timwest

GLD - sell short strategy & reasoning

AMEX:GLD   SPDR GOLD TRUST
841 5 4
What is MOST interesting to me about GLD             here is it has faied to attract new buyers at a time of near panic as measured by VIX             reading above 40 which happened concurrently with fears about the solvency of European banks, ratings agenciy downgrades and announcements to throw more debt onto the back of most developed nation's economies. Obama's fiscal stimulus announcement could have added $100 to the price of gold             if this market were in a strong bull phase. So when I see a situation like now I would think it would be wise to step out of this market and let it fall. NOTE THE CHART: The last 5-days of trading have occured entirely inside the day's range of 6 day's ago. This is rare and a warning of lost momentum. Sell short now & sell stop at 174.34 and use a 183 stop loss initially, lowering that stop loss by 1 point for each 1 point drop in GLD             .
Subscribe to my indicator package KEY HIDDEN LEVELS $20/mo or a discount for a year and join in the trading room KEY HIDDEN LEVELS here at TradingView.com
I don't understand "last 5 days have been in the range of just one day's range"? 6th day according to the chart is Sept 7 - range was 174-178, even if you look at the weekend bars which are not showing up- sept 9 would be 6th day and 179-181 is the range. I am just trying to make sense of your statement there. Could you explain it a little bit? Thanks.
Reply
timwest PRO kb2425315
Sure- the blue box represents the "true range" of the bar from 6 bars previous. "True Range" incorporates the previous days close to capture the gap. For more info on "true range", you can consult varieties of technical analysis books. So, with that in mind, the following 5 days all occured "inside" that 1-day range. That kind of behavior showed me that the buyers were timid and the sellers were more aggressive, which was at odds with what was going on with the headlines at the time. When a market can't rally on good news, then step aside. Does this help at all?
Reply
kb2425315 timwest
oh yea- now I see exactly what you are saying. Thanks! Hey Tim, ever thought about writing a book?
Reply
timwest PRO kb2425315
I have thought about it but I haven't set a goal or made a plan of action. I would write a book on "market profile" as that is what I am most passionate about. I'm glad you like the charts and we can thank TradingView for designing and building a terrific website that allows me to publish my concepts and ideas. Cheers! Tim
Reply
The stop can come down quite a bit given the size of the drop.
Reply
United States
United Kingdom
India
Deutschland
España
France
Việt Nam
Italia
Polska
Brasil
Россия
Türkiye
Indonesia
Malaysia
日本
한국
简体
繁體
Home Stock Screener Forex Signal Finder Cryptocurrency Signal Finder Economic Calendar How It Works Chart Features House Rules Moderators Website & Broker Solutions Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Profile Profile Settings Account and Billing Priority Support Ideas Published Followers Following Private Messages Chat Sign Out