1. Stocks are clearly collapsing. We have a failed daily cycle and we are heading down into the ICL. The buyers have disappeared because of the elections and if there was a US government manipulation regarding stocks they are way too scared to do anything now as the head of the FBI showed his power last Friday. Money is coming out of stocks. It should be crystal clear for everybody.
2. Oil . This is a huge market and it's clearly losing ground. Maybe because of stocks, maybe because of something else but it's going down and pulling down oil shares. Money is coming out of this sector also.
3. Dollar. The head of FBI had called the top in the dollar last week. One of the president nominees might be guilty at the very least of mishandling classified documents and perhaps obstruction of justice. They are selling the dollar.
When markets are scared it's time to face to safe heavens. In this case the dollar will not act as a safe heaven but gold will.
So we have a really good chance that the one and only thing they will be buying during the following weeks will be gold ....
What we had exactly during the last 2 weeks?
Gold had broken down from the blue triangle. The whole breakdown was an artificial move with a big contract dump. The target price counted from the triangle (height of the triangle : red line) was completed at 1241$. We also tagged and break below the 200 - remember from oil how important is the 200 at the ICL- but there was no follow through.
The first mistake traders committed was the hope in the what broke to the upside . Actually it was not a . It was a bottoming process after a manufactured break down.
The second mistake will be the back test of the triangle. A lot of traders will try to short at 1310 as a testback of the triangle. There will not be a backtest. The triangle is history. We broke down. Target price is completed. If we are back to 1310 we are not going to turn down from there we are going to break that level.
I want to prepare you for this scenario because tomorrow or Thursday we are going to test 1310.
I would not try to short this right now because we might see a more powerful event what we had at the Brexit night. My suggestion is to try to find an entry point and ride this wave.
This is going to be a huge run.
I don't think the FED will influence this tomorrow. If they want to have any chance for Clinton to win the elections they will be dead neutral. No rate hike tomorrow. And not talking about the rate hike in December.
Shorts' last hope.
I have a horrible long position.
So I'm going to close 25% of my position before FED.
I'm going to reopen them if Yellen is not going crazy and she does what she has to do.
Yellen did her homework well.
"The second mistake will be the back test of the triangle. A lot of traders will try to short at 1310 as a testback of the triangle. There will not be a backtest. The triangle is history. We broke down. Target price is completed. If we are back to 1310 we are not going to turn down from there we are going to break that level.
1290-92 could be a good entry point.
We can be in the flag till the election or even a week from today...
Are we having a bear trap?
Hourly double top and now the testbcak.
This is the same story just as with the triangle.
The target price counted from the double top - height of the double top - was completed. So the testback will not work.
It was a bear trap. They will need to stop out soon.
So this pattern testback rule is an old rule and in nowdays modern trading has forgotten about it. When target price counted from the pattern is tagged testback is not working.
The question now: are we ready to break higher or there will be one more round to the lower line of the flag.
I guess no.
It looks a flag breakout to me...
New high is coming
We all know Clinton has the most chances to win. In such case we all accept that GOLD and Miners will head down..
So why aren't you taking profit at this point and wait to see the results of election?
In a case Trump wins you can get back on the track on the other hand if Clinton takes then you are out during the correction ..Specially since Miners face a strong resistance at 26$ which suggest we achieved an intermediate top.
Thank you in advance !
It seems to me the trend line is down and we just tried to break it before getting back to it..
I think we may have further downside on MINERS before we finally resume the upside .
I am attaching by a chart of GDX ... it is a Url address since i do not success to share directly the photo.
here is the address: