yellow metal. Yesterday, buyers bid aggressively in a direct relationship with strength in the Nasdaq 100 and S&P 500. Ditto today. Markets are connected. Like dancers in a dance hall, each day each market looks for a partner to dance with or against. Today, equity danced with gold and against debt. Tomorrow is a new dance. Be at your trading desk early and see who picks whom. This is day-trading territory.
6-MONTH CHART: Gold pushes above its descending 10-period moving average. Now gold is pushing resistance at its descending 20-period moving average.
6-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 analysis. Each trading day, Richard e-mails his subscribers a detailed trading diary entry covering the day's gold, crude oil, euro FX (euro/$U.S. pair), eurodollar, bond, NASDAQ 100 and S&P 500 action. Visit his website at www.DayTradingWithLinesInTheSky.com.
