NEW YORK (TheStreet) -- Over the past couple of weeks we have seen sellers control the price of gold. This can be seen on the charts by the light-volume drifts upward and high-volume selling. This type of price action provides some excellent intraday shorting opportunities.
On the other hand, the S&P 500 has been doing the opposite, providing some very profitable intraday buying opportunities.
Below I review a couple of low-risk intraday trading opportunities that provided massive gains recently.
However, I think we're about to see a reversal of the current trends. Gold should start providing great buying opportunities while the S&P 500 should provide some great shorting opportunities.
Profitable Gold Plays
In the first two weeks of April gold had formed an excellent mini head-and-shoulders topping pattern. This is a pattern that I find very profitable when trading the intraday charts.
The first chart is the two-hour intraday gold chart spanning 25 days. It clearly shows the head-and-shoulders pattern I just mentioned.
Once the first wave of selling was finished and gold reached our price target of $1134, we exited our position and waited for another intraday setup. It came after only a couple of days and offered another opportunity to short and even more potential than the first trade because it had the possibility of dropping to the $1115 level. This would have provided a $40 move in gold, washing weak positions out of the market and setting gold up for another big rally.
Our first price target was reached at $1147.7, where we took some profits and moved our stop to breakeven (our entry price) for the balance of our position. Doing this guarantees a trade will be a winner no matter what happens. As you can see on the chart, depending on what investment type you use, you would have earned 2.6% - 210% return on your investment.
Gold's Surprise Rally: Spain Was A Pain
Spain was downgraded this week, causing large selling pressure on the euro as everyone sold the euro and moved their money into a safer investment like the dollar or gold. This sent both assets dramatically higher at the same time.
The red arrow on the chart below shows where gold was most likely headed before the eurozone news. The metal rocketed higher when the news hit the wires. Most of the price advance happened within the first four hours. Since then, the price has drifted sideways or ground its way a little higher.
