Gold Rally Rejected by Trendline and Former Low
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
Commodity Analysis: Near term evidence is conflicting so it’s best not to take too firm a stand here. Bullish evidence – 5 waves up from the 1540 low, extremely bearish sentiment and long term support from the 2011 and 2012 lows. Bearish evidence - the reversal lower from the trendline and former low. Either way, it’s obvious that gold is at a huge point in time. A drop below the 2011 low (1522.50) could send price cascading much lower as years of built up longs at bad prices are forced to liquidate. Areas of interest in the event of a break are the areas of 1400 (100% extension and 2010 consolidation), 1300 (127% and 2011 low), and perhaps even 1150ish (161.8% and July 2010 low).
Commodity Trading Strategy: Flat
LEVELS: 1522 1540 1555 1571 1590 1600
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