Friday, October 11, 2013

Gold Daily Chart Sideways Channel H&S Inverted H&S Sideways Symmetrical Triangle Gap

Lots going on with the gold chart. The annotation had to be stopped once it all started to look like spaghetti. The sideways blue channel range at 1200-1400 is in place for the last one-half year. Price sits in the middle. The brown sideways symmetrical triangle is in play. This is a critical juncture since price is slipping under the lower brown trend line. A failure at 1280-ish from the triangle will send price to 1180-ish while a breakout to the upside at 1340-ish will send price over 1400.  Note that both targets correspond exactly to the prior support and resistance levels (thin brown lines). There is a gap at 1263-1266 which may be the near-term target. Price will have to bounce violently higher from here, if not, gold will likely feel pain downward to 1200 and 1180.

The blue H&S is in play, although Keystone does not place a lot of confidence in H&S's during a larger downtrend. The head at 1420-ish and neckline at 1280-ish (current do or die level) targets 1140 if the 1280 level fails. Note the larger inverted H&S over the last one-half year with head at 1200 and neckline at 1400 which would target 1600 if the 1400 is taken out to the upside. It was surprising to see price break the pink channel. The indicators are showing a sideways vibe currently.  The chart clearly illustrates why many analysts are calling for a 1200 price target; they are simply looking for price to come back down for another test of the lows. Gold placed a very nice bottom in June-July so it would not be anticipated that price would have to come all the way back down again.

If the country falls into a deflationary funk, which very few anticipate (Keystone is in this camp expecting disinflation and deflation to rule for a couple years with currencies, gold, silver, and Treasury yields all moving somewhat flat and listless for many months forward), gold will remain challenged moving forward. In deflation, cash is king rather than gold. The coming days are very important for gold. The 1280 level must be held, and especially the gap fill, otherwise, lower numbers are ahead. Projection is that the 1280-ish area will hold and gold will move sideways to sideways higher from here. The blue sideways channel may be in play for many months forward. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Current gold print is 1287.

Note Added 10:45 AM:  Gold drops to the gap highlighted above at 1263-1266 completing the gap fill. Gold is coughing up 33 bucks today. This is it. This is the last chance for gold bulls. The whole enchilada. The last chance corral. Bounce or die time. Either gold recovers big from here or the path to 1200 is next.

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