It is no secret that I think TA works. It however has become more a tool for the perpetual short to manage expectations than it is for the speculative long. TA is working great for the paper gold short who wants to front run gold price management ops. With that said, the price manipulators are managers only. They cannot change the fundamentals or the secular trend in place. So looking for potential bearish chart patterns only is foolish. Paper longs need to see the obvious vulnerabilities when they present themselves, knowing that the MOPErs are watching and are ready to paint a favorable outcome for the short.There is a limit to their power and their painting ability. Eventually a longer term bullish formation has to arise, we are in a secular bull trend after all. Let the MOPErs have their short term portrait. Step back and look at the longer view to see what is really happening.
On a 6-9 month horizon I see a potential inverse head and shoulders pattern emerging, where the left shoulder and head are in place. The right shoulder is being formed and needs to paint a higher low than 1523. The inverse head and shoulders pattern is a reversal pattern that yield a projection of $2080. For the formation to validate we need to see the right shoulder form and then price needs to break above the neckline (dashed blue). The projection is determined by measuring price from the neckline to the head, then projecting upwards from the neckline.
My previous post outlined why I think $1600 is about as low as we go. If this in fact materializes, the right shoulder will be set. If 1523 falls, then all bets are off and the inverse head and shoulders will be nullified. However, I think that the inverse head and shoulders potential reflects the fundamentals and the secular trend that will remain intact until the paper gold market collapses.