Il buono, il brutto, il cattivo. Well, in English: The GOOD, the BAD and the UGLY.
A brilliant western classic by grandmaster Sergio Leone of the year 1966, with three villains – excellently characterized – fighting for a huge gold treasure.
In the film, each of the three tries to enter into possession of the treasure in his own cunning, tricky, consequently sly way, always trying to outsmart each other to get an edge of his own.
To me, it was apparent to choose the plotted tensions and twists between the protagonists as a model for the current situation in gold. By the way, the winner of the gold treasure at the end of the movie is Blondie, embodied by Clint Eastwood.
How is the story going to end likely as not this time? By all means, sheer thrill is assured!
Gold reached a new higher 2016 high at 1318.90 in the course of the week, thus closing far above the 1285, an arc resistance in the yearly time frame!
This is a clear and strong buy signal in the weekly time frame. Thereby, the weekly time frame activated the following GUNNER24 Up Targets: A) 1340 at the first square line resistance and B) the 1400-environment which might be worked off till end of summer/early autumn:
The GOOD - the weekly time frame:
Pretty clear and convincing weekly close above Blue Arc at 1301.60 within weekly 23 Candle up.
The following rally that started after the first exact test of the 1*1 Angle at the final May low is able to overcome the Blue Arc, so far having been the main resistance for the year 2016. The gold August16 contract even succeeded in marking a new year high at 1318.90 on Thursday. Gold delivered the highest weekly close for years!
Bullish in addition is that gold attained new higher highs in GBP + AUD + HKD as well as in EUR!
Additionally, the days of the week performed in absolute classic uptrend behavior according to Taylor: Monday + Tuesday were Buy-Days, Wednesday war an S-Day, followed by an absolutely textbook Sell-Short pattern Thursday, while Friday was a Buy-Day with a very positive note into the week close.
Watch and remember where the Blue Arc = now strong weekly support is located for the Britain referendum week and the post-referendum week. These supports might be tested back I think, especially the 1272 – newly being yearly horizontal support area now – will increasingly have to play a main part the coming days. More about this below!
==> The good news: the weekly time frame is in strong stable and healthy bull mode! By its current signal, this time frame indicates that gold is going to rise much higher soon.
Unpleasantly, the fact attracted attention last week that silver wasn’t able to reach a new year high. It set a – possibly important – lower high instead. The next negative and the point but one was set by platinum and palladium that didn’t join at all the current gold rise but traded downwards or sideways. This is a divergence. Especially it’s a little dazing that silver wasn’t even able to attain a new year high.
Here, you see a gold chart in the monthly time frame. The first publication and analysis ensued in the free GUNNER24 Forecasts, Issue 02/21/2016.
The gold-key resistances and quite natural uptargets for the current upmove are on the one hand the 1308 – first worked off by the early-May high – and overshot for one single day last Thursday. The new higher year high is close to the 1322 being the other quite normal final target for the current countertrend in the monthly time frame. Well, maybe the new year high at 1318.90 worked off this important 1322 upmagnet ultimately and finally.
==> 1308 + 1322 were obvious uptargets for the gold countertrend, and maybe gold topped for a long time on Thursday!
The 1322 is the last bear standing, so to speak! Located at the upper line of the 3rd MAJOR RESISTANCE DOUBLE ARC LINE within the chart above and the MAJOR RESISTANCE HORIZONTAL, the 1322 forms a MAJOR YEARLY RESISTANCE MAGNET for June + July 2016...
.. and if overcome on monthly closing base this month or in July or in August, the 5 year gold bear market will be over confirmed according to the GUNNER24 Forecasting Method.
In such a case, the GUNNER24 Method will turn into a confirmed gold bull market with main target 1700!
==> I think, it’s not at all coincidental that gold headed for the very most important resistance of the entire bear market before resp. towards the Britain referendum.
In my opinion, the only fundamental reason at the moment for the justification of the 1322 to be overcome on monthly closing base through August 2016 would be the Brexit!! The Brexit could be the fundamental reason for gold to switch into a confirmed bull market. The Brexit would shatter the financial world. The Brexit would cause a next fundamental based and long-lasting buying frenzy in gold and silver.
==> On the other hand, the much more likely Bremain is considered to be the main reason for gold not to succeed soon in overcoming the 1322 sustainably. ONLY A FINAL monthly close above 1322 till August would be a trustworthy signal for us that the gold bear market came to an end… then consequently in the further course having to reach the 1700 in 2017/2018.
==> If gold starts to overcome the 1322 AFTER the month of August it will KEEP ON being in the confirmed bear market with target 1392 that is supposed to be worked off till January/February 2017 in that case. Then, the resumption of the bear market would be expected to ensue, technically.
The daily time frame contains enormous explosive. IN BOTH DIRECTIONS!!!!
The chart pattern under development is technically a very bearish pattern in the short term offering a lot of downwards potential if gold decides not to overcome the 1322 finally! 1322 is a multi-year resistance trail and at megaphone resistance in daily time frame.
Gold has formed a megaphone. Tests of red dotted megaphone resistance at red 1 + 3 + 5. Green dotted megaphone support tests made at green 2 + 4. So, maybe the Thursday new year-high at 1318.90 was the highest gold was able to achieve before Brexit referendum on Thursday 23. Maybe the 1318.90 was the final high of the current daily up cycle, a Bremain vote might send gold lower into green 6 at/near 1200!!
The really ugly item is however the existing Bearish Wolfe Wave setup. It´s not a textbook-clear Bearish Wolfe Wave pattern, because the low at the green 4 is a little lower than the low the the green 2. Watch a 100%-perfect Bearish Wolfe Wave setup below:
... I think gold being at 1100-1000 for autumn is thoroughly worth to be considered. Especially in consequence of recalling the 1322 is the natural final uptarget for the whole countertrend as well as MAJOR RESISTANCE for the countertrend. A bounce from such an important magnet on yearly base = strong resistance magnet may thoroughly turn out to be very brutal according to price and time. That would be just natural and normal in consideration of the given/existent importance of this magnet that has been playing a certain part in gold for as many as 5 years.
So, if ultimately the countertrend were finished at the 1322, logically the next multi month downleg in the overall bear market would approach gold. And a new bear leg would ultimately mean new bear market lows as well??!! Wouldn’t it??!!
==> Technically, a Brexit vote should lead almost compellingly to the 1322 to be overcome, actually even mean a pulverization of the 1322. Overcoming such megaphone resistances usually leads to a very stable and relative long-lasting rally leg. 1372 should easily be reached if gold is able to overcome the 1322 within next 10 trading days!!
Which is the bedrock gold is going now into the Britain-leaving-the-EU referendum from?
I’d like to present you two options that seem to me the most likely ones at the moment…
A decisive question I ask myself now is the following:
Why hasn’t the gold August16 contract work off the obvious 1322 upmagnet being in absolute reach on Thursday? It seems to me a little rare and unlogical that gold turned downwards from its 1318.90 daily swing high on Thursday being that near the 1322 to be worked off. Answer: Maybe in order to trade next Thursday and Friday close to the 1322, dwelling and receiving the referendum result precisely then, at this MAJOR MAKE OR BREAK BEAR/BULL magnet. Perhaps in order to smash it just at the very first test???
Technically, a Brexit should signify that gold will easily smash through the 1322-do-or-die on late Friday arriving the first computer predictions to the market. A Bremain outcome should/could be the excuse for a next multi-week/multi-month downleg just for testing the 1200 at the daily megaphone support.
The alternative likely option for the coming week is that at the new 1318.90 year high a pullback in the daily time frame was started that may lead the metal down to its now most important combined weekly + monthly + yearly support magnet at 1275-1272 till next Friday. There, between 1280 and 1270 gold will receive the referendum computer predictions.
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