POG Chart

[Costa]

Hey.

Interesting harmonics forming and formed with amazing reactions (T1, T2).

Right now we're seeing the breakdown of an initial reaction of the Bat. I am expecting a retest of the XA at a minimum and should that hold a type 1. If it fails i am will be looking at the range to the HOP. However, It will take time.

Here is the chart...

[Costa]

Privately amongst friends here and on Twitter i have expressed a view that the 'really important levels for Gold was not so much the 1680 USD level (although it was key) but more importantly the harmonic extremes that exist at 1622 USD & 1612 USD. The Twitter discussion i had with a couple of prominent chartists & AU Advocates who expected a bounce at that 1680 level were basing it on a technique that was starting to falter imo. I know that TA is a selection of tools and sometimes we as Technical Analysts may select the incorrect tool for the job. That happens in all work walks of life. As some of you know i am a firm advocate of harmonics, but it's not the sole thing i do. I actually try and incorporate some traditional TA elements into my work.

What Am i Getting at?
I think the Gold Price will eventually fail at these levels. That is to say the price will drop! Looking for support lower. I think that ultimately it will find that support around the 1500 area. This does not mean the price will not drop below that level. As well as break outs, there are fake outs. They are measurable and usually do not breakdown below the 1.13% fib extension level. So what could that be? Difficult to say with certainty. Firstly, i like to work using horizons. Therefore i need to see the price action in and around that area. Secondly, I need something to measure and i do not have that at this time.

(Note: As i am writing this at midday 27/9/22. The Harmonic Extreme level has been hit again, 2nd time in 2 days).

With this in mind, please take a look at the following chart.

A Harmonic zone - Labelled with numbered red circles
A confluence of harmonic zones providing the following levels within those zones...
1. A Crab Pattern: Volatile nature of the crab pattern makes an over extension towards the 1.902 level more than a possibility, pricing around the 1455 usd. The pattern completion level is at 161.8. This puts us at 1546 usd
2. The other harmonic zone.
There is a 88.6 measurement from the November 2019 low pricing at 1518 usd
There is a 61.8 C&H (pattern) low point to handle retracement pricing at around 1445 usd

Therefore, the harmonic area of interest is: 1453 - 1565 usd

Massive C&H retraced to 50%
- The cup took approximately 10 years to form.
- The Handle has taken about 6 months.
- The important thing to consider here is the length of the handle and the 'tilt' of the cup. The handle, not quite yet at 50% (Ideal retracement) but that
the 50% Cup measurement aligns perfectly with the Harmonic aspect of this chart. Namely the Deep Crab Pattern also expected to complete at or
around that level.

The Tilt i refer to is the fact the the RHS of the cup is slightly higher than the left had side. So, a slightly bullish set up in that sense.

The area of interest here is with less precision. However using the 50% it gives an area of around 1565 usd

A Previous Key Level (Labelled with blue circles 1 & 2)
1: A previous resistance (starting August 2019) and broken in January 2020 and then turned support in the creation of the 'spout' / 'pour' from the cup.
2. Support/Resistance from 2011.

Again that is around the 1565 area. Applying a 1.13 extension (if using the complete swing) it would price at around 1510. Within the harmonic range

I understand that this is contrarian to many gold bugs, investors and some who may base their investment in GGP on, so it may not go down well. We must remember here that the Dollar strength is playing its part in this, and that cannot go on forever. How long, i do not know. But i can measure it lol. . I have some ideas about that and the rates dilemma. I may post my thoughts. When the dollar weakens hopefully that is when we see some rotation.

So...Should we break this level (1612-1622)
We will look to the key levels described above as the potential support to hold, combined with the bullish, but volatile Deep Crab pattern confluencing with the completion of the handle for the c&h pattern. I am hoping that this could create a 'wind in the sails' scenario coupled with the historical gold price trajectory and boost the performance. Culminating in an eventual attack on ATHs.

No advice given anywhere here. I trade my own book/money based on my own work. Therefore, as always DYOR

PS. I'd imagine what i have described above will take time and that things can change. I am always open to that, and the result of change presents horizons one may not have anticipated.

[Popsy22]

Thanks for this Costa, really appreciate your expertise and sharing of info in this area.
Do you think the $ will be the pivot point/catalyst for turning or multiple economic factors?

[Costa]

So that zone between the HOPs did hold 3 times. A Type 1 move off the BAT then followed hitting T1 this week. Beautiful.

So, we are between T1 and T2, in Type 2 Reversal territory looking for signs including the indicator OS. AmpRSI is expanding into that zone and HSI is nowhere. Looking left there is a ledge...A previous resistance area so next week or so important. If we break it (could up around 1900) will keep an eye on HSI as we should anticipate that T2R. That will drop us to 1750 at least. Equally, if we hold the break then its possibly T2 at 1928.

These are just my thoughts, no advice here!

[Costa]

Thanks for this Costa, really appreciate your expertise and sharing of info in this area.
Do you think the $ will be the pivot point/catalyst for turning or multiple economic factors?

Popsy, apologies for taking so time to respond.

I have no thoughts on those things to be honest as i am only interested in the charts. I am sorry i cannot answer your question.

[Hydrogen]

Really appreciate your detailed work and thinking time stamped on here costa.

Let me get this right...

The gold price chart didn't quite play out, regarding the 'highest probability' outcome - you favoured bearish zone (1540) 'yet' because something in the macro/fundamental space (which - we may disagree on - of course IMO dictates the charts, in the end) ... but something, at the end of November early December, completely changed the gold price course, right..?

I wonder if that fundamental change factor was China Central Bank buying more gold (whilst selling US Treasuries)....? It's been clear we had a some sort of major (anonymous) gold buyer in market as reported by the bugs - Alistair McCloud etc.

I couldn't help but notice over the past few months, the gold price typically seems to rise overnight when China is open. Could this be that they are starting to come clean about their desire for a gold backed BRICS settlement currency. - the gold backed Yuan?

Add to this, the US market's slow but now real realisation that the FED was lying about Inflation, which will be here for longer, as will negative real interest rates, because the FED cannot afford to raise rates high enough to crush inflation - that would require 8-10% on the 2 year treasury .. (ie higher than inflation.)

BUT the big problem: Government debt - currently financed on short term notes at 1.6 to 1.7% - will probably crush the Treasury department and bankrupt the US - which cannot happen with interest payments over 5-6%

HOWEVER What they can do is reduce the money supply and this is what they have done. They have sucked liquidity out of the system at a rapid rate. M2 money growth is now negative, for the first time since I believe, the 1980s.

I've been debating with friends whether inflation can even realistically get back to the 2% target... given the macro... (which is also required to make the US Treasury at least look solvent so it has to happen somehow). But unless the US government completely crushes the economy by deflating the value of all assets that looks unlikely. The 'everything bubble' is still full of, well, something and probably has a lot lower to go.

But it's a huge challenge fro Central Bankers. Especially given much of the inflation is not caused by an overheated economy... it's being cause by obscene M2 money supply increases, and a broken supply chain and devastated EU energy supply regime. Also if the dollar falls US domestic inflation will rise rapidly.

And then there's Putin who is about to secretly conscript another 500,000 soldiers (having banned all foreign travel for male Russians a few days ago)

Perhaps when the sh*t really hits the fan in the US - with a credit event - which is coming, we will get that brief spike down to your Harmonic 1540 target...?

[Costa]

Like i mentioned to Popsy above Hydro, i am really trying to focus only on the TA side. Having said that i read the Zoltan essays. Which are a brilliant read.

The 1540 ish level is just that and should we test that again there will be many horizons to get through so to speak. What you suggest is certainly possible and given consideration to those essays then one could see a spike down.

...Our Commodities Your problem...

And what do we know we have in terms of metals as per MRE etc...And is there more to come, metals wise.

[Costa]

A break through the 1900 resistance and hopefully an attack on that 1928 level. But, we are between the Targets on a Type 1. Therefore, a bearish HSI puts us on watch for the Return move. We could be about to go O/B but will still need to pop. A few days away if it enters the zone. This suggests continuation for now.

[Costa]

Update

Okay, so we did touch Target 2, that 1928 level. It was actually 1929.4 lol. So will this become resistance?

I continue to watch and look for a fade in this move. No HSI and that has turned away so for now not heading into OB. And, we have a complex structure in the OB AmpRSI. This is interesting because sometimes it suggests consolidation and a side ways move. Will monitor that as the expectation is a return to the midpoint (AmpRSI) and then a reversal to retest that AmpRSI level. A failure would equal a higher potential for a rollover. If not then I will reassess

[Costa]

Update:

We are today retesting the recent after past three days down. We now also have a confirmed a bearish Shark and the price action in this new Harmonic Zone is playing nicely, in that the initial minor reaction of the 1929 level down to the 1896 and then as of now, a one candle move back from there to retest that top, a three rising methods formation? Its also testing the top of the range of yesterdays shooting star candle. AmpRSI and standard RSI still expanding. As mentioned in last post a period of consolidation / side ways move was an expectation is what has happened till now.

What Next?
HSI is not OB, so still thinking side ways until one of two things happen.

1. We break the high and fail the HOP (1951) (with the 3 rising methods formation) and then get bearish HSI, then am looking a similar move down discussed previously, target in this case would be 1771. Unless, a demonstrative move up and through the HOP (1951). Then reassess my bias.

2. We fail this retest and a demonstrative break down through the 1876 level, then Target 1 771. Could take time to play out.

I am more bearish...Sorry.