But what if the majority is wrong, which, obviously, is the contrarians' bread and butter.
Is anyone interested in either:
1) playing a contrarian role and provide strong technical arguments why the majority is wrong indeed; or
2) providing arguments why the chart above is flawed.
I suggest such discussion, if approached professionally, would help all of us here, betting on the in Gold , to become better prepared for Sep 21.
For example, as you might know, ProJack's vision is that Gold may continue falling after the next Wed, at least down to $1,250-sh. However, he seems to be looking at it only from the prospective, ignoring the current year uptrend line. But such rather focused-view approach doesn't necessarily invalidates the possibility...
Since Gold still hasn’t penetrated the bearish trendline, the expectations are that the Sep 21 no-rate hike decision will give the metal enough of an impulse to bounce off the current year raising trendline in order to drill in the bearish ceiling a hole, large enough to escape for good.
However, if the 2011-2016 pattern turns out to be a textbook’s falling wedge, the chart below is sketching the next few years’ precious metal’s potential movements.
The period by the end of 2016 becomes a critical stretch of time that will be setting Gold up for the following decade.
Despite all the bullish enthusiasm around, at this point there are three not quite impossible scenarios that could push Gold back into falling wedge formation:
1) Sep 21 FOMC decision to hike the rate. Though the chances are currently estimated at slim 15%, until the opposite decision has been made public such move still remains a possibility. In this case the bullish trendline will likely get damaged beyond repair;
2) Sep 21 FOMC decision to keep the rate intact will likely send Gold back to $1,350 area but the impulse might not be strong enough to penetrate the bearish trendline, which, in turn, could change the sentiment from bullish to bearish and Gold suddenly becomes shorted like there is no tomorrow;
3) The bearish trendline will get penetrated but upon backtest will prove to be not strong enough to hold (i.e. the combined buying force of bulls will not be able to withstand the shorting momentum from the new high).
I hope the above will remain a pure speculation, none of the scenarios will ever unfold, and Gold will indeed continue its upward move. But if this post has made you thinking about your strategy in case the things are not unfolding as planned, that’s good enough for me. I would also appreciate comments in the constructive criticism form.
SignalSwiss published a similar long-term bullish view on USD little while ago but I just can't find it at the moment to link it to my post. If I come across it later on, I'll re-twit it here.
And apologies for two repetitive posts down below - I kept publishing this chart in the wrong box. I'm still new to the UI of this site.
Potentially developing multi-year cup'n'handle in Gold?..
I agree with Arpi that the KEY to what happens around 1350 is DXY and the currency wars wrapped in an approaching DCL then ICL. "It is a riddle wrapped in a mystery inside an enigma" - Churchill
Every central bank is battling the dollar to keep it stronger than their own currency, but will they succeed??? The largest of them, the EU may be too wrapped up in their political problems to have Draghi be effective. Then - everything gets reset on November 8. The US election is truly of historic proportions as it comes to the dollar and gold. Short of total economic collapse between now and then, FOMC in Dec will raise rates as they have been playing politics up until now and have to do just for credibility sake and to try to throw the dying pension funds a few basis point bone. Buckle up!
SignalSwiss published a similar long-term bullish view on USD but I just can't find it at the moment to link it to my post. If I come across of it later on, I'll re-twit it here.