#202445 - priceactiontds - weekly update - gold futures
Good Evening and I hope you are well.
tl;dr
gold futures: Neutral. Market only went lower through spikes, which were followed by a pullback. This is not as strong as it looks and I do think it’s likely that bears get disappointed next week. 2600 is possible but that is the lowest I can see this going for now. Any long closer to 2626 is an amazing trade. I have an open bull gap there and I highly doubt bears will be able to close it. For now bears have turned the daily 20ema into resistance and if you want higher probability on your longs, wait for a breakout above 2725.
Quote from last week:
comment: Bear surprise because they just melted through 2700 and the bull trend line on Wednesday. Bulls retested the bull trend line and got rejected. Bears were also strong enough to keep the market below the daily 20ema and as long as that is the case, bears are in control for now. 2600 is my lower target for the bears and sideways 2600-2720 is the most likely path forward imo.
current market cycle: Best guess right now is a bigger trading range 2600-2800.
key levels: 2600 - 2800
bull case: Bulls failed at 2700 and if they don’t close a daily bar above 2720 soon, we could test down to 2600, which is where I expect many more buyers to enter the market again. We have an open bull gap, the October low and the weekly 20 ema in the price area. I do think the closer you can long to 2600, the better the trade.
Invalidation is below 2600.
bear case: Bears had 2 spikes down now and they could get a third before I see this going higher again. Bears know that each sell spike was followed by a bull bar, so the trend down is weak and will likely find it’s bottom soon. Bears will likely wait for another pullback higher to daily 20ema and/or bear trend line around 2710, before trying for a third leg down.
Invalidation is above 2730.
outlook last week:
short term: Slightly bearish for a test down to 2700-2710.
→ Last Sunday we traded 2749 and now we are at 2694. Good outlook, market got even 50 points lower than my target. Hope you made some.
short term: Neutral around 2700. If we stay below 2720, I can see a third leg down to retest 2650 or even go down to 2600/2620. Above 2730 I favor the bulls to go higher again.
medium-long term - Update from 2024-11-03: For now I can’t see this breaking above 2800, since the rally was climactic. Until 2600 is broken, I expect sideways movement inside this range. Market should test down to the weekly 20ema over the next weeks/months but bears have absolutely nothing to show for since June and that’s why we can’t expect bigger selling until they clearly do more.
Update: Changed 2700 to 2600, since market broke strongly below 2700 already. Trading range is still my preferred path forward, just the lower end went down 100 points.
current swing trade: None
chart update: Added bear trend line
tl;dr
gold futures: Neutral. Market only went lower through spikes, which were followed by a pullback. This is not as strong as it looks and I do think it’s likely that bears get disappointed next week. 2600 is possible but that is the lowest I can see this going for now. Any long closer to 2626 is an amazing trade. I have an open bull gap there and I highly doubt bears will be able to close it. For now bears have turned the daily 20ema into resistance and if you want higher probability on your longs, wait for a breakout above 2725.
Quote from last week:
comment:Decent pullback now on the daily chart but still far above the daily 20ema. Friday’s rejection at 2772 was good enough to expect this to break below 2740 for the second leg down. Problem for the bears is, that even if they break below 2720, the downside is probably limited to the bull trend line from August. So clearly a tough spot to trade. Any long closer to 2700 is better than closer to 2750. Same logic for shorts, I think 2800 continues to be a good level to sell and market moves more sideways instead of another break above that price.
comment: Bear surprise because they just melted through 2700 and the bull trend line on Wednesday. Bulls retested the bull trend line and got rejected. Bears were also strong enough to keep the market below the daily 20ema and as long as that is the case, bears are in control for now. 2600 is my lower target for the bears and sideways 2600-2720 is the most likely path forward imo.
current market cycle: Best guess right now is a bigger trading range 2600-2800.
key levels: 2600 - 2800
bull case: Bulls failed at 2700 and if they don’t close a daily bar above 2720 soon, we could test down to 2600, which is where I expect many more buyers to enter the market again. We have an open bull gap, the October low and the weekly 20 ema in the price area. I do think the closer you can long to 2600, the better the trade.
Invalidation is below 2600.
bear case: Bears had 2 spikes down now and they could get a third before I see this going higher again. Bears know that each sell spike was followed by a bull bar, so the trend down is weak and will likely find it’s bottom soon. Bears will likely wait for another pullback higher to daily 20ema and/or bear trend line around 2710, before trying for a third leg down.
Invalidation is above 2730.
outlook last week:
short term: Slightly bearish for a test down to 2700-2710.
→ Last Sunday we traded 2749 and now we are at 2694. Good outlook, market got even 50 points lower than my target. Hope you made some.
short term: Neutral around 2700. If we stay below 2720, I can see a third leg down to retest 2650 or even go down to 2600/2620. Above 2730 I favor the bulls to go higher again.
medium-long term - Update from 2024-11-03: For now I can’t see this breaking above 2800, since the rally was climactic. Until 2600 is broken, I expect sideways movement inside this range. Market should test down to the weekly 20ema over the next weeks/months but bears have absolutely nothing to show for since June and that’s why we can’t expect bigger selling until they clearly do more.
Update: Changed 2700 to 2600, since market broke strongly below 2700 already. Trading range is still my preferred path forward, just the lower end went down 100 points.
current swing trade: None
chart update: Added bear trend line
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