Spy of the week
The previous trading week resulted in a flat performance of the market. We have been going back and forth between the 164 and 167 level, forming a bottoming area that might evolve into a support level. As it seems now, this is what’s going on.
Additionally, on the daily chart, the price movement is clearly resting upon a positively sloped channel which starts way back from mid october 2012 to this day. As a support for the strong up channel effect we can see the 6/24/13 attempt to break that uptrending support, where failure to do so sent the price quickly up.
Adding on ProTradingIndicators’s Laguerre Filter we will see a flattening slope of the indicator which signals a neutral sentiment.
As for this trading week price action, on the 5 minute chart of the SPY we can see that the price has tried to pierce through the 14.5 level 3 times with no success. On the third failed attempt the sellers gave up and the SPY went up for two consecutive days.
Adding up all the information bits we can safely conclude that as for now, we are technically in a Bull environment overall, and it is safe to say that we are looking for Long positions throughout the coming week.
Gold & Metals
The last month’s Gold price action was not hidden from our watching eyes. Since the beginning of July we see a quite decisive buying pressure, a slight pause for catching back the breath and continuing the rally to this day.
It has been a long time we were Bearish on the Gold with all the good reasons – We mentioned the obvious price downtrend that took place for a long period of time. We added the high relative volume of the declining spikes, a strong indication of the determination of the sellers panicking to get rid of the asset. And we also mentioned the down sloping Laguerre Filter (An indicator of ProTradingIndicators.com) which concluded the forecast: The Gold is going down.
As for the last month, it seems like things have changed. The price pierced through the upper channel with a high relative up volume, and the Laguerre Filter is already pointing up in a confident way.
Drilling into a smaller time frame (5-10-20 minutes) you can see a relatively high number of green spikes up with high volume, and that’s definitely Bullish.
On the earliest blog post on ProTradingIndicatos.com site, we mentioned that analyzing such a conceptually important asset as Gold cannot be complete without a geopolitical/macroeconomic analysis as well. The reason is obvious. Since Gold buying/selling pressure is so tightly tied to global economical and political events that a simple, yet accurate analysis could be completely out of the way in a matter of a few quotes coming from a fearless crazy leader.
Obviously we are not going to make such an analysis, but we cannot also ignore the war whistles coming from the middle east regarding the situation in Egypt and the civil war in Syria that could quickly escalate into a situation that could heavily impact the price of Gold.
A quick glance into FB chart reveals a very ‘happy’ chart, a lot of green and positive slopes. Back on 7/29 we took a Long around $35 within our “Continuation Trade” strategy. In brief, this strategy consists of looking into symbols that had an important gap up with considerable volume, and then looking for an entry with the help of ProTradingIndicators.com’s Darvas Box indicator which lays precise levels of entry and exits.
As for today this trade is a success. Putting the stop on the break even point we are up almost $5.5 or 15% in a matter of 3 weeks. As this stock price is getting extended, we will take out half of the position now, and next week we will look into other possible and interesting trading setups.
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