Gold Analysis December 2015 (D,W,M)
Created on Wednesday, 02 December 2015 03:46
Written by Austin Galt
Gold continues to inch down and make the wait for that big bear rally all the more frustrating. Let’s take a bottom up approach to the analysis beginning with the daily chart.
GOLD DAILY CHART
The numbers on the chart refer to three broadening top or low formations all forming within themselves which is just evidence of human behaviour repeating. This low is point 4, point 5 and point 6 low.
The move down into this low was extremely impulsive which is often seen in the final move into low no matter which timeframe.
The Bollinger Bands show price bounced up from the lower band to upper band where resistance seems to have come in. So perhaps price is headed back to the lower band where support may come in once again.
The PSAR indicator is bearish with the dots currently around $1079. Breaking that resistance now would likely signal the bear rally is on.
The RSI shows multiple bullish divergences at the recent low and a new low now would also likely set up yet another bullish divergence.
The Stochastic and MACD indicators are both currently bullish with multiple bullish divergences also.
GOLD WEEKLY CHART
We can see the downtrend channel with price currently at the bottom of the channel. Price could capitulate down from here but that seems too obvious and considering this downtrend channel is following a capitulation I doubt another capitulation is in store. Not now anyway. I favour quite the opposite – a big impulsive bear rally that will get many thinking the next great bull market is underway. Perhaps price does a little fake out by trading a touch below the bottom channel before exploding higher. Let’s see.
The Bollinger Band show price is back at the lower channel and the next time it clearly leaves this lower band is probably the signal that the bear rally is on.
The RSI looks set to throw up a triple bullish divergence at this low.
The Stochastic indicator is still bearish but threatening a bullish crossover.
The MACD indicator is bearish and only a solid move up by price would change that now.
GOLD MONTHLY CHART
The RSI shows a triple bullish divergence likely to accompany this low.
The MACD indicator is currently bearish but has been trending up so it is also showing multiple bullish divergences.
The Bollinger Bands show price back down at the lower band and there looks to be some room for further downside.
The bullish Fibonacci Fan shows the 76.4% angle providing support and then resistance and price now looks to have the 88.6% angle in its sights.
The bearish Fibonacci Fan shows price gliding down just below the 88.6% angle and price busting above this angle will likely mean the low is in place and the bear rally is on.
I still believe this low will be a wave A low with a big wave B rally to follow.
The horizontal line denotes a previous swing low set at $1523 and that is my minimum target for rally high once the rally begins of course.
Once that B wave high is in place then the downtrend should resume to new lows. Plenty of time to worry about that however.