Gold swing trades – week of July 18, 2016

Last week

160715-gold prices

Gold futures July 15, 2016. Weekly prices.

GOLD hit the upper boundary of the long-term downtrend channel and made some ultra-short-term retracement. It was down $31 from the prior week’s closing and had a net weekly loss of 2.3%.

Last week’s trades

160715-gold 60a

Gold futures, July 15, 2016. 60-minute bars.

Nat’s commentary last week discussed the possibility of a short-term retracement and identified $1333-36 as an important control area, which it was.

The market briefly touched her first sell level in overnight trading Sunday, and traders who were awake could have gotten a fill at $1373, which ultimately was good for a $40 move, worth $4,000 per contract.

Many more had an opportunity to get short at her pivot level, around $1357, and to capture the second half of the leg down, worth about $25, or $2,500 per contract.

There was a nice little bounce from the control area that earned an additional $15 per contract Wednesday, and later in the week the control zone stopped two attempts to rally that also provided profitable short-term trades.

Apart from the initial move down from Nat’s sell level, most of the trades were relatively modest, but the entries were very straightforward. No surprises, and some nice profits.

This week

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160715-gold weekly

Gold futures, July 15, 2016. Weekly chart.

Gold could continue to pull back this week, but it does have fairly strong support waiting at around $1300-05, which is near the 200-week moving average line (the purple line on the chart.

The bottom of the rising intermediate-term trendline at $1280-60 zone is below that moving average line. Both constitute a long-term support zone and help to hold the price up.

There is a negative divergence between the price and MACD histogram. The market needs to solve it quickly, otherwise the pullback could become more serious.

$1341.50-45 becomes a key zone for this week. As long as GOLD stays below it,the price is likely to continue falling.

But the price decline could slow and perhaps stall at the major support zone $1300-05 or higher at $1320, last week’s low area, especially if the equity market starts to make a minor short-term correction.


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