Gold Shows Seasonal Strength

gld at resistance 8-20-15

September is the seasonally strongest month for gold each year. A number of factors are likely to give an extra boost to the seasonal this year, including the expectation of a rise in interest rates, the failure of stocks to move higher during the summer months, and particularly bearish trader sentiment.

The SPDR Gold Trust is moving into a position of strength, and is currently at Moving Average Channel weekly resistance. Seasonal strength for gold is greatest in September, but with the proper technical setup, we may find an entry point significantly earlier than that through the MAC Breakout method.

Subscribers should watch our Daily Banana and Metals trade recommendations for specific trades in gold and other precious metals.

Activist Investors Buy, Do You Too?

dd current downtrend 8-11-15

Nelson Peltz has been engaged in a very public fight with DuPont. Although he lost his battle to break up the chemical giant, he has continued to add to his massive position as the stock’s price has declined nearly 30%.

It’s rare for activist investors like Petlz to be wrong in the long run, so it makes sense that the strategy of taking positions in stocks targeted by activist investors is appealing to many traders and investors. But it’s not a viable strategy, and this trade is case in point.

Remember, Peltz continues to add to his position in DuPont. This is something he can do because of the size of his war chest. But can you do the same as him? How often do you add to a position that’s already down 30%? Hopefully, your answer is “never.”

This is where our timing triggers come into play. Has Peltz’s activity gotten our attention? Certainly! Have we taken a position ourselves? Certainly not! The chart above says it all. Since mid-May, DD has been in a clear downtrend. Time after time, it has shown multiple bars below the Moving Average Channel, while Williams Accumulation-Distribution remains consistently below its 57-day Moving Average.

We’re looking forward to profiting from DuPont’s recovery along with Peltz. When exactly we do that will be timed by our Moving Average Channel methods.

CotW: Long-Term Bonds Above MAC

long-term bonds EFT tlt above mac weekly 7-30-15Long-term bonds returned to the monthly MAC low in early May. Support has proven strong at these levels, with highs remaining within the lower bound of the monthly MAC.

Now, as seen above, TLT is showing significant movement on the weekly chart. Watch carefully over the coming days and weeks. With price currently above the MAC, the next two weeks may provide the signal necessary for an intermediate-term breakout buy.