We Called the High in Gold - Now What?

Hi everyone,

I hope you’ve had a good week.

In last Friday’s blog I shared how our Checklists had helped us to identify ‘the big short’ and ‘the big easy’ trades in gold and equities, respectively. With our Monthly Checklist Report now updated for September, I thought it would be interesting to revisit these trades and see whether things have changed.

Let’s begin with gold. Last month’s bearish reversal gave cause for it to be approached from the short side. Despite this being an extremely contrarian view at the time, I demonstrated why the data analysed in our process supported this. Here’s a reminder of how that trade played out from the beginning of August, when the Checklist had a score of -0.5:

Following three good setups to sell the range on an hourly RSI, it proved to be a very good month to trade gold from the short side (despite the deafening chorus from bulls continuing). So, where do things stand heading in to September?

The changes this month can be seen in ETF flows, futures and options positioning, short interest and price momentum. On balance, these had a positive contribution to the outlook for gold in the new month. I would usually obscure some of the scores as a courtesy to our Trading Club members, but as there continues to be a lot of interest in gold currently, I thought I would be kind and reveal just this one Checklist in real-time today. The total score of 3.5 shows significant improvement and suggests that the last month’s consolidation is more likely to be resolved with a bullish continuation than a reversal in the trend.

Whilst we certainly don’t claim to be able to predict the future with absolute certainty, our Checklist process puts the odds firmly in our favour, as Trading Club members know. Having consistently been on the correct side of the trade this year, no matter what the media narrative or consensus may be, can you afford to trade without our proven process on your side?

As far as the technical are concerned, the retracement from the 2011 high to 2015 low projects an initial target of 2127 which we would expect to be achieved for as long as our Checklist is positive.

I hope you found this month’s early insight in to gold to be interesting. As always, Trading Club members are first to receive these Checklists in real-time along with our weekly commentary covering all the key markets.

If you would like to join us for our full analysis including new insights each week, or learn from the ground up with online tuition from Lex in our MDT online course, then head to milliondollartraders.com and take your financial knowledge to the next level right away!

Have a great weekend,

James‍

Disclaimer: For educational purposes only. Even though we do our best to provide reliable data, you should not trade based on this information. For more information go to www.milliondollartraders.com

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