Gold has made some wild moves since its peak on February, 20 at the $1346 price level. I also dropped the degree level down by one degree which might not last too long as I do have the potential for a triangle to play out as well.
Commercials are still net short by a large amount and last week they added to their bearish outlook when they removed longs and added short positions at the same time.
What I’m looking for is a zigzag type of a move which should take us to new bearish lows. If that happens then my mythical triangle may also become more visible, which suggests a new record high can happen.
You can ignore that huge spike to the upside, as it only shows up in a bar style setting but it doesn’t show up when I switch to line type settings. False spikes do happen and since the April peak, several other false spikes were also created, which I didn’t count.
The worst that happens with a spike is that your account provider scopes in a huge amount of stop-loss orders from the bears.
It used to happen to me when I was trading the mini gold contract as the liquidity was extremely low and spikes were pretty normal.
I know that the gold bulls are looking for investors to charge into gold as a safe-haven but those are emotional decisions which never last that long.
Gold has been in a bearish mood since the 2011 peak and unless you know how bullish they were at that peak we can make the wrong decisions thinking a standard 5 wave bull market has happened.
That 2011 peak was a 30-year ± 1 year mania peak as wave 3 in Cycle degree. Not only that but gold also finished a huge Primary degree zigzag at the same time.
All commodities run under an idealized diagonal world that has been active since the Little Ice Age. That all changed during the Roaring 20s as stocks and commodities separated and went their separate paths.