Trader Dan's Market Views: <b>Gold chart</b> from Yesterday's Selling <b>...</b> |
| Trader Dan's Market Views: <b>Gold chart</b> from Yesterday's Selling <b>...</b> Posted: 07 Jan 2014 04:16 PM PST For those who enjoy entrail reading of price charts as I do, I thought you might find the following chart an enjoyable reading experience. It is a one second chart and shows the tremendous volume that resulted from yesterday's selling outbreak in gold. It is difficult to get any sense of perspective when viewing the chart on a one second time frame so I am putting up another one with a big longer time perspective on it so that you can see just how large the number of contracts that were that traded.  Here is a 20 second chart - notice how the volume on the recovery higher exceeded that of the volume on the way down.  I must say that the speed at which this thing recovered makes me suspect more of an erroneous trade than anything. Open interest readings in gold showed a sharp drop of some 6,243 contracts in the most active February contract in yesterday's wild session. Overall volume was not particularly high given the huge sell order that hit the pit around midmorning EST. It came in at a mere 158,991 on the screen. Combined with the pit trade volume, it did not even make it 200,000. That is not large by comparison to other heavy volume days. If this was a fresh sell order which was met by fresh buying, we would have seen it by an INCREASE in the day's open interest. We did not get that. One thing I can say from looking through the data was that some short-term longs were kicked out of the market on the plunge lower as their stops were hit so we obviously got some decent sized long liquidation. But that long liquidation must have been met by some short covering as well. Here is the other thing I can say from going through this stuff - the sell off occurred at a key technical price level on the chart. Gold failed to extend higher as a result. The price fell to, but did not break below initial chart support near $1225 or so - YET. If it does, the support zone that brought in buying yesterday was near the $$1210 level will need to hold to prevent a retest of psychological support at $1200. The mining shares are holding up which should give the bulls some consolation. That will need to continue. Where gold goes from here is anyone's guess at this point but keep in mind that on the intermediate term chart, the bears remain in control of the market until PROVEN otherwise. The weekly chart shows a downturn in the ADX indicating a break in the downtrend but negative directional movement ( RED LINE ) remains above positive directional movement ( BLUE LINE ). Bearish forces dominate as long as that is the case. The level near $1180 is critically important!   |
| <b>Gold</b> to Real USD <b>Chart</b> | The Big Picture Posted: 07 Jan 2014 09:00 AM PST
Category: Gold & Precious Metals Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous. Leave a ReplyYou must be logged in to post a comment. |
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