2018 Gold Slide Intact, But Beware Momentum "Down Here"

August 20, 2018 8:30AM CDT

Against the backdrop of this year's broader slide we'll discuss in more detail below, the past couple days' rebound is advised to first be approached as a corrective hiccup ahead of resumed losses. Former 12010-to-1212-area support is considered new near-term resistance with strength above 03-Aug's 1212.5 (suspected minor 1st-Wave) low minimally required to jeopardize the impulsive integrity of a more immediate bearish count and provide the first indication of a base/reversal threat that could be major in scope. Per such this 1212.5 levels is considered our new short-term risk parameter from which shorter-term traders with tighter risk profiles are advised to rebase and manage the risk of a still-advised bearish count.
Gold 240min Chart
Gold Daily Chart

Looking at the daily chart above, there's no way to tell if last week's 1167.1 low completed a 3-wave or 5-wave decline from 11-Apr's 1369.4 high. Commensurately larger-degree strength above 31-Jul's 1237.8 larger-degree corrective high and our key risk parameter remains required to, in fact, break the major downtrend and expose a base/reversal environment that we believe could be major in scope. This base/reversal-threat environment is predicated on:

  • the market's return to the lower-quarter of 2-1/2-year range shown in the weekly log chart below amidst
  • historically bearish levels in our RJO BSI not seen since 2001!

Additionally, we find it interesting that 16-Aug's 1167.1 low is only three bucks away from the (1170.3) 1.618 progression of Apr-May's 1369.4 - 1281.2 initial decline from 14-Jun's 1313 corrective high.

In sum, it's not hard to find reason to be very watchful for a base/reversal environment that could be very opportunistic from a longer-term perspective. However, strength above at least 1212.5 and preferably 1237.8 is required to threaten and mitigate the bear and warrant a shift from the bear side to a new bullish policy. In lieu of such strength the past few days' bounce is advised to first be approached as a corrective hiccup ahead of at least one more round of new lows below 1167.1.

Gold Weekly Chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.