Update on Gold: Aug 15, 2012

Gold continues to trace out a large descending triangle.  Interestingly, though, it has now constructed an ascending triangle within the descending triangle (the white dashed lines.)

Each is roughly 65% of the way from origin to apex — typically the point at which these things break out.  The larger triangle comes at the tail end of a spectacular run up in prices — meaning it is more likely (73% according to Bulkowski) to break upwards.  The smaller pattern could break either way, though a break down for another test of the 1530ish baseline certainly looks logical.

There is little in the harmonic patterns to suggest one direction over the other.  A completion of any of the potential patterns means a trip outside one or both triangles.  But, the regularity of the travels from one bound to the other suggests playing the swings and/or the breakout.

A break upward from the small triangle at 1634 would likely result in a run to(at least) the upper bound of the larger triange — currently at 1655.  Likewise, a break of the small triangle’s lower bound (currently at 1592) should be good for a trip down to 1530.

Since prices most recently tagged the lower bound of the small triangle, I’d be inclined to play the upside at the moment; but, from 1609 to 1633 is only about 1.5%.

GLTA.

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Update on Gold: Aug 15, 2012 — 1 Comment