Gold Has To Decide

I'll start today with gold. Yesterday it sold off, which almost made to post something about gold probably breaking to the downside. But today it is rallying hard back up. I have absolutely no clue on earth what's the next move for precious metals. Luckily we have a pretty decent pattern to watch. The triangle is getting squeezed to the apex and gold will have to make a choice soon.


Today's news driven market is very unfavourable for anyone trying to grab a share of a trend. Not seen on the daily chart below, but intraday charts are ful of wild swings in both directions, causing breakouts and pullbacks to fail, only to reverse later in the day and fail the very next day again. In such environment it is best to stick to the larger perspective and trade longer term swings. There is nothing on charts that would change my mind about stock market being in a cyclical bear. I still expect the current rally will top some time in December and roll over down to at least October lows. The problem is that now we have resistance at previous top but also support at previous lows and MA50. So this chopfest may continue for quite some time, trigerring several false alarms in both directions. I think we should not a expect a textbook technical top. However, I would love to see a failed breakout above MA200, because this would give us a very reliable stop for short positions. All markets still neutral.