New Trend for Gold?

[The Baptist]

Gold Windows, and Mind the Gap

Gaps/Windows are not always significant, they can occur in fast moving markets or be caused by data gaps.

However the theory goes they are often closed. They also usually form support or resistance once established.

On Gold the hammer of 24th July, circled on the chart, was made and failed to break support caused by a previous window 1. Golds last relative high at 668.2 (RH3 - 2/8/06) a week or so ago was repelled by a window starting at the 669 level (window 4) just before RH2.

Most interestingly was the Friday just passed, (last day of trade) which was a volatile down day, however the extreme low of the day did not breach the 636 level (the bottom of Window 2) and returned a fair way back up, almost forming a spinning top candle. The Close in fact retreated above Window 3

While the convex shape (upside down bowl shape) of the last few weeks is bearish the number of window supports just below this price action is high, I have not highlighted them all, not to mention the trendline which is passing close to current price action. All this added to the rejection of Fridays lows may mean all is not yet lost for Gold bulls.

I would however see the taking out of the 615 hammer intra day low of 24/7/06 (circled) as near fatal and Trade below 574 as the coup de grace for longs.

Similarly I might be tempted to place Buy stops just North of the top end of the window 3, currently serving as resistance, as the bottom of this window is so close in level to RH3, it may be worth ensuring the BO, if it occurs, has the required momentum to clear the last high (RH3) and the window directly above it which has served as resistance so far.

Enjoy, Oh yes…… and Mind the Gap.

 

[The Baptist]

Monthly Look

chart attached monthly view, sometimes it helps to view through a different time frame.

 

[TheRake]

The Baptist is wrong. The extreme low for August 11 (after London close) was under 628.

 

[The Baptist]

The Baptist is wrong. The extreme low for August 11 (after London close) was under 628.

You are right it traded lower than my datafeed appears to have captured, in fact on closer investigation my Spreadbetter which is essentially a market maker on the underlying, dipped there bid as low as 625.6 which on a 0.5 in and out may have implied the mid point at 626.1 as a low Friday.

I will investigate where my MS9.01 through Paritech get their datafeed collects from, on the Cash Gold CCB and what market hours it takes data from to locate the discrepancy. Because the charts I have are as posted, though they clearly don't tie in with my market maker as well, I will get back on this one.

 

[TheRake]

Thank you, The Baptist. I've only recently started to study gold so I don't want to be dogmatic about the correct data source. I get mine from the IG tick chart and from the 24 hour chart om Kitco.

 

[The Baptist]

TheRake

Thank you, The Baptist. I've only recently started to study gold so I don't want to be dogmatic about the correct data source. I get mine from the IG tick chart and from the 24 hour chart om Kitco.

To conclude on this query.

On my charts, I have found out that I am pointing to a continous rolling future, which seems like it may already be on the October future. The nearest I will get to the Cash Future will be by posting August Charts, but even this has a marginal premium in it at present. Unfortunately my Dataprovider does not offer Cash Data.

Apologies if the actual numeric levels mentioned have not tallied with those trading Cash market. I will highlight which contract referred to in future chart posts.

 

[gugaplex]

I think the MC Hammer on 8/14 shows that gold bugs are going to get screwed pretty badly if they hold onto their "precious" for too long. The gap/window will be closed on potential LT gains for the metal as "investors" run for the door.

The Hammer is being dropped on gold prices, and it will likely accelerate for the near term.

 

[The Baptist]

im now in.

Decided last night to initiate a small position long at these levels (627.8) Cash.

Up until now my buy stops for any position still sit just above the last relative highs at the 657 levels untouched, where they remain for now. Will they be met?

Stop for this position is at 599.

 

[TheRake]

Decided last night to initiate a small position long at these levels (627.8) Cash.

Up until now my buy stops for any position still sit just above the last relative highs at the 657 levels untouched, where they remain for now. Will they be met?

Stop for this position is at 599.

Well done ! Would you say briefly why you felt it right to buy at 627 ? Are you remaining long until 657 ?

 

[The Baptist]

Why the Entry Batman?

Well done ! Would you say briefly why you felt it right to buy at 627 ? Are you remaining long until 657 ?

I originally felt a downleg was a possibility from the $540 levels and posted the below attachment suggesting my best estimate for a relative low was in the 620 – 630 levels before the pattern could develop further.

After a fairly convex bearish shape to the price action the run off was losing momentum and turned more concave, and it was entering the range I felt may also be a turning point when I first addressed the possible pattern. It could well be a bit early hence my size. But there was an upside gap move when some volatility returned on the hourly charts and this is more indicative of a later upside move to me usually a signal that the selling overhang is getting light.

The main scale of my bets are on Buy stops near and around the last relative highs at the 655/8 levels. This keeps you out of the market if early or wrong and springs you in upon confirmation of the Break Out, if it materialises.

Despite this as a primary entry system at the lower levels when waiting for a bottom, the distance to my technical stop is short and a reasonable stake can be put in near the suspected bottom. This allows one to maximise the return if correct, but guaranteeing a loss if wrong but at an acceptable level which will be quickly and unambiguously confirmed.

 

[The Baptist]

Link with original post and chart of Gold at Relative low 2 point after making a Hammer.

http://www.trade2win.com/boards/sho...48&postcount=67

Black Line details expected performance ofr Gold over next month. largely performed to type so far, with the downleg ending in the 620 - 630 range, values maybe difficult to see (also continous chart not exact to Cash Gold as discussed previously).

 

[The Baptist]

Further added.

I have added further to my position.

See chart attached with Bollinger band constriction, classic volatility being ironed out signal.

Also note the smaller candles as per the last relative low at the 615 level illustrating a similar thing. Lowest recent candle was also a small hammer.

CCI indicator showsn to be near relative lows.

Good Luck.

 

[DaveT]

The Baptist -

I am with you on the Long Gold scenario from here.

Before coming across this thread, I actually went Long Dec this morning at 640. My stop is also just below the 600 mark.

1) Intraday volatility squeeze (Bollinger bands/ Keltner Channel on 60/90 min)

2) Daily triangle formation finding support at lower end.

3) Bullish (reverse) divergence on RSi with this low (comapred to last low)

4) VERY BULLISH SEASONAL from late Aug thru September.

 

[pssonice]

Correction in GOLD

gold final level of correction is 51.
we have seen the top.
the weekly chart is showing H&Ss

If gold is able to rebound up to 66 a new scenario will take place

 

[gugaplex]

Looking pretty darn bleak for gold. I will buy gold when all of the gold bugs on this board go bearish or cease posting....

 

[pssonice]

long haul projection in gold

you lost have the way to your initial stop within a few hours.

you are betting against the trend

 

[The Baptist]

Daily pattern fail

Vols returned, Break was to the downside, position covered. Sellers still in charge .

 

[shrenickshah]

Vols returned, Break was to the downside, position covered. Sellers still in charge .

I can see it going to 600 before making a move upside...

"The "Conspiratorialists" are out in force these days, convinced that the evil hands of various governments are at work trying to keep gold prices down. We do not doubt that there has been some reasonable...perhaps even material... selling of gold on the part of the "legacy" banks of continental Europe as the September 30th end of the current year under the Washington Agreement looms, and that gold not sold under the 500 tonne limit will be lost. Were we France's, or Italy's or Luxembourg's central bankers certainly we would be asking Germany for permission to use the amount of gold Germany is allowed to sell under the Agreement but has chosen not to sell because of arguments regarding the disbursal of funds gained from those sales. We cannot know for certain, and here we are merely speculating, so please take this with an unusually large dose of suspicion, but if France, Italy, Luxembourg et al are not talking with Germany about this matter and have not acted to sell we shall be greatly.... indeed very greatly... surprised.Is this collusion then? Of course not. It is selling that was long ago announced, and acted upon consistently over time. Does it weigh upon the market anyway? Yes, indeed it does, for the psychology of the commodity markets has changed over the course of the past several weeks. Panic buying has given way to aggressive selling. Panic selling lies just ahead we fear."

 

[Pippppin]

I suspect that many of the gold bulls have been premature in their market entry....a significant potential downward correction is a distinct possibility

 

[gugaplex]

It is interesting how easily people latch onto an opinion, and will then seek out any information which supports their opinion, and ignore anything which does not. Usually, of course, their opinion has no understanding, or relation to, the forces and dynamics involved.

Yesterday the price of gold fell - only a small fall relative to increases in price made over recent time frames. The price movement was probably part of the general oscillatory behaviour of financial markets - however it is interesting that the person on this thread who has labelled himself (or herself) a "bear" immediately attributed the fall in gold price to yesterdays main news event. There is, of course, a high probability that the price movement in gold yesterday would have been exactly the same if there had been no major news event, but because the price movement coincided with a major news story, and supported a very one-eyed view of the gold market, he (or she) immediately attributed the price movement to it.

Which does rather suggest that, in our opinion obsessed society, most of the views and opinions expressed on T2W have no understanding of the financial dynamics they pretend to to posses an understanding of.

CYCLOPS was probably an expert on the dynamics of gold as well

Well, now that you are scared for a significant drop in gold, does my opinion matter to you? Atleast I am stead-fast in my projections, despite whether everyone agrees with them or not.