It’s too nuanced to make a blanket statement TBH. It all depends WHAT analysis your consuming and how it applies to your individual trading plan.
Moving average crossover- lagging.
Forward P/E ratio w.r.t multiple expansion analysis- leading.
TTM P/E ratio- lagging.
FXCM SSI- leading.
on and on…
This is an over-simplification and how did you settle on 3-5 years specifically? Individual equities trade minute-by-minute based on whatever is happening that day. A short term trader has 0 interest in the “3-5 year outlook”. High frequency algo’s (making thousands of trades per week) can care less about fundamentals- it’s arbitrage, order flow analysis (front-running), and spread scalping.
Don’t these two statements contradict one another?
let me rephrase it, During a earnings call the CEO of CFO will give their outlook going forward several years, that outlook for long term growth will move the stock price
Lets also not forget their is a lot of insider trading that goes on, and the SEC is very selective in who they go after.
Since my last post we have broken above this downtrend channel and it looks to be holding, gold also looks like a double bottom has been put in so maybe this is the turning point we have been waiting for
@MattyMoney Nice! I went to the derivatives market yesterday around lunch and picked up GLD calls that expy on FRI. They doubled overnight and I had to get flat when the market opened / GLD rallied.
I try to keep things mechanical, and, one mechanic I try to never disregard is - “If you double your money overnight, close the trade, and move on”. Yea- there prob is some med/longer term upside in gold, but we literally just rallied the entire month of APR and are kissing the 200 and 100 moving averages. There will be profit taking here, and, I don’t want to tie that capital up. Also, these expy on FRI…so, there is a ton of risk if GLD pulls back - I wanted this to specifically be a short trade. The contracts were trading for prob something like $1.70 intrinsic value and $.20 extrinsic, so the benefit of holding and hoping for vol / premiums to increase vs. a pull back evaporating the intrinsic value just didn’t make sense.
we are not out of the woods yet, and this 4-day pullback is not helping, we need to see buyers come in right here and challenge that 200 dma, then takeout that old high at $39, then we should be off to the races, worst thing from here is falling back into that downtrend channel
I’d be careful here- the GLD / GDX correlation is high (avg is ~.80), but, when it’s not, it can break down for months (sub-.50). I love the technical setup on GDX tho over GLD. Breakout of the channel, pullback to test literally 3 converging MA’s and the top of that channel. Clear as day.
I’ll definitely be putting on an options trade likely this week via GDX. There are a ton of ways to structure it and take advantage of low premiums. If you’re interested, I can post what I end up doing back here.
I’d imagine you’re going to start nibbling b/w 35-34?
@Dennis3450 Thanks for sharing. Yea, that pinbar, off the 50MA after the channel breakout was definitely going to bring some sellers + profit taking.
I see 3 scenarios (1) bounce off upper channel and continue upward (2) chop sideways (3) breakdown back into channel and test lows around $31
The miners are a bit of a different beast then just a straight up play on XAU.
But, they are correlated and it’s important to watch.
The USD has seen some profit taking too.
I’d bet that we either see a resumption of USD strength, or, some sideways action.
Anything gold-related today caught a pretty big bid.
Today was kind of a weird session though- It kind of felt like the market didn’t know where to go.
I couldn’t get a read, so I sat on my hands.
GLD is testing the 100/200MA - could be printing a significant double-top.
I still think the gold trade is largely dependent on what happens w/ the USD here.
The price action today was a perfect 50% retracement of Friday.
And, basically an inside day (except for the open).
Why such a dependency?
Look at the DXY/GLD 30-day correlation for the last year.
We’re approaching extreme readings right now, almost at -1.
To me, it feels like the dollar just wants to test that 200MA. It’s like a magnet.
And, the recent price action confirms there is a floor @ $90.
@Dennis3450 What type of trade(s) do you have on the GDX?
I’m still short XAU through the futures market. Feeling a little burn right now as my avg. is ~1770 and the JUN contract is trading ~1790. I’m chalking today up to a “meh” kind of day- I don’t think any of the moves we say - especially on the JPY crosses, were the ‘real’ moves.
I have long-tern holds on GDX, Gold and Silver. This is my hedge against the hyperinflation that we are seeing in some areas due to endless US government money printing
Looking at our Cup with Handle, we are having a good start to the month, Using the GLD if we can get above 190 that will confirm the pattern and we could be in for one hell of a ride higher
