Note the multiple price action contact points on the 61.8 projection. This area is an axis line. The market oscillated around this area for nearly 10-years, before heading on to new all-time highs.
The axis lines and reversal points on the chart provide confirmation we have selected the price action waves correctly.
Using the same 25-area on GLD, we’re gong to remove the projection tool and use the retrace tool and then zoom in using the weekly chart.
That chart is below:
There is a lot going on with this chart. Note the wide, high-volume bar. Volume for that week was about double from the week prior.
Markets tend to go back to these areas for a test.
That area also represents a Fibonacci 38.2% retrace of the entire move off the February 2001, lows.
On top of that, a retrace to GLD 130, is a near exact -33% from the highs.
If that weren’t enough, price action getting to that level would automatically set-up a Wyckoff spring (reversal) condition by penetrating the support area shown.
Will this all happen? Obviously it’s unknown at this point. However, it does give us context.
As always, price action is the final arbiter. We’re short on the GDX, the Major Miners via DUST (not advice, not a recommendation). Our original stop was probably too tight at just 0.41 points from entry.
We’ll see how it works out. Certainly, we are at another danger point.
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.
Gold is set to open higher as expected. Corn is set to open lower … not expected and nat-gas looks like it will test its trend-line.
The only position currently open is CORN.
Lower CORN open in the works, crop report due at the upcoming close and price action hugging the lows. We’re at the danger point three days in a row; planning to exit CORN (not a recommendation, not advice).
Taking the markets on the watch list into account, the opportunity appears to be nat-gas, UNG.
If price action contacts the trend-line and begins to pull away, there is a potential confirmation and trade set-up.