#202431 - priceactiontds - weekly update - gold futures

Good Evening and I hope you are well.

Quote from last week:

bear case: Bears made another amazing trade selling above 2440 and since this was the third time, they are confident they can push the market lower to at least 2300 again. The selling was strong enough for a second leg and right now a measured move would bring us exactly to 2300. Coincidences huh. Every time someone tells you technical analysis does not work, just nod and make money. It’s not worth the discussion.

comment: Bears got their second leg down and the buying has been lackluster at best. Leaning heavily bearish until bulls trade strongly above the daily 20ema again. It’s a tight channel down and already much stronger than the previous sell offs from > 2400. As long as the channel holds, I’m full bear. No deeper analysis needed.

current market cycle: trading range on the daily chart but small bear trend inside, which could bring us to 2300.

key levels: 2300 - 2488

bull case: Bulls are very weak. The pullbacks they printed so far were doji’s and inside bars. Until they can print a big bull bar closing on it’s high, they have no reasonable arguments for a reversal. 2300 is much more likely than a strong breakout above the bear channel. Expecting more buyers to step in around 2300/2310.

Invalidation is below 2290.

bear case: Increased volume on the sell off and every rip is sold. Play the channel as long as it holds, bears have every argument on their side. The odds that we break below 2300 this time are decent, since market now tried 3 times to hit 2500 and market will only try one thing so many times until it does the opposite.

Invalidation is above 2436.

outlook last week:

“short term: Full bear mode if we close below 2360 over the next 1-2 days. At least down to 2300 but decent chance we drop lower this time and start a new bear trend.”

→ Last Sunday we traded 2399 and now we are at 2381. Low of the week was 2352, outlook was good for 47.

short term: Full bear mode continues as long as the bear channel holds. Look for shorts near the top and take profits at new lows.

medium-long term: For now I think the most reasonable outlook I could give is a trading range 2200-2500. This could hold for some time. Bear in my still thinks this rally is moronic and we will see 2000 again this year but that’s as unreasonable of an outlook one could hold so don’t. —unchanged since May

current swing trade: None. Will short on weakness on Monday.

chart update: Added bear channel.