darth.stocks
Short

Dangerzone ahead: Short Gold

FX_IDC:XAUWCU   GOLD / WORLD CURRENCY UNIT
110 2 4
Sorry to disturb the bulish feeling, but it is alwasy reasonable to check Gold             against a currency basket and not just US$. We are now in timerange and pricerange as I suggested last autumn. We had a high volume surge we haven't seen since 2011 and the bullish feeling people have is certainly justified! BUT as a perma Gold             bull I also learned to be realistic. We are currently at the upper Resistance of our tradigrange and RSI , Stochastics and Choppiness look terrifying! Each time we had similar data, we had a correction! So expect another one these days!
Stoch and RSI "overbought" do not work very well in a bullmarket because how they are constructed. You should know that.
When you get high numbers for a longer time without prise breaking down, it just tells you the market is a strong bull market.
The longer run the stronger market. Not the kind of market you should short (based on stoch/rsi anyway)

Since 2011 until end of 2015 we undoubtely had a bearmarket for gold. No wonder then "overbought" in stoch or RSI worked.
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Regrettably I can't comment on the Choppiness Indicator as it is nothing I have ever worked with but I can comment on the chart pattern. I wouldn't call it bearish. Actually I would call it very bullish
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