On Tuesday I wrote a blog post about gold futures (read it here). Gold had reached an important Fibonacci retracement support point and I thought a low was being put in. After some fits and starts it has rallied, so I thought I’d revisit it to see what it may do next.
The daily chart is below. On Wednesday) it broke under then closed over Fibonacci retracement support at 1158.30. Tuesday’s narrow trading range (NR7) and doji gave it a breakout setup for Thursday and it saw a small rally yesterday.
Things are improving.....
Today is a pivotal one for gold in the short term. The day following a breakout rally often sees a selloff (a Sell Short day in the Taylor Trading Technique cycle) as a vigorous breakout rally creates the “excess” that Taylor said marks the end of a move
In this case yesterday’s rally was likely not big enough to create excess, so we have more of a Sell day today. On a TTT Sell day we look for an extension of the Buy day rally, setting up for the Sell Short day in the following session.
Today saw the rally first regain the $1175 area. This was resistance, as it served as support and a downside breakout point earlier this week. From there, the next upside target is 1179.80, a 50% retracement of the selloff from the 7/23 high.
Looking ahead, Monday will be a Sell Short day, so I anticipate negative price action. If it can hold over $1175 (or $1180 if it can clear it today) would be supportive longer term. I’m still not a long term bull, but it looks good from a trading standpoint.
This is a sample of the analysis from my Swing Trader’s Insight advisory service. For information on STI, and to sign up for a free two week trial, visit here.
The information contained here includes information from sources believed to be reliable and accurate, but no guarantee is made as to accuracy, nor do they purport to be complete. Opinions are subject to change without notice. Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
