Gold Trend Jan 09, 2015

Long Term ~ Bearish-Need a monthly close above 1800 to confirm the bull market
final phase underway. Need a monthly close above 1560 to neutralize the trend.

Medium Term ~ Bearish– Gold needs to close above 1272 on a weekly and monthly
basis to neutralize the downtrend.

Intermediate Term ~ Bullish– Any NEW price high AFTER WEDNESDAY
will favor higher into Jan 19th (plus or minus 72 hours)

Short Term ~ Bullish- Gold at 1222-1232 resistance.  This could be the high for this week.
The other major area is 1255-1272 and it is possible we go there if we close above 1234.

Initial Resistance 1215-1222 2nd tier 1232-1239

Initial Support 1196-1204 2nd tier 1187-1192

Gold is gearing for the NFP report on Friday.  That’s what it comes down to.

Short term Gold

Tonight we use the daily chart to show the situation.  The blue rail downtrend parallel channel engulfs all the price action since the last key high failure and reversal lower.  Note how critical of a level we are at.  We are on the 4th test of the downtrend channel. Each time it gets more difficult for the market to hold a downtrend line. It is rare a market can handle 5 tests and not break.  While it can handle a 4th test a little better, it surely can break higher here.  If we break above 1222-1225, we have the 1234 and the 1242 area as next resistance before the key 1272 area.  (Note 1255 is also an important price point of resistance in Elloit Wave circles).  The key is gold needs to break above this blue dotted downtrend line. That’s step one.  Step 2 is in the 1234-1242 area.  First Support is the 1195-1205 area on Friday and then 1172-1182.  

It all comes down to the NFP report.  The short term trend remains up and it takes a close below 1197 to move to neutral.    In summary, the short term decision point and the trend into Jan 19th (plus or minus 72 hours) starts Friday/Monday.  A close above 1225 on Friday would tilt the odds to the upside.

What Next?

We wait until the NFP report comes out Friday morning.  From there the control boyz will most likely clear the stops and then gold should decide trend into the 19th of the month. 

In summary either 1222-1234 or 1255-1272 are the odds favored target highs for this current cycle from Jan 5th to 19th.  Remember, they are the odds favored, and not the ABSOLUTES as there are no absolutes in markets.  

In any event, a close above 1225 should be enough to give the bulls the advantage.  A close below 1195 would leave us in limbo. 

Any close below 1167-1172 AFTER THE WEDNESDAY close will cancel that outlook and suggest that gold is succumbing to the downward spiral in commodities.  

Bottom Line

I still don’t like the choppy and overlapping price pattern we have been seeing and odds favor this is still a counter trend rally. We got the move to 1222 but will gold falter there again?

For now, we could have a medium term rally continue first, but be aware, so far it has been very weak. We need a weekly close above 1222-1232 and then 1256-1272 if things are going higher into February.

Keep in mind that gold is at the most important price point in decision.

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