26.07.2011 Daily Technical Report GOLD
Resumption of uptrend needs to close above 1620-24.
Gold’s previous resumption of the uptrend still needs to close above 1620-24 in order to confirm sustainable extensions higher in line with the major uptrend for extensions into the next key level at 1700.00.
We had prefered hedge for downside risks following the recent unprecedented explosive upside move, which triggered a confluence of our exhaustion signals.
However, as previously stated, it was critical the market confirmed a reversal beneath a filtered price/time trigger point. This downside trigger level still holds at 1588/82.
In terms of the big picture, we continue to watch price activity within the apex of the 12-year exhaustion pattern (illustrated on the weekly log chart), which has also developed a unique long-term DeMark™ exhaustion signal.
Gold’s COT liquidity indicator (net long positions) remains squeezed within a tight range (as Gold continued to make push to record highs on lower volume). At this stage, the risk remains for a downside breakout which would unlock over 1.5 years of sizeable gold long positions.
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