Gold Trend 21/02/2013

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=Neutral - It takes a weekly close above 1694 to turn the trend back to bullish. Resistance 1755-1765(Oct/Nov 2012 Resistance) Support 1500-1550.
Intermediate Term= Bearish--it takes a close above 1661 for neutral.
Short Term=Bearish--- Need a close above 1626 for bullish

The hourly chart

Price collapsed from the 1596-1600 channel line and went into freefall all the way to a major support line in one day.  We were looking for a bounce to develop on Tuesday but we closed at the lower end near 1605 the bounce was lowered from 1622-1628 last night to 1613-1614.  We ended up peaking at 1610. We discussed any drop below 1690 would most likely favor 1542-1560 and the low turned out to be 1558 on Wednesday.

This much we’ll say about Thursday---the strongest support area is the 1640-1560 area. If that area gives way then 1470-1520 open up.  That’s a wide range and well show you the spots on the weekly chart. When prices go into freefall they’re one level below panic because of the Leverage involved.

A realization came on me today while watching the action. There’s a reason the futures market allows up to leverage up to 90% and that is to have the ability to WIPE YOU OUT.  It allows the control boyz to nudge the market when pushed enough at the right spot to create a self sustaining avalanche of sell orders in order to force exit while collapsing price.

The chart below shows us at one of the major support lines at 1540-1560.  Because the market is reaching it in a freefall the danger that exists and that is if freefall turns into panic.  It can turn to panic because of the leverage involved and forced liquidation of accounts that get wiped out.  Therefore I cannot tell you for certain that this level will hold.  Not if a liquidation event takes place again.  You’ve seen this market get dropped 30 dollars in a few seconds on more than one occasion and I cannot rule that out.  This is gold we’re talking and whether we realize it or not this is for all the marbles as the only REAL currency in the world that could ever challenge paper and Plastic and that is gold.  It’s the only check and balance that the Government has.  Thus support on the hourly chart is 1540-1560.  The FIB 23% retrace of the entire Bull Run is around 1542 and the Gann 2*1 TRENDLINE ANGLE is around 1558 in April gold.

Odds do favor that 1540-1560 will hold as support but they are only odds.  The short term cycle is not due until next week but when price goes into this state we can’t say it won’t be affected. Therefore we view the market as dangerous and trading a highly leveraged contract here if you’re not highly capitalized involves great risk any way you slice it. Odds favor that the 1575-1585 area should be strong resistance on Thursday and major resistance at 1597-1615.  The trend is still down and the danger we’ve discussed has reached freefall.  The only other level higher is panic mode and I cannot sit here and guarantee you this support line.  Odds favor it should hold but they are only odds and they are the least reliable (as is everything) during an event like this.

There is a level 1 Geocosmic signature event that Buttonwoods update on our website that had listed for the February turn points and they were;
Weekly Dates:
February 4, 19-24
Weekly II Dates:
February 4, 18, 25

Odds favors reversal points in this time frame as high potential and at the moment we’re right in the middle of the event but we can’t pinpoint the exact time or exact price or exact event. When in panic we can’t say it won’t collapse to 1500 or if the mighty forces come in here are scoop gold to 1600 on Thursday.  It was 1600 on Tuesday night  now it’s 1650.  That means if it was 1500 on Thursday or 1600 again it would be no more volatile that what we just on Wednesday.  Anything can happen in this type of condition as today clearly showed as gold CUT THRU EVERY SUPPORT and reached the lower line on the hour chart.

What Next?

We discussed last night if the gold stocks were any indication the control boyz would most likely be going for the liquidation event and that is what is happening.  We’ll have to see what the volumes were and everything else but odds favor the gold bulls are finally capitulating and a liquidation event is in play. What we NOW HAVE TO WATCH for is if the STOCK MARKET JOINS.   If it does things will get dangerous.

One of the big stories is the currency wars --- but if that is the case why is gold collapsing and not the currencies?  See the chart at the beginning of the report.

IF THE STOCK MARKET JOINS then the freefall can continue. It’s best to remain defensive.

Bottom Line

The ideal time for a low is next week but the 1542-1558 area is also a potential.  We’ll look for a bounce but when things get like this it can get out of hand and while it is a good support point things get very dicey when in freefall. It’s best to stand aside and wait for a low to be established or use very tight stops.  Resistance is the 1575-1585 area on Thursday.  And let me mention again, during freefalls, support areas and anything in the way don’t necessarily work the same way as a normal market.  A liquidation event is taking place. We haven’t seen that massive spike we usually get at the end of a big move so if we see that then the odds will shift to favor a low with a good sized bounce to accompany it.

 

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