Long AU

AU is a gold miner. Buying gold miners is an "unforgivable trading sin!"

With Yellen stating that rates will not be increased "soon", then gold is in play again... and so should be gold miners. Gold/Silver still look very weak, which might indicate that the market does not believe what Yellen said. However, a very weak GDP figure today will help gold.

[ATTACH=CONFIG]28125[/ATTACH]

[ATTACH=CONFIG]28122[/ATTACH]

GDX looks also weak.

[ATTACH=CONFIG]28123[/ATTACH]

Then, why buying AU?

We can see that the gold miners sector is high in the sector RS and that AU is high in the price RS.

[ATTACH=CONFIG]28120[/ATTACH]

I would buy a breakout above 11.75 on strong volume.

[ATTACH=CONFIG]28121[/ATTACH]

Data looks good, especially on a 1000 days back-test.

[ATTACH=CONFIG]28119[/ATTACH]

The sensitivity analysis shows that the stronger the breakout, the better. Weaker breakouts are prone to reversals.

[ATTACH=CONFIG]28124[/ATTACH]

AU's earnings are expected around mid of February.

AU broke out above 11.75, but volume is not strong.
Below are the stats for breakouts on normal volume.
Not too interesting!


Pascal

[ATTACH=CONFIG]28143[/ATTACH]

[ATTACH=CONFIG]28142[/ATTACH]

[ATTACH=CONFIG]28141[/ATTACH]

Although AU's volume was not strong early in the day, it increased later on and I should have bought since the settings were correct.


Pascal

[ATTACH=CONFIG]28337[/ATTACH]

Pascal, Because AU is headed into the 200-day moving average where it has stalled in the past, I might expect the same here. So I ran an overbought short evaluation of AU in the case that it rallies into the 200-day and stalls.

[ATTACH=CONFIG]28341[/ATTACH]

So it might be possible to go long on your scenario and turn right around and short the position if it does as I suspect.