Wednesday, August 24, 2011

Trade Update: IAU

Well I knew that gold had the fall back soon. We went short on IAU at $18.33 and today it closed at $17.21. I think that is most of the move.

You can see in the daily chart that it came right down to within pennies of support at $17 a share, which also happens to be where the 20 day moving average is. The stochastic still has plenty of room to the downside but I don't think we'll get much force from that. In fact I almost covered just before the market close, but I opted not to.

If you take a look at the intraday chart below, you can see that most of the move happened in the first few seconds of trading. You could not have caught it, you had to have already been short from the day before. Check out that surge of volume just at the open. That could be washout volume.

I don't know if it is or not, all we can do now is move our stop down to $17.55.

Short 100 shares of IAU at $18.33
Stop at $17.55

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