Gold Bubble Weekly Update Week # 6

sawcruhteez (55)in #investing • 8 years ago

Disclaimer: This is not meant as financial advice and is for entertainment purposes only.

Things got very exciting last Wednesday (4-11-18) when it looked like we were breaking through $1,355 resistance. We had a double bottom and a strong rally leading into the key area of resistance.

I made a partial entry at $1,358 and waited for further development. To my dismay we quickly wicked down and my stop loss triggered at $1,338. Oh well, I expect to be getting another chance sooner rather than later!

1 Month Chart

Higher low in March leads to a potential double top for April
Support is moving up
Resistance is being eaten away
RSI remains above 50, forming higher lows and higher highs

1 Week Chart

Higher low ($1,320) leads to higher high ($1,365)
Bearish div in RSI - higher low (53) leads to lower high (57)
Double top from last week led to a shooting star type of candle (bearish)

1 Day Chart

So far bears have been unable to build momentum off the shooting star wick, instead it was met with a higher low.

I relate this to Newton’s Third Law: “For every action, there is an equal and opposite reaction.”

I would expect a double top to be met with a lower low. Instead we have formed a higher low and therefor the reaction to the double top was not equal and opposite. I view this as a bullish divergence. It tells me that the bears are running out of ammo and will have trouble holding down the resistance for much longer.

We also have a nice bullish div in the RSI.

Things are looking very good outside of the bearish div in the weekly. Support moving up into the key area of resistance is like a volcano getting ready to erupt. The pressure is building and at some point it has to be released. I will remain firmly bullish as long as support holds above $1,300.

Click Here for last week's post!