BONUS AVAILABLE FOR
BOTH NEW AND EXISTING CLIENTS
Long Term – Bullish The key resistance area’s to regain upside momentum and potential new highs are 1792 and 1804.
Medium Term – Bullish (but clouds on the horizon) – – resistance 1755-1765 – support 1620-1648 and 1570. NEED a close above 1715 to move out of the wedge and to go test 1755. The danger of a selloff is increasing due to price action and the seasonal tendencies of gold as 35 years of data shows that February usually produces a choppy first half and a selloff into the 3rd week of March.
Intermediate term – Neutral/Bearish A close above 1715 gives bullish reading. THE SAR indicator on the weekly charts is still in a downtrend. A close below 1645 would favor a test of the lows at 1625. Seasonal tendencies are also arriving where gold prices usually turn down.
Support for this week 1653-1663 2nd tier 1635-1642
What Next?
Gold is stuck in a wedge between the 200 day average and the 50 day in the 1660-1695 area. There have been a few probes below 1660 but so far gold doesn’t hang there long and makes its way back up over the 200 day. As long as we are inside the WEDGE gold can still move in either direction. Once we get out of this wedge, the next trend should be in play.
It’s getting late for a February rally and the upcoming seasonal factors will not be on the upside for gold as it’s arriving at one of the seasonal weak points that can develop. Because the seasonal gold rally from August peaked early this year and has retraced just about all of it that the seasonal that is due won’t play out. But the other side of the coin could be that gold---as hard as it is to imagine---has been weak and if it’s been weak during what is a strong seasonal we’d best be cautious when the weak part of the seasonal arrives. That time is usually (but not always) mid February. UNTIL WE CLOSEABOVE 1705-1725 it’s best to remain cautious.
UNTIL WE EXIT THE WEDGE, the control boyz can keep toying with choppy action in both directions. A wedge is probably one of the most frustrating patterns and the tighter the wedge gets, the choppier it can become as both bulls and bears are fighting for control of a medium term trend.
Bottom Line
We’ll leave in what we said last week with just a couple of tweaks, as nothing has changed except that the seasonal is approaching.
A WEDGE IS USUALLY A VERY FRUSTRATING PATTERN UNTIL IT BREAKS OUT
Gold has been stuck in a very tight trading range. A lot of coincidental favor gold this week for the upside. But price is the one and only thing that makes a difference. As long as we are inside the wedge, the chop can continue as wedges are basically where the bulls and bears fight for control of the next trend that develops and either side usually doesn’t give up easily. The bears will be waiting near the 1676-1686 area to defend the upside and the bulls in the 1650-1663 area.
The bulls had the advantage but time is beginning to run out. The potential for risk and CHOPPY action with spikes down can and often do occur and the control boyz drop price just a bit lower than the last low or move price a bit higher than the last high inside the wedge and those with tight stops just keep getting taken out. It actually helps the wedge last longer.
If the downtrend line is overcome it should bring a lot of momentum players and traders who have been on the sidelines. Even then, anywhere near the wedge is always liable to throw a fake here and there.
The bull market is not over, but the trend hasn't turned back up yet and a WEDGE is unpredictable and the control boyz make it that way with swings all over the place. If we get a breakout or break down, we'll cover it on the daily updates.
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
