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Strategies & Market Trends : Technical. Analysis A to Z chaired by John Jacob Pitera
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To: John Pitera who wrote (3)6/10/2013 1:27:24 PM
From: John Pitera  Read Replies (1) of 20
 
Gold Update for Monday June 10th 2013
The Outlook for Gold continues to look negative..... as we will recall I illustrated on April 4th how the 2 year Gold Chart was in a very bearish descending triangle and when support broke in the low $1500's.... the most logical read was for an intermediate term decline of $400 dollars.....we knocked $225 off when it broke down the Thursday after Goldman piled on to the trade "piling on was originally a Rugby term"

as we can see by from this chart....the price actions on the rallies has been feeble, Gold is just quitely rolling over and is getting ready to take out the 336 and the $321 price support levels.

the technical traders have sold it at the 26 day Exponential moving average and Gold has not even been strong enough to rally to the 50 day Simple moving average where many professionals have been hoping it would get to so that they can put out more shorts...After the initial $225 plummet we had a reasonable rally that retraced about half of the first major thrust down. When the SPX bottomed and we had the 300 point move in the $/JPY and the EUR on June 6th... it pushed the 10 year yield down, fueled a rally in SPX ........

a quick review of the bigger picture in Gold and the talk about a $400 decline....

---------------------

To: Yorikke who wrote ( 13977)4/4/2013 1:59:05 AM
From: John Pitera1 Recommendation Read Replies (2) of 14155
Hi Y,



here is a chart........GOLD is in a very interesting and fairly complicated pattern.....it has many elements
of a market that is in a descending triangle which usually one of the most reliable chart patterns to which would suggest that we will break the horizontal baseline support and in that case a reasonable target for the ultimate end of the decline would be about $400 lower than 1923$ price top out in Sept of 2011 and these jagged lows
in say thw 1528-1535 range....... the chart looks lousy and I would not be looking to buy this support but would be shorting it on a break 2 day close below $1500 andwondering what will be happening in the global economy if it goes down $400 bucks from here.

The very deep momentum generated on the RSI on it's Feb 2013 decline almost mandates that this chart is going go break down and the price of GOLD denominated in USD is going lower.



The XAU is down 50% and, is showing a double momentum buy signal but a quarter of those companies are on the financial rocks....... if GOLD breaks down and we see a meaningful decline, then I do not know how you can say that TA is Nonsense.

Our FED and the Central Banks of the world have driven us off into fantasy worlds........ but I would not throw the baby out with the bathwater......... Interesteing the XAU..... which is down from 228 to 128...... that chart is actually showig a double momentum buy divergence...... but remember its for the companies that stay in business....

John

PS constance brown has written an excellent book on TA that has been updated in 2012.....she has a very interesting of using a methodology of using specifice ema averagers overlaid on the RSI and I believe she's on to something good.

I hope to discuss her methodology..... and maybe generate a few books sales for her sometime soon.

John
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