Is gold forming a triangle?

A couple of days ago we suggested 3 possible moves for gold (Gold: A road-map for the next 15 days).At that time we were neutral and in fact we remain neutral on gold.Gold broke below the support line of the rising channel and currently is moving towards 1110 support.

If gold bounces at that level then probably gold is forming a triangle (usually a continuation pattern).

If gold breaks below 1110 and especially below 1090-1095, this will mean a possible move towards 1040-1045.

 

Gold: A road-map for the next 15 days

Recently Gold managed to break above the resistance at 1135.
Currently gold is moving along a steep rising channel and next resistance level lies at around 1165 (previous regional high on 23/8/15).Above 1165 there is heavy resistance at 1180 level.

Currently as we explained in a previous post(Gold: Ready to make a move?), we remain neutral about gold. Below we describe a bullish, a neutral and a bearish pathway for gold depending on the price action at different important levels:

A)Bullish scenario
Gold retraces towards the lower channel line near the support line of 1136 where it bounces and moves above 1167 level towards 1175-1180 (channel resistance and heavy horizontal resistance) where it will probably correct towards 1160-1165.A break above 1180 level can be a very bullish event.

B)Neutral Scenario
Gold breaks below the channel support and horizontal support at around 1136 and then after a small pause moves towards 1110

C)Bearish scenario
Gold moves below 1110 after forming a Head and Shoulders (three black wedges).This formation points towards 1100.A move below 1110 is a significant bearish event.A move below 1090-1095 will be a very bearish event for gold 

Brazil turnaround?....Under conditions the unthinkable can happen

Currently Brazil (EWZ) is in a well established downtrend since a year ago(-57% since last Sept).

Yesterday EWZ closed(21.90) just below the critical level of 22 forming a gap.Today is going to be a very interesting day regarding the price action of EWZ.
2 possible scenarios:
A) EWZ closes well below 22.That will probably mean that the gap was actually a continuation gap and will lead EWZ towards 14.
B)EWZ closes above 22.In that case a possible inverted H&S formation is on the cards.In that case we need to see a fast move with relatively increasing volume(PVO already is increasing and is ready to cross zero level).This upmove needs to break 23.8 level and close above this price level.Then a correction towards around 23.3 will complete the pattern of an inverted H&S.

 However wait until almost today's close.Don't catch the falling knife...Be ready to catch the handle.

Gold: Ready to make a move?

Gold after bouncing at resistance zone of 1155-1160(Gold at resistance zone) moved downwards towards support at 1105$.Currently Gold is lying between 2 support and 2 resistance zones(green and red lines respectively).

At this point Gold is in an established long-term downtrend (beneath 200 SMA).Short-term Gold is neutral.In order to establish a new uptrend or confirm the current downtrend gold needs to move above 1155-1160 resistance zone or below 1075 support respectively.

We believe that a significant move of gold price is in the cards.As we can notice in the weekly Gold Volatility Index chart ($GVZ), gold volatility after bottoming during last summer is now in an uptrend.

Currently we are neutral on gold.Above 1155-1160 gold will turn bullish and the next target will be 1190-1200.

Below 1075 gold will be bearish and next target will be 1025$

Are better days coming for oil? 2 possible scenarios.

Oil after touching 37's bounced hard towards mid-40's. A month ago we suggested that oil would move towards 36-37$ and then bounce hard(Oil at crossroads).

Currently oil is approaching a strong resistance zone at 48-50$ where the current upmove will probably stall.From that point onwards we can see two possible scanarios :
A)A V-shape bottom scanario where oil will move above 50$.
B)Oil will bounce at 48-50$ (or even lower) and then move towards 38-40$ at which point it will reverse and move towards 44-46$, where it will face a substantial resistance zone.This one is our prefered scenario currently and it is a scenario that potentially can lead to a longer-term bottom formation

Again Energy sector (XLE) moved according to our plan and bounced at 59-60.We believe that the current upmove of XLE will stall at 68-70$ and then probably it will move again towards 60's or lower. 

Treasuries: A small pause

TLT (20+ year treasury bond ETF) tried without success to break above the resistance zone of 125-126.

As we noted earlier (QE...4?) TLT will probably move towards 120 where it will probably bounce.We stay with our previous projection:

Gold at resistance zone

Gold recently managed to break above 1130$ and move towards the strong resistance zone of 1155-1160$.Probably Gold has just finished a 4th wave.It is now lying just below a strong resistance zone and is getting overbought(RSI(14) 69) .IF gold manages to break (and remain) above 1160 then the current count is dead and a possible next target will be 1200-1210$.This will be the last line of defence for the bears.

Same picture for miners(GDX).GDX managed to break above 15 but it is still below the strong resistance zone of 17.5-18.IF GDX breaks above 18 then next target will be 20.5 (last line of defence for bears).

  

QE...4?

Long-term US treasuries (TLT) have probably entered a new bull phase after a correction from 138.5 (early 2015 high) to around 115.5(A-B-C correction).

We believe that TLT will probably stall at 125-126 and correct towards 120 where it will bounce and resume its upmove towards 131.5 and then 140.

It is very important for TLT to break above 131.5 to establish a longer-term bull move.

We feel that the above chart could possibly mark a new round of QE... 

Gold still Bearish (...but slowly we're getting there)

Recently gold broke up from a trading range around 1090.Regardless of the recent run-up we remain bearish on gold. Currently and as long as gold stays below 1135, it has few possibilities for a longer-term upmove.
We believe that the current move of gold will stall at around 1125-1130 (or lower) and reverse towards 1080 or a bit lower.

We stay with a previous gold EW count(Gold shows further signs of weakness).
Current upmove is probably a fourth wave of a bigger third wave.So probably, gold will retrace towards 1080 or lower in a fifth wave:

Same picture for miners (GDX):Probably the current upmove will fade at around 14.8 and reverse towards recent lows (13.0) or even lower.After that, a strong bounce (fourth wave of current downmove from January this year) will probably kick in.

Oil at crossroads

Currently Oil is touching support at 46$.As we noted in a previous comment (Oil towards 46$) 46 level is an inflection point.We believe that Oil will soon breakdown 46$ and move towards 36-37$ with simultaneous increase in volume (capitulation) which can potentially lead to a significant reversal, marking the initiation of a significant bull move from these levels.

Similar picture for Oil companies (XLE).As we predicted there was a bounce at 68 level.However the bounce was not significant.Probably we will see a move towards 59-60$ or even lower with increased volume (capitulation, bankruptcies for oil explorers) and then a significant reversal.