JWagnerFXTrader

Gold and the False Break - 1065 Key Level

FX:XAUUSD   Gold / U.S. Dollar
2008 20 23
With price meeting Nov 2014 low, technical traders are looking to the current level as a hot spot, where a reaction higher or break lower is likely to occur. The retail sentiment at FXCM             is showing 4 times as many traders who are long versus who are currently short. These short traders become a pool of future sellers when they decide to close out their trade.

From a technical perspective, there are 2 wave relationships showing up in the 1130-1135 zone...so these traders MIGHT be right. If a break does occur, there is another wave relationship at 1093 and around 1065.

The Elliott Wave labels on the chart suggest we are in an expanded flat correction and prices are likely to visit above 1300 in the coming months. The question is, how low does this expanded flat push?

The false breakout zone extends to 1065. The deeper we cut towards 1065, the better the risk to reward ratio.

A large reason why I'm favoring the expanded flat is the slope of the sell off since January. This recent sell off has a much softer slope than the prior 2 waves. Therefore, it is behaving more like a 'B' wave than a 3rd wave.

Best of luck!
I've been out of pocket and disconnected from the markets for past week. It is interesting to see Gold still hanging out above the wave relationships near 1063-1067.

SSI is steady at +2.0 so net positioning hasn't changed much on Gold.

Open positions show longs have grown slightly (up 4%) and shorts are down slightly (-2%) compared to last Friday's levels.

Further dipping may take place and 1060 area may see a real test coming. Wave relationships and wave positioning suggest 1060 area holds on the first test. A move above 1119 builds the case for a bottom.

snapshot


I will be out of pocket for the next week. Talk with when I get back.
Reply
Gold SSI dropped from 4x as many traders who are long vs short down to +2.2. Long positions are down 37% and short positions are 23% higher over the past 24 hours. So the retail sentiment is shifting towards bears.

Sentiment is contrarian...so as retail traders shift towards bears, look for bullish opportunities.

As of now, the sell off stopped at the lowest point noted in the original analysis. The expanded flat correction suggests a 5 wave 'C' wave higher. The overnight low is a key level if 1130 is regained.
+2 Reply
AndyM PRO JWagnerFXTrader
This is awesome data! Extremely important! Is this available to non-FXCM subscribers in some shape?
Reply
Hi Andy - we have it in 2 places right now.

1) Available in real time to FXCM live accounts with greater than $25k equity.

2) Available in 2 snapshots per day inside DailyFX Plus - you can sign up for free here for a trial - http://www.dailyfx.com/forex_trading_signals?CMP=SFS-70160000000Nc3HAAS (go to the SSI section). Or, with an FXCM live account, you'll receive unlimited access.
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IG market insight and CMC markets demo account also provide similar info on most instruments.
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DavidRoberts JWagnerFXTrader
Great analysis, thanks!
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Hi J, agree with Andy's count as it is just a correction of the 251.95/1920 uptrend
50% correction at 1086
deeper 61.8 at 889 - which will be toughest
And on monthly charts you can see that from 2013 drop we didn't advance much lower.
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That if you count that impulse to be a 5 of 5 of 5 top thing.
If not, the fibonacci from low to high won't work.
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Gold EW analysis. Correction is just half-way through.
+1 Reply
This labelling from EWI is bogus in my view - their C wave of the contracting triangle is an impulse, no way to count it otherwize. There is no triangle there, but rather a flat correction, which then transitions into wave 5 ending diagonal. So the bottom can be very near, and then a bounce back to 1240 in wave 4 of 5.
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