GOLD had a very choppy week, rising and falling to resolve its short-term overbought condition. A minor correction didn’t do serious damage to the short-term uptrend even if it generated a short-term selling signal from the PMO indicators.
Last week’s trades
Last week was as close to a slam dunk as trading ever gets.
The price moved up to the Pivot Levlel/Keyline in the pre-market Monday, bounced back just blow that level in regular hours trading, then dropped to Nat’s 1st buy level (and the first support level) and stayed there.
The FOMC announcement Wednesday afternoon drove the price back to the Keyline/Pivot area in less than 60 minutes.
Anyone trading her numbers could easily get $15 per contract on the way down and $15 per contract on the way back up with easy entries and exits, worth about $3,000 per contract in three days.
Meanwhile, the weekly the open-to-close movement was all of $6. Who says you can’t time the market?
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The daily major support moves up into the $1200-1210 zone, which also overlaps the low band of a potential bull flag, which is expected to hold the price up for this week.
The $1239.50-37.50 area will be the ultra-short-term uptrend line support, and may possibly act to to slow down any decline that approaches that level.
However it may not be able to hold up the GOLD price if the equity market continues to rally early in the week.
The medium-term indicators are also getting overbought. This could persuade speculators to take profit if there is a testing move up to last week’s high area.
But the long-term indicators are still bullish and not in overbought territory yet. That will continue to bring new investors into the GOLD market if there is a decent short-term pullback.
So long as the central bankers continue their currency debasement battles, gold will continue to shine.[/MM_Member_Decision]