@V*
What is a double bottom if not a testing of what is now new Support (Brexit level)?
It will hold or it won't. Obviously all are now sitting on the fence awaiting NFP (the right thing to do), hence a nothing day (so far). I can't predict that event. No one I know can. Hence...a nothing day.
I would certainly not be surprised to see a retracement (up), since nothing goes in a straight line, including falls, even plunges....stocks, commodities don't collapse (or soar) in a straight line....they move in wave like patterns, and I don't mean Elliot or any other kind of fancy waves; there will always be bulls who think this is the bottom ("bargain" - I hear it here so often) to push it up - but the main players here are Market Makers (and Institutional Investors), and I don't believe they adhere to Chart Patterns like double bottoms. The question is will the Support hold.
TA tells us that Old Support (1,302) becomes New Resistance...and everyone can see it on the Chart....everyone...(and the rule is to sell into strength = Resistance)....the retracement could test that Resistance level, but my guess is that it may well fail, due to the chart being somewhat broken (clear loss of bullish momentum, if not the trend itself - different things), not to mention the enormous overhead supply of trapped bulls in that wide range above, desperately wanting to break even, should it approach that level. i.e. a kamikaze-like wave of sellers, and so, pushing it back down.
In other words a Dead Cat Bounce. The DCB is certainly tradeable (why not?), so long as it's understood it's against the trend, and there should be a clear exit strategy...sell just below Resistance, since the level is clear to the MM's (and to you and me), and if you don't , they'll stop you out. If this happens will it settle at Current Support, or go lower? I don't make predictions, but the bears are currently in control, and they all see the next lower support at start of June.
If you are suggesting it will break Resistance...well, read the above. It won't be easy.
The only definitive proof of a resumption of bullish control, is for it to decisively breach that resistance (1,302), pull back, test the 1,302 level, and succeed. Then we have a new higher Support level, 1,302 (which is where we were until very recently) . I think this is normal price mechanics.
Then it needs to decisively breach the next resistance ($1,375), already shown to be a tough nut to crack, and same as above......retrace (quite normal), test it, and succeed...same as above, establishing a new Support etc. and on it goes. The waves I mentioned above.
I think this is it basically how it works, price mechanics.
I also think this holds even with major shocks, like Brexit, once in a generation event, and look what happened? Price fell exactly to that level last night....and has held......just......for now.... ($1,256.39) ONE dollar above Brexit day Open (the Brexit day lows should go tonight....was literally pennies away last night, to throw the bulls a bone...make them feel "safe").
In the end, they're just price bars, Brexit or no Brexit, visible to all, and everybody can see them, areas of huge liquidity, to buy or sell into.
Of course, we could get a favorable shock that smashes gold right through these resistance levels (as Brexit did, an NFP miss etc...)....but as I just mentioned.....the same principles apply.....in the end, old fashioned Support and Resistance seem to rule the day.
It's also generally true of common stocks, just with less finely engineered manipulation.
Just 2 more points...I have no idea why we are where we are today....a stop hunt I understand, and expected (but expected tonight, NFP is a good excuse to swing it both up and down, until the dust settles...the MM's can and do have it both ways), but not the events since Tuesday evening. Maybe one day we'll know, but it's irrelevant. We just have to deal with it.
I think a lot of people are seeing and saying things because they want to see them, they want gold price to rise. To use a term I like, "confirmation bias"...look at all the Thumbs Up (TU) a certain Heart gets for unsupported and outrageous claims of imminent explosive moves etc, and then suddenly is MIA....
I want it too. I was 100% invested in gold stocks (still holding 3 specs, one now in a TH, sold all my majors, the largest holdings).
My entire Super, life savings (which is not huge) in gold. I have to try and make a living out of this game, and I knew full well the high risk of such single sector concentration (all eggs in one basket).
But, the market, no one (certainly no one important), gives a Shiite what I think or want....and that's what counts.
Hence the expression "trade what you see, not what you think". It's very hard.....we all let emotions poison our decision making.
By "trade", it could be 5 minutes or 5 years - you can't just put in the drawer and forget about it - think BHP "The Big Australian", from $43 to $16...even CBA recently, for that matter ( just held support at $70...was probably a stop hunt), but especially commodity based stocks which are so vulnerable to extreme fluctuations and volatility.
Hope this helps.
P.S I think your question belongs on the dedicated Chart / TA thread.
