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Wednesday, September 30, 2009

Golden Opportunities

Trades for September 30, 2009

/ES Range Estimate for All Sessions

( 1033 - 1045 - 1050 - ( 1058 ) - 1062.5 - 1070.5 - 1083)
(subject to change after evening session)

( 1.4348 - 1.4467 - 1.4527 - ( 1.4586 ) - 1.4646 - 1.4705 - 1.4824)

Gold tried to break out into new high ground a couple of weeks ago but soon suspended its mission, backing off to consolidate and test support, frustrating swarms of drooling gold bugs in the process. Today signs of new stabilization were apparent, with a good number of stocks in the sector logging nice gains as the commodity inched back up towards the goal. Spot gold is also enjoying a nice move after hours and again flirting with the 1,000 mark. The chart of the gold ETF, GLD, is shown below, in all its controversial glory.

RGLD is a stock in the group that has a nice setup and is trading just shy of all-time highs.

Some other names in the precious metals sector to watch include GOLD, AEM, ABX, SLW, BVN, NEM, GFI, GG, SA, IAG, GDX, and CDE. In addition to gold's gyrations, all eyes have been on the dollar, as traders try to determine whether the recent bounce from short-term oversold conditons will fizzle out and head to new lows or gain traction. EUR/USD is moving up after hours, having cleared some initial resistance. Note that on the daily chart, the recent pullback tested support at the rising trendline and is attempting to turn up from there. If successful, it could trigger a rally in equities as we end the quarter and head into the month of October.

Overall trading action has been somewhat erratic, with bulls and bears struggling for supremacy at these levels. While it's conceivable we may need to drop back slightly to test short-term support just below here before pushing up, the bullish action in many individual stocks, the abundance of bullish setups, and the market's continued resilient behavior, lead me to believe that we're likely to head higher near-term. I am still positioned on the long side with stops in place, and remain cautiously bullish for now. I'll try to post an updated watch list before the open. Trade well.
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