It is stated that writing can do little but remind those who already know.-Plato, Famous Writer
Update: Gold Sold
Spot Gold was trading $1341 when we originally posted a heads up earlier. That put it just in the area warned of basis December futures.
Here we are now, the break came in the hour after the original post. We're now $8 lower from that level as of this writing after dropping to a low of almost $10 from the last report.
The hourly Bollinger band warned of a violent move pending after our other indicators put it on the radar. We did not participate.
The Yen also held its bottom and went nicely green.
Good Luck
Original post from 1143
Intraday Analysis
Right now Gold is steady and Silver is strong. Silver it should be noted is playing catch up if one subscribes to the correlation between the 2 metals as being still strong as we do. But frankly, Gold is controlled by Central banks explicitly and is being remonetized slowly. Silver is more subject to the industrial supply/ demand factors and un-retrievable consumption. Silver is not money.. but it will be a proxy (like oil) if Gold ownership is ever restricted in Asia
To the point of this post:
The Yen has made a double bottom on the daily today. If it holds, we see Gold being more susceptible to profit-taking. On a daily basis, new lows in the Yen warn of a top in Gold.
The Euro also looks a little toppy vs the USD and we see profit taking there the last few days based on flow info and the long wicks above. Not as classic, but cautionary none-the-less for Euro longs. Right now in terms of FX pairs, we continue to watch the Yen.
Look Out Above
And the $1346 level (basis Dec futures) was given repeatedly as a possible exhaustion area. So even if the Yen penetrates and makes new lows, watch how gold handles a retest of that area. it already flirted with it the other night on the gap higher. From a previous post:
According to Moor Analytics: One area of possible exhaustion for this move up comes in at 13466-556. The decent trade back above 13278 (+1 tic per/hour) put the macro bull calls back into play.
While $1346 to $1356 may seem a wide berth. It is not. It is proper and responsible. Michael deals in longer term levels. A $10 area of expected selling makes a lot more sense when you look at Gold in time frames of years instead of days. Further, the problem with most technicians is they put emphasis on a number, as if that number has some magic. What matters is when a cluster of possible levels are near each other, like where Michael notes. And his numbers imply a penetration of $1346 does not necessarily mean propulsion higher .
Watch how the market reacts when it is in that zone, if it gets there. Does it make a bull flag? Does it show higher highs with lower RSI? Does OI go up or down? So far it hasn't even been breached on a daily settlement basis. We smell a ton of selling in that area. And just as we saw producer selling in April above $1850 in Silver, we are saying be careful if a $20 pull back in Gold from here puts you out of the money as a trader.
Gold is a Market Now
But when resistance becomes support, like a couple days ago when the market gapped above the $1331 area, that makes us smile. For when afterwards, that gap was filled and gold bounced we were very happy.
We like this: Gold filled its hourly gap and resumed its rally... (spot chart)
Click chart for live mkt.
We like it not because we are bullish ( we are), but because the market is respecting levels in a MORE TIMELY FASHION. And that dear readers, is a sign of a trade-able market. All markets respect the numbers. Its only the ones that respect them quickly that you trade. Quick feedback whether your idea is right or wrong, especially with our style, is the key to ROR in trading.
We don't like this.. when Gold touches the possible exhaustion area Moor Analytics points out and runs away. RSI and BollingerBands also warn of exhaustion ( Z futures)
On a Tangent
Change is coming and it might be terrifying. Trump is the (possible)culmination, not an aberration of our governmental de-evolution. While we do not ascribe to the Fourth Turning's pseudoscience, we do note the concept of political Anacyclosis: 1. monarchy, 2. kingship, 3. tyranny, 4. aristocracy, 5. oligarchy, 6. democracy, and 7. mob rule
Just be careful
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