Gold Technicals Point To Down Move
Trader Moe | Aug 08, 2016 09:44AM ET
Gold is trying to work its way back to its head-and-shoulders neckline (red).
This pause, en route to an obvious target, suggests that a triangle right shoulder will form. A head and shoulders with a triangle right shoulder is a strong favorite to breakout downward.
Gold Thinks It Broke Out Of An Inverse H&S Bottom (Red Neckline) But It’s More Likely Forming The Blue Megaphone Bottom.
Gold thinks it has broken out of a big inverse head and shoulders (red neckline on daily chart above). But an interior megaphone (orange on chart) suggests it is forming the big blue bottoming megaphone instead and that the next move down will target the blue megaphone bottom at a little below 1000.
If instead of a fast move to 1000, gold gets bogged down in a megaphone across 1200 (Dec. contract), it is likely forming a big triangle between the last low and wherever it tops.
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