Flirting With Disaster
Originally posted on Marketslant.com
The headline refers to the decreased volatility of gold, coupled with the increased Vol-of-Vol., spinning in place with knee-jerk moves based on either some event (higher) or some non-event (lower). As we write this, Gold is twirling (flirting?) with our signal that volatility will increase on the downside.
If Spot Gold does not settle sub $1321 on the 4 hour bar depicted, then the twirling will resume. Perhaps with a chance to rally if the next session closes above $1332. But if it does close under $1321 in about 3 hours, kiss it goodnight (with a stop-loss at $1325). Profits should come in 3 bars if at all. Either way, US Gold longs get to spend a nervous night in the dark. If it falls out of bed before the current bar closes or overnight, then we missed the trade.
From this Morning’s Post:
The effects of last night’s missile launch dissipated quickly on the markets. Gold gave back all gains and is now lower. The Yen unwound most of its own move in 3 minutes.Yen buyers (decrease in value vs.USD) after missiles fly over Japan may want to question that logic. Spot Gold on the other hand, may be seeing less hot money piling in on news like this due to some wounds needing healing from last time up. Perhaps missile launches are not very interesting anymore. The half life of their effect certaintly is shorter. We wrote last night that perhaps this was the surprise event that would keep gold from continuing its descent. Otherwise, the trend was still lower.
The market came working 30 minutes of giving us an “all clear” that the downside was temporarily closed off. But it was another tease. Now we are looking at a renewed risk lower.The single best indicator for the last month in our timing arsenal has been the 4 hour chart with the Volatility system applied. And right now if the current bar settles under $1321 spot that’s a trigger.
Conversely, a settlement over $1332 on the accompanying chart’s current bar gives the go ahead to be long with a reasonable stop.
If neither happen, the game goes on.
Disclosure: We are long Silver with a month-end $17.40 stop
H/T @rudyhavenstein for the “twirling” reference
Click chart for live spot prices
Michael Moor has us touching one possible exhaustion of the downside
move already, so maybe the deluge is over? If it isn’t over, his projection possibilities end a little lower than ours.
Moor Analytics Weekly Macro Report
Note to newbies: Michael is not one for prosaic synonyms. His work is written for traders. You will frequently see words like “decent” and “warns” repeated. This underscores his consistency and agnostic work directionally in our opinion. For us, his style helps prevent us from cutting profits short as we are want to do. We thank him on behalf of our community for the occasional synopsis to post.
He covers Oil, spreads, and Nat Gas on top of Gold.
Gold Macro Synopsis
via Moor Analytics
(Soren K.-Just a guess but trendlines, retracements of bigger moves, and flow spotting are a part of his system)
Gold (Z) 9/15/17
On a macro basis: There is a macro resistance line coming in at 13522 all of this week. We will likely see a significant smack down from here, likely for weeks. A macro solid penetration above will project this upward $242 minimum, $339 maximum; the minimum to take roughly 9 months to attain. This is based off an oddly shaped but structurally sound formation. This has a lower conviction if we do not see a significant rejection from the area first (we are starting to see some of this as we have come off $32.7 from 13522). The maintained gap higher on 7/18 left a medium term bullish reversal intact below that warned of higher trade for days. We have seen $123.4 of this so far, but this has been on hold since we broke below the formation mentioned below. The solid penetration above 12417-21 warned of solid short covering in the days/weeks ahead. We have seen $119.7 of this so far, but this has been on hold since we broke below the formation mentioned below.
On a shorter-term basis: The decent break back below 13585 has brought in $41.8 of the decent profit taking we are looking for. The decent break below 13500 (+3 tics (30 cents) per/hour) projects this downward $13 minimum, $23 (+) maximum. We have seen $32.3 of this so far. This will come in at 13811 (+3 tics (30 cents) per/hour starting at 8:20am). Monday, we left a short term bearish reversal intact above that warns of decent pressure, likely for days. We have seen $19 of this so far from Monday’s close. Decent intra-day trade above 13471 will negate this. Trade above 13381-82 and 13403-05will warn of short covering. I would note that possible areas of exhaustion for this move down from 13624 come in at 13194-82 (we traded down to 13195 and have just bounced $18.7), 13048-19, and 12832-13. Decent trade below 13065(+.7 of a tic (7 cents) per/hour starting at 8:20am) will project this downward $60 (+); but this could use an initial bounce off the line before breaking below for better
For more info contact Michael:
Phone : 646-708-4612