There’s been a fair amount of activity in the markets since our last post of spread betting strategies for stocks and commodities. Today we’re going to have a look at both gold and the S&P 500 as interesting things have been happening in both markets.
In our last post of spread betting strategies we referred to last Friday’s close at 1070.3 (September contract) and suggested that the S&P 500 was headed lower and would likely test support at 1061.8 before moving lower still towards 1000. We only had to wait until Tuesday for 1061.8 support to be taken out and ended up with a decent down day which also took out 1050, and reached new multi-week lows at 1044.3 before a minor recovery.
Yesterday we saw new 7 week lows at 1038 before the lows were rejected and the market recovered to close at 1054.6, which is roughly where the market is now at the time of writing. Clearly there is some support in the market around the 1040-1050 area as the long lower shadows of the last 2 days candles show the lows are being rejected. However, the long and short term trends are still very much down and if short term support can be cleared then a move down to test 1000 will likely follow. Therefore we’re still only using short spread betting strategies in this market and will continue to reject longs.
Gold cleared the resistance level at $1222 last week that we have been writing about for some time and the market pushed up to $1239.5 before we saw a big move lower intraday on Tuesday down to $1211.70. We had seen prior resistance at this level so a change of polarity came in to effect and we saw rejection of the lows and buying came in all the way back to a close at $1237.5. This was a bullish candle on Tuesday and that momentum continued higher on Wednesday to $1243.3. That was the highest price for Gold since the 1st July.
Therefore the short and long term trends are both bullish for gold and we may see a push further towards new all time highs. Any weakness should be met with buying around the $1211 support area. We’re therefore only using spread betting strategies from the long side in this market.
Until next time, good trading