Not much has changed in a day. I did exit my Coffee long today at the close where indicated. I know some of the readers are in this trade as well, why did I exit? You can see where I had the target orders today, and we almost got there but not quite. I had intentions of holding this trade longer, but when I get 3 days in a row like this with expanding ranges in a row, and we are close to a target, I generally take profits. This could very well be a big fish the way it has started, and we certainly have seen some big runs lately. Interesingly enough we still have not made a higher short term low than the low point on the chart, even though we have rallied quite a bit. This is unusual. It could mean many things, but it tells me a pullback should be coming here. I was not trying to guess in that regard, my exit was strictly due to what I just stated. If I were still in trying to ride this further, I would be carrying my stop below today's low. I wish we had not had those quick three expanding ranges, so I could have held this longer, but this rule has by and large with some exceptions, gotten me out at some good places in the past. I do not have any expectations either way on this one, it is over and I am moving on. If it keeps going up or declines, I do not care. I gave everyone ample warning a rally was coming here so I hope many of you caught this move.
This is a chart I find very interesting. It is a weekly chart of Gold with a Larry Williams indicator called Will Spread at the bottom. This indicator measures levels in the Dollar vs Gold the way I have it setup here. Historically, the level of 30 indicated almost right on the number, declines in this market. The dotted line I have marks the 30 level. This is just incredible to me and shows how unique in history this move is. We are approaching 200 now! It is "different this time here," no question about it. When emotions take over during runaway markets, you can throw fundamentals out the window as far as timing goes, they are completely ignored. There is a theory being propogated that in times of strife GOLD rallies. The following chart shows the DOW and at the bottom the price of GOLD. I have marked off the 1987, 2000, and 2008 crashes, do you see rallies in Gold during those periods? If you do get your eyesight checked.
I just showed these because I want people to realize that this alleged relationship is not there, that is all.
Here is what I am looking for. First, a dip, then a bounce setting up the next sell for stocks. It appears the Dollar is setting up for a sell Friday at this moment. I would not be surprised to see Crude decline here since some of my indicators have far outraced price on the upside, telling me this bouce is overdone. That pattern is also there in the stock indexes and Copper. I am looking to buy Cocoa if it dips, and also watching Natural Gas for a buy setup. I am unsure about Bonds here, I have minor buy signals from a couple of days ago, but this market is really extended to the upside, so I did not take them.
I do have a few trades still on and they are in line with the directions I have been pointing out in some of the markets I have discussed.
Good Trading to everyone