Just a quickie here. Covering my GOLD short. It was a lot of fun to play the contrarian and land in profit, but GOLD has reached a significant support structure and also it is just below the lows since the 2070 top so this would be a likely area for a shakeout reversal pattern.
It could of course go much lower but this was just a simple trade off the shooting star for some simple profit and there are better trades elsewhere from here I think. I do think GOLD will see much lower lows and if a chance presents itself I may short again, but this is not really a name i'm really interested in currently other than for the fun of charting.
Not advice.
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This example shows the importance of understanding shakeout patterns. There will have been plenty of bears rushing in to short the breakout to the downside here only to get trapped on the bounce.
And now that it has bounce and I am out, here are 2 reasons why I didn't buy back in.
1) GOLD is at a top. I want to buy low not high.
2) There are both short and long term resistances above which make a rally less likely. See on the chart price is just below the 2011 top now acting as resistance. And a rally could still happen but this is a game of probability and really anything could happen now. It could bounce a bit or get caught up in a sideways correction or fall, but the easy trade was from the star close.