Gold Critical Decision Point Coming Up

Gold will have a Critical Decision to Make at the Red Megaphone VWAP

Gold will have a Critical Decision to Make at the Red Megaphone VWAP

Gold has broken out of its blue rising megaphone and is approaching its critical decision point at the red megaphone VWAP at roughly the March 10 low.

Since gold broke out of the blue rising megaphone without a proper top, it’s either morphing the formation into the pink megaphone within the larger navy blue triangle or it’s morphing it into a double-headed head and shoulders top at the red megaphone VWAP before a collapse to the red megaphone bottom.

A right shoulder bounce off VWAP would set up, but not guarantee, the larger move down (purple scenario).  A faster breakdown through VWAP would favor the green scenario.

Either way, gold is likely to break through VWAP to take out the December 2016 low and retest roughly 1100 at the pink megaphone bottom. Gold would then likely retest the red megaphone VWAP before either a breakout downwards from the pink megaphone to the red megaphone bottom or a breakout upwards through VWAP to the pink megaphone top.

QQQ & NQ Head and Shoulders

QQQ and NQ are Likely Working on Triangle Right Shoulders on H&S Tops

QQQ and NQ are Likely Working on Triangle Right Shoulders on H&S Tops

NQ put in a nice move down overnight within its likely triangle right shoulder at its potential head and shoulders neckline (red).

The triangle is still in its early stages and could redraw into a larger triangle or morph into a mini head and shoulders at the red neckline.  It could also turn into a megaphone right shoulder or a rising wedge right shoulder.

Triangle right shoulders on potential H&S patterns are always bearish.  They imply disciplined professional selling.

The purple scenario represents the NQ & QQQ H&S top morphing into a megaphone top.  Usually there’d be good odds of that but in this case, the big red June 9 candle suggests QQQ will top with the H&S (green scenario).

QQQ needs a pullback to at least the 100ish area.  There’s a set-up for a drop down to 70 if QQQ can put in a genuine breakdown through 98.

A stab down that failed to make it all the way to 100 and then started melting up after a minimal bottoming pattern would suggest the start of a major market melt-up.

See yesterday’s post for the daily chart.

Neely Set-Up on T for Return to All-Time High

AT&T has a Neely Crash Set-Up for a Return to the All-Time High

AT&T has a Neely Crash Set-Up for a Return to the All-Time High

T followed up on its 2002 crash with a partial retrace and a retest of the crash low in 2008. That is one of my favorite Neely set-ups for a return to the all-time high.

T formed a megaphone top (red) on its partial retrace and now it is bogged down at that megaphone VWAP.  It looks like it’s forming a triangle there, but that could morph into any kind of consolidation you can think of.

Once T breaks out from the VWAP consolidation, the next target is the all-time high near the megaphone top.