I'm starting to think ahead to how I'm going to trade the end of the year and then the new year. My seat of the pants recollection (prior to an in-depth analysis) is that the end of the year tends to be good, but the new year can be quite treacherous.
Following this post are the charts this analysis is based on. Here's the tabular results:
The trades I find attractive are as follows:
- Column B: Go long the second to last Friday before the end of the year. Exit at the end of the year. REASONING: The relatively high percentage of winners and the relative small size of the losers makes this attractive.
- Column G: Watch what happens on the first trading day of the year. If its not at least up .5% from the end of the year close there is no momentum supporting gold... Go short. Otherwise, gold has good momentum... Go long. Exit at the close of the second Friday following the entrance. REASONING: This smells like curve fitting, but I like it because I think that Cartel manipulation of the price of gold is significant. If they can keep gold soft the first day, they attempt to set the tone for the whole year by pushing the price down right at the beginning of the year. If they can't push it down at the beginning of the year, then gold is too strong and can keep going.
- Column H: Skip the new year's opening uncertainty. Go long at the close of the first Friday following the first trading day of the year. Exist at the close of the following Friday. REASONING: Avoids the manipulation and drama of the beginning of the year.