Jump to content

Gold & Silver in a LT rally

Recommended Posts

I think another possibility is it could start to go range bound around the inverted hammer top and bottom

Share this post


Link to post
5 hours ago, tehka said:

Nice to see something other than "Chart is frozen" and "Help, how can I get my money back!" :)

"If you can head, while all around are losing there..."  Not to minimise the frustration at all, it was a difficult moment but it happens, accept it and move on is my philosophy.  If you had stops in place that were satisfactory then no problem, IG will always honour that.  With the system down there was nothing to do but take a break and clear the head.

Regarding you suggestion on Gold I agree @tehka, a consolidation phase is a credible scenario for me also.  Swing traders, like me, will tend to assume a retrace at this point for the following reasons:

  1. Typically such strong rallies get a strong retrace, unless this is the meat of a wave 3, which is possible but not, in my opinion, likely yet.
  2. The Top for Gold occurred at strong NMD, which is a signal of a retrace rather than a consolidation, less so for Silver but Silver acts in a different way to Gold in this regard, owing to the fact it is a smaller market overall I think
  3. The move down was sudden and sharp, again more synonymous with a retrace than a consolidation
  4. It is typical for a H&S neckline breakout to be retested, this would clearly only happen on a retrace
  5. From a Fundamentals perspective I only see Gold/Silver going on a major tear when the proverbial really hits the fan, which hasn't yet happened.  My assessment is that the concern about the macro economic and political events has given fuel to precious metals, the fear factor if you will, but there will have to be actual triggering events rather than supposition for this to go on that tear, so now we have the opposite fear of not cashing good positions or worse getting caught with a good profit turning into a loss (who hasn't experienced that one..?) 
  6. Professionals need to cash to make money for their clients so profit taking is a factor

I cannot rule out a consolidation, yet, but have set out my stall to trade the swing here.  If it doesn't work out then I get stopped out for no loss and I can trade any consolidation breakout.  If the market continues to drop in line with my road map then some additional positions are possible but chiefly I will be looking for the end of the retrace to get Long when the big one comes.  As I write stocks are rallying again and USD is in bullish retrace, not typically good for Gold, however I think you have to take these markets on their own merit rather than assume they are driven by other markets.  Gold and Silver have had a good run but the market moves in waves and we are due a bearish retrace in my opinion.  Let's see...

  • Like 1
  • Thought provoking 1

Share this post


Link to post

Ok well today's move on Silver seals it as a retrace (or worse maybe if the Bear scenario is in play but I am ignoring that for now).  The daily chart shows a follow on bearish candle as price rushes down to the lower channel line.  What happens at this juncture will be telling.  Gold is lagging, which is not atypical, but all things being equal, if both markets are in the same type of retrace move, Silver may have much further to go in this first phase to hit a wave A and allow Gold the time to catch up.  If this hold and Silver breaks the lower channel with force then I think we are well into a very strong wave A that could carry to the Fib 50%.  After than a strong B is likely before the eventual wave C conclusion beyond the 50%.  This is conjecture right now but the strength of the bearish move must be building covering pressure on those who have loaded up on the big rally, hence the fast reversal on Silver and probably we will see something similar on Gold in due course.

XAGUSD-Daily_060919.thumb.png.1d8799b442579d5b779ee6202b1ab11a.pngXAUUSD-Daily_060919.thumb.png.500ebe7005213b1c7b5687aca4128893.png

  • Like 2

Share this post


Link to post

When bad news is good news and good news is also good news you know there is "something rotten in the state of Denmark"  Add to that the only significant mover on the US NFP data release being Gold and Silver and it is a head scratcher, if you follow news that is.  I myself prefer to follow technicals and as such the rally is likely to be a retrace one after a 1-5 down.  The turn occurred on PMD at a point of horizontal support.  I now anticipate an A-B-C type retrace that will likely retest the channel breakout zone or the channel line itself.  Probably this retrace will carry further back on Silver.  After than the wave A bearish move would return with a wave 3.  Rather than think of it as a missed opportunity, where any of my positions were stopped out, I look on it as an opportunity to get short with more certainty that the next move will be long and strong down.  Might start end of play to day might start next week sometime, let's see.

XAUUSD-1-hour_060919A.thumb.png.752b124cb9b0552f9c579f6a51703cc8.png

 

  • Like 2

Share this post


Link to post

Only 2 charts of interest at the end of last week, which in my view show a clear (as much as anything can be clear on a price chart) turn into a retrace move.  the strength of the reversals gives some credibility to the large scale A-B-C scenario that some few contrarians have been touting.  This would totally fly in the face of the current zeitgeist for a major long term rally.  But that is for the future.  For now it seems that we can expect the retrace scenario rather than the consolidation scenario.  That doesn't mean that is is down, down, down.  Retrace moves can be difficult affairs to navigate so for me the choice is swing trade with care or wait for this to play out, assuming the long term Bull scenario is the right one.  If a longer term Bear move plays out then getting Short in this early phase is crucial.  One things does appear to be the case, we are seeing a profit taking sell off, which at a minimum should last a month or so until something new stimulates the market to decide its long term direction.

XAUUSD-Daily_080919.thumb.png.1631fb524cbfd526b93bd70e9ee943ab.pngXAGUSD-Daily_080919.thumb.png.a11a2308dc9c12d9f73b00cb27ef72ab.png

 

  • Like 1

Share this post


Link to post

There is some chatter about buying the dips on Gold/Silver right now.  It may turn out right, Silver has not yet broken through its daily chart supporting channel, although Gold may have.  Even if it is not a buy the dip to higher highs it is likely to be a short term rally prior to further drops.

The technicals on Gold (1H chart) look like this to me:

  1. The bearish move drop was in a 1-5 pattern (suggesting a change in bigger picture trend if we subsequently see an A-B-C retrace)
  2. There is PMD at the potential turning point last night
  3. There is a resistance trend line as part of a bearish channel that has been broken and has 1 failed retest so far

Based on EWT I would be anticipating either an A-B or 1-2 retrace after a strong bearish move, especially on Silver, but after that a continuation of the larger time frame bearish retrace.  So this is my lead and I am preparing to get Short again on a retrace turn bearish.  I am also watching for a period of consolidation the breakout of which would be the tradeable event.

XAUUSD-1-hour_110919.thumb.png.ddf84d5944c2dee6a8c3201a553d40a0.png

 

 

  • Like 1

Share this post


Link to post

The retrace on Silver was remarkable shallow (only to the Fib 38%) while Gold made the Fib 50% (with a spike through and return back - very bearish).  Now we see Silver has indeed broken both horizontal levels to lower lows and crucially the recent bullish channel.  The form is very bearish with little retrace price action so it could either hammer down now or slow up as Gold plays catch up this time.  It is typical that Silver amplified Gold so if Gold does reach back down to the neckline and Fib 50% then Silver may go beyond to more like the Fib 76/78%.

On Gold we may have seen an A-B already and could get a fast run to the Fib 50% in a wave C OR, as depicted on the Silver chart, we could see a later wave A and rally back up to a wave B before a completion wave C.  Impossible to tell which just yet, time and price action will reveal all.  For now I will be adding to Shorts on relief rallies and watching for a possible wave A reversal to cover and possibly swing.  At this point, and given the strength of the moves so far, I am setting the Fib 50% on Gold as my most likely retrace end scenario.  If we see a period of USD bullishness next week and if stocks hold up ok ahead of the Fed then this would lend support to further bearish moves on Gold and Silver and possible quite dramatic as the fear of missing out on all those profits kicks in and as stops are taken out against the pure play trend followers.

XAUUSD-Daily_140919.thumb.png.498f922da1abd173af89fecdb8594b15.pngXAUUSD-4-hours_140919.thumb.png.cfbc100430d2ac530552b8f59688467a.pngXAGUSD-Daily_080919.thumb.png.f8fe27ac2ca7aaca6b96e2626eaefc4b.pngXAGUSD-Daily_140919.thumb.png.553fe4133fde0575884be7db7ac9cd37.png

 

  • Like 1

Share this post


Link to post

Gold and Silver also seemed to react a bit to the drone strike in Saudi Arabia but not significantly.  However it does pose a technical issue in that the small retrace I had previous labeled a 1-2 (brown on the 4H chart above), that set up a stronger bearish move, is no longer valid so that brings into play an alternative scenario that the wave B (green) is not yet in.  The move off the 10 Sept low is in a series of A-B-Cs which projects a final rally to complete a larger A-B-C.  My first target for this would be the Fib 62%, which is around about the previous rally channel breakout point; some horizontal resistance; and also where the wave C might roughly equal the wave A in length.

In the short term we could see a bearish phase to close the gap before a final rally to conclude the overall retrace move.  If this turns out to be an A-B (green) then the next phase will be bearish and probably a straight 1-5 pattern move (with a consolidation phase at some point) to the end of the retrace down; I am still targeting circa 1360 for this and Fib 76/78% for the equivalent move on Silver.

A break of the 10 Sept low will negate the above scenario so my approach will be to wait for the pull back to the Fib 62% zone (circa 1530) and get Short on reversal signals OR go short on a break of the 10 Sept low.  I see no case for a long trade at this point, unless you believe that 10 Sept was the end of the dip, which I don't.  The alternative of a protracted consolidation phase is still on the cards although the price action of Silver doesn't seem to match a consolidation.  If this is a consolidation phase then whip saw price action will be dangerous.

XAUUSD-4-hours_160919.thumb.png.5dcea12b12afc98bb64417821b308620.png

Share this post


Link to post
6 hours ago, Mercury said:

price action of Silver doesn't seem to match a consolidation.

 

It certainly doesn't look like an attractive short at this point.

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Member Statistics

    • Total Topics
      7,422
    • Total Posts
      37,677
    • Total Members
      47,667
    Newest Member
    Jeremyv
    Joined 18/09/19 05:30
  • Posts

    • Overnight Indices down Bonds up, USD flat Gold up. H4 Chart US 30y Treasury note up slightly this week after drifting down for the 2 weeks prior. UK and EU CPI data but it's all about the Fed today, 7pm, presser at 7:30.. Check out Dailyfx's summary on how interest rate cuts affect the different markets from the link below. https://www.dailyfx.com/forex/fundamental/article/special_report/2019/09/17/how-gold-oil-stocks-usd-perform-after-fomc-rate-cuts-start.html
    • I have a new account with IG, and I want to trade in stocks using DMA facility, Is there any minimum deposit I need to make into my account, so that i can use this facility? Or i just need sufficient balance so that my trade get filled?
    • Dow looking to break out up over the pivot on the US close having been restricted all day is very bullish. H1 charts;     
×
×