Gold has been on quite a rollercoaster recently from $1200 to $1800. But you may be wondering why gold is now more affordable!

Well, IMHO, one of the biggest reasons gold is priced down is that there are fewer expectations of inflation, economies are sluggish so aggregate demand for goods & services is slowing. So we’ll have higher unemployment, less spending power, and ultimately lower inflation.

This is certainly true in the Eurozone. And mostly true in the US. It’s only when there is excessive demand for products that prices will start to surge again.

However, there is also the opposite scenario: crash & burn. In which case, the West goes to hell in a basket; and price of gold goes through the roof again. We might see a little more risk-based fretting in the news… esp. with Greece & Portugal. Bond prices there are jumping again…

But ultimately, we’ll just muddle through. The type of scenario where growth is anemic, employment & wages stagnate, but not enough to trigger a flight to safety again. Expect Gold to wallow as a result US$1100~1200 until a firm direction is established to the upside or downside for the remainder of 2013.

Should you buy or sell gold in the meantime? What do you think?

While the Cyprus government may sequester this money (it’s not a tax), the consequences of doing this will be profound and may damage the very foundations this deal was aimed at creating.

In a radical departure from previous aid packages, euro zone finance ministers want Cyprus savers to forfeit up to 9.9 percent of their deposits in return for a 10 billion euro ($13 billion) bailout to the island, which has been financially crippled by its exposure to neighboring Greece.

1. Who would leave their deposits in Cyprus, knowing that the greedy eurocrats could easily turn around and say ‘sorry, that didn’t work!’ we need more?

2. Capital outflows will massively erode the foundations of these banks themselves. It’s hard to believe new capital would enter Cyprus when the govt. has shown its eagerness to levy this. If I were an oligarch, euro-expat, or whatever, I would certainly cross Cyprus off my list of favored tax havens.

3. If the locals withdraw their cash, the foreigners remit their cash away, and new deposits dry up, it’s hard to see how those banks will survive anyway. How can they not breach their capital ratios? How can they not be insolvent?

Lastly, the threat of contagion may be minimized for the moment by the hints that this is not going to be repeated. But who can’t forget the admonitions of the prime ministers of Ireland, Portugal, Spain & Greece that they didn’t need bailouts. Really they didn’t. Honest, guv.  Let’s count how many times this is denied as well.

Chart patterns are specific price-action patterns in stock prices that have repeated themselves for decades, giving prudent traders many profitable trading opportunities. However, there are many chart patterns that are unreliable and not profitable. In this article we will cover the 3 highest win rate patterns that almost guarantee long-term profitability and gains.

Pattern #1: Head & Shoulders

The Head & Shoulders is one of the most reliable chart patterns, having accuracy of almost 90% and generating profits for decades. The head & shoulders is a reversal pattern, that indicates a shift in trend and beginning of a reversal.

We will usually trade this pattern when the neckline is broken, and will join the trade right at the breakout. However, for even more accurate entry it is recommended to wait for price to pull back to the neckline, and begin the new trend. The pullback entry is even more accurate than the breakout one, reaching around 95% accuracy. This is a chart pattern you must trade and master.

Pattern #2: Double Top

The Double Top is another pattern which you must trade, as it provides very good win rate (around 76% winning trades) and very consistent profits in many stocks and Forex pairs.

The Double Top is created when price tries to break a resistance level twice and is unable to, creating a shape resembling the letter ‘M’. Eventually price breaks the neckline downwards, which is the sell signal for chart traders. We will also enter a short trade if price pulls back to the broken neckline from below.

Pattern #3: The Channel

The Channel is one of the most accurate chart patterns that appears in almost any Stock or index, and are the foundation of trends. The Channel consists of two parallel trend lines in a certain direction – it can be either ascending or descending.

The Channel symbolizes a healthy trend in which price moves forward in a certain rhythm. We can trade the channel in several methods: The first one is to take trades on the trend lines themselves (make sure to enter only with the direction of the trend and not against it).

Another trading method that is particularly powerful with channels is to enter after it is broken: entering short when an ascending channel is broken and entering long when a descending channel is broken. For extra accuracy we recommend not to enter the breakout itself but wait for the pullback.

Conclusion

Chart patterns are a very reliable and consistent way of trading, and if you focus just on the 3 patterns mentioned above, you will generate stable profits from any market you trade. Choose one pattern at a time, learn to identify it on historical charts and then proceed to master it in real trading.

Steve Sollheiser is a trading veteran with experience in trading stock chart patterns and trading Forex. In his site he shares his insight about chart trading and trading psychology.