GOLD: Next Week is Extremely Vital for What's to Come
Hello traders!
Next week will be extremely crucial for where Gold is within its movement cycle. A lot of people do not realize that Gold acts on cycle highs and lows as I posted about in my previous ideas and doesn't just move randomly off headlines.
We have three major scenarios as follows:
1. Current Levels to a Major Correction
2. Current Level --> 1645 --> Major Correction
3. On its way to new highs
I believe that Gold will have one more sharp and major sell-off to trap the weak bulls sometime within the next 2 to 3 weeks (or less) before the "bottom" is in for Gold for the next decade. As such, it is highly unlikely that scenario #3 pans-out at this time.
A few other things to note is that the US dollar is likely on a final wave 5 to the 105 level, and crude is likely going to short squeeze to the 35-38 level. These two actions will and should keep Gold's gains relatively capped in the near-term likely until later this month into May. With crude likely on the verge of a short squeeze this could give equities a short-term boost next week which would indicate "risk-on" and selling in Gold and temporary buying in stocks.
COT continues to show about 285,000 shorts. This indicates still too high of a value in commercial shorts. Although this value is shrinking, this is another aspect that shows Gold will likely fail somewhere between 1620 and 1645 (perhaps a shooting star to 1680) and undergo a sell-off. We need to see this number at 150,000-200,000 to start to confirm a bottom in the current cycle.
The point is, investors have to be careful with Gold and upon deeper analysis it would be wise to hold out on this market for longs until late April and into the first half of May. With a second wave of selling sometime in mid to late April likely upon us (in equities), Gold could sell-off once again sharply for liquidity.
- zSplit
Next week will be extremely crucial for where Gold is within its movement cycle. A lot of people do not realize that Gold acts on cycle highs and lows as I posted about in my previous ideas and doesn't just move randomly off headlines.
We have three major scenarios as follows:
1. Current Levels to a Major Correction
2. Current Level --> 1645 --> Major Correction
3. On its way to new highs
I believe that Gold will have one more sharp and major sell-off to trap the weak bulls sometime within the next 2 to 3 weeks (or less) before the "bottom" is in for Gold for the next decade. As such, it is highly unlikely that scenario #3 pans-out at this time.
A few other things to note is that the US dollar is likely on a final wave 5 to the 105 level, and crude is likely going to short squeeze to the 35-38 level. These two actions will and should keep Gold's gains relatively capped in the near-term likely until later this month into May. With crude likely on the verge of a short squeeze this could give equities a short-term boost next week which would indicate "risk-on" and selling in Gold and temporary buying in stocks.
COT continues to show about 285,000 shorts. This indicates still too high of a value in commercial shorts. Although this value is shrinking, this is another aspect that shows Gold will likely fail somewhere between 1620 and 1645 (perhaps a shooting star to 1680) and undergo a sell-off. We need to see this number at 150,000-200,000 to start to confirm a bottom in the current cycle.
The point is, investors have to be careful with Gold and upon deeper analysis it would be wise to hold out on this market for longs until late April and into the first half of May. With a second wave of selling sometime in mid to late April likely upon us (in equities), Gold could sell-off once again sharply for liquidity.
- zSplit
