US 500 trade idea

Having moved my stop loss closer to the market on 19 March to 2055, the US 500 cash has found sellers and has triggered my stop loss (for a loss of 0.4%).

US traders
Source: Bloomberg

I was clearly too quick to move my stop loss from 2035 as the index has found support at the October uptrend and has managed to close above this trend.

This is a positive development, but with geo-political issues surfacing, it seems we could be in for fairly choppy trading.  The 20-day moving average is moving sideways so it seems range trading could be in play for now.

New idea on spot gold

With a rise in US bond yields overnight and subsequent USD strength we have seen good selling activity in gold. I looked at short EUR/USD trades this week and if this plays as out like I anticipate, then gold prices should struggle.

The daily chart of spot gold has moved to a more bearish picture and I feel shorts could be looked at by traders.

As we can see the strong multi-month horizontal resistance has held between $1220 and $1223. What’s more, gold looks set to close below the 38.2% retracement of the January to March decline at $1206. This again is bearish development, although the various trend and momentum indicators are yet to turn bearish and suggests keeping position sizing small for now on shorts. A turn lower in stochastic momentum would suggest increasing short positions.

Where to place stops is key and that really is determined on one’s risk profile and money management strategy. But I would look at trimming back on a move above $1225 and closing the trade fully on a break of the 61.8% retracement and 10 February high of $1245.

Naturally traders positioned short would want to see the former January downtrend give way at $1177 and from here gold can make an assault at the 17 March low. 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.