The three bar swing chart of gold has formed a lower high which is a signal to watch any long positions closely. After the run of this duration, a correction of this little magnitude if very bullish (assuming the bottom doesn’t fall out). If price makes a new high out of this cup with handle pattern, my guess it it will go up at least another 20%.
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Tags: Cup with Handle · Gold5 Comments
Volume on RSH up move has fizzled compared to LSH and HEAD. Not good.
The trend line formed since Novembr was taken out today. Not good.
$USD looked to have bottomed ( at least for short term) so that does not help.
This can still work out as successful inverse H&S formation, but onlky to buy on break-out. If lateral support at 87-90 area +200 EMA are taken out then next target probable is 65-70.
Too many people know about the pattern now so maybe it will not workout .. or maybe they need to be shaken off the band wagon .. too many Gold bulls recently.
Ray – Thanks much for the analysis. Very helpful.
I still did not get SELL signal for $compq, but could be anyday as or if pullback continues.
Andy,
I’ve got an interesting TA report on gold from a different Andy. Frankly, I’m not sure I understand some of his wave count stuff, but it is another perspective. Send me an e-mail if you want a copy.
I’ve been watching from the sidelines, but I’m concerned that Ray might be right. The inverse head and shoulders almost seems to obvious and easy with everyone and his brother talking about it.
Mike – sure, send the info to the blog email address. The thing about Gold is that it is not traded by the rational. Although a completely different group of people, Gold fanatics are analogous to Dot.com company stock buyers in 1999-2001. It is possible that the strength in Gold is “because” too much money with too few brains are expecting some action. If Gold fails, the bottom will drop out much like the Nasdaq in 2000 and Oil in 2008. But at this point, the chart looks very bullish. If you can’t tell, I am completely baffled by the strength of a shiny rock over 1,000s of years. My guess is the creator has a wicked sense of humor and this is just one of the cosmic practical jokes played on humans… maybe Volgonians too…