Waiting for the Shoe to Drop

Hello All,

This 60 minute bar chart of the April Gold suggests that there’s a decent chance of another fall from current prices in the 1064.0-1067.0 area. I will be waiting for another deep drop and then buy when I hear the bulls screaming their loudest.

The reason for not getting short in this area is that we have forces suggesting the market should go up, and other forces suggesting the market might want to go down.

Look at the Daily bar chart below.

Trading excruciatingly far away from the moving averages on Friday, the Gold had every reason to spring back toward them a bit. The high today of 1074.3 was almost exactly where its weekly pivot was, and came within 10 cents of its former low last week of 1074.4. Former support lows that are broken are supposed to become resistance when re-tested. After the bounce from 1074.3, the Gold generally trailed off (down) suggesting the market is sticking to some technical “rules.”

One technical “rule” is that markets like to go back to their moving averages, which suggests up.

Another technical “demi-rule” is that markets like to seek out stops, and the nice cluster below the market in the 1044.5 - 1029.0 area is just beggin’ for the business….. Which suggests a possible move down.

50-50 is not for me. I will wait for a deep, stop loss hitting run down, and buy for a short term trade from some blatant market chasers in the 1027.6 to 1023.0 area. I expect to see the 1054.4 area or higher, after that. To me, this will occur with an 80% probability (at least in my mind). I prefer the 80%’ers as opposed to 50-50’s when it comes to entering trades.