On an intra-day 240-min basis below, yesterday and today’s continuation of the past week-and-a-half’s rally leaves Mon’s 1753.5 low in its wake as the latest smaller-degree corrective low the market’s now got to sustain gains above to maintain a more immediate bullish count. Its failure to do so will confirm a bearish divergence in short-term momentum and expose at least another interim correction lower. Per such, this 1753.5 low is considered our new short-term risk parameter to a still-advised bullish policy and exposure for shorter-term traders with tighter risk profiles.
This tight but objective short-term risk parameter may come in handy given the market’s resumption of the secular bull trend following today’s break above 11-Apr’s 1788.8 high shown in the daily log chart above and weekly chart below. The daily chart shows the market above the past TWO MONTHS’ resistance from the 1788-to-1761-range that would now be fully expected to hold as new support per any broader bullish count.
A failure below 1753.5 would be of too minor a scale to conclude a larger-degree peak/reversal count. Indeed, commensurately larger-degree weakness below 05-Jun’s 1671.7 next larger-degree corrective low and key risk parameter is now minimally required to break even Mar-Jun’s portion of the secular bull, let alone the secular bull trend dating from Dec’15’s 1045 low. But against a backdrop of historically frothy bullish sentiment levels not seen since those that warned of and accompanied 2011’s 1920 all-time high, admittedly short-term weakness below 1753 would be hard to ignore as a prospective start to a more protracted correction or reversal lower.
The monthly log chart below provides a great historical perspective of golds long-term ride, with the 4-1/2-YEAR rally now testing 2011’s historical 1920 all-time high amidst the same type of frothy sentiment that ended that previous secular bull run. If there’s a time and place to be leery of another such peak/reversal, it is here and now. And we will gauge such a prospect around the market’s ability to sustain gains above recent corrective lows and risk parameters like 1753 and 1671. Until and unless such weakness is shown, the trend is up on all scales and should not surprise by its continue or acceleration. These issues considered, a bullish policy remains advised with a failure below 1753.5 required for shorter-term traders to move aside and for longer-term players to pare exposure to more conservative levels. In lieu of such weakness, further gains remain expected.
