This stuff is somewhat time sensitive.
The August Gold is leaving little “technical” gaps all over the place. Classical technical analysis suggests that gaps on a chart will be filled. (It doesn’t specify when though.) I will not worry about the gap on the downside being filled and instead, focus on the upside.
Should the Gold attempt another high, I will tentatively focus on the 1267.0 area to initiate a short position with an initial profit objective of perhaps the 1,257.3 area. If the Gold moves up rather soon, I could imagine a $20 – $30 fall from its highs, similar to the one from 1,254.5 down to 1,223.1.
That’s why it’s so hard to buy a dip or stay on a trend- the corrections can be pretty deep.
I prefer to sell to someone who wants to buy at semi-outrageous new highs and ride his ‘slap on the wrist’ down a little ways. I’m more comfortable when I’m on the other side of someone’s trade when I believe they are most likely doing the wrong thing. (In this case, chasing the market).
Long term Trading is a whole ‘nother ball game.
The 60 minute bar chart below is making an ‘upside down’ bear arm formation (thought you’d heard ‘em all, huh?). Translation: The formation is bullish.
Bear Arms can produce big moves from where the shoulder turns. In this case, since it’s an upside down Bear Arm, we could see a move (perhaps rapid) well beyond the recent highs of 1254.5
This analysis brought to you by Sean Blair of +FastMKT>>Focus. He would like to remind everyone “Futures and Options Trading is Risky and Not Suited for Everyone. Trading in Futures and Options should be done with Risk Capital Only, and Should Not Affect Overall Lifestyle should Losses Occur.”