So what is up guys, I haven't had the opportunity to sit down and produce an analysis on gold over the last few days as I have been extremely busy working with students or other businesses that I run, I will admit my attention has been pulled away from the charts in the last few days but I am back and I am here for the day (I hope lol)
So looking at the monthly timeframe I can say that it still definitely is extremely bullish - there isn't anything that can convince me otherwise - See image below of the monthly timeframe
As I would mention in the image below I can't yet trust the monthly candle as it has about 20 days before it closes - meaning ANYTHING can happen between now and the next 20 days
I am skipping the weekly timeframe in this analysis as I don't think there is any information that I need from that timeframe that I cannot get on the daily - Looking at the daily timeframe we can see that it has had quite a few bearish days and moves in the last week
Now looking at the last 3 days or so, we can see that there are some wicks being thrown to the top side and I don't know about you but that doesn't give me confidence in looking for buys - why if I am looking for buys would I want to see data that suggests sells?
But it is interesting and I will tell you why - Why would the dealer be inducing sellers in a bull market? Let me tell you why I think this is the case
Who is the real target in a bull market? Buyers or sellers? Before you try to answer I want you to think who has more to gain. When you think about who has more to gain, you have to ask - does the dealer want this party to win? does he want this party to gain? Of course not. So in that light it is simple and easy to say that buyers would be the target right? Sellers would be taken out once the market resumes buying
But before it can resume buying the dealer needs to get rid of traders who bought - remember he doesn't want traders who are buying to gain anything.
So the next question is simple - Where are the buyers buying?
Lets look at the chart again and see if anything makes sense
When we look at the 4 hour time frame I am just trying to identify areas in which I feel the average retail trader may have felt safe to place a buy and I arrive at these zones circled in green, but why? These are low points that would have also made higher lows - which I am aware traders love using that B.S - Higher high and higher low to dictate whether or not they should buy.
If you realize I am using what I know other traders do in my analysis but I am not using that myself to place a trade - I said this before, I like Context, I want to understand what other people may be seeing so I can build out the picture as close to what it really is, you cannot do that when you look at the market one dimensionally.
But wait there is more
Is it at all possible that this bull trend is also now an additional induction to get traders to buy? I think so yes, it makes sense for the dealer to induce buyers to make them feel safe and add more buys
Buyers would feel more inclined to open bigger positions because the gold market is bullish overall so buys make sense. Interestingly enough buys are the right play I think but it isn't WHAT it is HOW.
This is why I think the seller induction of the higher timeframe right now make sense - get sellers to step in and push price lower and stop out the buyers induced to buy in these areas (green)
On the m15 timeframe I believe that sellers would have already been destroyed so the dealer is free to use that seller liquidity to push price lower as seen in the image below (turquoise)
Look at the previous tap on the trendline or the most recent low, I wouldn't be surprised if price stops there and bounces back up temporarily to further induce buyers before dropping lower to take out all buyers completely
I have an alert set at the low
Let me know what you think about this thought process
Don't boost if you didn't take the time to read and try to understand this entire analysis
OR
Boost if you did take the time to read and try to understand this entire analysis
I think trying to take a trade before I know what price is likely to do next is irresponsible of me. So I will be waiting
Have a great day folks
So looking at the monthly timeframe I can say that it still definitely is extremely bullish - there isn't anything that can convince me otherwise - See image below of the monthly timeframe
As I would mention in the image below I can't yet trust the monthly candle as it has about 20 days before it closes - meaning ANYTHING can happen between now and the next 20 days
I am skipping the weekly timeframe in this analysis as I don't think there is any information that I need from that timeframe that I cannot get on the daily - Looking at the daily timeframe we can see that it has had quite a few bearish days and moves in the last week
Now looking at the last 3 days or so, we can see that there are some wicks being thrown to the top side and I don't know about you but that doesn't give me confidence in looking for buys - why if I am looking for buys would I want to see data that suggests sells?
But it is interesting and I will tell you why - Why would the dealer be inducing sellers in a bull market? Let me tell you why I think this is the case
Who is the real target in a bull market? Buyers or sellers? Before you try to answer I want you to think who has more to gain. When you think about who has more to gain, you have to ask - does the dealer want this party to win? does he want this party to gain? Of course not. So in that light it is simple and easy to say that buyers would be the target right? Sellers would be taken out once the market resumes buying
But before it can resume buying the dealer needs to get rid of traders who bought - remember he doesn't want traders who are buying to gain anything.
So the next question is simple - Where are the buyers buying?
Lets look at the chart again and see if anything makes sense
When we look at the 4 hour time frame I am just trying to identify areas in which I feel the average retail trader may have felt safe to place a buy and I arrive at these zones circled in green, but why? These are low points that would have also made higher lows - which I am aware traders love using that B.S - Higher high and higher low to dictate whether or not they should buy.
If you realize I am using what I know other traders do in my analysis but I am not using that myself to place a trade - I said this before, I like Context, I want to understand what other people may be seeing so I can build out the picture as close to what it really is, you cannot do that when you look at the market one dimensionally.
But wait there is more
Buyers would feel more inclined to open bigger positions because the gold market is bullish overall so buys make sense. Interestingly enough buys are the right play I think but it isn't WHAT it is HOW.
This is why I think the seller induction of the higher timeframe right now make sense - get sellers to step in and push price lower and stop out the buyers induced to buy in these areas (green)
On the m15 timeframe I believe that sellers would have already been destroyed so the dealer is free to use that seller liquidity to push price lower as seen in the image below (turquoise)
Look at the previous tap on the trendline or the most recent low, I wouldn't be surprised if price stops there and bounces back up temporarily to further induce buyers before dropping lower to take out all buyers completely
I have an alert set at the low
Let me know what you think about this thought process
Don't boost if you didn't take the time to read and try to understand this entire analysis
OR
Boost if you did take the time to read and try to understand this entire analysis
I think trying to take a trade before I know what price is likely to do next is irresponsible of me. So I will be waiting
Have a great day folks