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Gold GOLD PRO WEEKLY, April 01 - 05, 2019

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Mar 31, 2019.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Fundamentals

    This was pretty nice trading week for the gold as it accurately follows to our expectations. Next week we continue with our long-term trading plan.

    As we've mentioned yesterday in our FX research - next week there will be a lot of important statistics. For gold market US retail sales should become major driving factor.

    Major event of this week was Friday's collapse. As Reuters reports - Gold slipped on Friday and was headed for its worst month since August 2018 on a stronger dollar and equities, while palladium rose after three straight sessions of sharp declines, but was on course for its biggest weekly fall in more than three years.

    The metal is set for its first weekly fall in four and has lost about 1.9 percent this month. But on a quarterly basis, gold is en route to a second straight rise, due to a dovish U.S. Federal Reserve and concerns about a global economic slowdown.

    The dollar was poised for its strongest monthly gain in five, while Asian shares rose on hopes that Washington and Beijing are making progress in trade talks.

    The world’s two largest economies started the new round of talks on Thursday to end the year-long tit-for-tat tariffs war.

    “If we have a positive outcome from the trade talks, gold will be under pressure as investors will rotate out into more risk seeking assets,” said Jeffrey Halley, a senior market analyst with OANDA.

    “But, if we have disappointing outcome then stocks will go down and people will move into safe-haven assets like gold. The market is very much in a wait and see mode.”


    White House economic adviser Larry Kudlow said on Thursday the United States could lift some tariffs on China, while leaving others in place as part of an enforcement mechanism on a trade deal.

    "The dollar is pulling back a little bit," said Josh Graves, senior commodities strategist at RJO Futures in Chicago. "Personal spending has declined, so investors are looking to place money in more safe-haven assets, like gold."

    U.S. consumer spending rebounded less than expected in January and incomes rose modestly in February, adding to concerns that slowing global growth was affecting the world's largest economy as well.
    The dollar edged lower against a basket of other currencies after the U.S. data, but pared losses as sterling
    fell after British Prime Minister Theresa May's Brexit deal was again voted down in parliament.

    Also propping up bullion were cautious signals from the U.S. Federal Reserve and the European Central Bank. Gold, however, was still bound for a second consecutive monthly drop, losing about 1.4 percent - its biggest decline since August - weighed down by the dollar's recent strength. The yellow metal had declined about 1.5 percent on Thursday.

    COT Report

    Despite big drop on Friday, CFTC data shows that net speculative position has increased more than for 30K contracts - from 88 to 119K contracts. This fact confirms idea of just a retracement on gold market. It looks like of a big scale but this is due it long-term nature. In fact the major time frame for retracement is weekly.
    upload_2019-3-31_13-20-26.

    So, as our long-term view as short-term one are stand in place. Long-term sentiment on the market stands bullish. On longer-term basis we watch for starting of long-term bull trend. But on daily and lower time frames - continue to work with downside retracement.

    Technical
    Monthly


    As gold market hit major target on weekly chart, it fluctuates inside major swings and mostly is driven by shorter-term factors. It makes minor impact on monthly picture and our long-term view. Recent fundamental and sentiment analysis shows that no big changes have happened and gold still stands positive. Despite technical retracement, we do not have reasons yet to cancel our long-term positive view on gold.

    As we've said earlier, we're watching for our so called "symmetrical" model. It could be clear symmetry in market action, and we have suggested that future action could be a reflection of previous downside action shape.Now market has moved more above the trend line, which was a crucial level for long-term technical picture.

    Gold shows good performance in December- February, which could put the foundation of new long-term upside trend. We still keep our harmonic technical model on monthly chart as primary tool of analysis. Current retracement down looks strong on daily chart, but it is just 30% of major swing up which is minimal level.

    Fundamental reasons for gold rising mostly relate to changing of global political and economical situation. Strong global shifts never could happen without big political events. This should provide big support to gold market. Now it is widely suggested that these processes should accelerate closer to 2020 year, or even in second half of 2019. For example, here is report by Fathom Consulting and their expectations to see world crisis around 2020.

    Here is explanation of our "symmetrical" model and scenario. Recent action on gold market reminds reverse H&S shape but very choppy and extended in time. Important COP target has been hit and upside action has started. In fact we have mirror action to the right and to the left from COP point. Market forms approximately equal lows on both sides. The speed is also similar. Is it possible that reversal is forming? Why not.

    On monthly chart we keep watching whether gold will be able to hold above trend line. Now price stands above YPP as well, but it has not been tested yet by price. As meaningful retracement stands under way - YPP should work as nearest destination point.
    gold_m_01_04_19.

    Weekly

    As bullish B&B "Buy" was done, here we have just one pattern that we're trading right now - "222" Sell. Its minimal target stands at 1275 level that has not been reached yet.

    This week we've got another important pattern on weekly chart - reversal candle. This week was bearish reversal one as it shows new top compares to previous one and close below the lows of previous week. In fact, it engulfs almost the whole month of action.

    Reversal weeks have the feature of continuation. Usually, once it was formed, market usually shows continuation down. In general, this corresponds to our 1275 target and gives the answer on question - is it time to go long already or not.

    gold_w_01_04_19.

    Daily

    Here is our major scenario. Pattern suggests reaching of 1260 area. AB=CD itself looks perfect, the speed of AB and CD leg is similar, both legs show real signs of thrusting action.

    Still it will be interesting to see what will happen around 1275 as well. This is strong K-support area.

    Our Friday suggestion was correct, indeed no downside continuation has followed and market spent all time in minor pullback. Now Gold again stands at daily oversold level and 1289 Fib support. It means that next week could start with upside bounce.

    For taking the short position it would be better to wait for pullback. Whether to trade gold long stands up to you. Our context on daily chart is bearish so, we use retracement only as a chance for short entry at better level.
    gold_d_01_04_19.

    Intraday

    Here is we can see favorite gold trap. It likes to show fake pullback before major target is hit. Thus, on 4H chart on Friday we've got a pullback. Of course it doesn't come out from nothing, it was daily oversold as well. But, at the same time, it has started before major COP target has been hit.

    As gold has formed bearish grabber - it suggests another drop down, below recent lows. It confirms the idea that major pullback here could start after COP target will be hit.
    gold_4h_01_04_19.

    That's being said, we have two major scenarios. First is - we're going step by step with daily AB=CD pattern. Week should start with minor drop to COP target, then upside retracement should start.
    Second scenario is long-term bullish trend. 1260 area is the one that we potentially could get upside reversal and "222" Buy pattern.

    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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  2. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Morning guys,

    Gold market behaves pretty nice, accurately following our trading plan. So, no bad surprises by far. In our weekly report we've mentioned classical gold's trap, when it shows fake reversal before major target is completed.

    The same trap you could see on a way up to 1322 target. As we've got 4H bearish grabber, we suggest downside leg in the beginning of the week and reaching of major COP target around 1283. As you can see, grabber has done well and now gold is forming butterfly Buy pattern which could start upside pullback. Most probable retracement target is 1300 K-resistance.

    Our daily context doesn't suggest long position on gold and we try to use any pullback as chance to go short at better price. But it is not forbidden to trade it long for intraday traders.
    gold_4h_02_04_19.
     
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  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Greetings everybody,

    on daily gold we do not have a lot of new action, market stands in tight range above support area.
    gold_d_03_04_19.

    So, while we wait for some continuation on daily, we keep our intraday scenario that we've discussed yesterday. Despite multiple pullbacks on 4H chart our COP target around 1283 works like a magnet. That's why our trading plan is simple - drop to 1278-1283 first, upside retracement (if any), somewhere to 1300 K-area - second.
    gold_4h_03_04_19.

    Thus, you could plan your own trades, based on this scenarios. Our daily setup suggests no long positions by far and using of pullback for short entry.
    1H chart shows that drop could be slightly lower, somewhere to 1278 as we have minor AB-CD pattern here:
    gold_1h_03_04_19.
     
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  4. fabioincontri

    fabioincontri Private

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    There is a double rippo in weekly chart confirmed last week . All context keeps it down , so far so good , weekly 3X3 price will be tested same area that we have confluence 1300 and can become even stronger turning into K - A Area .
     
  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi Fabio,
    This was B&B "Buy", not DRPO and we have traded it already ;)
     
  6. fabioincontri

    fabioincontri Private

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    What i meant was drpo sell confirmed end of last week .
     
  7. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Greetings everybody,

    We follow our trading plan on gold that suggests drop to 1280 area and starting a healthy reaction after completion of COP target.

    On 4H chart gold has formed bearish reversal candle and overall price action shows the signs of bearish dynamic pressure as MACD trend stands bullish price forms lower tops. This action very often leads to W&R of the lows. As we have daily COP right there, at 1283, this combination creates that context that is not friendly for long entry right now.
    gold_4h_04_04_19.

    As soon as 1280 target will be hit - minor pullback is possible, as normal reaction on daily extension. We suggest that 30% should be enough and most probable area that could be reached is 1300 K-resistance.

    On 1H chart price action stands tricky. Last upside leg definitely is weaker compares to previous ones. If even market starts upward action unexpectedly, right now - it will be difficult to take part. Thus, for traders that want to buy gold, we suggest either waiting for 1280 drop and completion of 4H butterfly, or, skip this trade.

    Daily traders watch when upside pullback will be over. All this mess around stands beyond daily trading plan.
    gold_1h_04_04_19.
     
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  8. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Greetings everybody,

    In recent 2-3 weeks gold behaves technically perfect, accurately following our trading setups. Last one we've completed yesterday as our COP target at 1283 has been hit.

    Now on daily chart we watch either for normal 30% pullback to 1300 area or, breakout of the lows, which also could be a signal of downside continuation. NFP release keeps on table both scenarios:
    gold_d_05_04_19.

    On 4H chart, once our COP target is completed we're getting a lot of bullish patterns - W&R, butterfly (with potential to H&S), 2-candle grabber and engulfing. This is a context for long trade for scalp traders, as gold stands right at the point of potential right arm.
    gold_4h_05_04_19.

    As a target we should use faded AB-CD at 1299, I suppose. If you decide to take part in this mess - move stops to b/e ASAP, as market will move ~3-5$ in your favor, to not be harmed by NFP release.
    gold_1h_05_04_19.
     
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