Here's a re-cap.
- The 30 minute chart has a Bearish "Head and Shoulders" pattern that developed over the past ten days (if this pattern fails, it is a strong indicator)
- If the pattern doesn't fail, a target for the Bears is approximately $1,740 on this near term head and shoulders pattern.
- In the longer term time frame, gold is now at the support of a "Balance Area" which is similar to a "Rectangle" pattern on the daily chart.
- Volume has been somewhat subdued on the sell-off and this is exactly what a Bull wants to see on a pullback to support. The Bulls would also want to see an increase in volume on the breakout above $1,800.
- Longer term time frame traders ultimately determine price direction, so Scott believes it is wise to trade on the right side of that order flow. These Bullish traders should believe there is "value" here at $1,750. For this reason, Scott has no desire to be short gold at this time.
- Open Interest has been steadily climbing in the daily time frame
Comments are welcome
Contact ScottPluschau@gmail.com
