Gold – 15 Jun

Gold closed higher after finding support at the 1515 level. The 45 day MA is coming up just below and also is providing support. Resistance is 1532 followed  higher by 1546. We currently have a series of lower highs and lower lows on the chart and therefore a short term downtrend. The Bollinger band is contracting and is telling us that the summer blahs are here and that we should see a break in short term prices soon. In this world anything can happen, but I believe minus any big news we head sideways with a downside bias. I see a range-bound trade with 1473 as the floor with strong support with 1563 as the cap.

RSI is dead neutral and is telling us what we know, we are going nowhere fast. Stochastic is heading lower and approaching over-sold levels. I do not expect an embedded stochastic with a range trade, so I believe we can go a bit lower than before that indicator reverses. The Bollinger band will serve to contain downside a downside move below support of the 45 day MA at 1512. Further support at 1486 and strong support at 1474.

The expanded view shows where the 1486 level of support lies in context. The next layer of support at 1473 is just above the Fibonacci 38.2 retracement level and is a strong natural support zone. If a major correction is in the cards and the range trade gives way to a longer term downtrend, I see the Fibonocci 50% retrace line falling where the chart says we have support from previous resistance. Also the 200 day MA is climbing up to join the support party in this area. I really like the 1425 area both on the daily and weekly charts as a downside limit.

The Elder Impulse chart for PHYS painted another red bar, meaning both the MACD histogram and the 13 day exponential moving average are both declining day over day. Red bars are a signal for a short trade, but only if price is below the 65 day EMA. In this case price is above that moving average and therefore the short signal is ignored. If either the MACD histogram or 13 day EMA increases day over day the bar will paint blue and indicate exit from all trades. If both increase then the bar will paint green indicating a long trade entry signal, but only if price is above the 65 day EMA. The Elder chart is designed to catch momentum moves and to get you out of the trade when momentum wanes. Typically you can expect to capture the middle third of the trade, missing the reversal before the entry and missing the blow-off at the exit.

Support at 13.15 is still valid with the swing low at 13.01 as additional support. As with gold, I see a range trade between 13.69 and 12.58. We have a series of higher highs and lower lows on the chart, forming a megaphone pattern. This is indicative of consolidation and a range trade. I think on this reaction wave higher, a lower high will be placed which will set up a potential short term downtrend if the swing low of 13.01 is taken out. I think we will likely see this. In the event of a break lower, the Bollinger band will provide support initially. Some of the premium has come out of PHYS and therefore the technicals are little ahead of the gold chart with stochastic just reaching the 20 level. MACD has put in a bearish cross and RSI has plenty of room to go lower.

This entry was posted in Gold, Matrix Sentry TA, PHYS, Technical Analysis. Bookmark the permalink.

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