PHYS – 07 Feb

Physical gold is the very best way to gain exposure to gold as an investment. Traders will likely choose something else for liquidity purposes to attain leverage. Something like GLD or some other leveraged gold vehicle makes a lot of sense for a trader, but an investor should consider a paper instrument only when there is no path to physical gold in hand. That would include people who have 401k and DC brokerage accounts. A more suitable option is PHYS, a close ended gold fund that does not have the possibility of multiple claims for the gold that is held by it.

I trade my positions in PHYS that are held in both my 401k and my DC fund. I however do not trade as typical swing trader would trade, with the short term trend and with momentum. I pick entries points for new money when market is grossly over-sold and I never sell. I see more risk in being out of the market than being in it. With that said, someone can do quite well trading away positions at grossly over-bought levels and re-entering on pullbacks to support within the longer duration intermediate trend. If support is breached, you simply hold your existing position and look to add new money. The secular long term trend will erase any short term or intermediate term losses in gold.

Here is the short term and longer term charts for PHYS:

Price is finding support exactly where you would guess it would when stochastic lost the embed (3 days or more above 80), the 20 day moving average (pink). A higher close today confirms the swing low of yesterday at 14.77. The short term trend is still lower until the last swing high at 15.23 is taken out to the up side. A short term swing trader will want to see a pattern of higher highs and higher lows before a long can be considered. Resistance will be the swing high at 15.25 and support at the 18 day, 100 day, and 50 day moving averages in that order. The intermediate trend is up by virtue of a higher swing low than 14.45 and higher swing high at 15.41. Intermediate resistance is the swing high at 15.41 and support is at the swing low at 14.45 and the 200 day moving average at 14.40. A longer term trader is still in a long position where a swing trader sold when the lower swing high at 15.20 nullified the up trend.

The technical studies are all neutral and the intermediate trader is looking for an over-bought situation where he may consider some liquidation or an over-sold situation where new money can be invested.

The long term weekly chart is also showing neutral technicals and wouldn’t you know it, price is dead center within the trend channel. No sell signal here for intermediate trend swing traders. Buyers have a green light.

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This entry was posted in Darryl Robert Schoon, Matrix Sentry TA, PHYS, Uncategorized. Bookmark the permalink.

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