Week 27: Market Update & Gold trading journal

Disclaimer: All information shared is solely for learning purpose and it does not constitute to a buy/sell call.

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Market updates 28th Jun 2020:

Items to take note:

  1. Post opening up by many countries, we are seeing a surge in the cases of COVID-19.
  2. Q2 financials would be releasing over the course of next few weeks (weak results would be expected)
  3. Fed has completed the stress testing, key points
    1. Covers 34 big banks, includes base line & severely adverse scenarios/sensitivity analysis
    2. For the third quarter of this year, the Board is requiring large banks to preserve capital by suspending share repurchases, capping dividend payments, and allowing dividends according to a formula based on recent income. The Board is also requiring banks to re-evaluate their longer-term capital plans.
    3. During the third quarter, no share repurchases will be permitted.
    4. In summary, loan losses for the 34 banks ranged from $560 billion to $700 billion in the sensitivity analysis and aggregate capital ratios declined from 12.0 percent in the fourth quarter of 2019 to between 9.5 percent and 7.7 percent under the hypothetical downside scenarios. Under the U- and W-shaped scenarios, most firms remain well capitalized but several would approach minimum capital levels. The sensitivity analysis does not incorporate the potential effects of government stimulus payments and expanded unemployment insurance.

 

 

Gold trading plan:

 

Weekly Chart:

BULLISH continues!

As mentioned last week, gold has turned bullish after closing above 78.6% Fibo and what is important is it has break above 18th May weekly high of 1,765 this week and managed to close above the level.

This showed a clearer intention of bullishness of gold to retest 1,789~1,800 range in the next week or two (eventually to 1,922 range).

 

 

Daily Chart:

Bullish.

Similar view as weekly chart, gold would likely to retest 1,922 in the upcoming weeks before executing a pull back for further movements. Technical indicators are supported by Elliott wave patterns.

 

4hours chart:

Bullish:

  1. Gold has completed back testing of resistance turned support at 1,746 levels and is on a upward momentum pattern.
  2. As mentioned, it is also important to note that Gold has closed above 1,764 as that is an important level to break up.
  3. We would expect Gold to be trading within the upward trend as indicated

 

 

As no trading/investments are guarantee sure win, please do your own due diligence and always look at risk to reward and trade with guaranteed stop loss.

Do PM me if you would like to understand how I trade with guaranteed stop loss.

 

Regards,

Ernest Koh