Gold Downtrend Technical Update

Commodities / Gold & Silver Apr 20, 2008 - 09:25 PM GMT

Best Financial Markets Analysis Article This is a quick update of the Gold forecast trend to between $800 to $830. For the background to the forecast see the two previous articles -

03 Apr 2008 - Gold Downtrend Forecast Update
20 Mar 2008 - DELEVERAGING- Gold and Commodities Teetering on the Brink of a Bear Market?

Fridays market action terminated the corrective rally off of the 875 low to $956. The market generated a 3 day swing chart sell trigger on break of 926. What is a 3 day swing trigger ? It is just a break of the previous 3 day's low. For more on trading Commodities and swing charts I highly recommend WD Gann's, How to Make Profits in Commodities, as one of a mere handful of technical analysis books that is worth studying. Note I mean STUDY and not just read. It will drill home the importance of support / resistance and %'s of ranges, as well as basic patterns such as double / triple tops and bottoms.

I will expand on the critical importance of Entry (Open Positions) and Exit Triggers (Targets , 50% of Range and Stops) in a later article so back to gold.

The above short-term gold chart illustrates the the break of a 3 day swing low to turn the swing chart down and confirm resumption of the downtrend towards the target of $800 to $830. Without repeating analysis of the previous articles, I will just summarise that Gold is an an corrective ABC pattern, of which A and B have been completed. Yes, your probably wondering will it be a three wave ABC decline from here ? WELL that would be too easy, therefore I expect something a bit more complicated and volatile, maybe 5 waves, or 7 for some sort of an eventual double bottom pattern, anyway the immediate trigger is a clear SELL to target a move to $800/$830. The immediate Exit Trigger (Stop) is above the high of 956.20 therefore 957.

By Nadeem Walayat

Nadeem Walayat has over 20 years experience of trading, analysing and forecasting the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 120 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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 trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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