Gold - Neutral Position, Approaching significant level
מעודכן
For the past week or so, Gold has been trading in a tight horizontal price channel, bound between 1205 and 1217. However today Gold has posted a new low just hovering above the 1200 mark.
Whole number points (1100, 1200, 1300) are incredibly significant in terms of trend analysis as they almost always show records of market hesitation before continuation in the trend or a trend reversal.
The psychology of markets is very interesting and can provide solid insight into our trading behaviour. Whole numbers are significant in markets as they are key milestones as the numbers are significant figures.
As you can see on the chart, I have highlighted significant market hesitation and reversals that are centred around the 1200 and 1300 point mark. The tops and bottoms in the highlighted circles represent a far greater amount of support and resistance at the 1200 and 1300 point level than the other tops and bottoms at non-significant figure areas. I can confidently conclude at Gold at least that the 1200 point line will be a statistically significant area and is more than likely that an extended hesitation or a strong trend reversal will occur.
My analysis highlights that my investment strategy is inherently neutral at the moment as the 1200 mark hasn't yet been breached. Also in contention, is that two strong trend reversal indicators (that I have relied on before and been successful) are showing divergence signals. The MACD and Chande Momentum indicators are clearly showing a divergence, however, both are confined are in an emerging triangle pattern with equal likelihood to go either way.
Supplementing my analysis, is that Gold is trading below the 61.8% Fib which is, in my opinion, the most significant Fib level. At this stage, Gold can go either way. Do be aware that a break of the 1200 line doesn't necessarily constitute a strong sell position. Gold should show a continued decline over the week before a confident sell position can be had.
If Gold doesn't reach the 1200 point, it may point out that the bears are exhausted and a reversal is on the way. To consolidate this view, a casual decline in volume should occur and indicators are either showing overbought conditions, indicator trend line analysis or a strong divergence in more than one indicator on at least a 4 hour chart.
As such this is my analysis, watch it closely this week as key movements are vital to this analysis.
Whole number points (1100, 1200, 1300) are incredibly significant in terms of trend analysis as they almost always show records of market hesitation before continuation in the trend or a trend reversal.
The psychology of markets is very interesting and can provide solid insight into our trading behaviour. Whole numbers are significant in markets as they are key milestones as the numbers are significant figures.
As you can see on the chart, I have highlighted significant market hesitation and reversals that are centred around the 1200 and 1300 point mark. The tops and bottoms in the highlighted circles represent a far greater amount of support and resistance at the 1200 and 1300 point level than the other tops and bottoms at non-significant figure areas. I can confidently conclude at Gold at least that the 1200 point line will be a statistically significant area and is more than likely that an extended hesitation or a strong trend reversal will occur.
My analysis highlights that my investment strategy is inherently neutral at the moment as the 1200 mark hasn't yet been breached. Also in contention, is that two strong trend reversal indicators (that I have relied on before and been successful) are showing divergence signals. The MACD and Chande Momentum indicators are clearly showing a divergence, however, both are confined are in an emerging triangle pattern with equal likelihood to go either way.
Supplementing my analysis, is that Gold is trading below the 61.8% Fib which is, in my opinion, the most significant Fib level. At this stage, Gold can go either way. Do be aware that a break of the 1200 line doesn't necessarily constitute a strong sell position. Gold should show a continued decline over the week before a confident sell position can be had.
If Gold doesn't reach the 1200 point, it may point out that the bears are exhausted and a reversal is on the way. To consolidate this view, a casual decline in volume should occur and indicators are either showing overbought conditions, indicator trend line analysis or a strong divergence in more than one indicator on at least a 4 hour chart.
As such this is my analysis, watch it closely this week as key movements are vital to this analysis.
הערה
Although the 1200 point has been broken, a clear short signal has not yet emerged. A trend reversal at the 1200 mark is still a possibility. 1174 is the 76.4% Fib level. While not as significant as the 61.8% Fib, 76.4% is a Fib nonetheless and can provide a support line, however it is usually not a common fib to provide such support.
In my opinion a close on a 4 hour chart below 1190, does indicate a signal to sell, as it is likely past a hesitation period and the downtrend continues.
As I have pointed out, a reversal could happen at 76.4% Fib if Gold continues to decline, however, it is more likely that a 100% re-tracement will occur.
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