Trying to understand your thought pattern / how you trade. I can pull up any instrument (FX, equity, future, crypto) and apply tech analysis that “could” eventually play out. What I see is a double top and $185-ish handily defended.
One can argue that the chart is showing 20 different patterns in “the early stage”. The conclusion is- What value / benefit does the community attain through analysis of something that hasn’t even come to fruition yet? How much energy/time/emotions are wasted on analysis of instruments to fit a narrative? If the price action has not printed the pattern, then there is no signal and I’d argue you’re wasting your time sitting around waiting for something to happen.
Technical Analysis 101, Recognizing patterns in their early stages allows the Trader to do his research and be ready if the pattern plays out, we clearly have a cup and the beginnings of a handle, this is undeniable. What we don’t know yet is will the pattern play out. The entry point for a trade would be breaking above the the white line at around 187, I have found that taking a small position early keeps you focused on the trade and you are less likely to forget about it.
As far as a double top, you are correct, there is also a double top in play and had you shorted at 187 you would be looking at a nice profit, Your double top just happens to be a shorter term element of my Cup w/Handle,
This Gold play could still take months to playout and I will be watching and up dating
First chapter of my Tech Analysis 101 book says “Don’t trade what you don’t see”
This is a unique way to stay engaged- I don’t think it’s a bad idea.
Exactly- no one knows. I’d say that this correction has gained steam as of late, and a break beneath 165 is going to take out some stops. From there, things can be a bit dicey in terms of support.
But hey, this back and forth is what makes a market! Markets move in two directions.
Gold will run when real yields turn south and head negative; watch the bond market. For the time being the 10y yield is signaling inflation expectation. I prefer silver, personally I’m looking for lows in the gold miners for investment purposes (1 to 3 year holds).
In the short term holding Gold is going to be a bit painful as the bears keep pushing price lower, and I agree silver might give us a better return once this price correction is over
Hey Dennis, just for awareness-- that is not a valid engulfing (reversal) pattern. Bar 1 must be completely engulfed (thus the name) by bar 2. There is a wick sticking out and down beyond the low of Bar 2.
If anything (if the candle were to print right now), it’d technically be a valid 2 bar reversal.
technically you are correct, and I do not see this on its own a strong reversal signal, we need some follow through and something on the Weekly chart, then I will be feeling good about it, until then the market maybe just playing with us,
I pity the fool with so little patients, this pattern has been 10+ years in the making and you want to call it quits after less than a month. It might be another year or two before this plays out
Really hope your right @Dennis3450, for me Gold is always where I make the most.
However I put zero faith whatsoever in long term price patterns. I guess that’s why I make a lousy investor.
For me the best predictor of gold is a favourable COT position structure with the swap dealers AND when front month futures contracts are more expensive than longer term ones.
Then I’ll pay notice.
Cup and handles, flying saucers, ceramic tea pots, whatever you want to call em, to me its no different to a trip to the Oracle of Delphi.
John, you sound like Warren Buffet, which is not a bad thing. Technical analysis verse Fundamentals has been a long time debate. One could make a small fortune just by investing in the S&P 500 buying more each month and reinvesting the dividends and never selling, All without ever looking at a chart.
Gold has been a disappointment for me, I have bought into the hype of gold/silver and have been holding a rather large position for many years, Had I put that money into Amazon I would have seen a 5 times return, had I put that money into Bitcoin I would have seen a 200 times return.
Let’s hope the Oracle of Delphi ( I have no idea what that is) is also calling for gold to rise
Heh don’t get me wrong here, I’m a technical trader for the most part.
But in the same way it’s easy to predict what your likely doing tomorrow and not so easy predicting what you are doing a year from now, to me TA is very much the same.
Its easier to know what the market is doing tomorrow rather than a few months out IMO
I think TA is generally a poor predictive tool anyway, I prefer to let the market tell me where to go, rather than predicting where it is going.
The difference is subtle and may be lost on some of the newer members.
But the predictive TA camps such as GANN & Elliot in particular, make for the worst possible style of trading - though I admit they are great for newsletter writing and internet marketing for pulling in the gullible.
