Time at Mode Methodology looked for a rally to the 1290 level last month, which it reached. Once the rally completed its target, I was able to see that the mode was really 9-weeks and it allowed for the market to have rallied to 1300+, which you can see here.
Since there are 4-weeks left in the uptrend and this current decline looks to be just a correction within the uptrend, I think it makes sense to re-enter long here at 1234 and look for 1300 again in the next 4 weeks.
Risk is approximately $20-$40. Upside is $60-$80. You decide how much to risk. I'll say Risk $40 to make $60, but that is being conservative.
Reason for correction? Market isn't rallying Central Bank Money Creation. US Growth, jobs, earnings, etc, have come in a bit better than expectations which is notching up strength in interest rate forecasts going further into the future. However, I think this is just a correction from SEVERELY overbought. Silver, by contrast, hadn't reached its target, and I'll make another chart about silver next.
Tim
1:58PM Friday, February 6, 2015
Comments
timwest
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I also put one stop methodology at 1223, a close 11 stop. You can buy down to the bottom of the green box and to the mode labeled "9-weeks" - and use a stop just under that mode. It's time to look for a bottom in the market after strong run-up to begin the year. Central Banks hate gold and they are doing their best to reflate financial markets, but you really can't push bonds up too much more once rates are negative going out 10-years. It's a massive bubble which we will only understand in hindsight. Bubble in Bonds, that is.
VRShaiju
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I thought I would like to share my bullish count which exactly matching your strategy
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jangseohee
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different time zone, different view, same immediate support seen, well done
you can insert your chart on right hand corner of reply
smitheric1970
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Just my take... Trend lines were meant to be broken (which is why I'm often wrong) :)
smitheric1970
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jangseohee
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yes trendline will break as well as channel, i believe you are using linear scale
timwest
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NOTE: I shifted the box up to 1300 from 1290 (target reached level) because the box starts from the mode, which shifted up from 8-weeks at the lower level to the higher level and became 9 weeks with a 1300+ target. Either way, I'm not trying to "re-write history" but rather show you the construction of the accumulation in the gold market. There is tremendous support down here in this correction that is worth noting. Don't be scared by the selloff, because there are plenty of buyers just below the current market. That's how I see it.
GcNaif
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Thank you
GcNaif
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Thank you Tim, i like your analysis, infact i was waiting for Gold chart from you ,