mbrennan
Long

Spike and Channel Bottom, but Prob. Weak Rally to Follow

COMEX:GC1!   GOLD FUTURES
61 0 3
The market spiked down in 2013 and then was in a bear channel for the next 2.5 years. The bear channel then tested the measured move down based on the spike, and reversed up strongly.

February is a strong close and a first higher high after a series of many lower highs. It had a bull signal bar last month, and is a second-entry buy at a new low (first was above September High). This is strong buying pressure, and the context is good for the bulls.

However, it is unlikely that the market will just breakout to the upside in consecutive bull bars. Instead, the rally will probably be somewhat weak, and may pull back in March. This is because there are many strong bears who sold near the low of the bear trend and are waiting to exit on a test down. After the first pullback, if the market rallies, the odds are that those bears exited and the market will go higher.

Bulls buying this can enter long today, but need a wide stop and should scale in a pullback to test the low.

The target for the bulls is 1430 because that is the start of the bear channel . Bulls buying will take scalps along the way but will exit their swing portion at 1430.
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