(90 day Chart, 2 hr)
It has been about a year and a half since writing, but I am going to start writing again. This is gold from Jan 15 until today, May 20 2015.
What you see is a market that has been rather trendless, However, I think there are two important lines we can take from this time period. The first, is the uptrend from the low you see @ 1141.6. While I know the numbers aren't on the chart, imagine it were to drop overnight to that line. That would be around 1180, an area of known significant support. So, for the time being, a drop of 20-30 dollars down, does not disrupt the general pattern upward.
The other line that is significant is the line drawn downward from ~ Feb 9th, @ ~1245 through a top at 1224 in early April, and the lower high of 1215 towards the end of the month. So, these two lines formed a wedge. You can see the two lines would've met around 1195 in 3 weeks time, but gold never waits til the very end of a wedge to make its move. As you can see, last week it broke above that downtrend line just discussed. Making a move up to 1232, it has come back to the line it broke but now held. So for now, perhaps this will serve as support. A sudden 20 dollar drop however would put it back into the wedge. At that point, we will see if the uptrend line from 1141.6 can continue to hold as support.
(180 day chart 4hr)
There is only one line in my opinion that matters here that was wasn't touched on in the 90 day chart. And that is, the uptrend line that was formed beginning at the low of 1130.4. You will seen it was only kissed around 1141 a few weeks after the low, forming the beginning of the uptrend line. I believe that this is a very powerful line and will help us figure out whether this bull move has legs.
I believe this uptrend line is as significant for the support it created on the way up as it is for the resistance it has created since it was broken.The uptrend line was formed starting with the low of 1130.4 (a low not seen since 2010) and the 1140ish point and both times they were tested there was significant buying that came in and pushed it drastically higher (Gold rallied over 60 dollars from the lows intraday after the second point of our downtrend was touched). So, with a line characterized by infrequent visits and strong buying when visited, the consolidation around 1195 in early March spelled the end of that uptrend.
That former uptrend, which now serves as resistance has two times since been breached (trading above the line). Each break has been very unconvincing, and quickly met with selling.
The second breach interestingly happened on a Sunday night. It was good Friday, but they opted to release the unemployment report, even though markets were closed. So, Sunday night was the first chance the market got to react. While it gapped higher to 1224.5, it had no follow through and quickly sold off back below.
Now gold finds itself in the uptrend formed by the bottom line mentioned in the 90 day chart (1140.6, through ~1168 on May 1st) with the extension of the broken uptrend as resistance. If gold were to stay bound by these lines for the next 3-4 weeks (holding ~1195 and ~1252) it would give a lot of credence to this as a solid up-channel. Breaks below 1180 in the next few days, or a settle below 1195 by mid June would negate that channel.
(Three Year Chart, Daily)
Finally, The three year chart. There is a lot of interesting stuff in it of course, but admittedly some of the lines in there are questionable at best. However the only one I want to hone in on is the beginning of the downtrend that was formed starting around 1480 in May 2013. That line has 3 distinguished points, the 1480 connects through the top in March 2014 around 1390, and most recently capping the rip up to ~1307 in Jan 2015. So for now, that is where we sit, 2 years into a downtrend. That being said, we've seen gold make multiple efforts at breaking down, and strong buying has come in to defend it. Consider, looking at this chart, just how strong the support at 1180 has been. When Gold broke 1525-1550 support in April 2013, it found support at 1180 (~350 dollar drop) in less than 3 months. 1180 was not tested again for nearly 5 months, and it was met with strong buying. Gold didn't find itself back at 1180 until last October, nearly 10 months later.There was a muted bounce, and the triple bottom break looked like it could crush the metal. But, the good thing for the bull case is that it has been seen that buying has come in in places where the chart technically looked incredibly bearish. So, we find ourselves still range bound, with short term trends breaking here and there, but little net movement overall.
This is "the big picture" as I see it right now. Please write if you have any questions/ comments and I'll do my best to respond.
Looking forward to posting more often,
-Ben
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