Gold Analysis: Bull Market Remains Unconfirmed Despite Rebound After Correction
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Gold Spread Betting Analysis
At the beginning of May we saw a relatively large correction in the gold spread betting market.
On the 5th of May it even dropped below the blue Kijun Sen line, as shown in the chart below, and closed at $1474.05.
The bulls proved too strong, however, and after that the price started recovering. On the 10th of May it was back above the Kijun Sen and closed at $1517.15.
After that another minor correction followed and the price dropped below the Kijun Sen again, this time between the 11th and the 23rd of May. On the 24th it was back above the blue Kijun Sen and closed at $1525.25.
Although it hasn’t yet reached the high of $1562.05, which it reached on the 29th of April, the gold market could be well on its way there.
If we consider gold technical analysis of the chart below, the price is above the Ichimoku cloud and also above the red Tenkan Sen and the blue Kijun Sen lines. In addition, the upswing is confirmed by the red Tenkan Sen line which is above the blue Kijun Sen.
The only cautionary note is struck by the green Chinkou Span line, which is not above the price of 26 periods ago and indicates that a continuation of the bull run can not yet be fully confirmed.
Should the price break through the previous high of $1562.05, it could be seen as a clear signal that the bull run has resumed.
Any weakness in the spread betting price, below even the red Tenkan Sen line, and definitely below the blue Kijun Sen, could mean uncertainty in the market, in which case it would be better to stay out of the trade.
Under these circumstances, it is likely that short trades should only be entered into by day traders using the Ichimoku Kinko Hyo in a shorter time frame, e.g. hourly or even shorter.
Good luck and happy trading
Shai Heffetz, InterTrader
(Original article written 8 June 2011).
Spread betting carries a high level of risk and you can lose more than your initial deposit, so you should ensure spread betting meets your investment objectives.
The contents of this report are for information purposes only. It is not intended as a recommendation to trade. Neither InterTrader nor CleanFinancial.com accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.
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'Gold Analysis: Bull Market Remains Unconfirmed Despite Rebound After Correction' edited by DB, updated 09-Jun-11
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