This is the monthly chart of Gold. Gold finished 2017 with a promising bullish tone. Gold had the opportunity to test support at the trendline formed from the 2015 low. It did not do this. Instead, it broke support at a steeper trendline, and reversed sharply in December. This implies that it was a false breakout to the downside (yellow circle), which has naturally produced a fast move to the upside. Logically, we must expect continuation in the short-term, to test the down trendline that has contained price since 2014. From there, Gold has an opportunity to create a powerful break to test the 1500s, not seen since 2013. The bearish scenario would be that we roll over at the 1350 zone. This is entirely possible, but price doesn't normally test resistance four times, only to resume a bear trend. In other words, Gold looks like it wants to break to the upside. Adding to this tone is Gold's rounded bottom formation over 2014-2017, and the recapturing of the 200 MA. I expect continuation in January.
I've had to reconsider my position on Gold. After September, October, and November, I wasn't expecting the sharp rally of December. In fact, Gold came into December looking as though it wanted to break serious support levels. Admittedly, I am still net short on Gold, although I have a long position that can be built up, and my underwater positions can be 'traded out' to breakeven with some maneuvering. The key is whether Gold can break and maintain price above the mid-1300s in 2018. I will be happy to re-instate short positions there.
The Gold chart is telling me that 2018 will not be an easy year to trade. Although there will be plenty of fortunes to be made, it will require flexibility. 2018 may be the false move in many markets. For instance, Gold could test the 1500s, and roll over to make a new low, below 1000. That would be insane. But the rule for 2018 is to be prepared for anything.
I've had to reconsider my position on Gold. After September, October, and November, I wasn't expecting the sharp rally of December. In fact, Gold came into December looking as though it wanted to break serious support levels. Admittedly, I am still net short on Gold, although I have a long position that can be built up, and my underwater positions can be 'traded out' to breakeven with some maneuvering. The key is whether Gold can break and maintain price above the mid-1300s in 2018. I will be happy to re-instate short positions there.
The Gold chart is telling me that 2018 will not be an easy year to trade. Although there will be plenty of fortunes to be made, it will require flexibility. 2018 may be the false move in many markets. For instance, Gold could test the 1500s, and roll over to make a new low, below 1000. That would be insane. But the rule for 2018 is to be prepared for anything.