Gold Textbook Triangle

The Blue Megaphone and Pink Rising Megaphone Lock Gold Into a Textbook Triangle Scenario

The Blue Megaphone and Pink Rising Megaphone Lock Gold Into a Textbook Triangle Scenario

Between the pink rising megaphone and blue megaphone, trading formation rules now pretty much lock gold into a textbook megaphone-inside-megaphone triangle scenario.

An upwards breakout from the red triangle would be an upwards breakout from an inverse head and shoulders bottom with a triangle right shoulder.  The technical inverse H&S target would be at least 1800 but the long move sideways would imply a new all-time high for gold.

Gold Long-Term Rising Megaphone

Gold Long-Term Rising Megaphone

An upwards breakout would usually mean gold was extending its long-term rising megaphone (blue in chart above).

A downwards breakout, which is more likely, would target the 700s and likely lower in the course of forming a bottom.  A downwards breakout would complete the blue-rising megaphone with a retrace to its bottom.

Gold Still Heading Up

Gold is Putting in a False Top Near its April 17 High but is Highly Likely to Go Higher

Gold is Putting in a False Top Near its April 17 High but is Highly Likely to Go Higher

Gold has formed a new megaphone across 1250ish and has reached the level of the previous April 17 high within this megaphone. A price would often put in a false top here and retrace as far as VWAP at 1250-51ish before heading up to a new high for the megaphone.

The pink rising megaphone on the chart strongly suggests gold will head up to at least the top of the potential red triangle (that triangle bottom is likely to be redrawn).

If gold makes it as far as the blue megaphone top I’ll be redrawing the most likely scenarios.  Right now the green is such a strong favorite I’m not cluttering up the chart with others.

Gold is Setting Up a Swing to its Megaphone Top

Gold Elected to Bottom in the Critical Decision Wave of its Red Price Channel and is Setting Up a Move to the Blue Megaphone Top

Gold Elected to Bottom in the Critical Decision Wave of its Red Price Channel and is Setting Up a Move to the Blue Megaphone Top

Gold formed a price channel (red) on its move down from its April high and elected to form a bottom in the critical decision wave of the price channel.

Gold is now breaking out of that price channel as it forms either an inverse head and shoulders (green scenario) or megaphone (purple scenario) bottom for a swing to the top of the blue megaphone.

That swing could put in the top before a move down into the 700s, or gold could stay stuck in the blue megaphone for a while longer as it forms a big triangle between 1400ish and the 1050ish low.

I posted the long-term gold scenarios here.

Gold Tell

Gold Just Gave a Tell that it's Likely to Keep Megaphoning Across 1250

Gold Just Gave a Tell that it’s Likely to Keep Megaphoning Across 1250

Gold just tagged the bottom of its red rising megaphone and may break the bottom by a bit. That means gold just ruined its chances of forming a proper head and shoulders top inside the red rising megaphone.

That would usually mean gold is settling in for extended megaphoning across 1250, and that would usually mean a triangle is forming (green scenario).

The purple scenario is gold abandoning the red rising megaphone to form a simple or complex head and shoulders top across 1250 for the move up from the December 2016 low.  That would usually set up a crash to the bottom of the big navy blue megaphone.

The purple scenario is unlikely, but if you see it, that crash into the 700s  would be a strong set-up for a fast move to at least the navy blue megaphone VWAP and most likely its top.