Gold Can Be Sweet
- Posted by Greg Harmon
- on January 10th, 2013
I know, I know, just two days ago I was spouting how you should Not Buy Gold in Yen or Any Other Any Currency Yet and now it is sweet? Well if we are allowed to price Gold in anything currency, then why not any commodity as well. So looking further into this it appears that Gold priced in Sugar just might be a good idea. The ratio chart of the SPDR Gold Trust Shares, $GLD to the iPath Dow Jones-UBS Sugar Subindex Total Return ETN, $SGG, or the price of Gold in Sugar, is showing strength. It is above the key support/resistance level of 2.30 in the rising trend since early 2011
and has held support on a backtest of the level from above. The Relative Strength Index (RSI) is holding in bullish territory as the Bollinger bands are squeezing for the next move. As long as this holds over 2.30 you can own this ratio. Do so by buying 100 Shares of $GLD for every 230 share of $SGG sold short. Look to take profits when the ratio hits near the previous high at 3.0 and stop the trade on a ratio of 2.25. In this way you are risking $8.05 – $8.23 to make $32.78 – $42.76.
Join the Dragonfly Capital Views Premium Membership
Sign up here to get deeper analysis and nearly 50 trade ideas every week.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- Thanksgiving Over-Indulgence or the Euro Causing Indigestion
- The Stars Say Buy Constellation Brands
- Seems the German DAX is Always at Critical Levels
- Put a Collar on Hewlett-Packard Stock, Not Your Cat
- Premium Earnings 11-25-14
- Silver Driving Higher For the Holidays
- Looking for 6% Upside in Lazard
- Premium Earnings 11-24-14
- Top Trade Ideas for the Week November 24, 2014: Bonus Idea
- Top Trade Ideas for the Week of November 24, 2014: The Rest