Bullish Swing within a Bearish Trend

Inverted head and shoulders: Gold has been very bearish since October 2012. After finding support at 1180.15 lat week, it has been in a correction. The 4H chart shows an inverted head and shoulders completed as price pushed above the neckline around 1248.60. This signals a break in the downtrend, perhaps for some correction/consolidation. It is too early to call a reversal at this point.

RSI, MA: It should be noted that the 4H RSI has held under 60 since May (except for a brief moment at the end of May), which reflects a persistently bearish market in this 4H time-frame. The RSI is nearing the 60 market again. The moving averages are converging after being in bearish alignment, but the 200-4H-SMA hovers above price, reflecting an overall bearish mode in this time-frame.

Resistance factors: So we have a bullish swing within a bearish trend. Let’s take a look at some resistance factors just ahead. First of all, it is testing a falling trendline that goes back to the 6/21 resistance pivot at 1302.40. A break above the line exposes this pivot. Before that, we have 1269-1270 as a previous support pivot that can be resistance.

Bearish continuation: Back to the downside, a break of the “shoulder” pivots around 1220 would be needed to revive the bearish trend. Hold above 1248, the neckline however would represent respect for the bottom structure and call for a more bullish correction.

 

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