Gold is finally breaking down and we’ve decided that it’s time to jump on-board for a quick downside move that represents the short term cycle. It all started back at the beginning of August, when the price of Gold had been breaking out the massive resistance key level of $1434
As we already know very well, most big breakouts (about 70%) will come back to test the very key level that was just broken, in an attempt to solidify that key-level as a “new” support level. This is what we call the ‘pull-back re-test’.
In-fact, sometimes we feel so confidant with a potential ‘pull-back re-test’ that we decide to get some of the action and jump on-board, targeting the same breakout key-level that price is trying to re-test.
This is pretty much the case we have right now with the Gold. We have been watching it very closely during the last couple of weeks, waiting for the right moment to strike. A couple of days ago the ‘pull-back re-test’ move was officially initiated as price began to drill through the strong support level of $1467.
As we’re gearing up for a ‘touchdown’ on the breakout key-level of $1434, we are also prepared to flip over at that spot since it’s probably going to provide massive support, propelling price for a full-fledged upside reversal, which totally fits the big picture technical situation.