Gold: Down $46, Quasi Shooting Star for the Week
December 5th, 2009WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
This is from Questions on Gold, November 13, 2009:
Shorter term dollar bears and gold bulls, that upper channel line is your line in the sand.
U.S. Dollar Index, Daily Interval
Short to medium outlook dollar bears and gold bulls: Stay the course as long as the downtrending channel on the USDX remains intact. Keep in mind, however, that a move up and out of the downtrending channel on the USDX above could mean substantial pain in the weeks and months ahead for dollar bears and gold bulls.
Now, let’s look at some charts with today’s closes printed. Anyone who has been following along doesn’t need this explained yet again. In case it’s not clear, here’s the summary:
There is an uptrending support line on the USDX that goes back to March 2008. The USDX is subtly indicating that it is going to bounce off of that support. On gold, we see a weekly quasi shooting star—a bearish pattern—that occurred after gold reached a new high. It is not a “text book” shooting star because there is some candle shadow below the body, indicating that bargain hunters were still buying. This bearish formation, however, must be considered along with the bullish divergence and channel breaks on the USDX.
U.S. Dollar Index Daily Interval
U.S. Dollar Index Weekly Interval
Spot Gold Weekly Interval
