Gold: Selling? Not So Fast! Falling Knife WARNING!

15. Aug. 2019

Ok, more like a spike in the a**...if you know what I mean! I'm posting this because I see here that there are several "prominent" posters who are saying "SELL! SELL! SELL!" and I know that more than a few of you "less experienced" traders here are just taking their word for it and selling. Well, I hope you pay close attention to what I have to say and take the proper precautions and hopefully protect yourselves! Or better yet...BE PATIENT and WAIT for the price action to give you the go ahead. Don't try to "chase the top". If it does fall as hard as I also predict it will, there's PLENTY of profits to be had without "catching the very top". Sacrifice a few pips to get the confirmation needed to sell this safely.

But if you are reading this, then I am telling you that this is NOT the right time to sell! Keep reading to find out why I say this when so many others are screaming to SELL!

Here's my LONG TERM chart that I posted in my blog back in July 7, 2019. Two months ago, I predicted that prices were headed higher to 1530 or so. Where are prices now? They recently hit 1535. How's that for a prediction?

But you know what? I actually think that I'm WRONG and that prices are actually headed even higher than that! Just 1 month later, this is what I posted to my blog:

You can see in that chart that I am predicting Gold to go MUCH HIGHER possibly to around the $1700 level. But that is for later. The warning I'm giving here is for the right now. Take a look at this current weekly chart:
https://www.tradingview.com/chart/R3XdMoxF/

What I want you to pay attention to is that yellow STRONG RESISTANCE zone that I have painted on my chart and look back to where it begins. There you will see that this "zone" served as STRONG SUPPORT previously for prices and back in Dec, 2011 - July, 2012, prices could not break below this "zone". Then in April, 2013, prices finally broke through this "zone" and headed lower but never came back up to retest this zone....that is until now! If you know anything about price action analysis, then you should know about one of the most common types of price action: the break/retest pattern. What it is simply is that when prices do "break" through a support/resistance zone like the one I am showing you, almost ALWAYS, it will at some point retest it. That is what it is doing now. The first time prices retest a "zone", more often than not, in fact most of the time, it will be rejected. And that is what I am expecting to happen here. But look closer and you will also see that in my chart prediction, I am also projecting that prices need to move up into that "zone" before being rejected.

But here's a closer look and what and why I am projecting that prices STILL need to move higher into that "zone". Look at the main chart above that shows my 4HR and Daily chart analysis. The thing you should immediately see is that the current spike high I labeled as the completion of the wave iii within the larger wave (iii). That would mean that the main wave (iii) is NOT OVER and STILL needs to head higher in the wave v of (iii) in order to complete. What that also means is that currently prices are in the wave iv of the larger (iii) correction and that we should expect a sideways wave iv correction. NOT a deep retracement before it heads higher in the wave v of (iii). And that wave v should take prices into the STRONG RESISTANCE zone that I have shown you.

So take my warning the way you will. But don't say you weren't warned!