The most reliable gold story ...

http://edgetraderplus.com/market-commentaries/gold-and-silver-back-story-v-charts-charts-are-superior

The most reliable gold story is found in the charts. Why is this so? Like we say, do not listen to what people are saying about the markets, listen to what the markets are saying about the people.



The monthly chart is telling us the downside momentum has lost momentum. This can change in the next few days or few weeks, but the future has not yet happened, so we can only deal with what is known, at this point in time. With this context, we look to the lower weekly and daily time frames to see if a clearer message emerges.



The lines connecting the recent swing highs and lows shows how the momentum has slowed. The net decline at "D" is far less than the decline from "A" to "B." Notice the two bars leading into the lows at "B" and "D," both wide range with little to no overlap. The current decline into "F," [? = may or may not be over], has overlapping bars, the opposite of previous lows and in keeping with the small sign of potential change evidenced on the monthly chart. What is lacking in both time frames is confirmation of an actual change.



The comments on the daily shows the interchange of past behavior being somewhat determinative of future behavior. The development on the left side of the chart, A, B, C, D, gave reason for why the recent activity unfolded as it did, on the right side of the chart.

After the failed probe lower, [4th bar from right], an indication that sellers failed to show up when it was opportune to drive price lower, [like a 2 million oz order was not enough], we get confirmation of sellers being AWOL with Friday's strong rally, strong close, and increased volume. Just as one swallow does not a summer make, one bar, especially on this lower time frame, does not a bull market make, but it is a sign of change.

The rally did stop at/below two small failed rally highs. What will be key is how price corrects Thursday's rally bar. Maybe we should have labeled it D/S, Demand over Supply, for it is warranted by that show of activity. If it is real, we should see smaller bars and less volume on any retest of the bar, classically. If volume does increase, the largest increase should occur at/near the low of the correction. Time will tell.


 

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