Sunday, October 12, 2008

Gold vs. USD

The first two charts are dailies of Gold and the USD. We have an inverse relationship between the two. Friday the $USD rallied hard and gold sold off.

The next two charts are the 5 min. and 1 min. of AEM a Canadian gold company. AEM opened weak and attempted to retrace. Each attempt was on low volume. After the second attempt, we had an inverted C&H type setup. I shorted and covered when price carved out a base from which to retrace.

After a 38% Fib retracement of the swing high to swing low, AEM carved out a double top on the 1 min. timeframe, the second of which formed a bearish tweezer top. I shorted the trend line break and took a partial at base and covered the balance as it formed a second lower base.

Here's a good article on Gold, commodities, and inter-market relationships. The USD is likely to retrace back to its trend line soon (83-85 resistance). That will an opportunity for long gold.

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