Source: http://scottpluschau.blogspot.com:
Yesterday on a 5 minute chart (see left hand side below) there was a textbook bullish "Double Bottom" pricing pattern.
Notice the big volume on the initial low, followed by a failure to take out that low on the second attempt on lower volume. When the neckline broke this trapped the losing day traders on the short side of open interest during the COMEX session, fueling demand side pressure on the breakout going into the close. The "Measured Rule" was nailed for $700+ per contract.
I have seen this pattern too many times to count.
(Click on chart to expand)
I don't care to point out patterns "after the fact" but in order to do this post live and in time for readers would be impossible. I am mentioning it in regards to an ongoing conversation in the comment section of a prior post with Bron. The link can be found here: http://scottpluschau.blogspot.com/2012/05/gold-on-verge-of-new-phase-of.html
I have discussed the bullish "Double Bottom" and the reasons for its formation many times in the past here on this blog. There is no "secret" or "technical indicator" giving a signal. This has to do with pattern recognition, and the understanding of "open interest", "volume", and "price" and the "zero sum" game of "futures" and nothing to do with "fundamentals" or "other markets". twitter/ScottPluschau
Consulting? ScottPluschau@gmail.comMembers to Scott's blog are appreciated
Comments are welcome
