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Doctor of chiropractic, part-time macro analyst, and currency trader.
  • Bearish Divergence on Gold 2 comments
    Nov 12, 2010 8:24 AM

    Gold made a peak back on October 14 at $1387.07 before declining to $1314.90 on the 22nd. From there, it made  a new peak (a higher high) on November 9 at $1424.25.

    At the same time as the new high in price was being made, the MACD signal was making a lower high. Taken together, this bearish divergence suggests that gold will retrace the uptrend which began back on July 28.

    The precious metal has already found support on several days at the 14.6 fibonacci retrace level; a close below there suggests a move to at least the 23.6 if not the 38.2.

    Five days before gold flashed negative, bearish divergence was also being seen on EUR/USD:

    As well as AUD/USD:

    Meanwhile, USD/JPY was making a bullish divergence:

    Disclosure: Short Euro, Aussie, Yen and Gold

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  • 4Duxs
    , contributor
    Comments (15) | Send Message
    I have an uneducated belief you are correct. So what pops the bubble, we have to cause deflation and not a flight to quality. What is your short vehicle, any ETF's?
    14 Nov 2010, 07:43 PM Reply Like
  • NewstraderFX
    , contributor
    Comments (110) | Send Message
    Author’s reply » I don't think the up trend in gold is over, but a move to $1322 is certainly within the realm of possibility. If it gets there, we'll see how things look at that time.


    Should the Fed downgrade QE2, that certainly would take gold lower. No idea if that will happen, though.
    15 Nov 2010, 07:11 AM Reply Like
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