Tonight's chart is a daily bar chart for gold that shows all the consolidation
patterns since hitting the top of the rectangle back in October of last year
at 1800 or so. If gold was ready to break below the bottom rail of the big
rectangle, today would have been a good time to do so. Because it didn't breakdown
this morning that tells me the sideways correction that has been going on already
for almost 3 weeks now, still has more work to do. Below shows what I think
could be a smaller red rectangle that is forming below the brown shaded support
and resistance zone that may end up being just one more consolidation pattern
to the downside. The possible red rectangle is about 60 points and with today's
close around 1575 or so would leave about 45 more point to go to reach the
top rail. At our most recent bottom there have been 3 main declines out of
the H&S top and the two consolidation pattern. This is a good example of
how a downtrend works. It starts out with a top that breaks down hard and then
a consolidation pattern forms and then when its finished you get another hard
down and so on until you get a reversal pattern form at the bottom. I've labeled
these 3 hard down phases A B & C.
This next chart is another daily chart that goes out a little further out
in time that shows the top and bottom rails of the large rectangle gold has
been in for 18 months or so.
The next chart is a long term weekly look that goes all the way back to the
2008 crash low. This chart gives you a good look at our big Blue rectangle
that I think is going to eventually break to the downside. Until it does its
still consolidating.
This last chart shows what I consider the most important moving averages on
the daily look. As you can see the price action is trading well below all three
moving averages which is a negative.
This should get everyone up to speed on how gold is trading. I don't really
expect much action until the smaller rectangle is finished forming. All the
best...Rambus
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