Mini Gold: Flash Update

Yesterday I put out a Flash Alert that Gold had just completed a three wave correction signaling that there was a good opportunity to go short. Our Trade Strategy was to wait for the recent decline to confirm five waves down ( which it did) and to establish a bearish position with an entry on lower TF as momentum indicators make a bearish reversal against a 3 wave corrective structure with a protective stop 1417.2. The expected target was for a full retracement of the corrective structure from 1382 - 1417.2.

Here's what transpired:

Right after the close, the three wave correction against the decline from 1417.2 - 1403.8 completed at the .618 retracement of 1409.4 and whereas w.c=.618 w.a @1409.9. I have shown the lower TF at the 20 min chart level but the 5 min. could also be used to fine tune the entry with a smaller capital exposure (stop) just above 1409.4. Notice the green vertical line indicating the bearish momentum reversal. While it is hard to see, there is 1 price bar just before the gap that gave a trader a very low risk opportunity to place a short.


As you can see the decline from 1409.4 has indeed fully retraced the corrective structure from 1382 - 1417.2. Momentum has reached OS and has diverged with price. A bullish reversal has also been made.
Time to take profit.

This was a great trade and the best part is that the Gold trade is crowded. At the daily chart level there is potential for a much larger decline so I will be monitoring the wave structure to identify another set-up.

Best of Trading