c03 JWBT016-Busby September 30, 2008 14:23 Printer: TBD
Opening the Vault with Key Numbers 45FIGURE 3.5 Daily chart of gold futures for the first quarter of 2008.and precious metals tend to be a safe haven. Therefore, when gold prices
take an upturn, stock prices often move in the opposite direction. The cur-
rent market is a good example of this phenomenon. At the time of this
writing, stocks are down for the year. The housing market is weak and the
mortgage crisis is looming. While stocks are down, gold is up. Some of the
key numbers to watch when trading this commodity are 1050, 1020, 970,
and 950. Remember that the key concept behind key numbers is to buy
just above resistance and sell just below support—or at least avoid buying
right in front of resistance or selling in front of support. Trade with the
market and do not fight it. Identify the trend and ride its wave to profits.
Key numbers are moving targets. That is, they change from time to time.
Figure 3.5 identifies some of the key numbers for gold in the first quarter of
2008.
When 2008 opened, gold was trading at 839.7. That is a big key number
and can be used all year as a benchmark for trading gold. The current yearly
high for gold is 1033.7. That number will serve as strong resistance and is
another important key number. The low for gold futures when the second
quarter of 2008 began was 874.6. This is another point of strong support for
gold prices. Let key numbers increase your profits and your consistency.