The picture shows the intermediate decline in 2008-2009 after gold came out of the bear market and printed the first phase of its bull market. Little bit different. Not have to be exactly the same. Bear market ended in Nov.2008. Bull market started, initial rally Nov.2008-20.Feb.2009. After that came an intermediate decline .
-The intermediate decline lasted for 2 months. - During the decline gold made close to a 50% pullback of the initial rally :(1002-681)*0.44=141$ - We could be today at 04.03. - We had a bounce in the middle of the IC decline - Intermediate decline lasted for 2 months (40 trading day) - We bounced from the 100 EMA
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In the blue box there is the bounce we are waiting for to reenter shorts or adding to the short position. Notice how tricky it was in 2009. They will not let you to hold your longs in this little bounce easily. They took out the stops in 2009 with a 70$ (!!!!) daily move. AT that price it was 10% move in a day. I don't think any retail long survived it.
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Trendhopper
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I think the first decline from 1288 -1207 was huge, bounce next week then gold isn't stopping at 1140, full retracement to 1045 in my opinion, if your views on oil are correct and we have 3rd cycle unto 55-60 , gold surely will crash as inflation fed hikes will be on the cards.
Trendhopper
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Copying the trend identically at the moment...1 large green followed by smaller one today, will be interesting to see if it gets shorted in next 24 hours in early 1220's and falls to 1190, then a 8/ 9 day climb to 1250 where it will be shorted heavily around the time the fed announce no hike 15/16 june.....
mabaert
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Too bad it's unclear to me tomorrow. Took out all my shorts end of last week, no outstanding longs either. So itching to play the bounce and then the way down again. But uncertain if I would take a small short in now, while I wait for the bounce.
Trendhopper
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Thats a very useful comparable! we are a little to the left of your blue box following a solid 8 day decline, so if history repeats itself we get a bounce to about 1235-1240 followed by a decline to 1190 ish, followed by a big bounce to approx 1255-1260 (end of wave) with a bastard spike at the bottom. lengthy stop losses required
Victor.Y.F
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Thank you chart watchers! I look for the correlations very carefully too. I think we're at the date of 10th. Oct. 2008 before the crisis but not after it. The DXY is running a huge monthly 5th. wave could reach new highs it's very dangerous to long gold if 1045 breaks then we may have target 888 from long term view.
itrade9s
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Hi Arpi,
What are the chances that this is just a larger than usual bear market rally because gold prices were so compressed to the downside in December and this is actually not a start of a new bull market?
Based on how drastically the sentiment changed and how fast the prices dropped from the peak from not being able to close above 1300 leads me to believe any bounces will be subtle and that the top is in.
The biggest bear trap that occurred when gold went below 1050 only to become the biggest bull trap at above 1300.
This spells out to me that the false breakout above 1300 sucked in many investors who bought at 1260+ are still stuck holding their long positions and refuses to see that the trend has turned. The panic selling has not even begun even though gold has lost $100 in 3 weeks. Retail investors has and will ALWAYS be lagging the smart money both on the way up and on the way down.
Re-test of lows to come with new lows by year end?
itrade9s
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The big rounded bottom carved out over 2-3 months that rocketed only to create a big rounded top that carved out over 2-3 months just technically doesn't look good to me at all IMHO.
saint_athur
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Half of me still worry about the bear trap since I never take any profit yet. I read few people start assume that yellen will increase the rate after US election. Not FOMC.
chartwatchers
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Cut in half the position next week Monday.
You are one of the last man standing ! I closed my shorts in the hope of the bounce. Only have DUST.
If there is a bounce - I think it's coming - you short again with the same position what you closed.
If no bounce you still have the half of the position in profit, and the other half with realized profit.
I'M telling again 100$ is a big profit here in one direction. Once per year maximum.