Gold swing trades – week of Oct. 10, 2016

Last week

161007-gold-prices

Gold broke its neckline (at $1311) of the double top pattern . It triggered a pattern breakdown and pushed price down to complete its full measurement at $1244.70 within 5 trading days.

Last week’s trades

161007-gold-60a

Gold futures to Oct. 7, 2016. 60-minute bars.

It was a tricky week for gold traders, with a breakdown through the long-term support at $1311 leading to a $67 per contract move.

But capturing all of that profit required ignoring some of Nat’s short-term buy levels and interim support and concentrating on the longer-term analysis.

The first significant activity was the failure Tuesday to reach either the pivot level of Nat’s keyline, followed by a sharp drop through the long-term support ($1311) reaching (and passing) Nat’s 2nd buy level at $1274.

As Nat said last week:

The short term support at $1310-$1300 has been tested three times before, and is likely to break down at the next test.

But the next support ($1280-75 and $1250-60) is very close and there is a big chance for GOLD to bounce from it. … $1260/1245 is long-term major support area.

Which is pretty much what happened.

Traders who recognized what was going on — the breakdown of long-term support, fairly obvious to those monitoring the market in real time — were able to capture about $37 per contract in Tuesday’s move.

Those who kept their positions open waiting for the full anticipated move, noted in Nat’s earlier commentaries at around $1244, were able to capture about $67 per contract, worth $6,700 for each position.

This week

Member content

This section contains the specific buy/sell levels for this week. It is reserved for paid subscribers. Previous weekly swing trades are available free of charge in the archives.

Want more?

You can get instant access to this valuable information and much more for as little as $9 per month. Please follow this link for the details.

 

Hi . Read or download the full trading plan here:

Download link: (161010-Gold.pdf, 262KB)

 

161007-gold-daily

Gold futures to Oct. 7, 2016. Daily chart.

Gold has fallen out of favor lately due to the possible interest rate hike by Fed and the strong US$. The correction could be deeper than we expected.

But after 10 of 11 days of short-term declining, GOLD starts to have a short-term oversold condition. A brief bounce should be seen.

But this kind of brief bounce will not change the short-term downtrend direction. Sometimes short-term oversold can gets more oversold until the intermediate- and long-term charts also become oversold before the price can rally again.

Therefore, any bounce in short-term will be killed by sellers as long as GOLD stays under $1316 level.

This week, $1278.50-85 will be a key zone. A move above it could lead GOLD up to test $1293-95 or higher $1310-05 (the broken neckline of the bearish double top formation).

A stay under $1278.50-85 will continue to give a bearish outlook for GOLD, suggesting a further toward the next neckline of a big potential intermediate-term H&S pattern near $1200-05 level.

Nevertheless, a short on those testing levels should be used for short-term trades. Scalping on the long side with protective stops is also expected to be attempted by day traders.

[/MM_Member_Decision]