Gold

This broke out of it's short term downtrend yesterday. Here's the daily chart showing next resistances at 1695 (horizontal)and 1707 (next downtrend):



dl.dropbox.com/u/20815047/Golddaily16_01_13.gif

Also looks to be forming an ascending triangle on the hourly which generates a target of 1695:



dl.dropbox.com/u/20815047/Goldhourly16_01_13.gif

Not sure, but it stopped me out of POG. Back on the sidelines on that one for the moment

Wow! What just happened there? Gold just dropped nearly $20 in the space of a few minutes...

This looks to me to be in a wave 3 hence it's motoring on nicely. The RSI downtrend from the bearish divergence at the recent 1796 high could be broken on today's close and that could, in turn, be in indicator of a price breakthrough of the matching downtrend resistance. I've shown it on the following chart:



dl.dropbox.com/u/20815047/Golddaily10_01_13.gif

The retrace half way down the hammer looks to have been a wave 2 of some degree so I've projected that and the "normal" wave 3 extension target of the 161.8% Fib comes in nicely around the 1701 mark which coincides with natural resistance and that intermediate downtrend. I'd therefore look to bank profit at that level (the RSI should have broken through before this happens) and perhaps re-enter at around the 1680 level (that would be a wave 4 retrace of 38.2%). If this works out, I'd also expect that it's at that point that the RSI would be backtesting its trendline break.

Obviously, this is all theoretical currently, but these are the sorts of I look for ie multiple TA methods all pointing towards the same levels. If these all look good at the time I'll execute the above plan. If not I'll re-assess.

On the bigger picture, the above waves I'm talking about would just be subwaves of a larger degree wave up as I suspect we could be just starting a big new bull trend in gold IMHO.

Hammer an resistance broke 1664/1666
Possible buy on any retest if not already in.

Silver also flying, this has been pushing and waiting for gold

RMc

remo wrote: Yep..
It's good for an early entry.
But the main one comes on the daily chart.
And above the top of the hammer can be classed as a 123 low breakout.
That will be similar to the 4 hourly level.

The top of this hammer/pin bar seems to be acting as resistance for the moment. This coincides with the days close before the pin bar.

If we compare to silver (as I pointed out on the silver thread), the silver pin bar broke and finished into the previous candle. Therefore the resistance of the previous days candle was not there.

Entry half way down the price bar would not have been possible. But there would have been a trade to take above the break of the pin bar as with the 123low scenario currently in play with gold.

Regards RMc