In the May 27th edition we showed a daily-scale top extension in Gold futures. This had the usual meaning – an imminent end to the uptrend, with the most likely outcome of some sideways ‘churning’. Our recommendation was to ‘protect profits’ on the long positions advised on April 6th. The market has traded sideways in the ensuing 13 days and that signal is approaching the end of its ‘shelf life’, so we think the uptrend will probably resume soon. We do not always get any signal to re-buy in these exact circumstances, so the purpose of this bulletin is to point out that the top signal has almost run its course, so you may choose a moment to re-buy. An update:
re-visits to compressions, once broken. These re-tests are the moment to enter trades
Meanwhile, Copper futures have been compressing and are (so far) breaking down today. Here is a history of the recent up-move that started with a compression in February. Note that there were initial breaks downward from the compressions shown on this chart and no ‘re-visits’. This is also typical – if the break from a compression proves to be ‘false’ then the subsequent ‘real’ move tends not to include any ‘re-visits’ to the compressed area. Copper looks more vulnerable:
All signals provide by software developed by our friends at Parallax Financial Research www.pfr.com
