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 - It takes a weekly close below 1625 to turn the trend Neutral. Resistance 1755-1765(Oct/Nov 2012 Resistance)
Intermediate Term= Neutral---it takes a close below 1647 to go bearish & close above 1711 for bullish.
Short Term= Bullish/Neutral--- Need a close above 1683 for bullish & close below 1647 for bearish.
Support and Resistance
(APRILGOLD – SUBTRACT TWO DOLLARS FOR APRIL GOLD)
Initial Resistance 1683--1695 and 2nd tier 1704-1714
Initial Support 1656-1666 and 2nd tier 1633-1643
The hourly chart
The hourly chart is in transition. Let’s take in context what we see. We have a downtrend channel with upper and lower red channel lines. Since December 20th we have a price pattern (dotted white lines) that has gone sideways with a trading range of 1626 (1620-1630) on the downside and upside of 1705 (1705 – 1730). The first step in ending a downtrend is for it to stop going down. That’s why it’s important to recognize the sideways action since December 20th. It is the first step if the downtrend is ending. The next thing to note is that the dotted red arrows on those lines are forming a wedge. You can see price is compressing into this wedge. If price breaks on the downside under 1651 then the fist support is that gold downtrend line just above 1640. Below that line is the lower trading range line 1620-1630.
The Downtrend Channel and the Uptrend Channel are crossing and the massive chop at 1680 is the first line of transition to an uptrend. The Fibonacci 1695 must be exceeded and the reaction high 1699. Thus 1695-1703 and then 1709-1715 are the two points of resistance if price can overcome the 1680’s. There have been multiple tests inside those price spikes but nothing so far has been able to penetrate. The bears are trying to hold it in desperation. Its going to come down if the bulls have enough firepower. The only way we get thru is the same way the Allies did at Normandy. Its going to take a constant barrage of buy orders to keep pressing the 1680 on every pullback.
The red channel line resistance slope is about to be under 1680 and if price can move above the 1680’s then the two resistance points become Fibonacci 1695 -1699 and purple/blue line 1710-1715
THE ONE FLY IN THE OINTMENT IS THE OBSERVATION THAT THE PRICE PATTERN IS CHOPPY AND OVERLAPPING. This is usually and odds favored weak pattern that often fails at key levels and turns back down. They’re odds and not absolutes. But the point is they can be dangerous if they reverse down and the selloff are usually swift and hard.
The situation is this. Because of the pattern odds favor gold to peak in the 1687-1697 area. But if price breaks out higher the move should be be quick to the 1710-1715 area and potential for more. We’re either starting a new UPSIDE channel or the downtrend (red channel) that we’ve been in is about to resume the downside. Because of the choppy pattern we need to be super careful of a turndown because from a standalone point, choppy patterns usually resolve down.
What next?
Gold is stuck in a wedge between the 200 day average and the 50 day in the 1660-1695 area. Until we move out of this price range, things can go either way. Thursday may very well remain in the range one more time. With the Chinese new year next week markets are expecting a buying spree. It is possible that jewelers and gold dealers have ample supply, but it they don’t then there could be some pressure on gold.
BOTTOM LINE
The decision on gold can go either way. I can build a case for both sides. Now we wait for the market to decide the short term trend.
.jpg)
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 - It takes a weekly close below 1625 to turn the trend Neutral. Resistance 1755-1765(Oct/Nov 2012 Resistance)
Intermediate Term= Neutral---it takes a close below 1647 to go bearish & close above 1711 for bullish.
Short Term= Bullish/Neutral--- Need a close above 1683 for bullish & close below 1647 for bearish.
Support and Resistance
(APRILGOLD – SUBTRACT TWO DOLLARS FOR APRIL GOLD)
Initial Resistance 1683--1695 and 2nd tier 1704-1714
Initial Support 1656-1666 and 2nd tier 1633-1643
Initial Resistance 1683--1695 and 2nd tier 1704-1714
Initial Support 1656-1666 and 2nd tier 1633-1643
The hourly chart
The hourly chart is in transition. Let’s take in context what we see. We have a downtrend channel with upper and lower red channel lines. Since December 20th we have a price pattern (dotted white lines) that has gone sideways with a trading range of 1626 (1620-1630) on the downside and upside of 1705 (1705 – 1730). The first step in ending a downtrend is for it to stop going down. That’s why it’s important to recognize the sideways action since December 20th. It is the first step if the downtrend is ending. The next thing to note is that the dotted red arrows on those lines are forming a wedge. You can see price is compressing into this wedge. If price breaks on the downside under 1651 then the fist support is that gold downtrend line just above 1640. Below that line is the lower trading range line 1620-1630.
The Downtrend Channel and the Uptrend Channel are crossing and the massive chop at 1680 is the first line of transition to an uptrend. The Fibonacci 1695 must be exceeded and the reaction high 1699. Thus 1695-1703 and then 1709-1715 are the two points of resistance if price can overcome the 1680’s. There have been multiple tests inside those price spikes but nothing so far has been able to penetrate. The bears are trying to hold it in desperation. Its going to come down if the bulls have enough firepower. The only way we get thru is the same way the Allies did at Normandy. Its going to take a constant barrage of buy orders to keep pressing the 1680 on every pullback.
The red channel line resistance slope is about to be under 1680 and if price can move above the 1680’s then the two resistance points become Fibonacci 1695 -1699 and purple/blue line 1710-1715
THE ONE FLY IN THE OINTMENT IS THE OBSERVATION THAT THE PRICE PATTERN IS CHOPPY AND OVERLAPPING. This is usually and odds favored weak pattern that often fails at key levels and turns back down. They’re odds and not absolutes. But the point is they can be dangerous if they reverse down and the selloff are usually swift and hard.
The situation is this. Because of the pattern odds favor gold to peak in the 1687-1697 area. But if price breaks out higher the move should be be quick to the 1710-1715 area and potential for more. We’re either starting a new UPSIDE channel or the downtrend (red channel) that we’ve been in is about to resume the downside. Because of the choppy pattern we need to be super careful of a turndown because from a standalone point, choppy patterns usually resolve down.
What next?
Gold is stuck in a wedge between the 200 day average and the 50 day in the 1660-1695 area. Until we move out of this price range, things can go either way. Thursday may very well remain in the range one more time. With the Chinese new year next week markets are expecting a buying spree. It is possible that jewelers and gold dealers have ample supply, but it they don’t then there could be some pressure on gold.
BOTTOM LINE
The decision on gold can go either way. I can build a case for both sides. Now we wait for the market to decide the short term trend.
YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
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
