Saturday, March 19, 2016

Gold Trend March 19, 2016

Long Term ~ Bearish BUT READY TO TURN NEUTRAL- Need two monthly closes above 1322 to FULLY neutralize the trend.
Medium Term ~ Neutral-Need a monthly close above 1255-1272 to turn bullish. The blue average has crossed above the red, and that’s a bullish sign.
Intermediate Term ~ Bullish– The intermediate term remains in bullish mode and it takes a weekly close below 1217 to neutralize the uptrend.
Short Term ~Neutral- The short term trend has moved to NEUTRAL. Short term cycles called for a potential pullback low near 1222 or 1190.  We got 1226 this week. A close above 1287 favors 1306-1322. Neutral is not bearish and gold can still move higher.

Initial Resistance 1263-1272 2nd tier 1280-1288
Support 1217-1227 2nd tier 1200-1210

Gold Long Term
Long Term Trend ~ Bearish – BUT READY TO TURN NEUTRAL on Monthly close above 1322.
Moving Averages 1222-1312 (A monthly close above 1322 moves Long Term to Neutral from bearish. The close above the blue moving average signifies that we could already be at Neutral).
For the first time since March 22 2013 when gold was at 1600 per ounce, price has closed above the blue long term moving average. This is a significant development in the process of gold returning to a bull market stance. We’ll still need monthly closes above 1322 to move to full neutral, but the fact that we have broken above the dual yellow downtrend line and have closed INSIDE the blue and red averages gives this move the best chance since the correction began to be the real deal. The next significant step will be to close above 1322 (the red moving average) on a monthly basis.
The dual yellow downtrend line now becomes SUPPORT 1122-1172
Our two favored months for a turn was Dec 2015 and/or March 2016. The price range was 850-1050. The Dec low at 1045 has met the qualifications. In order to TURN fully bullish we need that monthly close above 1322 and gold needs ONE OTHER ELEMENT to suggest that this move is for real and the gold bull market has resumed. 

Gold Short Term
In our last two updates we stated it was not impossible for gold to shoot back up to 1265-1275 and since then we did exactly that…moving to 1279 intraday and closing at 1276. Since then however, another pullback attempt (which we thought would happen) developed into the FOMC meeting. This time it came to our first support listed here at 1222-1232 with a 1226 low. However, price rebounded right back and re-tested 1272 again.
The 1217-1225 area is now key. UNTIL we close below 1222, gold remains in an uptrend.
That choppy and overlapping wave could very well be signaling we’re still going to pull back towards 1180-1200. First support remains the 1217-1225 area. Another close below 1240 would suggest a pullback is underway into next week. A close above 1275-1288 means that odds favor gold is moving towards 1306-1322 into the week of March 23rd.
Monthly resistance is 1306-1322 and monthly support is 1162-1189.
Gold Short Term Cycles
The next Cycle is due March 23rd (plus or minus 72 hours). As you can see we’ve been fighting the 2015 upper channel line and we almost made it support. We rarely show the medium term cycle because I’m still learning its characteristics. Suffice to say that gold is a difficult read here at the moment as it refuses to close below 1222. And that is the key if gold is to reach the strongest support in the 1180-1200 area.
We’re just not sure if we’re going to pullback here or get a cycle inversion and keep moving higher into the next BLUE cycle. A close above 1288 will favor we are moving higher towards 1306-1322 into the week of March 23rd. As long as we are BELOW that upper black channel line, then the potential to move lower into the next blue cycle arriving next week. It is a sign of strength that gold’s pullback so far has not done much during this red cycle. Anytime we close above 1272-1288, then we have the potential to move higher. That’s the place to watch in price. Strongest support is at the lower dotted channel line near 1180-1200. The other key spot (as mentioned on our last update) is near 1222. The low since then was 1226.  As long as we hold 1217-1222, the trend is still up.

What Next?
The FOMC hesitation and dovish statements this week pushed gold back to 1272 before this pullback that began on Thursday.
Short term and medium term Cycles are due to turn. The short term cycle is Mar 23rd (plus or minus 72 hours) and its possible we will get a pullback next Monday/Wednesday. But beware the medium term cycle window is in play and its also possible that metals could rally into the next blue cycle due next week. If that happens, odds favor the gold rally will be complete and a deeper correction will take place going into May/June. IF we make a low then we should get another upturn higher towards 1302-1322 on any close above 1288.
Any pullback to 1162-1190 would seem to be a gift at the moment in gold.

Bottom Line
Is the final low in gold in place? Perhaps. The two most likely places for the gold low was in (December 2015) or the ideal time of March of 2016 where it will be a Fibonacci 55 months since the gold high in August 2011 took place. So for the low has been December. At the moment we can't rule out another low in March. We would like to see February close above 1255 for the next sign that gold is indeed bottoming.

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