Swing Traders must be vigilant about sector rotation and money flow. Back in early December we started talking about gold miners as a bottom play in the Trade Report. Notice that as gold miners were at lows, positive volume outweighed negative. This was a clear signal that “big money” players were accumulating positions in this sector. That’s what we call positive money flow.
There were two great spots to play this sector. First, a low risk trade was available on the second leg of the late December bottom retest. Second, where we played it, on the remount of the 50 day moving average. Now that the stock has exploded, we can weight for the inevitable pullback for another trade entry.
Unless we get clues to the contrary, gold miners is the sector to watch for 2015.
If you like this article, follow me on twitter