Gold XAUUSD showing signs of extreme accumulation
How does accumulation reveal itself in charts? When distribution doesn't end up causing a deep enough selloff to confirm the distribution.
So here is what I see:
Here are some VERY INTERESTING Time@Mode facts:
1. The daily 7-day mode downtrend ended after FAILING to decline the proper amount to indicate the sellers are in control.
2. The next 7-day mode from 1242-1230 (wide range) broke to the downside in a range expansion (See red triangle) and then has failed to decline. The market has returned to the mode.
3. The next event was the formation of a 10-day mode, which I believe it the key amount of bars at one price to signify the trend that is in place in the market. Wednesday was the 10th bar and moved away from the mode and now has returned back to the mode. If a trend is indeed in place, it will move away from the mode very quickly and with range expansion.
4. The last decline on the first day of April was the expiration of the 7 day downtrend from the 7-day mode. What you typically see is the market drop another time to repeat the range expansion from the close of the bar that the range expanded. If it doesn't "confirm" by dropping the same amount, then you can say the market has failed and can reverse.
On two-other standard technical analysis methods, we have a neutral triangle here with contracting trendlines with an apex of around 1225.
There is also the look of a "head & shoulders" pattern that will make traders exceptionally bearish on any weakness from here, if they aren't already.
Lastly, although commercial hedgers are as short in the futures markets as they have ever been, there is always a chance for them to let the market rally to put on more shorts. Generally you want to be long Gold when hedgers have reduced positions and also are closer to net-flat or long the market. We are fighting the commercials here, but I am fine with that given the other observations listed above.
Keep a closer stop, of perhaps $10 at $1220 or just a bit lower. Re-Enter long if stopped out and back above $1232 and use the same stop again. (Perhaps options will help you manage risk better).
Cheers.
Tim
1:11AM EST 4/7/2016 1230.09 last XAUUSD
So here is what I see:
Here are some VERY INTERESTING Time@Mode facts:
1. The daily 7-day mode downtrend ended after FAILING to decline the proper amount to indicate the sellers are in control.
2. The next 7-day mode from 1242-1230 (wide range) broke to the downside in a range expansion (See red triangle) and then has failed to decline. The market has returned to the mode.
3. The next event was the formation of a 10-day mode, which I believe it the key amount of bars at one price to signify the trend that is in place in the market. Wednesday was the 10th bar and moved away from the mode and now has returned back to the mode. If a trend is indeed in place, it will move away from the mode very quickly and with range expansion.
4. The last decline on the first day of April was the expiration of the 7 day downtrend from the 7-day mode. What you typically see is the market drop another time to repeat the range expansion from the close of the bar that the range expanded. If it doesn't "confirm" by dropping the same amount, then you can say the market has failed and can reverse.
On two-other standard technical analysis methods, we have a neutral triangle here with contracting trendlines with an apex of around 1225.
There is also the look of a "head & shoulders" pattern that will make traders exceptionally bearish on any weakness from here, if they aren't already.
Lastly, although commercial hedgers are as short in the futures markets as they have ever been, there is always a chance for them to let the market rally to put on more shorts. Generally you want to be long Gold when hedgers have reduced positions and also are closer to net-flat or long the market. We are fighting the commercials here, but I am fine with that given the other observations listed above.
Keep a closer stop, of perhaps $10 at $1220 or just a bit lower. Re-Enter long if stopped out and back above $1232 and use the same stop again. (Perhaps options will help you manage risk better).
Cheers.
Tim
1:11AM EST 4/7/2016 1230.09 last XAUUSD
Trade closed: target reached:
Gold still looks promising with major upside potential. Although this trade has reached its target, you could also use a trailing stop to stay onboard while this rally continues.
Comment:
I'm going to RE-visit this trade as it is down to an interesting level again here on May 25th. I want to see it get washed out as short-term longs get stopped out. That clears the deck for another rally very soon. Stay tuned! 1218.83 -8.09 -0.66% last May 25, 2016 @ 10:45AM EST
Comment:
My comments from a month ago were certainly on-target. That the decline back then was a setup for another rally and we certainly got another rally.
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