1. General remarks => The base of the swing => The idea of two clashing forces
After the impressive leg:
...we have a completed Gold swing trade. The legs A, B and C are individual moves in the swing; a zigzag should be considered a retrace and in this case while inside a second wave that serves a function for the medium and long term macro chain.
So the bottom of the swing, which we traded together below live here, will be called the base.
Every retrace swing, in other words every ABC sequence running diagonally across the currency board meshes flows together, it divides the market incrementally into blocks, which are consisting of bids and offers opposing each other. For the sake of convenience, we will dig deeper into the basing process:
The diagram illustrates an example of a transition in direction.
The idea of building a swing
Before you tackle what follows, you should walk forward and check that you are well versed in the ideas concerning Gold and event risk. If not you should refresh your memory here because this is necessary in order to understand what will follow. The question we need to answer if we 'know' our direction is up: after ABCDE and for as long as 1700/10 does not advance, Sellers have the possibility of directional change and can move here. Sellers did not disappear just because of coronavirus, or mediocre risk. No, they must still be there, in a macro sense from the Gold peak in 2011 which coincided with the transition towards BTC and negative rates via ECB & BOJ.
Gold above all is a retail market, and the boat is fully loaded towards one side with markets trading as if the plague is here. Well, we all know what happens when markets exhaust and dislocate from reality. The powerful urge to continue hedging with risk will only expand, and thus what I have modelled are inflows into BTC to outperform Gold.
Towards the breakout
The ease of movement (in terms of capital) must be taken into account, the demobilisation between BTC and Gold will come from the inability to move large sizings of Gold around without raising flags anymore. BTC can advance and take full advantage of this handicap Gold now wields. Should buyers try to push Gold any higher here by attempting a breach of 1700 for the 3rd time (it will present yet another selling opportunity), my strategy remains to reunite with the sell side around currently levels in Gold and recommend those who are still long to start rounding up troops.
Attacking the swing
The attack from the base in Gold is both fundamentally critical and technically valuable for the logical justification of transitioning away from a commodity driven currency and more towards digital money. I have to attribute to myself the honour of having made a killing in the latest Gold rally, because the price drivers kept telling us to load more. It was not about the direction of the swing, but purely and simply about how cheap could we buy.
The main thing is that the buyers from these lows should now be restrained! What was at that time my most revolutionary position (one to which I have come across by intensive work on the issues of reflation). Smart money realises that BTC is deflationary and will weigh heavy on Gold (traditionally inflation up was bullish for Gold). Critics will scream about how they knew it was overstretched... pull the trigger! That's the play!
So, here is the chartpack mentioned above from the well-known @ridethepig tradingview portfolio, which I present in its entirety, with no changes and not a word in my own defence.
I make only the comment well done all those who were long Gold from 1205, 1250, 1305, 1350, 1400, 1450, 1500, 1550 and even those greedily playing 1600. A flawless move that is now time to take profits and switch sides !!!
Marking the highs as a strategic necessity
Sweeping the highs in this nature towards 1700 in the opposing direction only happens in unsustainable rallies on a short-term sentiment belief in panic. This essentially reduces the sustainability towards the rally... we are almost at a 90 degree angle !!
Recognising exhaustion comes from experience, it is cramping our enemy (late buyers in this case) and attacking it can be formulated as follows:
Any traps should never be started with haste when direction changes are involved...
The struggle for transitions and picking tops is one that retailers have struggled with and can talk about till the cows come home. The transition should first be aimed at forming a base (or in this case a top) by insisting and threatening to achieve denial of the highs (invalidation, rejection etc). So according to the rule, flows should immediately start to unwind as buyers reach their final targets and smart money should attack aggressively and that should be by 1680/1675, because the highs are more of an aesthetically pleasing ornament. After marking the highs, sellers will have different possibilities to plan and can see which path is clearest if buyers play somewhat naively, as though they have no idea that technology is deflationary, something like:
That is the logical knee-jerk profit taking and positioning swing we need to develop: firstly the big exhaustion, and now the tree is shaken, smart money see's this miles in advance! Just like the hero in the films, stubborn traders will continue to buy, very simple. Those nimble enough can take the first one and knock him out, then turn to the next barrier and beat the living daylights out of them!
Before gold bugs realise what is happening, the technical blow will be to severe ... Stay long BTC.
Trade ativo
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What a move guys....
Trade fechado: objetivo atingido
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TP1 HIT!
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An update here to the Monthly chart
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We are back to square one here...
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Remain nimble... Another test of the highs cooking?
@ridethepig, Hey pigrider, you have a multi year timetable chart showing the projections of Gold going down from its recent highs without showing any possibility of gold going up before going down to the possible level of 1340's around Feb of 2021 then down too the impossible level of 900 around Jan of 2022 poppy-cock !! First to get to those levels Gold would have to rise to all news records of around 1928 then back down to the low 1300 level. But to get too the 900 level first Gold would have to rise somewhere around $2035 level then back down to the fib retrace of 900's . Gold will not go below $1048 within the next two or three years until it reaches a all new high. :) Megalo
ridethepig
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"But to get too the 900 level first Gold would have to rise somewhere around $2035 level then back down to the fib retrace of 900's"
ridethepig
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Disagree, even a simple fib extension target would do the trick if you are talking through a strictly technical lens:
MEGALO1
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@ridethepig, @ridethepig, Hey pigrider, your muti-year chart demonstrates the very fact of the Fib. retrace did not break the thousand dollar mark from the high of 1900 in 2011 to the low of just over thousand mark in 2015 four year time span ? It most certainly will not get too those level again because the world wide crime cabal that make up the world central banks will not allow Gold to get much higher than 2000 merely of the psychological much less the monetary effects on world wide markets :) Megalo>
ridethepig
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What are you suggesting will be the price driver to take us to ATH? Coronavirus?
MEGALO1
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@ridethepig,Hey pigrider I'm Still Waiting for the chart speak ? p.S. I've noticed you keep posting this worn out chart before the sell the news event I guess it might look like it makes you smarter not in my book.:) Megalo>
ridethepig
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@MEGALO1 ... Your expectations are completely out of scope for a conversation on Weekly Swing conversation that we are talking here.
A quick reminder as things are wild out there, the ORIGINAL shorts which is the chart you are talking about began at $1680 highs (btw crazy that this was only last week) and hit the initial $1600 target within a few sessions !!!! A +800 tick swing!!! ... before completing a full retrace back to the ORIGINAL entry $1680 [which is where we were sitting right now] for the NFP and W close.
The point of a loading zone is to recycle positions; if you had taken partial profits on the original $1680 shorts at $1600 last week that's +800 tick swing !!!! It is pointless to hold a winner +800 ticks to watch it come all the way back up... We are right back to square one when we started the switch, you have a second opportunity to load with risk already paid for.