The Start Of The Next Gold Rally?
Is this the start of the next Gold rally leading into the next year?
Looks to me like it may very well be. I will be looking to buy dips around this region, adding to my position as long as 1550 support holds on a daily close.
Dips towards the 1600 and 1580 looks to be perfect buying opportunities for a target towards 1640 for first target, 1680 for second target, 1750 for third target, while leaving a position looking to close all positions at the 1800 level.
A better idea might have been to wait for Gold to make another bearish move below the LOW of 1560 on your chart, here’s why:
There is a support trendline that has lasted since Oct 2008 - which I expected to have lots of gravity during such a big correction on the Gold price.
If we zoom in you can see where the Gold price reached this trendline and it was after the low that you had on the chart above - a lower low - from the continuation of the down-trend.
That was the first reason that I would have waited before going long when the market was at the point when you made your post.
The second reason is based on the wave count.
In the chart below you can see that I showed a possible wave count for the 3 wave A-B-C correction, leaving wave C an open-ended arrow.
At the low of 1560, that might have been the end of wave C, since sometimes wave C does not fall below the low of wave A. But the breakdown of wave C (as if it ended at the low of 1560), which is most often a 5 wave impulse pattern, would give a wave 5 bigger than wave 3 - while wave 3 is almost always the longest wave.
So, my assumption based on that was that the waves 3, 4, and 5 of wave C on the chart were actually fractals within the structure of the greater wave 3, and that wave 5 was yet to come. Combine that with the gravity of the long-term trendline below.
So this was a more suitable wave count at the time and it brought the price right down to that trendline, where of course the big position traders were waiting with their BUYING-guns loaded.
This all seems like it would be easy to explain in retrospect, but this was actually my analysis before the next drop, and I bought Gold right near the bottom when it started the consolidation at the end of wave 5 of C - right on that trendline. Here’s a screen shot of my account with the history window opened:
APPARENTLY IM ONLY ALLOWED 5 PICTURES PER POST - ILL PUT IT IN THE NEXT POST
Here’s the account history:
So I opened 2 positions at the bottom yellow line (chart below), and closed them both at the top yellow line.
You can see the date and time and prices from the account history. I had a invisible stop loss running on a script that used an external application, and it was at 1525.60 - roughly 1000 points from my entry - and had a total risk of 5% of my account. I gained about 38% from this trade so the R to R was pretty good.
My exits were done manually and my reasoning was based on completion of a 5-wave impulse movement that ended on a technical resistance level and the top of a channel.
