Chart of the Day - Gold Trendline

Today's chart of the day for 01/28/2011 display's several trendlines for Gold investing over various timeframes.

The timeliness of today's chart fits in with the recent theme of the articles I've been posting on using trendlines to improve your trading.

I've been trying to point out the power of using this simple method at all of our disposal over several articles, not just the one linked above. You'll also find a free ebook on using trendlines accessible on my page above, for a limited time, that is well worth the cost....(free!)

Looking at today's chart below of the Gold market and where gold is in relation with it's medium term 2 year trendline, we can see it's at an important juncture.

The argument for the bulls, would be that this is a pullback and a great long entry point for both a long term investor and a swing trader.

Of course the opposite is true for contrarian traders and investors who haven't gone short already. A break down below the 2 year trendline would simply add more fuel to the bear's case that a more lengthy decline is in store.

Over the last several weeks I've written a few articles on Gold and hinted at my views that Gold was too high for my liking. The last article I wrote is here: Gold Update 01/25/2011 and all Gold related articles can be found here: Gold Investing.

Today's chart provides a long-term view of the gold market. As today's chart illustrates, gold has been in a strong bull market since 2001.

Today's chart illustrates that the pace of that upward trend increased beginning in mid-2005. Following the financial crisis of late 2008, gold surged once again.

More recently, gold has pulled back from resistance (red line) of its accelerated trend channel. However, gold has pulled back to and is currently testing what is two-year, intermediate support (see green dashed line) for the eighth time.

Chart courtesy of Chart of the Day
Chart of the Day 01/28/2011 - Gold Trendline

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