Gold spot price briefly spiked over 1250 before pulling back as speculators took profits, and metals bears put on fresh shorts in the hope of an overreach and a double top.
The breakout needs to take out the 1250 area and hold it, put a nail in it. It will likely back and fill before making its move. I have added the new short term fibonacci retracement levels to the chart.
There is something profound going on in the background of this market, making it well worth watching even if you do not have an investment interest in it specifically.
There is nothing wrong with selling strength and buying weakness to round out a trading position. But you never wish to lose your entire position in a bull market, because it becomes a formidable task to buy back in, a real effort of will and emotion to get back on the train once it has left your standing at the station. Rather than admit they were wrong, most amateur investors will instead become bystanders and spectators, jeering and cajoling the passengers to get off as well, so they do not feel so foolish and lonely as the bull market passes them by.
"For instance, I had been bullish from the very start of a bull market, and I had backed my opinion by buying stocks. An advance followed, as I had clearly foreseen. So far, all very well. But what else did I do? Why, I listened to the elder statesmen and curbed my youthful impetuousness. I made up my mind to be wise carefully, conservatively. Everybody knew that the way to do that was to take profits and buy back your stocks on reactions. And that is precisely what I did, or rather what I tried to do; for I often took profits and waited for a reaction that never came. And I saw my stock go kitting up ten points more and I sitting there with my four-point profit safe in my conservative pocket. They say you never go broke taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market." Jesse Livermore
