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15d (edited) • Charts + Analysis 📈📊
Gold Finally Cracks
Date: 31/01
Its finally happened .. just when everyone thought the sky was the limit. Gold has fallen around 16% in a matter of days. Luckily we had already secured close to a 1:8 return on our positions, had booked profits and were trailing longs as we went along. It's been an awesome month so far.
Now getting down to the important part - What next?
The beauty of Elliot waves are that they show you all possibilities for the markets with confirmation points. All we need to do is be patient and wait till our confirmation points are triggered to know what scenario we are looking to play out.
So before we jump in, one thing remains constant - Gold is still bullish overall. We just need to figure out if its finished its current up move on a large degree or a smaller one. I'll explain with the scenarios below.
Scenario 1 - Scenario 1 on the daily chart shows us an impulse has completed. Now to further understand if scenario 1 holds true, this corrective needs to respect the 2-4 trend line drawn in red on the chart. If prices manage to sustain above and keep that trend line intact - we are heading back up to an all time high with the current impulse that completed being marked as W1 of 5. Judging by the speed with which this corrective has kicked in after a prolonged bullish period I'm unsure if this scenario will play out. I feel this is an ideal point for bigger players to book profits and for a slight cool off in Gold to take place as it prepares for its next surge. However, until the trend line holds - Scenario 1 is very much accurate and valid.
Scenario 2 - Entry into this scenario kicks in the moment the 2-4 trend line breaks (as shown in the next daily chart). This break would indicate an end of a larger impulse and a deeper correction which is highlighted in the Weekly chart below. If this happens we are looking at a buy zone for Gold at around 4153 - 3700. I know it's a rather large zone but this would be a corrective on a much larger scale so the zone to buy will also be large. This however would be an ideal entry point to catch the next impulse once we see some positive price action in this area. Please do wait for a positive reversal from this area as Gold does have room below this to move downwards while still keeping this count completely valid.
Overall - I would recommend we DO NOT short Gold - even though it may seem very tempting. Wait for the perfect buying positions. People really keen and bullish can look out for reversals near the trend line if it holds and use the latest swing low as a tight SL for the position.
Any break below the trend line and we are minimum going towards out buy zone which would be an area to be alert to build our new positions. We've secured some great profits in Gold this month .. lets play it smart and only re - enter when we're sure
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Gold Finally Cracks
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