Long Term=Bullish - major yearly resistance 1792-1804 needs to be exceeded on a monthly bass and close above 1840 to resume long term up bull trend.
Medium Term=Bullish/Neutral - It takes a weekly close below 1625 to turn the trend fully Neutral. Resistance 1755-1765(Oct/Nov 2012 Resistance)Intermediate Term= Bearish--it takes a close above 1685-1711 for bullish.
Short Term=Bearish--- Need a close above 1675 for bullish
Support and Resistance
(APRILGOLD – SUBTRACT TWO DOLLARS FOR APRIL GOLD)
Initial Resistance 1639-1649 and 2nd tier 1655-1661
Initial Support 1619-1629 and 2nd tier 1598-1604
The hourly chart
price made it back to 1650 on the button but could not overcome the downtrend resistance line and it turned down from that point we highlighted last night (1650-1660) We discussed the importance of maintaining a close above the yearly closing low of 1647 and that was broken on the Wednesday night close and now we’ve breached 1638. As mentioned last night the only thing we can classify price is that the trend is still down.
These new lows now open the door to 1619-1630 with the potential for more. As discussed last night the price point is as stretched as it can without a test of 1620-1630 and as of this writing the low is 1630 and we’re just barely above it.
Tonight I’ve expanded the entire channel so you can see where the major support points are as well. We are on the verge of a potential breakdown. And if you think it’s a coincidence that the G20 is meeting this weekend with China closed all of this week and with the USA MARKETS closed on Monday, well it’s just too coincidental for me. In other words anyone looking to take a trade here has to do it without control of what the G20 says over the weekend and have the USA markets closed on Monday. Even if you’re in Europe it means low liquidity and a chance for the control boyz to have access to a lot of long positions without the other side being able to liquidate until Tuesday where there is volume. The real major support of this channel is now all the way down to 1550-1570. We don’t usually look that low because there has been no need to. But now price is at an INFLECTION point where it could accelerate down much the same way an avalanche takes place due to the stops that are below this price point. We have to go all the way back to August to see lower prices than 1620. Support is 1619-1630 and anything below 1615 favors 1600 give or take a few dollars. Resistance is 1642-1647 and 1650-1655 and finally 1661-1666. The trend is down and is in danger or breaking. Not that it has too on Friday but regardless this is a dangerous spot for leveraged traders. There is no doubt that it could be a low point and a bounce back to 1660-1665 where the next purple line above price is could develop. But don’t think the risk isn’t great that the control boyz try and deliver a death blow to the bulls.
We’ve been bearish in metals since mid October but we’re in the camp that an end of December/January low would take effect. Our ideal date was Dec 21st and that is the 2nd lowest price reading since August. January 4th was the lowest. But the rally that was due to occur in February has just not developed. We tried two longs at 1669 and we got stopped out of the 1st on at 1674 and on the 2nd one at 1660. Even then our indicators never flipped outright bullish and the only thing that bailed us out of the longs was our ability to discern the CHOPPY and OVERLAPPING patterns. At least that kept us at bay from joining the rest of the bullish internet sites that have consistently told us that gold and silver were about to explode and they still were doing so even yesterday.
The consistent conspiracy theory is the only one that remains with any validity. If it weren’t for that then gold would have to be labeled BEARISH. But with so many rants for the last 17 months they have cornered their opinion and can’t change it now. You can bet that the moment they do this correction will end and price will begin to move higher in a consistent manner. That’s just the way markets operate. In summary, we are certainly at a point where a bounce can develop and we’ll continue to only expect bounces until the market price shows differently. No matter what the reason is conspiracy or not, the gold market at the moment is only bullish long term. Medium term is sliding into neutral and A BREAK OF THE LINES ON THE LONGER TERM CHARTS is on the verge. The control boyz know this and so does everyone else that are traders and funds. The only ones that don’t know the critical points are the cheerleader sites that are never willing to say gold is in a correction. We don’t like it either but the reality is in price and not opinion. It is amazing how opinion and not technical detail rules. The standard answer is technical analysis doesn’t work in a manipulated market. Well, neither does a car when it is driven by a five year old. If the truth be known ALL MARKETS ARE MANIPULATED, have been manipulated and are being manipulated. This has been the case since the Greeks started trading OLIVE OIL. It’s that plain. Look around you. Do you see anything that is pure, honest, truthful and full of integrity when it comes to the world stage? I don’t. Government and CEO’s have a job to do and it’s to LIE when things are bad. Their job is to maintain CONFIDENCE.
Right or wrong it’s the way it is. What should we have them do tell us the world is about to fold and we are in a big mess that has no chance of recovery? It just doesn’t work that way folks. Ever wonder why most bosses you ever had in life are usually the least informed about how the business works and how most seem stupid? (I said most, not all). It’s because they got the job because they are YES men, willing to do what the owners say to do behind closed doors. That is why they are where they are. (Again there are exceptions, but you get the drift).
The bottom line is that the gold market is not dead, but this correction is taking longer than expected. While out outlook on 2013 is not a bullish one per se, we’ve been at least expecting a bounce at some point. But as we’ve pointed out on a few occasions the gold stocks are telling us that ALL IS NOT RIGHT with the metals at this time.
In summary, the trend is still down. Watch this trend line, as it’s an important one.
Do I think there’s a bounce here? Yes. But it is very dangerous if we don’t and gold could get a drubbing. The control boyz smell blood here and if they get gold any lower there’s a bunch of stops that will get tripped up.
What Next?
The trend is down and now it’s whether we’re going to support between 1619-1630.
Because we’re in a wedge and with the way price has been acting we have to be open to reversals back to the upside as we saw over the last two weeks when we were testing upside resistance. We discussed that the downside could be tested and that has developed this week.
If we get a probe to 1619-1630 on Friday, and it gives way, the potential for a swan dive next week has to be a consideration. With G20 meeting this weekend and USA closed on Monday we could get a big move. Because it’s a wedge and because USA will be closed and CHINA is JUST RETURNING --- it could also be a barn burner back to 1670. This is how wedges are, wild and unpredictable. We can’t eliminate it from potential. As long as we’re in the wedge, the potential is there.
Bottom Line
Like a broken record we say the trend remains down. The control boyz have a chance to deliver a very hard blow to the gold bugs if they take out this area. They’ve been able to pull off what many thought was the impossible as it is.
Cycles have a way of doing that. We’ve mentioned the year 2013 as a critical one. It’s the 13th Fibonacci year from the bottom and will be the end of a 34 year cycle from the 1980 top and it’s the 144th year of the 1869 high at 162 when gold went into a panic when speculator’s found out that Grant was going to pay off the Civil War debt with gold. If we add a zero to 162 we come up with 1620. Interesting to say the least.
Watch this area 1619-1630 it’s an inflection point.
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.
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
