Calling the bottom on Gold

Earlier this week we posted and tweeted a warning to stay away from Gold. We did this in reaction to a strong historical pattern our computer algorithm identified which was rather sobering. Many investors know that the current trend in Gold is down, but the question is, how low will it go?

Much has been written about the fundamentals of Gold as an investment and we won’t re-hash it here, but the past year has shown a shift in these fundamentals and perceptions resulting in price volatility, confounding those still looking for a market bottom. This is where our algorithmic signals become a valuable tool in an investor’s arsenal.

From the same computer program that we used to create the Facebook Stock Price Predictor and a portfolio of over 15% since last month on signals we freely published, comes a Sell signal on Gold generated on September 2nd. The algorithm has identified a strong pattern going back to 2012, and the Sell signal happens to be near the top of the current down trend that started with the August 28 high at $14,30. Since then, Gold has retreated to yesterday’s low of $1,291, bouncing back to as high as $1,375 on Thursday.

Click to enlarge image

Click to enlarge image

The Thursday high was as far as gold got before it dropped on Friday’s session to close at $1,325. Some traders might think this could be a re-test of the $1300 handle before the price goes higher, but our algorithm has not confirmed a reversal yet. Our proprietary indicator shows some weakening of the current down trend, but we’ve learned that a trend isn’t over till our algorithm says it is so.

For now we are out of the Gold market until the algorithm confirms a Buy signal based on significant historical patterns. We have added the current Gold short to our algorithmic performance tracking sheet, but will not go long until it generates the next Buy signal. When that happens, we will notify the members on our Gold email list immediately.

To be notified (free) of the next Gold signal, send an e-mail to our list server at gold_list@intellikon.com

 

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The content contained in this blog represents the opinions of the authors who may or may not hold long or short positions in securities of various companies discussed in the blog based upon the authors' views. The commentary in this blog in no way constitutes a solicitation of business or investment advice. In fact, it should not be relied solely upon in making investment decisions, ever. It is intended for the entertainment of the reader, and the authors. In particular this blog is not directed for investment purposes at US Persons.
Posted in Gold, Long/Short Ideas, Public and tagged .

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