Gold Trend July 26/2013

Long Term ~ Neutral – Need a monthly close above 1800 to confirm the bull market final phase underway
Medium Term ~ Bearish - Need a close above 1525-1580 to neutralize.
Intermediate Term ~ Bullish– GLD and HUI neutralized the downtrend before gold and now all three are in bullish mode. Odds favor we could head back to the moving averages on a pullback.
Short Term ~ Bullish – The only question is the next short term cycle due to begin by Friday. It could put a two week high in place. Perhaps the options expiration on Thursday is causing this pullback as well.
Support and Resistance
Initial Resistance 1337-1347 and 2nd tier 1354-1361
Initial Support 1317-1326 and 2nd tier 1292-1308

Gold Hourly Chart

The pullback in play since Tuesday was favored to be from options expiration that ended today and indeed gold bottomed today and moved back up above 1330. The short term cycle turn from the 22nd could also have been the reason price was moving lower and we’re about to find out as the new cycle begins Friday/Monday. From a price perspective only, gold remains strong as the pullback are all holding above the 200 hour moving average and that was last night’s listed support.
So while we overbought on the short term, this week’s probe lower that began on Tuesday and bottomed today had a lot erased into the close. Resistance is the upper white channel line in the 1355 area. Any close above the channel by more than a few dollars would favor the purple lines in the 1370-1380 area. Support is the 1304-1317 area. As long as we’re above 1290 the short and intermediate term trends remain up. If silver closes above 20.50 and gold above 1355 the uptrend will remain in motion.

What's Next?

Gold has sold off sharply this afternoon after failing to breach 1340 this morning, which did not ever look likely with the weakening momentum and RSI divergence.  It is interesting that the daily volumes in GLD have been significantly higher on down days than up days recently, irrespective of gold's rally, suggesting investors have been using this rally to offload long positions.

Gold is now back below the 50 DMA and inside the down trend channel - a drop below yesterday's low at 1309 would be clearly bearish and a close at or near 1300 would set us up nicely for further falls next week.

What is also encouraging for the bears from today's action is that the dollar is down sharply and gold has not responded with a rally. We expect to see a sharp decline in gold once the dollar resumes its rally (which to be fair we did expect to have commenced by now).

Oil and equities are also down sharply today - with reference to the recent trends, this should be an ideal set up for gold to break out and build on the recent rally.  The fact that gold is also falling after failing to reach new highs this morning is ominous for the bulls.

Enjoy your weekend!

GOLD CURRENT TRADE 

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Sold Oct Gold At 1338.24
  Stop 1363.24 On July 26/2013
Target  1315
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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