Volatility-Based Long Setup on Gold D Chart

2 Apr 2019

I think this chart is very clean. We retraced to the implied mean reversion level and appear to be retesting it bullish. CCI rolled up.

Initial target is the 1.25 STDEV of the implied period and we should expect to consolidate inside of it for the time being. That said, I think there's also an FA case for trend continuation as equities close in on ATH despite eroding economic data and rallying bond markets - we could see volume pile into gold as a safe haven asset to outright resume trend if SPX finally has a meaningful retrace on its nearly uninterrupted rise since December. So, I'm thinking it makes most sense to take heavy profits at the initial target and keep some of the position for a rally a bit further.

Keep in mind, gold initially rallied as the 2007-2008 market started topping out, but did eventually start selling off with everything else in 2008. It may be a traditional safe haven, but it's not the safest of all the safe havens and I don't assume that this is as simple as "equities dump, therefore buy gold". The chart does look good now though, and we're still in the earlier distribution stages of a potential equities top where price is testing the top of the range.





If you'd like to learn more about the indicators used to produce this chart, check out SharkCharts.live, and DadShark's Youtube channel where you can find his daily livestreams applying this methodology as well as the series of overview videos I've released for these indicators. The video playlist for my indicator overview videos is youtube.com/watch?v=KfMpS65T0no&list=PLhWytUyCG_WGGpXI8KEBd5pT8sGgX1Vhk

I am an amateur and you shouldn't take anything I say as financial advice. I'm interested in any feedback.

18 Apr 2019

Catatan

This idea first reached about halfway to the target and then dropped back to entry in a single day before trending locally down past the stop.

Whether in practice that's a win or a loss or a breakeven result amounts I think to a crapshoot depending on your theory of the case as to when to move stops to breakeven or higher.