This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold's Move Higher Is Short-Term Reaction to Iraq Unrest

NEW YORK (TheStreet) -- Markets were extremely overbought last weekend and began to roll over last week right on schedule.

We are well off those overbought readings now and are setting up for another round of strength as stocks work to complete bases.

From what I see there is nothing that tells me we are in for anything more than a small consolidation period, not any sort of major correction.

We are still in a fantastic market for swing trades of a few days or more.

While many stocks still need a bit of time to complete major bases that will take them much higher, and quickly, we have been picking up nice gains of $10 or $15 in short order and booking those gains before consolidation occurs.

These swing trades can really add up while we wait for the major buy-and-hold signal.

Gold had a decent week but is still not looking good.

I had quite a few emails telling me I'm going to eat crow on my call for lower gold, and that is fine.

I never profess to be correct all the time, that is what stops are for.

That said, I still think gold moves lower.

Let's take a look at the charts.

Gold gained 1.93% last week.

I really see this move higher as being on the back of the fighting in Iraq and nothing more. I imagine it is a buy-the-rumor, sell-the-news type of move.

If the U.S. does help out over there then chances are high that gold will sell down.

Gold is still forming a bear flag or rising channel, which most times will break to the downside.

There is so much horizontal chart resistance and the 50-, 100- and 200-day moving averages are all hanging around $1,300 making that area very tough to overcome.

I do not see any reason why gold can move above $1,300 at the moment, but if it does then I will quickly change my stance to a more positive one.

All I do is tell what I see in the charts, and it is very often correct.

If I am proven wrong I have no problem admitting it and changing my view.

I am not biased at all one way or the other except for what the charts tell me.

I did note to subscribers Wednesday evening that many mining stocks and related ETFs had a strong day and that it could mean some strength for gold, and that is what happened.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $127.60 2.28%
FB $83.09 2.87%
GOOG $535.38 2.16%
TSLA $205.27 -0.74%
YHOO $44.66 0.46%

Markets

DOW 18,034.93 +208.63 1.17%
S&P 500 2,100.40 +19.22 0.92%
NASDAQ 4,994.6020 +62.7870 1.27%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs