If the fundamental traders would have been right that gold is rising because of the Brexit why did we stop today? And we not just stopped but printed a strong reversal on heavy ...
Gold was rising because of 2 reason:
1. There is a possibility that we printed an Intermediate cycle low on the 30th May. If that was the ICL I have to say it was a shallow "nothing" ICL. It's hard to imagine that gold - the most tricky commodity - is finishing the initial phase of its bull market this simple way. But it's not impossible. We have to be ready for this scenario.
2. Gold is not ready with the ICL and the banks have a decline plan for gold . For a real tough decline they will need all the retail traders and other traders to stop out in the panic selling. It's better to build a bulltrap for an ultimate decline.
Let's se what we have:
- We have a on the after this candle the pattern traders are short.
- The swing traders will be short as soon as price breaks yesterday's low. This mission could be easily completed.
- Sentiment traders: The short term sentiment is very . They are in.
- Chart pattern traders: for this we need to print a pattern on the hourly chart. If we have a pop up to 1285 in the following 4-5 hours the is ready.
- Indicator traders: left overbought, SlowStoch crossed and heading down, wants to crossover.
So everything is ready. And finally we need a bulltrap at the top. We don't just have a bulltrap we have a bulltrap in the bulltrap. That's the recipe of a steep decline.
So we are heading down at least till the brexit. In the meanwhile the gold will be coupled with the dollar again.
Most of the traders will not understand what's happening. They will stay hoping in the bulltrap .
As I saw today's decline I'm quite sure that at least we will tag the red or the blue around 1235-1240.
And there will come the question is the ICL in or not? Are we making a lower low with a panic selling or not?
Time will tell...
If someone would like to enter a short 1284-1290 is a good place.
It wants the 20 EMA or the trendline.
We might spend here the whole day after yesterday's monster move as a consolidation.
Commercial Short Positions In Gold & Silver Markets Near All-Time Record
- DAX posted bullish hammer on weekly chart bouncing from 200 WMA. on daily chart looks reversing.
- NIKKEI reached lower horizontal line, a boundary of descending triangle and 200 WMA. On daily chart posted inside bar. Breaking up will turn the USDJPY up. Breaking down will devastate this pair and NIKKEI.
I am optimistic and think both stock markets will reverse from here producing positive news which may cause gold to slide and US stocks to rise above their current resistance.
Brexit is just another cause for fear. Gold will be a "parking zone" for big investors for the time being .Only threat to long position is appreciation of USD as a safehaven currency; since other safe haven pairs are directly affected ( EUR,GBP and JPY). Fear of JPY intervention is the only resistance for JPY buyers.
Hope the Brexit vote will clear a lot of dust including US rate hike
"So far this week, Gold is attempting to form a reversal pattern (bearish wick). This reversal pattern is taking place at the highs of 2015. If this pattern remains at the close tonight (6/17), it will be the largest reversal pattern since the highs in 2013 "