Gold is looking pretty weak this morning, with the recovery rally stalling out at 1404 yesterday and not moving any higher overnight. This suggests that physical buying out of Asia was not particularly strong and we may see gold under pressure again today.
Although the ABC correction back up to 1425 is still a possibility, we are now starting to think that gold may drop away from here and retest the lows.
Accordingly, we will look to take a short position on a break of 1361, the "double bottom" from yesterday, with a stop above 1404. If however the price moves higher, we will look to take a short position from the 1414-1425 area, with a stop above 1450.
Long Term=Bullish/Neutral – the 1476 close last Friday was below the long term average (1480). A monthly close below 1480 would put long term out of bull mode and into neutral.
Medium Term=Bearish Need a close above 1680 to neutralize.
Intermediate Term=Bearish –need a close above 1530 to neutralize downtrend.
Short Term=bearish A close above 1404 and neutral. 1420 is key resistance.
Support and Resistance
(NOTE JUNE GOLD NUMBERS– Spot about 1 dollar above June gold)
Initial Resistance 1365-1400 and 2nd tier 1450-1480
Initial Support 1245-1365 and 2nd tier 1299-1328
WEDNESDAY TRADE
Gold needs to get above 1377-1381 AND MAKE IT SUPPORT. As long as gold can stay above 1360 the bounce will still be in play. For Wednesday watch 1397-1405 as key resistance -- but we've got to clear 1381 and make is support.
Wednesday Daily Bull/Bear Pivot Zone = 1360-1364 (Ideal 1364)
Weekly Bull/ Bear Pivot Zone = 1500-1515(ideal 1515)
Monthly bull/bear pivot zone = 1590-1600 (ideal 1590)
Gold reached the first dotted channel line resistance on Tuesday with an 85 dollar rally but pulled back mid way in the 1360 area. 1st support is 1350-1360. Moves below 1360 are worrisome. The key also is the 1358-1360 area. Failure to hold there weakens the bounce potential.
Right now until we get above that first dotted line and make that support. 1st resistance is 1397-1401 and then 1420. Must get above 1381 and make 1377 support. If we can make 1377-1381 support, then the potential to move to 1420 will come in play. Odd favor one more bounce day. Thursday is the most likely down day to go test resistance points. The key now is making that dotted line support. As long as we’re above 1358 the potential to continue the bounce is favored. Support is 1358-1366 and then 1340. Odds favor one more day higher before a test of support areas so it would be good to establish higher levels especially 1377-1381
What Next?
Gold caught support at 1320 a key area on the weekly chart. Odds favor one more day on this bounce and then Thursday perhaps a pullback to test support that gets established. Getting above 1377-1381 and making that support is key. Resistance is 1397-1403 and then the 1420 area. That should be strong resistance this week and there’s high odds for that to be the bounce high and a pullback from there. In summary, gotta get above 1377-1381 and make that support. Anything below 1355 area weakens the bounce case. All trends are down but a bounce is underway.
There might be one more pullback left this week. If gold can't get above 1384 be careful. It could turn into a pullback that last until late Thursday. It also possible to rally to 1400-1420 and then turn down. Just be on guard for the possibility. With that said, the bounce is still on. Even if we get another sell off, we don't think there's a very high chance of going under 1260-1280 and if we get to that area, we'll favor a low.
Bottom Line
Stocks shook off the sell off and until we get below 1530 on the S&P price remains in its highest channel line. Until we are under that area, the liquidity squeeze is stable for the moment. We’ll only bring it up if we close under 1530.
It’s too early to tell if gold made the “low” but the bounce was encouraging. The 1400 to 1420 is now the first key upside resistance we need to get above.
The low is near. We might have one more to 1280 area but a significant bounce should develop. THERE's STILL A SHORTAGE and the BUYING WAS HEAVY ON TUESDAY IN PHYSICAL markets in many parts of the globe.
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
