A market reversal signal was emitted from my prop system, defining new targets, namely:
1 - TG-1 = 116.76 - 28 APR 2014, moderate-probability
2 - TG-Lo = 115.38 - 28 APR 2014, low-probability
While this signal is offering a dominant directional bias, one should remain open to frustrating contingencies. Therefore, let us define what value range could impose resistance if price were to rise any further and still maintain an overall overtone.
In the chart, I have defined a resistance range between 131.49 and 132.48. While the current signal is , price may still find a leg to that level of resistance without contradicting the signal. Therefore, a break ABOVE the 128.25 line should open the trader's mind that this interim possibility.
Conversely, if price were to go immediately in the direction of the targets, the trader should perhaps consider added confirmation, such as a breach BELOW the 122.84 line.
These validations through price action may appear too conservative to aggressive traders, so a partial positioning might also be a possibility in your game, if you were not the type to wait.
Again, the predominant directional bias here is , based on a non-price prop system. While a decline is expected in such clear-cut signal, the trader should remain prepared to interim price action that may first appear counter-trending before dedicating itself to target completion. Using structural level as trigger lines may be the most conservative and prudent approach, if you considered trading this metal's chart.
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Price went in the way of the forecast direction, down. 122.84 remains a significant floor with which to contend. Break and close below this level would simply signify a continuation of our favored directional trend.
However, a support at this level could not yet be interpreted as a bearish failure unless price transgresses 128.25 overhead.
Bearish price action dominates the chart. Surrounding structures will define the dedicated directional intention once broken.
As indicated in the chart replay, the first impulse move defined by the dashed blue arrow did follow-through, but a significant reactive relief rally occurred.
Yet, this rally did nothing to alter the predictive analysis and forecast defined earlier - All targets remain in force, and the model-based directional bias remains intact as well.
PS: I will use this most recent chart to continue the discussion thread:
"$GLD break < 122.84 opens floor to bearish targets; pressures on $AUD $CAD $EUR $CHF $NZD - via @tradingview #forex"
Now that the 122.84 floor has been broken, bearish targets are coming thru the crosshair of predictive/forecasting model with higher resolution.
Will keep an eye on this, as it is likely to continue to correlate on commodity-sensitive currencies as well as in those walking at the antipod of USD pairs.
"$GLD stayed faithful to forecast, validating 119.93; relief rally to prior 122.84 probable Bearish - @tradingview "
As per forecast, price was held back on the minor 119.93 S/R level. A relief rally to the prior 122.84 is probable at this point, however, the outlook remains bearish. This means that the forecast TG-1 @ 116.76 and lower TG-Lo @ 115.38 are gaining added credence.
A pattern trader might potentially decipher a Bullish Shark developing its residual C-D leg, whereas the structure trader might be anxiously waiting for a potential double-bottom at that Bat's completion point.
Predictive/forecasting model remains on point, with aforementioned forecasts intact and in force.
Have a great last Friday of May!
"$GLD rallied to forecast target @ TG-1 = 128.49 from 29 JUN; High-prob reversal at TG-1 - via http://www.tradingview.com"
I have not covered this chart since last month, and it has since rallied. In fact, a separate chart I drew had defined an intermediate target which, once hit dead-on, saw price rallied to the forecast overhead resistance @ 128.25 - See that separate $GLD chart and target hit here: .
As indicated in the Twitter release, I have refined the overhead resistance to 128.49, which seems to impose a significant overhead resistance. The predictive model has been great at defining potential reversal levels, and best at defining potential targets (See archives of Dead-On hits where the model was used throughout: bit.ly/16JMnH8).
In this particular chart, a precise target defined at TG-1 = 128.48 was redefined on 20 JUN 2014, to add further resolution to the prior analysis from 27 APR 014 (see that prio analysis here: ).
At this point, I have to wholly rely on the model and expect that a reversal might occur at the defined level, as per following chart:
Time will tell. However , in case a reversal failed, the last bearish bastion would likely impose a significant resistance against a bearish advance at the 131.49/132/48 range, as per this following chart:
Yes, a bearish Cyper is looming and will have to overcome several resistance levels to complete - The levels are as defined below, and consist of a geometry, a Fibonacci, and an EAGLE range:
The first level is purely geometric and consists of the Kiss-of-Death ("KoD") pattern. I do not trade this pattern, but you will see that in many of my analyses, I do heed its power to impose an unexpected counter-trend. In essence, the bearish KoD will seek the completion of a smaller, then a large inverted parabola (ie.e.: the flat parabolic base is on top while the apices are down) before threatening any reversal.
Put simply, the 0.618-Fib is a classic reversal level that may be overused by the retail crowd, and thus foreseen by institutional investors. However, I decided to add it to the visuals of overhead resistance as it falls quite nicely in line again with that KoD.
At a loftier level that may or may not correspond to a Cypher level, a potential EAGLE level is defined (proprietary pattern I can not share). This level tends to fall in line with the 0.786-Fib at times, but its (proprietary) range has been very useful in the past when price would tend to exceed less aggressive forecasts.
EAGLE stands for (E)xtremely (AG)gressive (L)evel of (E)ntry, and simply corresponds to an old methodology I used to enter at a very low risk:reward premium.
Indeed, a pattern may materialize at the level you have defined. In the same time, a Shark could also appear at a somewhat loftier level as well. However, I do not trade off of pattern (I use some patterns such as the KoD, Shark, 5-0 and Bat/Crab to approximate a price action, but not to use in my forecasting). Instead, I have fallen back on a non-price action for the predictive/forecasting analyses. In any case, I have seen circumstances where all methodologies point to the same potential area of reversal. When this occurs, there is rarely anything left for price but to go in the way of the technical consensus.
Thank you for your input.