chartwatchers
Short

GOLD - The commercials strike back

FX:XAUUSD   Gold / U.S. Dollar
5085 39 81
Today morning traders could taste again what does the 411.000 commmercial short position with 0 blees and 545.357 interest means. It means that you don't want to be long at the gold             market right now.

I highlighted by green the zone which we have to break down to validate the head and shoulder pattern. (It's around 1277-78$) If we break it - and I'm convinced that the next attack will break it down- we will have time to decide what's happening.
Are we in the beginning of a new intermediate cycle?
Is it the 1st daily cycle of a new IC             and we are heading down to the DCL?
Shall we calculate a target price for our shorts from the H&S pattern?
Or just wait till price tags the 200 EMA on the daily and we go long from that point?

Right now we don't know.
The commercial short positions just increased to a record high . Bulls do you really think that they will close their positions in a panic just a week after they 've increased their shorts?

I see a few comments below my posts that gold             will rally because the dollar is collapsing. Normally I would say yes. But gold             has decoupled from the dollar last week. We paid a high price for that. The same price will be paid on the opposite direction when gold             will be weakening with the falling dollar. This will last for at least for a few days, while everything calms down after the poll.

Summary of last week on the chart:
The wedge I was watching last week formed into a channel by last Thursday. We had a panic breakout on Thursday afternoon ( GMT             ) but at the London tragedy we printed a daily key reversal and a 4 hrs chart key reversal also. That's a strong signal especially beacuse we turn down from the 200 weekly Moving average.
We must know when we can use the chart patterns and candlestick patterns in our strategy. Traders often see a head and shoulders pattern or a key reversal at the beginning of a trend. At that point they are not working. To trade successfully the chart patterns ( H&S ) we need a prior trend or - at the key reversal - we need a resistance zone where we can turn down from.
Now this is exactly the case. The key reversal is turning down from the 200 weekly MA and we have a 14 days prior trend to say we are printing a H&S pattern which we can break down.
So Thursday in the afternoon price broke down the trending channel. On Friday bulls just continued the buying procedure as they did in the last days. "Price will rally again ..." But this time the shopping was enough only for testing back the channel (red trendline ) . And Sunday night as the news came out with the new results regarding the poll / +3-4% stay/ bulls were not buying at the open and commercial shorts push down the price by 20 $ in 5 minutes.

The descending channel's pivots are ready now (blue channel) : price can easily drop 40$ from here in this descending channel . And we might want to test the daily 100 EMA at 1230$ or the daily 200 EMA at 1210$ while stocks are rallying and the dollar & gold             finds each other again.

So careful with those longs. We are in the 2nd phase of this bull market. The time of crazy rallies are over. This bull is older and much more tricky.

P.S.: I will post an interesting daily chart in a few minutes. :)
Comment: Look at the last candle where the red arrow is. Key reversal in 2009.
Next day it was erased "almost".
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Comment: The next day it seems the erasing candle was just a bait for longs...
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Comment: The matrix just copied itself.
Do you have a De Ja Vu? ;)
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Comment: Testing the resistance.
Comment: Testing the resistance zone again.
Maybe it wants to break down at Yellen's testimony?
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Comment: Broken.
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Comment: Miners will bleed today.
DUST, JDST will fly.
ANd Yellen haven't even talked ...
Comment: I will try to figure out the next step today.
Are we heading to the DCL? ICL?
Maybe a half cycle low only....
i shorted from 1298 :D
2 SCENARIO FOR GOLD BEARS!
+3 Reply
Could you advice any entry point?
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Loii MiDiGre
at the next retracement top. short with $3-5 sl
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Do you mean at 1297-98?
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sorry 1287-88?
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this is a bull count and I think this is a way we play this best chart in a room
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Lets see if it can break the neckline (1278) , im not sure it can this side of BREXIT...I think any gains from shorts will be small/risky until next NFP data on 8th July...its still a gloomy picture out there, lets not forget why Gold got this high..peolpe usually hold GOLD and only sell it when they are confident of a brighter economic picture...
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YoungPearls Trendhopper
gold has no yield it is a risky investment
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Perfect time for shorts..Good risk reward (based on purely price action)
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Another great analysis and insight! Thank you Apri :)
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Thanks for sharing all your hard work Arpi....
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support u mean ?
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Apri, Great value! Not just technical reasoning but insight to the rout of these indications and pulling it all together. Understanding the route to these technical indicators and how they are abused buy those who can is key in the market today. There is much more that meets the eye! Your experience and knowledge is great to hear and sea, with my intrest around other topics to what other use to see as conspiracy theories is proven facts to day. This gives more confidence to stay the strategy which is too easily swayed by less founded knowledge. Thanks for all the effort of your reasoning than just a pattern and a blabber anyone can do combining technical info! To demonstrate the insight is great to see and I thank you for that effort! The effort for some of us that try and learn but are given information that mostly just enough to hang your self with out true insight which come with years of experience. I and a few other can really recognise and appreciate this if you battle to sit on your hands..LOL
+5 Reply
GregGibbons PRO investment6300
Well put investment6300!!
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look hourly, 78 got rejected hard
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you sugested pl to short at 1284 with sl 96 on friday....
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Shorted few hours ago at 1286, looking nice was, for now it's testing trend, will see, but for now I think it's good.
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Thanks Árpád for the great example of the June 2009 engulfing candle, I also hope for a similar outcome for current gold chart.

snapshot
+1 Reply
Good Job I am PROUD of u THAT i Found A GOOD TRADER.Always watting for your comments
+4 Reply
Testing for a few hours...
It must broke down tommorow or wednesday, because if not, again can trigger 'brexit' blabla s*it.
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guys get real........ if gold aproach this price near brexit time, the volatility will be crazy more than 1320 is a shure thing if dosent lower to 70s before brexit
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still bearish on gold arpi? time to move on, ur other play/picks are playing wonderful
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Breaking trend line. Waiting a little down and going away...
Still brexit is in weight I thoght so because pound recovered and gold wasn't in good mood to rally down.
+1 Reply
Excellent analysis as always sir! I am of similar short mind but believe we may see some volatile upside over the next couple days.
Gold - Long and Short
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The probability that Brexit vote to stay is high. DXY is currently quite low. Yellen will have to talk DXY up tomorrow and on Wednesday to give it room to fall after vote. We should start hearing soon that July rate hike is back.
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For now I dont know what to think. This spike up in asian session and then back to trend. There still pressure on buying, but shorts dont give uo easily...
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i think we will break below 1278 today..
+1 Reply
Testing resistance or support?
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there we go..there is that 1278 break ...bears !!!
+1 Reply
freefall
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good to short now
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nice fall... thanks cw
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Good job!
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Wooopi! They must bleed and ope this runs to thurs morning when BRITex results come out! We can sell Wendsday and get out
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Interesting chart I thought to share
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this is a small drop down..it will rebound now to 1278 to retest neckline, might go back over neckline as its at 38.2 retracement...of course I could be wrong but not shorting from here
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Draghi hasn't disappointed. Now Yellen needs to do a second hook to prep dollar for Thursday.
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1268
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1262, afterwards shall do something.
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