Playing the Central Bank Mosh Pit
Traders are expecting volatility and perhaps some relief this week, with meetings from the European Central Bank, the Bank of England and the Federal Open Market Committee on tap. ECB head Mario Draghi caused markets to spike with his bullish comments Thursday, when he stated, "Within our mandate, the ECB is ready to do whatever it takes" to save the euro. There is speculation that Fed chief Ben Bernanke could hint at further stimulus, as well. How can we profit from these potential market-moving scenarios? Let's look to the charts for some clues.
When the question of central-bank intervention arises, traders often turn to hard assets like precious metals, or to tertiary plays within that group. First we'll take a look at the SPDR Gold Trust (GLD). The fund has broken out of a symmetrical triangle consolidation pattern, and is working its way through a field of resistance. Confirmation of the breakout will occur if GLD can break above $159, but smaller initial positions can be taken now....310 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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