Best of the Week
Most Popular
1. Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - Nadeem_Walayat
2.Gold Price Focusing on May Cycle Bottom - Jim_Curry
3.Silver, silver, and silver! There’s More Than Silver, People! - P_Radomski_CFA
4.Is the Malaysian Economy a Potemkin Village - Sam_Chee_Kong
5.Stock Market Study Shows Why You Shouldn’t “Sell in May and Go Away” - Troy_Bombardia
6.A Big Stock Market Shock is About to Start - Martin C
7.A Long Term Gold Very Unpopular View - Rambus_Chartology
8.Stock Market “Sell in May and go away” Study When Stocks Are Down YTD - Troy_Bombardia
9.Global Currency RESET Challenge: Ultimate Twist - Jim_Willie_CB
10.The Coming Silver Supply Crunch Is Worse Than You Know - Jeff Clark
Last 7 days
The Corruption of Capitalism - 17th Jun 18
North Korea, Trade Wars, Precious Metals and Bitcoin - 17th Jun 18
Climate Change and Fish Stocks – Burning Oxygen! - 17th Jun 18
A $1,180 Ticket to NEW Trading Opportunities, FREE! - 16th Jun 18
Gold Bullish on Fed Interest Rate Hike - 16th Jun 18
Respite for Bitcoin Traders Might Be Deceptive - 16th Jun 18
The Euro Crashed Yesterday. Bearish for Euro and Bullish for USD - 15th Jun 18
Inflation Trade, in Progress Since Gold Kicked it Off - 15th Jun 18
Can Saudi Arabia Prevent The Next Oil Shock? - 15th Jun 18
The Biggest Online Gambling Companies - 15th Jun 18
Powell's Excess Reserve Change and Gold - 15th Jun 18
Is This a Big Sign of a Big Stock Market Turn? - 15th Jun 18
Will Italy Sink the EU and Boost Gold? - 15th Jun 18
Bumper Crash! Land Rover Discovery Sport vs Audi - 15th Jun 18
Stock Market Topping Pattern or Just Pause Before Going Higher? - 14th Jun 18
Is the ECB Ending QE a Good Thing? Markets Think So - 14th Jun 18
Yield Curve Continues to Flatten. A Bullish Sign for the Stock Market - 14th Jun 18
How Online Gambling has Impacted the Economy - 14th Jun 18
Crude Oil Price Targeting $58 ppb Before Finding Support - 14th Jun 18
Stock Market Near Another Top? - 14th Jun 18
Thorpe Park REAL Walking Dead Living Nightmare Zombie Car Park Ride Experience! - 14th Jun 18
More on that Gold and Silver Ratio 'Deviant Conundrum' - 13th Jun 18
Silver Shares? Nobody Cares - 13th Jun 18
What Happens to Stocks, Forex, Commodities, and Bonds When the Fed Hikes Rates - 13th Jun 18
Gold and Silver Price Setting Up for A Sleeper Breakout - 13th Jun 18
Tesla Stock Analysis - 12th Jun 18
What Happens Next to Stocks when Russell Goes up 6 Weeks in a Row - 12th Jun 18
Gold vs. Stocks: Ratios Do Not Imply Correlation - 12th Jun 18
Silver’s Not-so-subtle Outperformance - 12th Jun 18
Why You Should Brace Yourself for Big Financial Changes - 11th Jun 18
Inflation to Skyrocket When Fed Reverts to New QE & Interest Rate Cuts - 11th Jun 18
Stock Market Topping Pattern or Just Consolidation? - 11th Jun 18
Study: What Happens Next to Stocks When the Put/Call Ratio is Very Low - 11th Jun 18
G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - 11th Jun 18
SPX Unshackled - 11th Jun 18
When Trump Met Fibonacci And Won - 11th Jun 18
FREE Theme Park Entry with Cadbury's Choc's! Legoland, Alton Towers, Chessington.... - 11th Jun 18
Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - 10th Jun 18
End of the World Stock Market Chart! - 10th Jun 18
All US Homes Are Overvalued - 10th Jun 18
Thorpe Theme Park London Car Park Exit Nightmare - Drivers Beware! - 10th Jun 18
Gold Price Summer Doldrums - 9th Jun 18
How to Prepare for Economic Uncertainty with Gold and Silver - 9th Jun 18
5 "Tells" that the Stock Markets Are About to Reverse - 9th Jun 18
Billionaire Schools Teacher in NAFTA Trade Talks - 9th Jun 18
Land Rover Discovery Sport ECO Mode Real World Driving MPG Fuel Economy - 9th Jun 18
Crude Oil Bullish Weekly Reversal vs. Bearish Monthly Reversal - 8th Jun 18
Fed’s Interest Rate Hike is Short term Bearish for Stocks - 8th Jun 18
The Deviant Conundrum Called Silver - 8th Jun 18
Pleasure Island Theme Park Cleethorpes, Last Day Trip Before it Closed Down - 8th Jun 18
America’s One-sided Domestic Financial War - 8th Jun 18
Debt Consolidation Advice: When and Why to Consolidate - 8th Jun 18
Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - 8th Jun 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

Gold Bulls : Do or Die !

Commodities / Gold and Silver 2013 Apr 08, 2013 - 06:37 PM GMT

By: Rambus_Chartology

Commodities

I was going to write about the Risk on Risk off trade this weekend but with the big move up in gold on Friday I thought we should look at gold instead. As you know, gold along with silver, broke down from their respective triangles this week which we have been keeping a close eye on. The 60 minute chart below shows the price action for the last six months or so for GLD. You can see the downtrend has been picture perfect so far with lower highs and lower lows all the way down. The price action broke below the bottom rail of the blue triangle early this week and had a strong rally, that so far, has taken the price back up to the underside of the bottom rail as the backtest. This is normal behavior. What I’ll be watching very close is how the GLD interacts with the bottom blue rail of the triangle. If the price action starts trading up and into the blue triangle that will mean we have a bigger consolidation pattern forming which will still be a consolidation pattern just a bit bigger at this time.


The daily chart shows all the chart patterns that have formed since the October high last year. You can see how critical this backtest is right now to the underside of the red triangle. Again if the price action can trade above the bottom red rail that would be short term bullish for gold. A failure right here would confirm the red triangle as a valid consolidation pattern. So we wait.

Lets look at another daily chart for the GLD that shows a potential horizontal trading range similar to the one that formed just above our current one. Sometimes a horizontal trading ranges can be a little sloppy where the price action can trade slightly below or above the horizontal rails and then move right back in to the rectangle. If the backtest doesn’t hold on the triangle pattern, that I showed you on the chart above, then I would expect a more horizontal trading range to progress with a move up to the top red rail around the 156.50 area.

Next lets look at a 2 year daily line chart that shows the big horizontal trading range that gold has been in since the fall of 2011. As you can see the price action is testing the bottom of the big 20 month rectangle. This daily line chart shows a little different chart pattern vs the bar charts above. The little red ascending triangle shows a backtest would come in around the 155 area. I will also be keeping a close eye on the brown shaded support zone, bottom of rectangle, as that has been major support for 20 months or so. We should have a clearer picture in a week or so as to what direction gold wants to go. For right now nothing is broken in regards to our DGLD trade.

There is a daily chart for the GLD that I haven’t shown you yet that is showing a parabolic downtrend channel that started off the October 2012 high. Silver also is showing the same parabolic downtrend channel. There is a gap just above Friday’s price action that may get filled this week. The gap could get filled and the GLD could still stay below the last downtrend rail which would be perfect. Again it looks like an interesting week ahead.

The five year chart for the GLD shows the price action trading well below the three most important moving averages. To really turn gold positive these moving averages will have to be broken to the upside to launch a new bull leg.

A weekly chart for the GLD shows the price action bouncing off the apex of an old triangle that was in play for some time before prices fell to the bottom blue trendline. It’s still an important area as there are two trendlines that intersect at the 149 area. If the price action does break below the apex that would be very negative for gold.

This next weekly look at the GLD shows the 2008 uptrend channel with all the smaller red consolidation patterns that formed during that advance. You can see how perfect the blue rectangle is with the price action testing the bottom blue rail this week. The rectangle is a completed pattern that still hasn’t told us yet which way it will breakout. As it has formed below the all time high made back in the fall of 2011 the odds favor a breakout through the bottom of the rectangle. Those are the odds but if the GLD starts to rally above the 65 week moving average then we would have to reconsider. For right now a bounce should be expected as everyone and their brother knows this is the bottom of the trading range. The big question is, How Strong are the Bulls? This is where talk is cheap. The bulls need to walk the walk and show us they mean business.

I would like to leave you with one last chart that is a combo chart showing gold and top and silver on the bottom. The blue shaded area shows how each moved to their bull market highs at different times. As you can see silver reached its parabolic high first in April of 2011 while gold languished. There was about a 2 month correction and then gold took off to make its all time high at 1920 while silver fell way short of reaching its all time high made in April. This was a major negative divergence between gold and silver. When I look at this chart it tells me they both got their parabolic move albeit at different times and that a good correction was at hand. As you can see once they both had their highs in place they declined sharply together to point #1 on their blue rectangles. They have been trading in lockstep, for the most part, for the better part of 20 months or so. Both are testing the bottom blue rail of their respective rectangles as we speak.

We are at a very important juncture right here where the gold bugs will have to step up to the plate and move the precious metals higher, not with talk, but with action. Believe me I will have no problem shifting from a bear stance to a bullish stance if the charts shows that is the case. For right now it’s up to the bulls to show the way. I will be watching their every move to see if they really have what it takes to move the precious metals up. This should get everyone up to speed on gold. All the best…Rambus

Rambus Chartology is a Precious Metals Based Technical Analysis Site with a Twist

Gary (for Rambus Chartology)

http://rambus1.com

FREE TRIAL - http://rambus1.com/?page_id=10

© 2013 Copyright Rambus- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules