Starting with Gold ...here are two very basic charts (Comex GC #F) with no reaction lines just to demonstrate which forks are in play and remembering my belief that price is never influenced just by one fork but but multiple forks in multiple TF's.
Friday as expected saw a test of $ 1300.00 and this was dramatically rejected as can be seen here in the first two MT charts. The long term ML that sits at 1309 level (yellow in one pink in the other) provided ample evidence that this market seems reluctant to go lower. The reaction line that i posted about last week is now underneath price and it was this RL that i believe was responsible for bringing price lower and i think this was adequately proved.
Now we can take the process one stage further by looking at the structure of Fridays price action.
If (as i think is highly probable) this ( 1308.07) is a new low pivot of some distinction, then i can apply my rules for a new reaction grid.It can be superimposed on existing grids. This fork (in white) is significant (& has a good angle of ascent) as it maybe part of/ 'the seed' of a new controlling /impulse swing. The pivots P0,P1 &P2 are used- the fork is drawn using the MQ4 custom indicator and the automatic RL & WL's are included( deep red for all reaction & warning lines) with the RL's extended from beyond the upper & lower MLP's. The option of using pivots 3, 4 & 5 is discarded as having first tried this fork (in all 3 forms: basic then Schiff & finally mod Schiff) there is little or no correlation with price action.
But with the fork shown here you can now observe a remarkable correlation between price and the various median & RL (includes warning lines).
After the new low at 1308.07 price retested the pink/yellow supporting ML twice. The second time making a HH and bouncing of the area of confluence of the warning line from the new up sloping white fork and the CL of the DS deep pink fork (arrowed) plus yet another long term RL that runs parallel with the pink/yellow long term median line. It is significant that price action from this point onwards was dramatic with good long candles with excellent separation and offered a strong tradeable trend. For the entry process i suggest using the B-line Stoch, MaccyD, Bolly bands or Keltner chnnls and the 'sling shot' setup of which there was at least one possibly more. Also there were countless retouches/small continuation patterns at the various reaction/ median lines.
( The dark blue ML are all Schiff or mod Schiff)
Here is some low TF detail where the RL & WL's are working well.
So...The Big Question....Where from here? There is a Dragon pattern of sorts with head/tail/feet & back but more importantly in one of my templates above there is a recent retouch (at the .382 Fib RT level) of the UMLP of the aqua blue D-S fork. All centre line objectives have been reached but expect to see consolidation after such a move before a break out higher. Any retracement of more than 50% would be alarming and suggest another possible retest of the $1300.00 level but i doubt this & will be watching & waiting to see if price is going to have a crack at the 1350.00 (1346-1348). Before then it must break up through various reaction line opposing price but never forget the fundamental picture re the Middle East which may provide further stimulus for the technical picture.
EurUsd
I still have the same view as last week but i am encouraged by the DX finding support. I favour the downside for the Euro if we see a LL- which we should as after the recent January strong move up from about 1.29 to 1.3750 we have not even seen a 23.6% retracement yet but like last week i am flat and out until we have a confirmation of a new trend down or a resumption of the old trend upwards.
Russell 2000 E Mini
I chart this market daily only but have been watching another reaction line that seems to be causing some serious resistance. For some weeks i have been bearish on the all stock indicies, and especially the FTSE but am too impatient for price to play out over time
Here is the FTSE (March 11). A break of either trigger line (5800 level ) would be very bearish.
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