I am relatively new to technical analysis and want to emphasize my lack of experience.
It has come to my attention that Gold has been trading in a range of consolidation for the past 46 trading days. With GDP destroyed in Q2, high unemployment, high inflation targets, near zero interest rates and US national debt reaching scary heights, the idea of a massive Gold rally does not seem far fetched. Gold and national debt have had an outstanding correlation between the years 03' and 15' (r: 0.912) and hints towards a potential upside level to look for (Debt as of today has reach $26.8 T).
1. My first indication of a bullish pennant continuation is the obvious cone shape formed off of the all time high (ATH), joining at an apex only a few days away from today.
2. The flagpole formation is clear from the sharp decrease off of the ATH (with associated heavy volume) and snaps the bullish trend-line previously observed. The sharp move is then followed by a brief pause in price movement (typical of pennant/flag formations).
3. Ideally, reliable pennant patterns form somewhere in the range of 1-12 weeks, most agree that 1-4 week formations are the most reliable and up to 8 weeks is the longest duration. The duration of Gold's bullish pennant is slightly more than 6 weeks in the making and has until September 29th before its has reached the apex of the pennant. September 29th would still be within the valid 8 week range if this occurs.
4. Analysis of the volume shows that the volume is in a trend of contraction as the pennant formed (an important indicator of the chart patterns' existence).
5. The bearish MACD trend shows the signal line and the moving average in a zone of convergence, potentially diverging into a bullish MACD trend with the breakout.
6. RSI is resting slightly above the mid-strength level (50).
7. The projected target range is illustrated by the flagpole height (24.73%) and the length of the bullish pattern (32 bars- 46 days).
It has come to my attention that Gold has been trading in a range of consolidation for the past 46 trading days. With GDP destroyed in Q2, high unemployment, high inflation targets, near zero interest rates and US national debt reaching scary heights, the idea of a massive Gold rally does not seem far fetched. Gold and national debt have had an outstanding correlation between the years 03' and 15' (r: 0.912) and hints towards a potential upside level to look for (Debt as of today has reach $26.8 T).
1. My first indication of a bullish pennant continuation is the obvious cone shape formed off of the all time high (ATH), joining at an apex only a few days away from today.
2. The flagpole formation is clear from the sharp decrease off of the ATH (with associated heavy volume) and snaps the bullish trend-line previously observed. The sharp move is then followed by a brief pause in price movement (typical of pennant/flag formations).
3. Ideally, reliable pennant patterns form somewhere in the range of 1-12 weeks, most agree that 1-4 week formations are the most reliable and up to 8 weeks is the longest duration. The duration of Gold's bullish pennant is slightly more than 6 weeks in the making and has until September 29th before its has reached the apex of the pennant. September 29th would still be within the valid 8 week range if this occurs.
4. Analysis of the volume shows that the volume is in a trend of contraction as the pennant formed (an important indicator of the chart patterns' existence).
5. The bearish MACD trend shows the signal line and the moving average in a zone of convergence, potentially diverging into a bullish MACD trend with the breakout.
6. RSI is resting slightly above the mid-strength level (50).
7. The projected target range is illustrated by the flagpole height (24.73%) and the length of the bullish pattern (32 bars- 46 days).