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Aug 15

Trend Following Update: Entering Long Gold ($GC_F)

Ever since we exited our Short Gold position for our best trade of the year, we’ve been anticipating if and when it might trigger again, and have perhaps been guilty of assuming it would be to the long side. One of the key disciplines of trend following is to remove any bias so you can take whatever signal the market provides with equal conviction. So while we might be guilty of assuming it would be a long signal, we are ably demonstrating we are not bulls or bears or bugs, we are trend followers, and we will enter long without hesitation at tonight’s open.

Going in to Friday this leaves us SHORT 30yr, Dollar, and LONG S&P, NASDAQ, Euro, Oil, Gold.

Long Gold ($GC_F) 8/16 +$0.00 per contract

The advance from the lows met with resistance at the descending trendline and 50-day MA but recovered strongly from support around $1273. In the last week it reclaimed ground above the 20 and 50-day, which also had a cross of their own, going on to establish a new sequence of higher lows. Consolidating just below major resistance in the $1352-58 range gave us warning it was likely to trigger, and today’s move gave us a strong confirmation.

AlphaCapture

Our futures signals are proprietary so we can’t pinpoint an exact price that would trigger an exit, but for position sizing purposes it’s clear a break of the ascending trendline from the lows would be the first sign of trouble, and a break back below $1281.50-$1273.40 support would signal the longer-term downtrend was likely resuming.

Our current open positions are as follows:-

Long S&P ($ES_F) 7/18 -$1,025.00 per contract

Long NASDAQ ($NQ_F) 7/18 -$40.00 per contract

Short 30yr ($ZB_F) 5/13 +$11,812.50 per contract

Short Dollar ($DX_F) 7/23 +$1,080.00 per contract

Long Euro ($6E_F) 7/22 +$2,675.00 per contract

Long Crude Oil ($CL_F) 7/5 +$6,090.00 per contract

 

 

 

 

4 comments

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  1. Adam

    I was wondering the other day what it would take for it to trigger for you. Was glad to see it today, as I had just bought options for GDX (admittedly not the same).

    1. Jon Boorman

      Think I’d been saying for a while a move above that $1352-58 area would do it, will be interesting to see how strong the correlation is now with $GDX

  2. Jason Pearce

    Jon,

    I’m new to your site, but not trend-following. Your content is outstanding! Suggestion: Perhaps the list that shows your open positions can include a link that takes one back to the original post from when you entered? That way, we can read your original thoughts that prompted you to get in.
    Best,
    JP

    1. Jon Boorman

      I assume you mean for futures trades, as the equity trades already have links to all entries and exits on the performance tab. A similar thing for futures is coming as soon as I work out how to do it with a drop-down menu, not tech savvy.

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