Gold – 20 Mar

Paper gold is looking weak even though technically speaking we have a short term up trend defined by a higher high and a higher low. The longer term trend is still down within the clearly defined downtrend channel. The swing low at 1634 certainly looks vulnerable for at least a re-test. Chart support lies around the 1625 area where we also have Fibonacci 61.8% support as well. Resistance is the Fibonacci 50% retrace level and then a combination of chart resistance and the 200 day moving average at our old friend 1680. Stochastic is embedded (below 20 for 3 days or more) and suggests all rallies are selling opportunities for the short. One can only hope that price falls a little farther for the physical buyers. I am a cash buyer at 1625 and will buy with the banker’s money below 1600. What a country, I manufacture bank credit and trade it for real gold. I truly live a charmed existence!

Here’s the broader view of support and resistance levels. 1625 becomes a very important level of support where a breach sets up a move to 1550. One can only hope for such a gift.

Now this view shows the interesting stuff. This pattern is an inverse head and shoulders pattern and is a reversal pattern. This pattern is still in play as long as the right shoulder swing low does not take out the head swing low of 1523. The projection is established by measuring the distance from the neckline (dashed blue) to the head swing low and then projecting up above the neckline an equal distance. The projection yields 2080. Not too shabby as my dad would say.

This weekly chart shows price very near the trend channel boundary and suggests we are very near a bottom. 1625 may very well be the bottom. RSI is where it usually finds support just under 50.

Finally, this monster chart shows that a move to 1600 is A OK and right with the long term trend. Again, one can only wish upon a star. From my mouth to the ears of Jim Sinclair’s angels!

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