Here is the latest on GOLDIt has formed the infamous triangle on a weekly chart. High level triangles the technicians will tell us are generally a bearish formation, and breaks below the downside of them should be shorted.
At the same time the commercials have been moving to the long side and open interest has been dropping. What this tells us that a larger and larger % of the positions on the long side are commercials.
This is bullish, yet we have a bearish chart pattern.
What to do? At this point I do not see a high probability entry into this market, so for me I will just stand aside and let the economists tell us what will happen here.
2 comments:
Lewis,
I say that just because the usual breakouts of these are to the downside. I have no percentages on this, only know it from the school of hard knocks. You are correct though, it is not a short until it breaks and closes below the triangle. Generally what I have learned is only play breakouts downward out of these formations. If the break is upward I pass on it.
Now, the commercials are now heavily long this market so upward movement is more likely, but I will wait for a different pattern to form to get long than the breakout of this triangle.
My August 16th post covered the Oil market. The commercials have been heavily short. They have lightened up a tad on their shorts, but nowhere near enough for a long entry.
It is tough to chase something that has fallen this hard, so for any short entries I would wait for a bounce. Certainly nothing on the long side in OIL at this point for me.
Post a Comment