Someone asked a week ago what is the Marubozu. This is it. Finally we got that hell of a bounce on Friday. Closing on daily maximum - as I predicted. We have the DCL in place (30.05.) Big guys have completely played out retail traders. Why? - We broke below 28.03 DCL on the 30th May. Everybody and his dog and his wife were shorting the market after Yellen's speech this Monday. - We had a strong swing next day and a beartrap formed in the breakdown. After the swing is in place the price usually prints one or 2 green candles on the daily chart. But that doesn't happen. The trapped shorts seems were not enough. Market had to believe that the swing was false and we are heading to new lows. We could hear in the news that gold is short, Goldman advised gold to short etc. So banks had the time to pick a long position while retail traders were opening short positions. Of course that they knew that the data is horrible. The only thing they had to do didn't let the price pop : " Make them believe and let them short." The reason for divergence between gold and GDX was smartmoney positioning in GDX longs on 02.06. Also the reason that Draghi was neutral because he got the note no need to strengthen the Euro before Brexit poll : US jobs data will do that work... Though I was right I didn't go long heavily before the data because it was too risky.
So now we see that gold price is heavily determined by the dollar. It's very important to watch the news affecting the dollar: - June 14-15th FOMC rate hike decision - 23th June Brexit poll.
Beacuse of the elections FED might not have any other chance to do the hike so I still think we might have it in June. If this is the case Yellen will prepeare the market tomorrow... We see what Yellen says. The Brexit poll must cause some kind of panic in the Euro so whatever happens at the FED meeting the Euro will have some kind of decline till June 23 and the dollar will rally. If the dollar rallies gold could have a decline. ( I wish I could see the COT and the blees next Tuesday... That would be a great help. But we will see those datas on Friday only...)
So here is my plan for the next week:
As I'm watching the volume I don't think smartmoney was positioning on Friday's panic. It seems to me that bears were stopping their shorts and retail traders tried to enter long poistion. Now everybody thinks that June hike is out of the table. "We will rally to new highs." I don't think that's the situation. This decline from 1308 to 1200 seems too thin to me. Intermediate bottoms are not this simple. At the intermediate bottom I would like to see a volume above average (highlighted in green on the chart) This last DCL's volume was even small for a DCL.
So tomorrow I will try to sell my XAUUSD positions into the Asian gold rally. (Asia stayed out of the rally so tomorrow the rally will continue but I think the maximum will be around 10-15$.) If I'm right we will have a pop up to 1260-65 $. I'm not going to short just sell the longs... After that I will wait for Yellen's speech if she hits a hawkish tone I will reenter with some short position. I will post in the Metal trade 2 - or open the Metal trade 3.
Warning: I set the neckline of the double bottom on the chart. If we break significantly above 1265$ the decline below 1200$ is in danger. We will see it next week. The chance for that is below 10%.
May the GOLD be with us !
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Asia is buying.
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AFter the first 2 hours of buying profit taking has started. If we come back above the 10 EM it's bullish for me again. We will try to break new highs on the hourly.
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Yellen's speech 5hrs 30 mins from now.
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I'M quite sure that Yellen will be hawkish today. No reason to say anything else. The March-April data is always weaker. They must raise the rates this summer. I will be holding gold longs in the follwoing 5 hours, but I might close some positions before her speech, or during the speech. I'm afraid she might call gold's daily cycle top today. It would mean that we head down to 1200 again.
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I will post my trades real time in the Metal trade 2.
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For the new players it's here:
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Somebody is lying. In the long term they should move in the same direction...
Comments
vikingaskepp
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Hi Arpi!
I've been following your work for a couple of weeks. Most of the technical is all greek to me, but following is like watching a show, listening to great music or enjoying great art.
It seems to me that you possess talent and and knowledge in greater amounts than many of your followers and getting everyone on board will be a very tiring job. My suggestion is, bugger that, and keep posting your ideas regardless, either people will learn more... or stop following.
Thanks for a wonderful cuople of weeks, and brilliance.
La Suede
al.calgary
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Awesome! What is the effect of Brexit on Gold and US$?
robus
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Thank you for all interesting insights every time on gold. my first target on daily is 1292 upper bollinger band with break of 1251. This my POV. I hope you drop some comments on it.
chartwatchers
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1265-1270 is the key for the 2nd bull phase. If we dont have a breakdown below 1200 the rally will be slow with lots of sideways consolidation as bulls and bears will be fighting for months.
I hope we break down.
ukraine
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I am still in long or better close it not waiting for the news?
chartwatchers
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What news are you uwaiting for?
ukraine
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USD unit labor costs 1QF
HarbeerS
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A very informative chart
Givingthelowdown
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Ok , so price not looking like its going close to 1260 in next hour, Yellen will send gold down a bit but have we reached top of the bounce??? we haven't hit upper trendilne, will Yellen kill the bounce stone dead or do we sit and wait for gold to rally and short in a couple of days once we hit the trendilne. I feel the trendilne is the signal to short. between 1255/1265...please what are your thoughts ?
mabaert
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Was hoping to take profit at 1252 before the speech and then see where it goes, but it goes pretty slow. Wonder if I should close all longs just before the speech
I've been following your work for a couple of weeks. Most of the technical is all greek to me, but following is like watching a show, listening to great music or enjoying great art.
It seems to me that you possess talent and and knowledge in greater amounts than many of your followers and getting everyone on board will be a very tiring job. My suggestion is, bugger that, and keep posting your ideas regardless, either people will learn more... or stop following.
Thanks for a wonderful cuople of weeks, and brilliance.
La Suede