Sive Morten
Special Consultant to the FPA
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Good morning,
Gold market shows its nature - again we see deep retracement around 1640 support area. On daily time frame, hammer pattern is still valid and from that point of view we can count on upward recovery. Still, recall that the one worring moment is long black candle right before 1640. When such candles appear right before AB=CD target, sometimes it could lead to a bit deeper move down. So what we should to do?
Well, we have to be ready to both scenarios, since they could be started by two different patterns. First pattern is on 4-hour chart - Double Bottom. Trend holds bullish here, and take a look - trend has held deep second testing of 1640. IF DB pattern will appear, then it will lead market right back up to yearly pivot area - ~1667 at minimum. That is the first scenario.
Second scenario is on hourly chart. What will be if DB pattern will fail - this could lead to appearing of butterfly "Buy". What is interesting is that this hourly pattern has the target at the same level as 1.618 on 4-hour chart - around 1630. Current move up looks not as impressive as it should be with DB pattern. Here we see mostly gradual retracement rather than starting of new upward trend.
One of the possible ways to act here could be attempt to possess with DB pattern first. This is a risk around 10$ per contract. Risk/reward ratio is tremendous. If DB will fail, then the next level to watch for long entry is 1630.
If you're bearish, you may try to make a scalp trade if market will erase DB pattern, but until market will not take 1625 lows, I think this is not the time for long-term bearish positions.
Be aware of wash&rinse of the lows and failure breakouts - these stuff gold likes most of all other markets.
The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
Gold market shows its nature - again we see deep retracement around 1640 support area. On daily time frame, hammer pattern is still valid and from that point of view we can count on upward recovery. Still, recall that the one worring moment is long black candle right before 1640. When such candles appear right before AB=CD target, sometimes it could lead to a bit deeper move down. So what we should to do?
Well, we have to be ready to both scenarios, since they could be started by two different patterns. First pattern is on 4-hour chart - Double Bottom. Trend holds bullish here, and take a look - trend has held deep second testing of 1640. IF DB pattern will appear, then it will lead market right back up to yearly pivot area - ~1667 at minimum. That is the first scenario.
Second scenario is on hourly chart. What will be if DB pattern will fail - this could lead to appearing of butterfly "Buy". What is interesting is that this hourly pattern has the target at the same level as 1.618 on 4-hour chart - around 1630. Current move up looks not as impressive as it should be with DB pattern. Here we see mostly gradual retracement rather than starting of new upward trend.
One of the possible ways to act here could be attempt to possess with DB pattern first. This is a risk around 10$ per contract. Risk/reward ratio is tremendous. If DB will fail, then the next level to watch for long entry is 1630.
If you're bearish, you may try to make a scalp trade if market will erase DB pattern, but until market will not take 1625 lows, I think this is not the time for long-term bearish positions.
Be aware of wash&rinse of the lows and failure breakouts - these stuff gold likes most of all other markets.
The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
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