This is macro analysis and shouldn't be traded upon, added to the fact that period of analysis is too short to make any reliable conclusion.
POINT A = Market moves with gold, best moment to look for decoupling between the two, remaining unknown is direction.
SP-TP closes the trade (signal) = Gold moves in the opposite direction of the market, this has resulted in a down market and further correction in old prices (1 green box) and up market and ranging gold prices (2)
What should it do now (?) on the last box? 1, 2 or something else? Point A is nice place to make assumption because SPY and gold are correlated, but here is unknown.
If we consider where the market is doing now, we would be bullish and thinking that SPX will hit 200-220 with GOLD coming back to 1500-1600 (green box2). Otherwise we are bearish and the market looks to be at all time highs and gold continuing it's long term down trend (wave#5) because we believe that the dollar will go up next year (2).
But in both cases we had a negative correlation, the signal triggered a DXY rally. My point of view is that we cannot really make a conclusion other than the fact that DXY will rally, Gold is in a strong downtrend (i am short term bullish BTW) and may resume it early next year and SP500 is making all time highs.
Cheers!
POINT A = Market moves with gold, best moment to look for decoupling between the two, remaining unknown is direction.
SP-TP closes the trade (signal) = Gold moves in the opposite direction of the market, this has resulted in a down market and further correction in old prices (1 green box) and up market and ranging gold prices (2)
What should it do now (?) on the last box? 1, 2 or something else? Point A is nice place to make assumption because SPY and gold are correlated, but here is unknown.
If we consider where the market is doing now, we would be bullish and thinking that SPX will hit 200-220 with GOLD coming back to 1500-1600 (green box2). Otherwise we are bearish and the market looks to be at all time highs and gold continuing it's long term down trend (wave#5) because we believe that the dollar will go up next year (2).
But in both cases we had a negative correlation, the signal triggered a DXY rally. My point of view is that we cannot really make a conclusion other than the fact that DXY will rally, Gold is in a strong downtrend (i am short term bullish BTW) and may resume it early next year and SP500 is making all time highs.
Cheers!