Thursday, September 03, 2009

Technical Picture - Consolidation Ahead of Jobs Data

Another narrow range session as participants move to the sidelines while awaiting tomorrow's jobs data. Gold, however, continues to shine, as the high volume momentum play extends.

Jobs data will set the tone for morning trade and then a quiet afternoon as people getaway for the long weekend.

After yesterday's high volume, WRB in gold stocks, I was anticipating follow through, but did not want re-enter before a pullback. By placing fibs from last leg up - point A to B, we can sit back and wait for an ambush trade to develop. GG retraced almost 62% and bounced for the next leg higher. I entered as price crossed above 38% retracement level. Took a partial as price approached 50% extension and was stopped out on balance. Volume today was brisk and from the daily, we see a clear path to the $44-45 level.

I took a partial on my ABX swing EOD just in case we get really favorable jobs data. I doubt that the data will be strong enough to kill the gold trade, but better safe than sorry.


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