Since this year’s important May lows, regarding important extrema and turns gold has been following the average election year course in the US presidential cycle in a noticeably significant way:
In the chart above, the blue line simulates the average gold performance of an election year in the US presidential cycle from 1968 to 2008.
Color-coded and emphasized by notes, you find the gold turns and important extrema in 2016 since just that mentioned late-May consolidation low (05/31) for comparison.
Shortly after the second important highpoint 2016 – the extrema (06/24) after the Brexit referendum – the current year high followed, reached on 07/06. According to time, the 2016 high is in total unison in respect of the typical year high in the election year that uses to start at the beginning of July on average.
Whenever such a blatant accordance with a seasonal extreme is detected, we traders and investors should get sensitive. Because, in that case it may well be that the respective market would like/want to join this "seemingly" determining seasonal pattern.
==> So, it’s thoroughly possible that:
A) Gold has already got over with its final high of the year 2016.
B) Its next important low in 2016 is perhaps still in store. As a rule, this one uses to ensue by the end of October, hence shortly before the 11/08 election date.
C) Thereby, the consolidation narrowly below the year high that started at the year high might extend by 3-5 more agonizing weeks.
Yeah, since the finalized year high 2016, gold has "only" been in a consolidation period digesting the previous strong price rise:
In my opinion, this 15 Candle GUNNER24 Up Setup in the weekly time frame displays the clearest way what’s happening with gold and what is still to be expected for the rest of the year.
It measures from the final year-2015 low made in December up to the important small exhaustion high of March 2016. At the year high, for the first time the 1st double arc resistance was reached. So we see that the 1st is an extremely important resistance – an arc resistance in the yearly time frame because that’s where the current year high was brought in, after all.
The consolidation cycle that began after the year high is predominantly determined by the 1st double arc, being the upper line of the 1st double arc the weekly high resistance and the lower line of the 1st double arc providing support. Partway, the lower line of the 1st provided weekly low support, but for two months it has been providing weekly closing base support again, as well.
Since the consolidation presents several closings within the lines of the 1st double arc in addition the consolidation taking place rather narrowly below the year highs and since the weekly candles are clearly oriented by the magnet of the 1st since the beginning of August again, gold is experiencing an absolutely bullish consolidation at the highs. As you know, such use to dissolve upwards.
Next strong bullish signal: When a first significant weekly close above the upper line of the 1st double arc appears/comes about, the consolidation should have to have come to its official end. As a result, with a probability of more than a 75%, gold will have to head for the lower line of the 2nd double arc in trend direction. In such a case, the lower line of the 2nd would have to be reached till year end 2016.
Next strong bearish signal: A first significant weekly close BELOW the 1*1 Bull Market Angle will activate A) a backtest of the 1221-1222 monthly GUNNER24 Support Horizontal resp. B) perhaps even a backtest of the round 1200 mark till year end 2016!
==> As analyzed already, the performance since the year high is to be interpreted as most bullish. Thus, the current prices offer technically a terrific entry chance for all the gold bulls, for the golden metal is supposed to keep on rising in the medium term.
As a conclusive step in today’s issue, let’s now slip in the takeaway / possible further impacts of the election-year cycle into the weekly 15 Candle up:
There is thoroughly the founded possibility that gold may/has to keep on consolidating for other 3-5 weeks towards the significant pre-election low by the end of October. Thus, with the last week candle that was newly restrained at the high by the dominating resistance of the upper line of the 1st double arc, the metal might have produced – once again – a lower consolidation high.
Please, take another look at the seasonal chart. On average, one week before the end of September = the "NOW!???" notice there it comes to the next important lower high in the cycle. Well, the gold election-year seasonal items together with the GUNNER24 Method suggest that gold will have to go down again into an important pre-election low. I think that gold will compellingly need a second test of the 1*1 Bull Market Angle before this consolidation period regarding the time factor can be finished finally.
The 1*1 Bull Market Angle was responsible for the final May correction low that was EXAXCTLY attributable to the monster support of the 1*1. Enormous rebound energy kicked in there not coming to an end before the year high and the 1st double arc resistance. According to the rules, the second test of the 1*1 Bull Market Angle is supposed to be able to generate likewise strong up-energies!
==> For the next 5 week candles, the 1*1 Bull Market Angle takes its course at 1298 to about 1320. Let’s wait and see at which date exactly and what price the 1*1 Bull Market Angle will be tested… after this expected test of the 1*1 Angle within the next 5 weeks, gold will be supposed to get started rapidly again to work off in succession the 1422 by the year end 2016/beginning of 2017! 1422 remains the main target for this countertrend!
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