Today’s stock market was sent south with the inflation data from the Bureau of Labor Statistics (BLS) and its Consumer Price Index (CPI).
The increase in monthly and annual data sent fears flying over inflation, and stocks were sold off again.
And even as the University of Michigan Consumer Sentiment data was lower, it was still above 50, showing a positive signal. But that was not enough.
Gold is viewed as a hedge. And today, it is being bought and is working as we have seen for higher trading levels. This means potential profits for you in the making.
So, here’s how the trade is shaping up this week and how I see gold potentially setting up for bigger gains for you via its futures contract (GC).
Gold Futures Contract (GC) Trade Setup
Here’s how the chart is moving this week…
And here’s how I see the trade shaping up…
The Gold futures contract (GC) daily time frame is in a long term uptrend. The market formed a low price near the up trend line and pushed bullish.
The market broke and closed above the short term downtrend line. But note that there is still a down Fibonacci at 1,781.70 that was not hit.
The market does not need to fall and hit the down Fibonacci to go up. However, if the market does fall, that is the bear target the market is expected to hit.
The one hour time frame is in an up trend. The market is in the buy zone making higher highs and higher lows.
Entry: Counter trend line break bullish in the buy zone.
Stop: 1,825.80.
Limit: 1,891.70.
As long as the market stays in the buy zone, it will be a good idea to turn to the five minute time frame and look for long ideas towards the Fibonacci limit level.
The Bottom Line
For more on the markets as well as trading education and trading ideas like this one, look for the next edition of Josh’s Daily Direction in your email inbox each and every trading day.
I’ll be bringing you more of my stock and futures contract trading tutorials as well as some additional trading ideas.
And this covers all sorts of trades including for the so-called “black gold” of crude oil that my comrade Anthony Speciale has set up a special tutorial on that is free to watch and learn with the link below.
And if you know someone who’d love to make this a part of their daily trading routine, send them over to joshsdailydirection.com to get signed up!
Keep on trading,
P.S. My colleague here at Traders Agency, Anthony Speciale, continues to provide a great pipeline of trading opportunities from his crude oil analysis.
To learn more directly from him, click here for an on-demand seminar.
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