We are nearing the global meltdown., page-169

I will post 3 charts that are relevant to the Gold discussion, POG/UAD POG/AUD AUDUSD

I'll use the daily and then zoom in. I'll throw in a MACD divergence but it was historical to demonstrate there is some use.


POG/AUD

Basically since march 2014, GP/AUD has been in a big range and I have marked key historical levels that I am watching. Note the MACD divergence (red arrow below) followed by a increasing peak (still capped by the resistance) then an almighty drop in price (green arrow). Hindsight is much easier to spot with divergence and at the time it only shows the possibility. Divergence can continue to produce false signal so I do not use it much. Currently price is rallying back up to test key resistance level again.

Depending on the school of thought regarding S/R lines, I subscribe to the theory that the more a level has been tested, the less significant it becomes against the consensus thinking. The next test may rotate down or finally burst through. I suspect any bursting through will take key fundamental change such as RBA rate cut or recession confirmation or something along the lines of bearish commodity currencies!

In addition, previous price action (orange box) suggest price will not just rally straight up to test the resistance but more a chop/sideways eventuality. That is what I am seeing but this is an art more than science.


POG/USD

The shaded region is what I was referring to as short term bottom has formed. Technically it offers support to price if it dips into the region. However a more realistic logical analysis still favors the trend which is still bearish! The scenario I can see happening is a rally to the resistance then again fundamentals will drive the direction at this key level OR short sellers jump in to drive the price down in the direction of the trend. I have no clue IF at that junction what will happen. Alternately price could just crash into the chop then break the support!


AUDUSD

In some ways Aussie look the twin of POG/USD so as far as I am concern I am looking at the spread between POG/USD and AUDUSD. As long as the news out of Oz economy remains threaten with recession, Steven will have no choice but to remain dovish with monetary policy. Bond traders are punting 100% June 2016 rate cut, you can get more confident than that!



Bond traders are the best risk assessor and the equities market follows their lead. Hypothetically speaking given the market 'thinks' RBA monetary policies favors doves, I see every AUD rallies as selling opportunities so I am watching the key level coming up. It is from this perspective that I see the gold spread widening or rather POG/AUD will continue to rally. Of course we have 2 moving parts and wrt POG/USD I am still on "L" plates so I won't even comment on what the fundamentals that are driving them in the desired direction.

I think my perspective is very similar to @goldbear77 and a few others that refer to POG/AUD. Some here see me as perma bear and that is fine. As you can see POG/USD has not given me any evidence of a trend reversal. It is in the making but whether one can defined a reversal depending on time frame. A monthly trader will probably see a deep retracement while a daily trader sees a collapsed! Who is right? Well, I think both are. If you trade/invest gold in any particular time frame then it is the size of the stop that determines surviveability whether with fix profit targets or trail. It does not matter who is right and I rather be profitable than right!

So in conclusion, if one is exposed to good quality gold producers with little debt and good margins who cares if Skol pick of $600 is ultimately correct. What matters is AUD follows it down the toilet and the holders continue to ride the cap growth. He was given a mouth just like every poster here and God says use it in the name of democracy especially when living in the West. I enjoy opposite views provided they back up their views with some 'evidence' instead of a one line comment. If you can't appreciate opposing views than you should not be in this dog eat dog environment.

You see and myself included, when money is down the line and some have probably over exposed themselves whether in gold or IO or whatever, anchoring takes over. It is a case of justifying holding no matter what the outcome. We lose objectivity and are sometimes stubborn to accept the truth of the situation. I have been through these crap my self big time and now it does not matter if 99% of this world agree with me, an out come is still 50% chance of success. There is always a black swan to destroy the greed plan or a savior white knight come charging along just when all hope is lost. I hope that could be Super Mario!

Sorry, more Shite opinions from me so blame Rise asking me for a chart analysis. Unfortunately it comes with waffle too! Be better with a dollop of ice cream!