Sunday, February 14, 2016

GC Gold COT (Commitments of Futures Traders) and Gold Weekly Charts

Gold went parabolic over the last three weeks. With oil prices tumbling and stocks following oil down the rabbit hole, traders flock to the perceived safety of gold. Price rocket launches from 1060 to 1260, 200 points, +19%, in only six weeks. Gold has violated the upper standard deviation band so a pull back, even a small one, is likely. The green lines show long and strong behavior for price so higher highs should come after any minor pull back due to the stochastis becoming overbot and a hair neggie d (red line).

The COT chart shows the gold price bottoms with the green circles and the gold price tops with the red circles. The two prior important highs came with the bars on the chart extended slightly more towards the outer limits shown by the thin red lines. Thus, gold price may relax for a week but higher highs are likely and that may take the COT chart into the red bubble consistent where a top is placed. it looks like much of the move in gold may have already occurred.

Price will very likely move up to test the 1264 high but in the mean time a day or three of softness for price to take a breather is a reasonable expectation. The time to go long was in December when Keystone pointed out the low bars and green circles on the COT chart and the dark green lines with positive divergence on the candlestick chart. Although more upside is expected it is not particularly attractive to play gold long. Instead a step-wise approach to exiting the long side say over the next two weeks or so would be a prudent strategy and then gold may set up for a short say in March. 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.

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