Most probably the previous gold idea will be closed in profit soon. I think the drop is just not finished yet. Before gold breaks upside from the 2-3 years bottoming process we need to wash out all the goldbugs.
Today we have a very similar pattern to the 2016 Aug-Oct descending triangle. In 2016 Sept wee tagged the 200 SMA twice before on Monday or Tuesday the triangle broke down.
This time today is the 4th time when price tagged the 200 SMA. Though the correct strategy is to take profit on the short position as price tags the bottom of the range it looks more and more likely the range will break down and we will have a 5-7 days of panic selling.
There are many ways how this scenario can play out:
1. If stocks rally hard with the bouncing dollar the whole panic selling might end in 5-10 days in a scary drop down to test the December lows. (35% chance) 2.We might bounce from the 200 SMA ad test back the 100 SMA and drop slowly to the ICL. It happens if the stocks don't rally only the dollar. (50% chance) 3. A bounce from the bottom of the range and we print one more daily cycle. (15% chance)
I would sell into any bounce in gold right now.
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And we broke the March 1 lows. No question the ICL is in progress. We will have our bottom this week.
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Scenario 3 is out of the table as we broke down from the range today.
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2 more possibilities left: 1. panic selling triggered today and we will drop to 1265-70 in the next 5-6 days. 2. We bounce from here and get one more daily cycle and we get the ICL later in the middle of June.
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Whatever happens I'm going to play it on the safe side as I think inflation is starting to spike. It spiked in oil, spiked in stocks and gold will not be an exception.
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So here at 1304 I'm going to close this idea's 20% position , and I'm going to close 20% after every 10$ drop from here. 20% at 1295, 20% at 1285, 20% at 1275 and 20% at 1265-70. If we break the the previous day's high at any day from here I'm going to close the whole position.
So today I will set a stop to the 80% position at today's high: 1316$. So from here I cannot lose on this trade.
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I'M also going to close the whole position 1 minute before the close if the daily heiken ashi chart closes in red.
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I'M also going to close the whole position 1 minute before the close if the daily heiken ashi chart closes in green.
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Graveston doji on the 200 SMA. Closing 20% of the position at 1305. Graveston doji can sign the end of the decline.
Apri, I have done a bit of a study of the cycles and the pattern length repeats, There needs to be a bounce (DCH) before the next waterfall (ICL). I used colors in waves at bottom and seperation lines. It seems that same colour is same lengths. On IC there is some pattern and in those there is a pattern that might change going into the bull after basing. There is a pattern in the cycle lengths , ICL, DCL, CL. Then to line up with turn weekly MA. We will have one more DC, before waterfall. Possibly first move to 1307 before back 1344. Back bottom bull flag then break resistance above seen in key MA weekly chart here:invst.ly/7am5j
UnknownUnicorn540299
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Timewise option 3 makes good sense. Then DXY should be up there it belongs;
So when gold bottoms, a very strong long cycle should be due.
Well that was an entertaining day. A gravestone doji across multiple markets (EUR/USD) on solid volume during a bear market at the 200 MA...I don’t even know what that means!! Holding my gold short to find out!
There is a pattern in the cycle lengths , ICL, DCL, CL. Then to line up with turn weekly MA. We will have one more DC, before waterfall. Possibly first move to 1307 before back 1344. Back bottom bull flag then break resistance above seen in key MA weekly chart here:invst.ly/7am5j