Dow Jones trade got stopped out for a small loss.
The US market is overbought. The SP500 companies trading above their 50 day moving averages have flat lined. This is a sign to me that the market wants to correct. I have closed out most of my position except gold and natural gas. I will add to my gold position if it drops into the 1405 range.
The Fed cut the federal funds rate and the IOER. This is bullish. However, the market looks like it wants a reason to correct. The fact that it was only 25 basis points gave it a reason. I believe this correction will represent another buying opportunity.
Category: Trades
Dow Jones Trade
The Dow Jones is set to make a weekly closing above its all time high.
On the fourth try, it broke its resistance and it is targeting 30,000. I went long at 27,167. I placed my stop at 27,020. This is a very tight stop and I risk getting whipped out by volatility. Looking at the price action though, it feels as though the Dow is going to slowly ‘melt up’.
The Bull is Back
Gold has formed a classics head and shoulders bottom that has been 6 years in the making.
For the past six years, there was nothing to be said about gold from a technical analysis perspective. Gold is about to have a weekly closing price well above its former resistance level. The bear market in gold is over. Within the next few years, gold will make a challenge to its all time high.
In the short term, far to many cheerleaders are coming out of the woods and jumping on the gold band wagon. A pull back to 1380 is likely.
Bottom Almost Completed
Not quite, but close. 
I am long gold. I did not think there would be the usually decline in the summer months. I need to see a weekly closing above 1405 to be confident this is the real deal.
The bullish case for gold is the fact that the fed is going to print money. They now call it the “symmetric 2 percent objective”. Soon enough it will be the “5 percent”. After all, 5 is better than 2…
Right now, the fed is shrinking the monetary base. I have no doubt that pressure from Trump and Mnuchin will reverse the shrinking monetary base. Election year is coming up and the economy needs another sugar high to ensure Trump’s reelection. This is nothing new. It has been going on for over a 100 years.
From the FOMC statment:
The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective as the most likely outcomes, but uncertainties about this outlook have increased. In light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.
Translation: We will print money if needed.
Gold-Up Against Resistance
Gold is back at the top of its trading range. This 1360-1380 area has capped rally for the past six years.
Longer term, we see this is a major hurdle.
I believe the market is discounting more QE from the fed. It will come in one form or another. The first sign of trouble the fed will expand its balance sheet. This is obvious to anyone who has been paying attention the last 20 years.
Cocoa Trade Stopped Out
Cocoa trade was stopped out for a loss.
No Summer Doldrums This Year
The summer doldrums are the quiet months of trading during the summer months. Historically, these have been bad times for gold. This is about the time gold typically will decline from June right into August. Watching the price action, I think this year might be different.
I am long gold. I think gold will heat up this summer and catch traders off guard.
Cocoa Set to Rally
Cocoa broke out of its rectangle pattern. After 5 touches at 2425, it finally busted through resistance.
I went long at 2465 with a stop at 2400. Target is 2700.
Russell 2K Stopped Out
Russell 2000 trade got stopped out for a loss. Trade war rhetoric whipped all the markets to the down side.
Russell 2000 Trade
The Russell 2000 made a head and shoulder bottom. It looks ready to challenge the all time high. Given that the other major US stock market indices are above or near the all time high, this trade looks favorable.
It also made a mini H&S continuation pattern.
These are usually the best trades to make. Mini patters that launch into larger ones.
I went long at 1618.7 with a stop at 1585.