Does anyone trade gold?

[Guest Condor]

..and now back to Gold... which has fallen back with all this bullish Market activity and dropped into my Buy level at 1249.  (of course with a protective stop in place in case this one goess against me too! ) Seems to have held at or around that level.  I was thinking it wasn't going to come back to this level and my Order to Open was hopeful and unlikely to get filled - more surprises .  C

[Guest Condor]

Josh on IGTV chart show just now was talking about support around 1243-44 on Gold if it falls through this then, my stop loss will activate.  On my Fib this 1243-44 is 50% Fib so its retraced back to this point.  Previous support was around 1232 so I might go bearish.  Any thoughts on Gold ?

[Mercury]

I exited for profit at 1260, my upper tramline resistance point, because there is a Bearish set up on the Daily chart (possible Wb of A-b-C down to W4).  However there is former resistance at about 1240ish alright but no evidence yet that this will convert to support.  Below that a possible kiss on my large Triangle at 1235 comes into play.  I'd need to see evidence of a bounce before concluding the Bear set up is not in play.  Ideally that should also coincide with a drop in stock markets...

[Mercury]

PS: at present I'm favouring the 1235 point as a more likely turning point.  Below this the whole move up from 1 Apr is negated.

[Guest Condor]

It's sticking around 1234-44 (at the moment) and was in a hairs breath of triggering my 1241 stop loss.  I see what you mean about that 1235-ish area ( I had 1232 marked ).  This Oil meeting is a massive influence on everything (not exclusively that) but it must be in the top topics driving our price charts across the board.  C

[Guest Condor]

Gold dropped through so could be heading for your 1235 area now. C

[Bradders]

I had shorted Gold for a scalp and only ended up with 1 point, should've held my nerve and would've been about 5 points .

[Guest Condor]

thats still better than loosing 8pts which is what i did. will sit on hands now re gold to see what develops. C

[Mercury]

One for you Condor,

 

That resistance line I was talking about may come into play tomorrow morning.  It cuts my large Triangle top line and an up-sloping parallel tramline in the AM and has to turn here or it negates the 1-5 count, which would mean the recent turn was most likely a Wave B and we can expect a sustained run down in Wave C.  This is a distinct possibility so I will go long on a hit on the resistance line and Triangle line with a close stop and if it doesn't hold I will reverse bias.

 



[Guest Condor]

smashing   many thanks for the post..makes a lot of sense, C

[Guest Condor]

..it got there earlier than I expected, not sure which way yet, it seems to be sitting on my support level noted at 1232, C

[Mercury]

At the moment I'm leaning towards the bearish scenario, the wave pattern has a distinctly 1-5 look about it, which suggests perhaps a bigger Wave C down to next resistance level ont he Daily (1190 ish).

[Guest Condor]

..blimey huge spike there of $6 north!

[Bradders]

Looking at the 4 hour chart, I'm expecting gold to take another little fall sooner or later.

[Mercury]

I think this is just a natural retrace, I don't detect any particularly bullish indicators just now.  The bounce was off a congestion zone, but you would expect that of a natural retrace anyway.  The big issue for me is, from an EW POV, the price closed below the 5 April highs negating a 1-5 up so something else is going on.

 

I favour the A-B-C down (brown labels) to Fib 38% and a Daily chart W4 end.  If you have a Long at the kiss point then hold it but stop protect tightly and be prepared for a reversal.  If that does happen I wont trade it down but wait for the W4 turn and go long there.  Obviously if we have just seen a turn I'll hold my Long at the Kiss.

 



[Guest Condor]

Hi  , just thinking again about Gold. With the triangles, given the shape of them - from my studies it seems that they usually resolve but  don't indicate direction of resolution - (do you believe that?  and therefore have to use other indicators/EW/knowledge).  

Whereas with a wedge - it usually resolves in the opposite direction to the slope of the wedge?

Appreciate your opinion on that,

C

[Mercury]

Hi Condor,

 

I am probably not the best person to ask about this for two reasons:

1. I have not made an exhaustive study of EW theory because I don't want to get bogged down in the complexities or all the outlying scenarios (they seem to have a justification for any exception, which bothers me).  So if it is not obeying the simple rules I stay away until it resolves rather than trying to make sense of it
2. I am a pedant: a wedge is a 3D shape not a 2D geometrical drawing so I don't make a distinction between them, though I understand the EW usage.  BTW, charting techniques predate EW theory so...

In terms of Triangles, you are right that alone they do not give much indication of direction of breakout but this is true of most, if not all, things.  That is why I use EW labeling plus Fibs plus key indicators (always looking for divergence with price) plus congestion zones, plus tram lines.  That all seems like a lot when you write it like that but I try to keep it simple and usually I make errors when I over complicate things (like when I went neck line crazy recently...)  Often that is a sign that I am trying to fit analysis to my bias (bad!!!).

 

There are some basic rules like a triangle cutting across a trend often happens half way along the trend and so on but again I'd take this as indicative only and not conclusive.

 

The 2 circumstances where I like to use Triangles, and rely on the more, are:

1. Wave 3-4 corrections, especially when complex (see my recent post on DX as an example yet to be proven I hasten to add!)
2. Ending Triangles, occurring at the end of a strong motive wave and usually encompassing 1-5 touches (sometime 7 or with 5 cut short).  These can be long and gradual on high time frames (weekly), see gold as a good example end at 1050 recently or sharp and narrow (like perhaps we are seeing on stocks at present?) 

As with all my analysis the Triangle alone is not enough.  The more you have, within reason, to corroborate your view the more likely it is to be correct (or put another way the low risk the trade).  Still nothing is a mortal lock, that's trading...

 

Hope that helps, if you have further points to discuss please throw them out.

 

BTW, I think someone set up an EW thread, maybe we should move this discussion to that one?

[Mercury]

Second bounce of resistance, this is a piviot moment I feel, will the bounce become a rally or a drop through? 

[Mercury]

So a slight alteration to my chart analysis produces a slightly different tramline position and alternative EW scenario (see below).  Can be a big Wave 1 up, where I had a Wb option, which would mean we are seeking a Wave 2 turn around about now and the price is turning at resistance and Tramline support.  it also hit Daily Fib 23%.

 

So the Gold long that I have I hold with stop just below recent spike low and let's see.  If US opens down Gold may rally.

 



[Guest Condor]

Yep, my Long got triggered at 1231 with stop at 1227.  If it hits that it'll probably go south some way with the break of support.  The hope is US500 balloon pops and Gold flies... But this seems a bit of sit on hands day so far, C 

[Bradders]

It has bounced of 1230ish a couple of times but I think it'll break it.

[Mercury]

 my money the pressure is bearish.  The only question I have is will Gold follow the stock markets down for a bit to trace out a more complex W3-4 or will it rally if the markets fall, the relationship of Gold up Stocks down is not a sure thing by any stretch.

[Bradders]

The dollar is having a good week too so take that into consideration, but the relationship of the dollar and gold isn't a sure thing either.

[Guest Condor]

correct  its just crashed thro support. C

[Mercury]

Oh Oh!

 

This could turn out to be a complex W4 retrace.  It it turns in or around 1220-23 it likely is and we are better off staying out until it resolves.  If it crashes down towards 1190/1200 it is a straight forward  A-B-C.  I'm wait and see from the sidelines, these complex retraces can whipsaw ya to death.

[Bradders]

I'm less sure of this but it probably will continue to 1210-1200. I don't think it will happen in the next day or two but maybe a little longer time scale.

[Mercury]

A bit of a random one but I read a piece from a long time fund manager called Charlie Morris (bit of a contrarian he is, at least I think so, he may not agree) who had done some analysis that shows investing in Gold in Q2 is a looser.  The logic is that Chinese New Year, Diwali and Christmas are over and demand is therefore lower.  This is both narrative and analysis coming together and I respect that!

 

As I alluded to the other day I feel a complex W4 is materialising on Gold, which may either continue to be contained within my Triangle formation (see chart - pink lines) OR break lower to the Daily Fib 38% to complete a more classic (albeit still with a complex pattern) W4.

 

If the former happens then we could get another up down within the triangle and then a final turn and surge to Daily timeframe W5.  If the latter then we obviously drop into the 1190-1200 area before the surge.  In the meantime a break above the Triangle (circa 1260/70) would tell me the surge is on (it can happen early...).

 

I'm using the 2 hour chart to get the whole triangle in but still trading off the 1 hour and the direction arrows tred a mid way average path not the path I actually expect (illustrative only, as my arrows always are off course):

 

[Mercury]

In case you are not following it, check out my post in commodities as a leading indicator on Silver and what it might mean for Gold - take about cat among the pigeons time...