Gold swing trades – week of Nov. 9, 2015

Last week

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Gold futures. Weekly prices to Nov. 6, 2015

Gold took the hawkish remarks from various Fed speakers to heart last week. The prospect of a rate increase in December – made more plausible by a “good” Non-Farm Payrolls report Friday – led to a sharp sell-off all week, accelerating in Friday’s $20 dump. Gold futures broke below the $1100 support and closed poorly.

The price never reached Nat’s key line at $1147 or the pivot point at $1154 and broke through almost all resistance lines.on the way down. Some of Nat’s live-voice members got short early in the week, for profitable trades, but for once-a-week traders all of the buy-side trades were stopped out.

This was a continuation and acceleration of the gold sell-off that tarted in mid-October (see the daily chart insert in the chart below). The question for swing traders now is whether there will be a recovery from this dump and if so, where will it start. Nat discusses that in the member content below.

Here’s the annotated intraday chart:

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Gold futures, Nov. 6, 2015. 60-minute bars

This week

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Gold futures, weekly chart

In the short term, GOLD has an extremely oversold condition. After seven days of sharp declines, some profit-taking among the shorts may generate a little bounce. The $1140-50 zone becomes a major resistance zone for the coming days and weeks, perhaps for for the rest of this year.

The intermediate-term indicators have just moved from overbought to neutral, and they still have lots of room to move lower into an intermediate-term oversold condition. That indicates a bearish outlook for gold in that time-frame. We don’t expect any sustained rally until those indicators show oversold, and that could take some time.

Member content

Download the full trading plan here: 151109-gold-plan

$1072.30 (last July’s low) becomes a key line for this week. If GOLD can hold the price above this level, we could have an ultra-short-term oversold bounce. But this bounce, if it materializes, may be very brief. The $1103-08 zone will be first resistance zone on Monday. $1072 will be closely watched this week; a failure to hold this major support line could lead GOLD price lower.

Last week was a momentum breakout move. The price not only broke October’s low at $1103.80, it also broke September’s low $1097.70 and triggered a downside momentum run. This week, both those lines will act as intraday resistance to prevent the price from popping.

In order to begin a recovery, GOLD needs to move above that resistance and reach the $1118.50-$14.50 zone to make a little test of the broken daily momentum line (previous support, now become resistance) at $1125-28, where the short-term sellers are waiting.

Support and resistance

Long-term support: $1007-$1033.90 – Yearly breakout level from 2008- 2009
Long-term trendline: support at $1009.50 this week.
Intermediate term: support at $1045-1035 zone
Short-term: support at $1072-1095 zone.