Gold Sentiment Shifts In the 3rd Wave - 1130 Support

2 months ago we identified Gold as a market that “the wave picture on Gold is simple, though the timing of the trade may prove difficult.” From a bigger picture perspective, Gold was close to finding a meaningful bottom.

We went on to say “There is a false breakout zone from 1060-1131 which means so long as prices hold above 1060, this wave counts suggests the possibility for 1300-1450. So the deeper Gold drives, the better the risk reward ratio trade there is.” Gold Bugs – You May Get Your Wish June 21, 2015

We have seen some interesting developments in the metal this week. In Monday’s US Opening Bell webinar, we discussed using a breakout above the Aug 12 high as a long entry trigger. The breakout took hold on Wednesday. (Catch the recording of the webinar inside DailyFX Plus – you can register for a free trial here if you don’t have an FXCM live account www.dailyfx.com...trading_signals?cmp=SFS-70... )

Secondly, and more importantly, the sentiment is shifting strongly.

On Aug 19, SSI shifted from net buyers to net sellers. For those familiar with sentiment readings, we use SSI as contrarian signals. With SSI shifting while it appears we are in the midst of a wave 3 higher, this means if you are not long, consider finding areas to position long.

Based on the current wave picture, price may soften towards 1130. Below 1120 would cause us to reconsider the wave count as depicted.

Good luck – feel free to comment.