Gold Trend 10/May/2013

Long Term-Neutral – Need a monthly close above 1490-1526 in May to regain Bullish status.
Medium Term=Bearish Need a close above 1650-1675 to neutralize.
Intermediate Term=Neutral –need a close below 1403 to return to downtrend.
Short Term=bullish– resistance 1487-1494-- -- weekly support 1439-1449 and monthly at 1415-1425---close below 1439 and bearish. Close above 1489 and full bullish.

Support and Resistance
(NOTE JUNE GOLD NUMBERS)
Initial Resistance 1465-1477 and 2nd tier 1484-1487
Initial Support 1439-1451 and 2nd tier 1420-1432

Gold Hourly Chart

The chart markup really tells it all. We've been stuck in a sideways choppy and overlapping structure that is about to resolve in the next between now and Tuesday morning that will set the pace into May 25th. I am always worried about choppy and overlapping. But let me say this. When gold is in a downtrend, choppy and overlapping leads to lower prices. Time and time again since the leg of this drop began last October, we’ve saved our butts from going long on trades because of our recognition of that type of price pattern. With that said, guess what choppy and overlapping suggest when the UPTREND has resumed? It means a consolidation before the next move up. 

And that is really the crux here. THIS IS THE FIRST CHOPPY AND OVERLAP price pattern observed since the crash low in April. If we’re now in an uptrend, then this pattern is going to resolve to the upside. But the range of this pattern does allow for price to move lower than 1440 before it resolves. It has carved out a trade range that allows for the pullback to move down to 1420 and even 1400 if I were to zoom out and show you. For this short term cycle and barring some event, odds favor 1420 or the very worse 1403 should be maximum draw down. We've had two lows at 1440, and now we enter May 10th and the cycle turn. If there is a shortage, and if we have turned up, and all the interest rate cuts and everything else, then gold should move up with the new cycle. The only perhaps concern is that the May low is 120 dollars higher than the April and the bankers are going to have to be successful in getting the economy started. This global intervention is going to have to do it and they’ve probably bought themselves a few more months.

What Next?

Here’s what it comes down to. The May 10th cycle date is here (plus or minus 72 hours). We’ve either been consolidating and this pullback on Friday/Monday is going to confirm that the choppy and overlapping pattern is about to end and take us higher. The 1440 has been the support. It’s possible that they will take gold down to 1420 between now and Monday. We can’t rule that out. It would be a perfect flush out before a two week rally. Now all of this is true if gold is ready to react to a global interest rate reduction program, a potential tight inventory, and a whole bunch of other bullish fundamentals for gold.

The next two week move most likely develops between now and Monday, say Tuesday the latest and odd s favor it lasts till the 25th or there about. Now it’s up to gold. It needs to get above 1490. It’s going to either support at 1440 or we’ll get a trip to 1420 between now and Monday.

Bottom Line

Whatever develops the medium term looks to have set a bottom that should be solid into late June and July. Then we’ll see how the pattern has acted. I’ll elaborate more on the short term cycle this weekend and what we need to see.

 

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