Gold Making A Lower High – Staying Cautious

by Olivier on January 20, 2010

Gold and Silver displayed quite some weakness today. The big cap mining stocks are not showing immediate buying pressure with the potential to break out to the upside. On the other hand quite a few small cap exploration stocks and junior gold miners look much better. My two portfolio positions MRZ.V – Mirasol Resources and MXI.V – Merrex Gold are my first ‘Test Balloons’ this year. I am being very conservative regarding my overall market exposure and am still waiting how those two trades will pan out. I am basically still in wait and see mode until the markets give me more clues. Gold will show its hand soon. Overall the picture is still bullish but waiting for the charts to give a green light is the name of the game.

Gold Price Chart US$

Up-to-date Gold chart on my public list.

Until gold takes out its most recent high and invalidates the lower high pattern I am not willing to be overly aggressive. As I’ve outlined at the beginning of the year I think this year will be much tougher to trade. Seasoned traders know there is never a shortage of opportunities in the markets that’s why I prefer to patiently wait for the best setups.

Do not try to be a hero. Do not rush things. Do not force trades.

Have a great evening!

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