Tech Alert- Put on your Rally Caps, Abv $1174 Gets $1232

Technical Brief: Bear Rally Set Up is Here

 

RSI Trade Overview

When a market makes new lows but its RSI does not, that is an indication of lost downside momentum. It does not necessarily mean a bottom is in. It does however, often leave a very good risk reward scenario combining a natural stop-loss and  downside almost exhausted.

We are not generally directional players, and only trust 2 types for our style. The RSI non-Confirm is one of those.

It usually appears as a "swing" or relief trade counter to the major trend. In this case Gold's trend has been down. And, as in the previous signal, the RSI Non-Confirm has hit indicating a relief rally is on the table possibly. Finally, it also indicates the rally will likely be slow and orderly, just as the last one was pre-election night.

This one is especially interesting as it may get further boost on a weekly basis. What follows are 2 charts explaining the trade opportunity. Then a recap of previous trades as posted on MarketSlant

  1. The Daily describes the trade
  2. The Weekly follows with the potential booster confirmation

Here is a quote from Dec 5th noticing the formation presenting itself:

We are seeing it again, but are not so sanguine due to many long side players not getting their allocations yet. Combine this with seasonal lack of liquidity, and we aer skeptical. That said, the tradeis to buy Gold around $1168 with an $1158 stop loomking for a rally to $1197. This is a 3 to 1 risk reward, but admittedly the stop loss is wide for our taste. Still the RSI is a good barometer in counter rallies from oversold positions in Gold

Caveat: These are risk/reward scenarios. They are designed to maximize inflection points. They are almost never right more than 50% of the time. Think for yourself. These are speculative trades. Those seeking guarantees will be disappointed. We are traders managing risk capital, not salesmen and share this for fun. That said, we hope this plays out like the last one did. Put on your rally caps!

About Silver: As almost always, we buy silver when Bullish Gold. The People's metal has held well adn will probably do better in the next rally. For us, Gold is our indicator to trade Silver.-  Soren K.

 

Gold Daily- RSI Non-Confirm

 

Gold Weekly: Booster Rocket Potential

 

interactive chart HERE

 

The Trade from October 6th:

From the PostLong above $1250 gets you $1300- Here's Why

Bulls First

  1. Buy Gold now ($1259 last) with a target of $1297-$1301
  2. Daily Stop-loss for us is $1242  print or
  3. Weekly Stop-Loss = settle under$1248 on a weekly close
  4. Risk $11 to make $40

The Chart Then

 

 

The First Alert on the New Trade

FTA: Above $1169 Gets a Bounce to $1235- Technical Trade

"This one is not as compelling due to a lack of RSI info, but the candle situation looks nice."

Full Post HERE

 

Good Luck

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