Thursday, March 3, 2016

GOLD Daily Chart Golden Cross

Gold prints a Golden Cross with the 50-day MA piercing up through the 200-day MA. A golden cross forecasts higher prices for gold in the weeks ahead, however, comically, sure as day follows night and night follows day, price will typically retreat when the positive golden cross occurs. This is why the chart pattern receives a bad rap. Ditto for the death cross only conversely. When a death cross occurs, price typically bounces, however, lower prices do occur in the weeks ahead.

Gold pierced the upper standard deviation band (pink) so a move to the middle band at 1212 and rising is in play and perhaps a move to the lower band at 1155 and rising. Note the tight band squeeze (pink arrows) and positive divergence in November-December that made the bottom call easy. Gold is staggering through a bunch of sideways slop now chewing up bulls and bears. Note the negative divergence six days ago (red arrow) that created a quickie spankdown for two days.

If bearish on gold you would have wanted price to be at the 1260-1270 area right now since the indicators are all sloping negative and a neggie d spankdown would be an easy call, however, gold price is staggering sideways  unsure what it wants to do. The blue boxes show the downside trend in October-November was strong but petered out in December another tool that told you gold was basing and contemplating a recovery. Gold took off like a rocket and the ADX shows the upward trend remains strong above the 25-ish level. Gold bears would need the ADX to drop under 25 while gold bulls remain in business if the ADX stays above 25.

There is nothing attractive long or short-wise with gold currently. A prudent approach would be waiting to see if gold pulls back into the 1210-1220 area to back kiss the middle band which is also the 20-day MA, at that point a long play could be considered as long as the ADX remains elevated. Another approach would be waiting to see if gold price jumps higher towards the upper band at 1268, say the 1265-1275 range. With the indicators negatively sloping (red lines) that would likely be a good time to short gold for a trade. So gold is a hands-off wait and see story for a couple days. 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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