Further to my short post about Gold on Friday and the excellent 30$ fall we saw on Friday afternoon i will explain why i was short gold and why i think we may see further weakness this coming week. Firstly please look at the daily chart below with reaction lines inserted and then look at the 60 min chart to it's right. You can see the effect the RL is having on price and i have been watching golds recent relentless climb looking for a possible time and place for a sell off . After the last upward effort by price action when we barely made new highs (by one buck only!) we now have possible double tops/'pipe tops' (at least in 60 & 240 min TF's and it is possible they are valid as D-Top's on the daily chart as well). One thing is not in doubt and that is the effect of the RL.........
Now have a look at the 15 minute chart below showing Fridays price action and the red daily RL. It runs almost along the same axis as the green downsloping forks CL & the aqua blue CL. Add to this the fact that we are near to the red UMLP in the long term daily chart and another long term yellow UMLP. Reaction lines can be dangerous and price often 'pops' straight up through them and then starts using them as support to climb away upwards but we have already been above the RL when we formed the RHS double top but could not convincingly make new highs/higher highs and have fallen back and made a lower low and (to me) this indicates price weakness and a possible reversal.
Now in the last chart above(right hand side) i have added a recent fork & reaction lines and used alternative pivots and changed slightly the position of the daily overhead RL very slightly (below 30 mins Metatrader sometimes cannot show RL's) and 'Hey Presto' we see that Friday's low was the second reaction line in the down sloping green fork in the 15 min TF chart. From this i suspect that price will be carried higher to one of the UMLP's or the intersection of the two reaction lines. This maybe a lower high and possibly another short position but as yet i see no high probability entry but definitely worth watching. Should price zoom through the overhead reaction line then it usually returns for a retouch which can be seen in the daily chart on the previous RL. This would be an opportunity to get long if my so called possible retracement comes to nothing... so either way there could be a way into the market.
Now in the last chart above(right hand side) i have added a recent fork & reaction lines and used alternative pivots and changed slightly the position of the daily overhead RL very slightly (below 30 mins Metatrader sometimes cannot show RL's) and 'Hey Presto' we see that Friday's low was the second reaction line in the down sloping green fork in the 15 min TF chart. From this i suspect that price will be carried higher to one of the UMLP's or the intersection of the two reaction lines. This maybe a lower high and possibly another short position but as yet i see no high probability entry but definitely worth watching. Should price zoom through the overhead reaction line then it usually returns for a retouch which can be seen in the daily chart on the previous RL. This would be an opportunity to get long if my so called possible retracement comes to nothing... so either way there could be a way into the market.
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