XAUUSD - KOG REPORT!

In last weeks KOG Report we said we would be looking for our higher targets to be achieved at 1795-7, 1804-7 and above that 1814-17. We said we would like to see the market find support at a few levels one of which being the 1750-55 which was the lowest support area. We also suggested that there are a lot of bullish traders in the markets and that we were likely to see more ranging with the move likely to happen just before or during FOMC! You can see what happened so we won’t say anymore! We suggested our members take a majority of their profits on their shorts on Friday and move the stops to entry to protect them.

So what can we expect in the week ahead?

We’re going to keep it short this week as we’re nearing the end of the year as well as the festive period so we’re not looking to get into any long term positions on Gold, Silver and Oil. We’ve closed below 1800 on Friday but we’re anticipating another attempt at targeting this level and bulls trying to close next weeks candle above it.

We would like to see a completion of this bearish pattern on the daily and the 4H chart. However, we are not ignoring another move to the upside as a sharp swing to again sweep up some liquidity from those trying to hold bearish and positions. We have a higher target of around 1817 which we would like to see complete in the early part of the week which could extend towards the 1830-35 level so we have to keep this in mind. This level we think would represent another opportunity to test the short again towards the lower levels. Note, breaking this level and closing above it will give bulls more confidence to drive this higher towards the 1854-50 level. We will remain bearish with our first lower target being 1735 and if you have been following KOG you’ll know we have targets a lot lower than that. We’re not however going to try and hold positions to target these levels, rather trade this level to level as we've been showing you, adapting to the range and factoring in the swings that come with it. They’re going to make sure they make it as difficult as possible to swing trade this up or down so we suggest you keep your lot sizes reasonable if you are swing trading it.

So we will again continue with two scenarios in mind.

Scenario 1:

We will be looking for the market to find support in the early sessions around the first region of 1785 and below that 1775-70. If these levels hold we think they could represent good opportunities to test the long trades up towards the 1815, 1824 and above that 1830-levels. This is where we want to see rejection and again short back down towards the lower regions and targets.

Scenario 2:

This would be the ideal scenario for us. We would like to see the market find short term support at the 1790-95 level and then resume the bullish move towards the 1817-20 level and potentially above that the 1830-35 level. This is where we will be waiting again to test the short trades down towards the lower regions and targets.

What we want to see is this range broken, until it is and left behind we will continue to see this type of movement that will only allow day traders to trade between the levels rather than holding positions for the swings.

Below is the “Trading the range” chart we have been using to illustrate the long/short regions

We’ve added the Weekly chart below which shows we’re nearing the end of the triangle

We’ve also added the Monthly chart which highlights our longer term view as long as the price stays below that 1830-35 price region.

Hope this helps traders and as always, trade safe.

KOG