What’s Going on with Gold?!?

The market continues to march toward its highs as we wrap up an eventful earnings season. That means more momentum — and more opportunity for you to lock in winning trades!

We’ve witnessed some exciting action over the past week and half. Last week, the dogged Dow woke up and led the S&P and the mighty Nasdaq. This week, we’re seeing more of the same. The Dow is pushing higher while traders take profits on the high-flying tech names.

Yes, the Dow still has some work to do before challenging all-time highs. But we’re starting to see some snapback action. It’s great to see some of these forgotten stocks participate in the rally. Everyone is getting a chance to play…

Meanwhile, gold is having an off day. Sellers stepping in following the metal’s incredible breakout to all-time highs. Gold dropped as much as 4% Tuesday afternoon, slipping back below $2,000 for the first time this month.

You can watch my full interview on where I see gold headed by clicking here.

Remember, don’t try to outsmart yourself picking the top! You can’t let yesterday’s hard reset cloud your judgement. We can’t argue with gold and its huge momentum move aided by the dollar’s three-month slide. For now, we’ll consider yesterday’s action some much-needed profit taking.

I’m a big believer in gold long-term. In fact, I believe the metal is setting up for even bigger gains, targeting a long-term move to $3,000. It should set up for gains again once it bleeds off some of the pressure from its July rally.

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Chart of the Day: Transports heat up

Greg Guenthner

Since the stock market recovery kicked in following the brutal first-quarter pandemic crash, one of the main critiques of the rally has been a lack of broad participation from anything residing outside of the tech sector.

It’s no secret that the big tech stocks have dragged the market back toward its highs. But as Alan noted, we’re starting to see some of that elusive rotation we’ve been waiting on for the past several weeks as big tech takes a much-needed rest.

The Dow Jones Industrial Average is attracting plenty of attention this week as it outpaces both the Nasdaq Composite and S&P 500. But there’s another Dow that’s managed to top the surging industrials…

I’m talking about transportation stocks, specifically the Dow Jones Transportation Average. While the industrials we’re up more than 2% on the week as of Tuesday afternoon, the DJTA was streaking higher by 4%. The Dow Transports have now gained nearly 14% since the week of July 27:

TRAN

As you’ve probably guessed, the pandemic shutdowns absolutely obliterated transportation stocks. Airlines were hit especially hard in March and are just starting to show signs of life. Meanwhile, trucking and rail stocks are looking constructive, and the delivery/freight/logistics giants UPS and FedEx are ripping higher.

This adds up to big gains in the DJTA. If the rotation continues, you’ll have plenty of new opportunities for gains in this space in the weeks ahead.

Trading Tip of the Day

Pay attention to price, not the news.

I feel like a broken record these days talking so much about why price action will always be more important than random financial media headlines. But it’s important to remember that market action is shaping the news right now. The tail is wagging the dog!

When stocks are powering higher, coronavirus concerns have less of an impact. But when the market hits a snag, CNBC is ready with their doom-and-gloom headlines.

If you turned on financial TV and tried to trade the urgent market headlines, you’d end up selling the dips and buying the rips … a terrible combination.

You don’t have to cancel your cable or move to the middle of the woods where you can’t get high speed internet. Just keep in mind everyone’s priorities. Remember, the media is all about ratings, not helping you gain an edge in your trading

— Greg Guenthner

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How to Master Your Next Big Trade

If there was a tool to practically ensure your trading success, would you want to try it? It’s not some new gadget or a big secret. In fact, this underrated tool for trading success, one that can withstand any market environment is to simply create a plan.

Alan Knuckman

Alan hails from the home of options trading in Chicago, where he began working as a clerk on the floor of the Chicago Board of Trade (CBOT). Beginning with his days on the floor, Alan’s worked with all aspects of the options markets for the past 25+ years.

Transitioning from a clerk to a floor...

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