Hard to Catch Falling Knife

After bouncing from 1525 on the first attempt we opened a long position, thinking that this major support level would hold and at least give us some kind of tradeable bounce.

However, the shorts had the bit between their teeth and slammed gold and silver lower, smashing through 1525 and stopping us out for a small loss on that long position.

We then immediately flipped short 1522, on the basis that major support had been breached and, as was sure to happen, gold crumbled, falling all the way to 1490 before finding some support from a massively oversold short term position.

The bounce since 1490 has been feeble and we look likely to close near the weekly lows.  Next week could see another smashdown in gold and we could easily see 1400 in the next few days - we are now into a new paradigm, this last Wave 5 is clearly going to be a true washout.

The danger is that this final smashdown (if indeed it is the final sell off and not the start of a new bear leg), will snap back powerfully, so we need to be nimble with our short to profit from it.

We are bound to have a retrace at some point to give you an entry position, we expect volatile trading as we enter a new phase below 1525 - we need to be nimble and alert, however the rewards in this environment of increased volatility can be huge.  The tricky bit will be identifying a tradeable bottom and going long, we all know how hard it is to catch a falling knife and the consequences of getting the timing wrong.

 

YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS 
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED. 

 Do your own due diligence. 

No one knows tomorrow's price or circumstance. 
 I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader. 
I do not accept responsibility for being incorrect in my speculations on market trend. 

 King Regards