chartwatchers

GOLD COT UPDATE - bearish

FX_IDC:XAUUSD   GOLD / US DOLLAR
588 2 21
I updated the my COT chart in gold             .
It looks a bit complicated , but I tried to put every important thing on one chart.
IT'S VERY DANGEROUS TO BE HAVILY INVESTED IN GOLD             , BECAUSE PRICE CAN GO TO BOTH DIRECTION!
Let's see from point to point:
1. We are still in the pennant . On 24.02. I thought we broke out but the price was slammed back from 1251. With 284.003 commercial short contracts it's no wonder. Commercials are protecting the 1255-1262 level very heavily. The pennant is a continuation pattern as I wrote a few days ago, if we break out from this pattern to the upside and commercials close the half of these 300.000 short position price will skyrocket. At that time you shouldn't be short becuse we could see a 80$ daily candle. So the pennant as a pattern is bullish I'm waiting for a continuation 100-150$ in the following 2-3 month. If you don't have time to check the monitor every one hour invest 20%of your capital in gold             and in 2-3 month you will have 10-15% profit. Most of us cannot sit in a position for 2 months, we must trade :) , so I continue the war plan in the next points...

2. COT is very bearish . If you read my previous comments you will see how COT is working. COT blees rating was 21 this Tuesday. It means that commercials are very heavily short. They are waiting for the price to collapse... Do they know something what we don't? Last time (10.27.2015.) the commercials were at 300.000 short position and blees rating was 21 the next day FED had announced that there will be a rate hike in December (100%). Of course they now it a week before... Gold             price collapsed. That's make me nervous. They also see the pennant. They also know that it's a continuation pattern. Why are they so heavily short???
So based on the COT I would go short for the medium term (next 2-3 weeks). Based on this I would say ( pennant break out A) we are going to break down the 1210-1212 level coming down into the DCL ( FIBO 38,2: 1179.6 or FIBO 50 : 1154.19) and then we can start the second leg up in the 3rd daily cycle in this intermediate cycle to 1300-1350-1400 - depending how strong is the rally...

3. Daily cycle : we might have printed the daily cycle low in the pennant (02.16) and we are breaking out as the "B" break out shows - I would give 30% chance for that. Or it's coming next week as the "A" breakout shows - I give 70% chance for this.
WE are very late in the daily cycle. Gold's daily cyle lasts for 25-35 days. Yesterday we were on day 31. So if we don't break down next week from this pennant to print the daily cycle low at those 2 FIBO levels than I will say the DCL is done in the pennant.

4. Indicators: MACD , TSI             , RSI bearish . They show we should break down...

Long term (2month-2years) : LONG
Medium term ( 1-3 weeks) : LONG/SHORT
Short term: (1-5days) : I might try a short at the beginning of next week ( Monday) for the breakdown to the FIBO levels (I will post a short term chart for that) BUT only with a tight stop. Even with 100 ounces you can have a huge loss (10-15,000$ if we break up from the pennant)... Friday's short was a fantastic success I used the 10 EMA. I also posted the trade in real time.

I hope it was helpful...
Have a good trading next week!
cmc0068
9 months ago
Awesome! Thanks for sharing!
Reply
JonGray
9 months ago
I like B, I think more people see the pennant and will make it happen,
Reply
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