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Analysis & Views

Gold to continue the longer-term bear trend and break lower in September?

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Gold has been in a bear trend now for exactly three years since topping out at 1920.30 at the beginning of September 2011. We saw particularly sharp losses from October 2012 through to June 2013 when the price collapsed from 1795 down to 1180. Over the past year we have witnessed more of a consolidation of these sharp losses with the price stuck in a narrowing range as volatility decreases. The weekly chart below clearly shows this consolidation triangle pattern. You can see in the chart how we drifted lower through July and August to retest the lower trendline. To be accurate this trendline is in the 1275/70 area so this quite perfectly held the August low. I have written one or two articles for InterTrader.com over the summer about gold and in none have I felt particularly positive on the price. I noted that any short-term spike higher on geopolitical tensions was never sustained and in fact despite trouble in the Middle East and the Ukraine this market has been in a bear trend now for two months. We looked at the strength of the US dollar last week…

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Strategies

Do you trade the S&P500? Here is why you should consider postponing your summer vacations

Written by admin

The major US stock market indices have seen a quite incredible rally since the crash of October 2007-March 2009. In this period the Emini S&P fell from 1586 to 666, a loss of 920 points or 58%. Very few investors saw this as one of the biggest buying opportunity in recent decades but that is exactly what it is turning out to be. In fact just for comparison the S&P 500 index quite steady growth after the stock market crash of 1987…the year in which I started trading on the London Stock Exchange Traded options market in fact. Then from 1995 it experienced an unprecedented rally up until the crash of 2000 caused by the internet bubble. These accelerated gains took the cash index from a 1995 low of 457 to a 2000 high of 1552, a gain of 1095 points or 239%. Chart shows the rally in the S&P 500 from March 2009 to Friday May 30th 2014. Each bar is one month. The next big crash occurred in 2007-2008 of course, taking the S&P 500 cash index from 1576 to 666. Very few investors and traders saw this…

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This content is for information purposes only and should not be construed as trading advice.

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