Golden Ambitions

I’ve been dealing with some data feed related issues this morning after switching data providers and thus having to reconfigure my chart settings in NinjaTrader. After wasting the past hour or so on this there’s not much time left for producing an extensive post, therefore you will have to make due with one symbol today. It’s a good one though and I’m pretty sure you can guess what it is.

That’s right – we are talking gold today and my ambition is to raise Uncle Scrooge’s depth gauge by another foot or so. As you can gather by looking at the hourly and daily panels the shiny metal has been quite en vogue as of late. The Brexit saga was good for a massive spike to the upside after which it’s been settling around the 1300 mark. The hourly Bollingers are now massively squeezed and that suggests that a big move is most likely just around the horizon. Until further notice my outlook here is bullish with a stop around the 1308 mark but it couldn’t hurt dropping it another handle or two.

The real reason for my bullish outlook on gold is the weekly and monthly chart. On the former we now have a clearly established a floor pattern with price pushing against the upper 100-week Bollinger. The only question remaining at this point is whether or not gold breaks out here or if it first makes one more trip to the downside to empty out the bus a little. Which is very much possible of course.

The monthly panel is in a similar configuration and is now on the threshold from flipping from a bearish into a bullish chart. As of now a LT bearish scenario is still on the table but it would require immediate failure here, on monthly terms that means July or August, followed by a revisit of the old lows and most likely the 1000 mark.

My personal sense is that a drop lower would most likely fork into two scenarios:

1. A quick shake out lower towards 1285 that scares the children. That would be followed by a run up higher and new highs for the year.
2. A more concerted sell off terminating between 1218 to 1200 followed by a rip higher which eventually produces new highs as well but most likely not until August or September.

Lacking a crystal ball our course of action is clear – we play the tape in front of us and given a sideways consolidation range on the short term panel and price coiling tighter a break out strategy has the best odds of succeeding. Should it fail then I will try my luck again near 1285 unless we see more organized selling.