This week, we are ending our commentary portion, probably until January due to a pressing time commitment for the next several weeks. Starting from next week, we will post charts and chart comments only on this site. If you are not a subscriber and still want to read the chart comments, you will have to subscribe in order to follow the updates.
This is not an effort to increase subscribers, rather, it is the only viable way because the sites to which our articles are submitted prefer some accompanying commentary, in addition to the charts. We do not use subscriber e-mails for any purpose other than submitting our commentaries directly to them. Subscriber privacy is respected. Besides, from our point of view, the charts tell the most compelling story.
Charts…
The continuing PM down trend is obvious, but sometimes adding a simple line to connect the swing highs and lows can alter what the eye sees. As a consequence, we were able to focus on reaction rallies 1, 2, and 3 for a comparison and assessment, as explained on the chart.
Typically, when a trend ends, there is often some form of dramatic price/volume activity that stands out. An example would be seen in the activity on the left portion of the chart. Price declined sharply into the June lows and had the look of a potential end to the trend. What is missing and explains why this was not an end to the down trend were two factors: lack of heavy volume at/near the lows, your typical sign of change from weak hands into strong hands, and the initial reaction rally off of the low was not that strong.
What you are seeing in gold is a steady decline with no apparent panicking to form the basis for a bottom. The very small range of last week is the antithesis of a panic. It shows that buyers were keeping sellers in check after a sharp decline. Sellers lost control, at least for the week. This opens the door for buyers to begin a reaction rally, and that remains to be seen.
This post was published at Edge Trader Plus on November 14, 2015.
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