chartwatchers
Short

GOLD - Trapped bulls

FX:XAUUSD   Gold Spot / U.S. Dollar
7954 104 104
When everybody was 100% sure that we are going to the Moon with gold             and by the Brexit 1400$ will be gold's price today gold             printed a key reversal candlestick . We turned down exactly from the The decline was 35$.

If the fundamental traders would have been right that gold             is rising because of the Brexit why did we stop today? And we not just stopped but printed a strong reversal on heavy volume ...

Gold             was rising because of 2 reason:
1. There is a possibility that we printed an Intermediate cycle low on the 30th May. If that was the ICL I have to say it was a shallow "nothing" ICL. It's hard to imagine that gold             - the most tricky commodity - is finishing the initial phase of its bull market this simple way. But it's not impossible. We have to be ready for this scenario.
2. Gold             is not ready with the ICL and the banks have a decline plan for gold             . For a real tough decline they will need all the retail traders and other traders to stop out in the panic selling. It's better to build a bulltrap for an ultimate decline.
Let's se what we have:
- We have a bearish engulfing candlestick on the daily chart after this candle the candlestick pattern traders are short.
- The swing traders will be short as soon as price breaks yesterday's low. This mission could be easily completed.
- Sentiment traders: The short term sentiment is very bullish . They are in.
- Chart pattern traders: for this we need to print a head and shoulders pattern on the hourly chart. If we have a pop up to 1285 in the following 4-5 hours the H&S is ready.
- Indicator traders: RSi left overbought, SlowStoch crossed and heading down, MACD wants to crossover.
So everything is ready. And finally we need a bulltrap at the top. We don't just have a bulltrap we have a bulltrap in the bulltrap. That's the recipe of a steep decline.

So we are heading down at least till the brexit. In the meanwhile the gold             will be coupled with the dollar again.
Most of the traders will not understand what's happening. They will stay hoping in the bulltrap .

As I saw today's decline I'm quite sure that at least we will tag the red or the blue trendline around 1235-1240.
And there will come the question is the ICL in or not? Are we making a lower low with a panic selling or not?
Time will tell...
Comment: H&S forming
snapshot
Comment: Bulltrap in bulltrap
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Comment: We might test back the purple trendline .
If someone would like to enter a short 1284-1290 is a good place.
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Comment: 10 EMA couldn't catch the price.
It wants the 20 EMA or the trendline.
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Comment: The more time we spend in the yellow area the bigger the chance that it's a flag which breaks down.
We might spend here the whole day after yesterday's monster move as a consolidation.
snapshot
Comment: Try to enter into the short position at the top of the flag when you are scared and not emotionally at the bottom of the flag (" it's breaking down i will left behind")...
Comment: If it's starting this is the time. We tagged the 10 EMA on the 4hrs chart and almost tested back the trendline.
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Comment: Trendline tested back.
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Comment: Let's see if the trendine test back was enough for them or not.
Comment: Ok so who wants to sell now this is the time
Comment: Stop goes above this candle: 1296.5
Comment: We have no business above the trendline
I think it would ordinarily be a good short setup with decent risk reward from 1300-ish or the 200 MA. But with a 14-Day ATR of 18 and the possibility that it may chop around in here leading right up to Brexit, any tight-stopped short may get easily stopped out in the whipsaw ... .
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excellent analysis, thank you
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this is the first time that i comment for your analysis. very clear, very amazing and complete analysis. i didn't see any long for gold. its turn to correction but always heart deep the people who have short for gold. exactly when people are crazy and ask them selves what is the next target for gold.. the market is noisy and i think the brexit couldn't change the gold price identity. it doesn't mean we have not the noisy market. the market is look like a ball when touch the earth. but last week we touch the roof. it doesn't matter if your analysis became field.. good luck everyone and who have short for gold.....
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xmrtl PooyaSalehipour
for what it`s worth..
Commercial Short Positions In Gold & Silver Markets Near All-Time Record
http://kingworldnews.com/caution-commercial-short-positions-in-gold-silver-markets-near-all-time-record/
+1 Reply
Some other things to watch:
- DAX posted bullish hammer on weekly chart bouncing from 200 WMA. on daily chart looks reversing.
- NIKKEI reached lower horizontal line, a boundary of descending triangle and 200 WMA. On daily chart posted inside bar. Breaking up will turn the USDJPY up. Breaking down will devastate this pair and NIKKEI.

I am optimistic and think both stock markets will reverse from here producing positive news which may cause gold to slide and US stocks to rise above their current resistance.
Reply
By keeping the safehaven nature og GOLD in mind, there is still room for GOLD to go up, I am planning for re-entry at 1246 zone. A test of 1310-1320 is for sure. When there is no growth in any economies and no US interest rate hike; GOLD has to push higher. Buyers are waiting for a better price. Some serious stops have been taken out

Brexit is just another cause for fear. Gold will be a "parking zone" for big investors for the time being .Only threat to long position is appreciation of USD as a safehaven currency; since other safe haven pairs are directly affected ( EUR,GBP and JPY). Fear of JPY intervention is the only resistance for JPY buyers.

Hope the Brexit vote will clear a lot of dust including US rate hike

Thanks
+1 Reply
Food for thought from Kimble Charting Solutions blog....

"So far this week, Gold is attempting to form a reversal pattern (bearish wick). This reversal pattern is taking place at the highs of 2015. If this pattern remains at the close tonight (6/17), it will be the largest reversal pattern since the highs in 2013 "
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The reversal came on low volume. Monday will tell the story.
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JesseL chartwatchers
Do you think Brexit vote will be postponed? If so,hat would be the impact on gold?
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I dont think so. But all we've seen on Thursday what is the effect if UK stays in EU.
I can't imagine any sustained move with this commercial short position.
We are above 400.000 and the blees at 0...
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