Hit During The Early Hours
It was a nasty mess for the gold bulls during the futures, pre-market session.
As price action pushed upward past the (GCG22) 1,820 area, volume increased significantly.
Good or bad, it means something’s about to happen.
Happen, it did.
Price action was only above 1,820 for about fifteen-minutes; then eroded back into the range.
In total, GCG22, dropped 12-points in just 25-minutes, going well below the established trading range.
If we look at the un-marked daily chart of gold (GLD), it does not look like much is happening.
Gold (GLD), Daily
Marking it up, gives a better perspective.
Now, it does not look so good for the bulls.
The chart below, zooms-in
While all this is going on in the gold market, the GDX miners (below) are posting their own (potential) reversal.
It’s potential at this point as we’re about mid-session.
Trade Model Review
- The Set-Up: Complete
- The ‘test’ or ‘gut-check’: Complete
- The first ‘correction’: Complete**
- Continuation or Failure
- Trend identification
- Potential channel(s)
- Exit process
- Scale out
- Full exit
- Post trade evaluation
** To verify the completion, we’ll need a daily reversal (today) as well as a new daily GDX low in the following session(s); not advice, not a recommendation.
From the trade model, the ‘first correction’ may be completing during this session.
If that’s the case and gold bulls are trapped yet again, this time around, price action’s not likely to be so tenuous.
The bears may be ready to ‘slice and dice’. 🙂
Charts by StockCharts
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The Danger Point®, trade mark: No. 6,505,279