It doesn't matter if you’re a fan of technical analysis or not.
Fact is – it works well.
And if you know what to look for you’ll make money up to 80% of the time. The best part – it’s insanely easy. While many folks run to gold only as a safe haven, smart investors jump in and out every time the herd overreacts to just about anything.
In early May 2017, gold had just pulled back from a high of nearly $1,300 an ounce. Then, out of the blue, gold plummeted to $1,214. Not many folks knew if gold would plummet even lower. But we had a good idea.
We knew the herd was overreacting – yet again.
We knew the underlying fundamentals of the U.S. dollar were weak. We knew global issues were still wreaking havoc. All of that would impact the underlying fundamentals of gold prices. We knew all that.
What many folks didn’t know is just how oversold gold really became. However, any one that has studied our pivot points – RSI, Money Flow, Bollinger Bands, and Williams’ %R – was well aware. In fact, take a look at what has happened to the price of gold, each time RSI has moved to the 30-line.
Now look at what happens when gold even touches the lower Bollinger Band. Or what happens when that’s confirmed with an aggressive move to the 20-line on Money Flow. Or what happens when Williams falls under its 80-line.
Like magic, gold pivoted, turned around and ran higher, as it did in May 2017.
Reverse all of that, and you can call the top of gold prices, too. In fact, in early June 2017, gold had again become aggressively overbought at double-top resistance. While it could always break above that point, any argument could be made at the time for downside given the overbought conditions.
The best part – this technical strategy can be used with any commodity, any index, any stock, and any ETF. Whether you’re a fan of technical analysis or not, the fact is it does work very well.