Tuesday, 2 March 2021

Gold Market: Even More Downside

In my previous post on gold Gold Market: More Downside,  i pointed out that a weekly candle had closed below 50 wma since 2019. But i also reminded the readers that there's a danger that i wrote the post 1 day before the end of week. Because by the end of week, that candle may close back above the 50 wma. And it did.

I had an egg on my face, it seemed. But if that candle turned out to be a bear trap, prices should break out above of the falling trend line or resistance. Instead it gapped down a week later. So it's not a bear trap, but a trap of bear trap. In other words, it makes you think it's a bear trap, but it's not! It's a bear signal.

I did say in that post that i don't rely on only 1 signal to call the downside. I relied on many other technical indicators, as well as fundamental reasons that i mentioned some in the post.

(Click chart to enlarge)

Not only prices have broken below the 50 wma (see chart above), but it also have broken below 20 mma (see chart below). And we know the longer the time frame, the more significant is the breakdown. With these 2 signals (and many others), the path to least resistance is to the downside.

It's likely it's going to get some support at $155 - $157. Ultimately, there's a good odds that prices would target around $135 - $138.

If price break below the support of $135, gold would be in the start of bear market.

Short gold, or buy Bitcoin (digital gold). Don't fall in love with any asset. Fall in love with your portfolio returns, if you need to fall in love with anything. One day would come, when buy gold and short Bitcoin may be a good trade.

(Click chart to enlarge)