Gold & Silver Plunge into Early-March; Intra-Month Trend Indicator Could Trigger Rebound (Before Drop into April 2019 & Down to ~1270/GC).
Gold & Silver Plunge into Early-March; Intra-Month Trend Indicator Could Trigger Rebound (Before Drop into April 2019 & Down to ~1270/GC).
03/06/19 Weekly Re-Lay Alert – WET vs DRY: Intra-Month Trend Indicator:
There are two primary schools of thought when it comes to programming and software development. Those same schools of thought apply equally well to many forms of writing, when conveying various forms of information and analysis:
— DRY – Don’t Repeat Yourself
— WET – Write Everything Twice
Some argue for the DRY method – only conveying something once and then looking to find some new and exciting focus. That works fine for entertaining but not as well for educating.
Others tout the benefit of WET – writing everything (at least) twice in order to really drive home a point.
I am definitely an advocate of the latter, believing that almost every point and principle needs to be reinforced – often multiple times – before it really becomes internalized and properly applied. Even once a technique is internalized, it is still important to review it as a means of continually challenging it – to assure that it is still valid (iron sharpens iron).
Nowhere is that truer than in the review and re-application of important cycle and technical principals.
With that preface, it is a good time to turn attention to an important indicator that involves time and price… and that is coming into focus right now:
The Intra-Month Trend Indicator.
In no way is this technique purported to be a Holy Grail… not even close. However, at the right times and in the right context, it is a powerful corroborating tool.
This trend indicator provides a reliable means of gauging expectations for specific parts of the month. The primary one of those parts or periods is the timespan between the fourth trading day – of any new month – and the ensuing middle of that month.
Like any other indicator, it has significant limitations that must be supplemented by – or compensated with – other indicators (synergy). In order to better understand its capabilities, let’s review its rules and objectives:
— The intra-month trend (up, down or neutral) is determined by a daily close outside of the price range of the first three trading days of the month. As a result, a confirmed intra-month trend cannot be determined until the close of the fourth trading day, at the earliest.
— An intra-month uptrend projects a rally to monthly resistance and/or into mid-month (ideally both).
— An intra-month downtrend projects a decline to monthly support and/or into mid-month (ideally both)…
— Once a new intra-month trend has been signaled, the month-opening trading range (of first three trading days) becomes support for an intra-month uptrend or resistance for an intra-month downtrend.
— Related expectations are determined by intra-year trends as well as intra-week trends.
— If a market is going to set an early-month peak, it should do so in the first 3 – 4 trading days without turning the intra-month trend up. (A market could spike to a high on the fourth trading day, or even after that, as long as it does not close above the price range of the first three trading days.)
— If a market is going to set an early-month low, it should do so in the first 3 – 4 trading days without turning the intra-month trend down.
— If/when a market exceeds monthly resistance or closes at new intra-month highs after mid-month, it projects continued upside into month-end.
— If/when a market violates monthly support or closes at new intra-month lows after mid-month, it projects continued downside into month-end.
With those criteria reiterated, let’s review how this indicator is impacting key markets as they complete the fourth trading day of the new month – the earliest that new intra-month uptrends or downtrends could be signaled…
Gold & Silver have sold off sharply, since peaking on Feb. 20 and fulfilling a myriad of related cycles (55 – 59 week, 27 – 29 week, 13 – 14 week & 6 – 7 week), the largest of which have been in focus for over a year.
They plunged on Feb. 25 – March 4 – the same time their inversely-correlated daily 21 MARCs were surging and exerting a negative influence on the daily 21 MACs and on evolving price action. Both have attacked their first decisive support/target levels (1281.6/GCJ & 15.000/SIK) and could see some consolidation.
Combined with the intra-month trends – that would not turn down until daily closes below 1282.0/GCJ & 15.060/SIK – Gold & Silver could see a multi-day bounce, possibly stretching into March 12.
The XAU has also dropped sharply after attacking its weekly & monthly targets at 80.42 – 82.56. Its Feb. 20 high fulfilled similar weekly cycles as well as the latest phase of a 21 – 22 day low-high-high-high-(high) Cycle Progression (that could create a subsequent, rebound high on March 13/14.
In the interim, the XAU could still extend selling into March 8 before initially bottoming. A daily close below 72.95/XAU would turn the intra-month trend down and reinforce that scenario.”
Gold & Silver are powerfully confirming multi-month peaks forecast for Feb. 19 – 22 (while validating projections for a subsequent correction into mid-April and down to ~1270/GC). The Feb. 20 peaks fulfilled multi-month, multi-week & multi-day cycle highs AND attacked extreme upside price targets – creating highs that should hold for at least 2 – 3 months. They fulfilled initial expectations and could see some consolidation take hold now that 1 – 2 week downside targets have been reached.
What Could Trigger Second Leg Down?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.