The gold monthly chart appears to be forming a classic cup and handle pattern. I expect a pullback that forms the handle.
Price action has been on a nice run since August 2018. Now, with a new all time high achieved today. I think the bulls can take a rest for a little while. The new higher high has confirmed a bull market. Long positions do not have to keep pushing for this to stay intact.
When volume comes in at the bottom it signifies institutional investors are loading up at the bottom. Volume seems to be highest at the top of this pattern, not the bottom. To me, this means smart money is taking profits at this point, while retail investors are getting FOMO (Fear Of Missing Out).
Now I'm seeing what looks like a blow off top on a sub wave 3 of 5 Elliot wave pattern. The bold orange line represents the macro Elliot wave pattern, while the thin blue line shows the sub waves.
Sub wave 5 should take gold up to about $2439. I'd expect a pull back to around $1920 at that point, but the Federal Reserve could squash that if they print enough $$$.
In short, it's time to start looking for a long term position in gold in the next 6 months. I think there is going to be another flight to USD in the near term as real estate and stocks crash again.
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Yup, should be pretty much down from here, or at least very soon.
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I was doing some historical research to compare my trade idea w/ some weekly time frames from 2007 to 2011. I thought it was kind of fascinating how well it lines up with my previous gold call.
In 2008 when gold broke to new highs above $850 it took 10 weeks to top out again, then 31 weeks to break back down below $850 again, then another 10 weeks to finally bottom again. That's a bottom 41 weeks after breaking to new highs. This all preceeded the next big run up in gold that went 149 weeks and 180% up.
Currently gold has been above the 2011 high of $1920 for 6 weeks. I expect we will start to hear about a liquidity crises in the next month or so that will start to drive demand away from gold and into USD again. If you count 41 weeks from a break out over $1920, that put's us bottoming again right around mid May 2021.
This is an exact match up to my previous post for gold. Obviously nothing is set in stone yet, but I thought it was an interesting find worth sharing.
Could you elaborate a bit further on what do the straight lines on the left side of the chart represent and also what does the bright green drawn curve stand for?
Crypto-Whisperer
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@logicalStork84455 the lines on the left are Fibonacci retracement lines on the monthly chart going back to a bottom back around 2009 sometime (I’m away from the computer ). We did a little over a 50% pull back. The green line on the bottom is my cup and handle I drew in a few months ago. I expected a pullback earlier than now to be honest.
Crypto-Whisperer
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@Crypto-Whisperer, I have to correct myself here, those fibonacci lines go back to the bottom all the way back in late 99', not 09' . That's a 12 year bull run to the top in 11'
Worth_The_Ri5k
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i don't see a cup and handle the whole reason its named that is because of the handle... the consolidation before breakout.
Unless your trying to presume the price will come down and make that consolidation sure but i really doubt we come down to 1500 on gold. 1770 for a support resistance flip maybe.
For us to dump on gold we are going to need to enter stable economic conditions as well as way less uncertainty in the market considering that gold is used as a store of value in times of recession and uncertainty.
This is a rounded/rounding bottom also referred to as a Saucer bottom.
Crypto-Whisperer
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@Worth_The_Ri5k I disagree. I flight to USD will work just fine for a price crash. Deflation is a son of a bitch. Real estate is the next domino to fall, then mortgage backed securities.
EmptyEternity
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@Crypto-Whisperer, not to mention if the China dam breaks - expect PBOC to print more CNY pushing up the dollar
Puszta
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i really dont see gold going back sub 1700....
Crypto-Whisperer
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@Puszta I’m of the mindset that Real estate is going to tank soon. This should cause a stock crash and flight to USD. If usd goes into a short term bubble, then I absolutely believe we could see sub $1700 gold. Short lived though and physical metal will be long sold out at that point.
martinf1
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@Crypto-Whisperer, Your on the money here, excellent analysis, time to stock up on the metals... Alot of people negative on Silver, you think will pump with Gold?
Crypto-Whisperer
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@martinf1, I heard a great explanation of whats going on with precious metals on an interview I was listening to. The speculative buyers (people looking for gains) haven't even hardly started yet. Those are the people who buy silver. Right now we have the super rich deciding to allocate 1-2% into gold because of preservation of wealth, NOT speculating on gains. It's easier to lug around a couple million in gold than a couple million in silver. That's why gold goes first. When silver breaks $40 then $75 will be right around the corner.
Could you elaborate a bit further on what do the straight lines on the left side of the chart represent and also what does the bright green drawn curve stand for?