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>
> <<If you look at the XAU index(which usually preceedes Gold) you will
find a
> potential inverted Head&Shoulder forming. Break out point 97,63. Close
Fri
> 95.15.
> BUT if you look att On Balance Volume for XAU we have a completed
Inverted
> H&S (July 8-July25)..................>>
>
> Stig,
>
> Not sure I understand your time frame for this inverted "head and
shoulders"
> pattern. We may be talking about the same period, but the most obvious
> inverted head and shoulders pattern I see, starts with the drop from
1987.
Peter,
Well, you are talking macro and I am talking micro. However, I have often
found that
the micro arguments often leads to the macro development I am touching on.
The inverted H&S I am referring to starts with a left shoulder on June 23
-97.
Head: 7July and (possible)Right: on July 24. A 1 month span (the OBV
above=2 weeks).
I am not sure I would characterize the gigantic H&S you are describing as
H&S,
rather a trading range, but thats only beacause I don't have data further
than
1983, so I can't see the development before that.
But what I see in the macro perspective is the rising trend line you can
draw in
XAU through the 1985 and 1993 bottoms. the 1997 bottom(?) doesn't even get
close to it.
Looking at gold however you can see, that, not only did we break a similar
trendline.
We also broke support from the bottom in early march 1993.
A really nice divergence!
Now, Robert Miner (Dynamic Trader's Report), who in the early eighties (I
think it was)
specialised in precious metals, claims that Gold usually makes a major
bottom in
a spike down move and also usually breaks a supportlevel.
The bottom(?) on July 7 looks like a spike down to me and we clearly broke
a support level.
The only question to me after/if we break Dec Gold 334,3 is if we are in a
ABC correction
or a 5 wave uppmove. either way the retracement in an B wave or 2 wave
should be very
tradable.
I am no expert on Gann, but I believe he said that at the bottom of wave 2
or B is the
safest place to place your bet (or was it Elliot?)
regrds
stig
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