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After having reached the current bear market low in November 2014, rather obviously gold has been orienting itself by the average yearly course of the past 30 years.
Source: www.seasonalcharts.com/classics_gold.html
Above this average yearly course of the past 30 years depicted by the blue line, I placed some arrows and dotted lines of different colors. The arrows mark some important turns for 2014 + 2015 from the November 2014 bear market low.
At the orange arrow, in November 2014 a one month rally started. In full alignment with the seasonal guidelines, this rally topped in early December 2014. Afterwards, corresponding with the seasonal patterns a correction till mid-December was to be supposed.
The real outcome for December 2014 was this correction lasting exactly until 12/22/2014, depicted by the dotted red line.
In alignment with the seasonal pattern, in early January 2015 a further up move began at the green arrow. This next rally move topped in late January 2015. At the same time, it led into the year high 2015.
The downleg after the year 2015 high spanned from late January through mid-March. This dow-leg is synonymous with the dotted purple line. It lasted longer than the seasonal pattern because the first upleg of the year came to its high in January, dissimilar to the usual high by the end of February…
At the purple arrow = mid-March 2015 – absolutely in alignment with the seasonal pattern – the so far last upwards move of the year 2015 began, topping on 03/26/2015, so again a little earlier than predicted by the seasonal pattern.
Since 03/26/2015, in the year 2015 gold is more or less in the sideways mode – illustrated by the black zigzag – performing in a choppy way and currently correcting the last upleg.
Normally, this chop-mode uses to start by mid-April lasting till the end of April. This is the way revealed by the average course of the year, mind the black circle on this!
==> Since gold has been complying very closely with its seasonal patterns for as many as 6 months, I think, we’ll have to expect the metal to continue this way for the next time as well. Ergo gold is supposed to start another upleg into the regular May high as soon as the current sideways phase finishes… declining from there into the cyclic summer low. Regularly, the absolute high of the first half year is to be expected for mid-May, as to the seasonal pattern – mind the red circle on this.
For as many as 4 trading weeks gold has been trading between 1180 and 1222. Since almost 2 weeks, the round 1200 is its pivot:
The improvement of the technical situation seen in the weekly time frame is endorsing the expectations of another upleg into the expected seasonal May high! The Slow Stokes oscillator, the shortterm momentum has turned upwards sharply now, the MACD signal lines standing shortly before a buy signal. RSI is staggering at the zero line, but like Slow Stochastics and MACD, with the March 2015 low a higher low formed.
Considering the different uplegs in the weekly time frame since the important 06/2013 lows we’ll have to state that the upwards dynamic of the individual countertrends is constantly diminishing.
First countertrend +21.6%,
Second countertrend + 18%,
Third countertrend – that started from the absolute low – “only!!” + 15.8%. So far, the current countertrend has reached +7.2% from the March 2015 low to the current April 2015 high.
==> I don’t see any reason why the current countertrend should suddenly perform better than the last 3 bear market countertrends did, let alone why it should switch into a confirmed uptrend! Technically, again the high of the first half year 2015 should at most be able to overshoot curtly the main resistance = 1240-1250 for May-June 2015 is the maximally possible, I think. It depends,…
… afterwards, gold should really sally forth to test at least the 1110$ respectively more likely the 1000$ till October 2015. For this forecast please watch again free GUNNER24 Forecasts, issue „Gold aims 1100$“.
Let’s go on in the weekly time frame switching to the signaling after the GUNNER24 Method and to both currently perhaps most dominating weekly setups that start at the current bear market low. An up setup measures the first initial up impulse lasting 13 weeks. This one measures the first initial up impulse during 6 weeks:
Presumably, this setup provides the explanation why gold has been that dull the last weeks. Again, the metal is simply trading at the main resistance resulting from the very first initial up impulse during 6 week candles. The January 2015 topped at the 1st double arc resistance. April 2015 reached only just the lower line of the 1st double arc at the highs. Also the current week highs obviously found resistance at the lower line of the 1st.
By more profound analysis, this up setup, just like the following 13 candle weekly up, how weak gold has actually been presenting for months. The November 2014 to January 2015 up move certainly reached and overshot somewhat the normal target of a countertrend – in this case the 1st double arc – but that was it.
The downleg following after the year 2015 highs really broke some important supports without much ado. At first it was the 2*1 Angle, then the 1*1 Support Angle, afterwards gold retraced the course of the Blue Arc falling down to the mid-March 2015 higher countertrend low. The current countertrend move was not allowed to start before the Blue Arc had lost its magnet function because it expired temporally.
With pain and misery, the current countertrend could re-conquer the 1*2 Gann Angle, but it has had to test it back since as many as 4 week candles. The current week closed narrowly above the 1*2 Gann Angle. An attack to the 1*1 Angle was not allowed to be carried out so far, owed to the current countertrend. Inner force is defined in a different way…
If the next candle closes below the 1*2 Gann Angle, thus below 1200, perhaps gold won’t be able to achieve a higher countertrend high through May, but it will have to follow downwards the resistance of the 1st double arc till June. Lower bear market lows would surely be the consequence until June 2015, because the 1st double arc is main resistance, this resistance pressing and pressing and still dominating!!
==> This setup is also signaling us however that the consolidation of the last weeks might come to its end on Monday, I mean tomorrow (!!) already getting started gold again beginning next week.
The reason for this justified supposition is the state of the 1st double arc resistance. For, if gold opens next week where the current candle closed, so at about 1203 – we should work on this assumption – the resistance of the lower line of the 1st is skipped over by next week’s opening. Skipped over in terms of time!
Thereby, an important GUNNER24 Weekly Resistance would be skipped over temporally, simultaneously being activated as upmagnet the next higher important weekly resistance in the setup.
Visibly in the chart and setup above, the next important higher upmagnet/resistance is matter of the upper line of the 1st that takes course at exactly 1222 for next week. What a coincidence… but as you know, there are no coincidences.
At the moment, the 1222 is again the currently strongest resistance for gold. It’s important on monthly base and in the yearly time frame. The current countertrend high was marked on 04/06/2015, namely at 1224.50. The last daily close above the 1222 was succeeded by gold on 02/13/2015. The 1222-horizontal provided strong support for the entire year 2013. Since October 2014, the 1222-horizontal has been a pivot horizontal gold has to oscillate around. For the time being, gold does not know whether it will be able to dissolve from it respectively whether it has to / will keep on considering the 1222-horizontal as main resistance of the year 2015.
I think that in the end the stubborn resistance function of the 1222 should/will drive gold into the final bear market lows!!
In accordance with the improved indicator situation and the seasonal pattern, the 13 Candle weekly up allows, it even tends to a continuation of the current countertrend that is indeed aiming at a repeated touch with the Blue Arc:
==> Either a new sustainable downleg started already at the current countertrend high at 1224.50 (orange arrow placement). Probability just a meager 10%!
Or – much more likely – there will be a last schnapps upwards going to a further intense test of the 1222 area and - again more probable – to the 1240-1250 until the final May high, before from there the move into 1100$ and 1000$ begins. At about 1240, there is the Blue Arc resistance for mid-May 2015. Red arrow forecast…
For the Blue Arc is – beside the 1222 horizontal – the next conceivable and strongest identifiable resistance for the year 2015. The Blue Arc is defined and cemented as a further major resistance for 2015 because the countertrend starting at November 2014 bear lows came to its end in terms of time (not of price…) at the weekly highs of the 13th week of countertrend.
==> The 13 is a Fibonacci number. At or near the Fibonacci numbers, it often comes to important and sustainable changes. Ensuing from the high of the 13th week of the last countertrend and near the absolute year high 2015, in this case the Blue Arc was thereby defined +determined + cemented as important future year resistance for 2015 by the market participants.
The sustainable overcoming of the Blue Arc resistance combined with the 1222-horizontal resistance on weekly closing base till the end of May 2015 seems to me almost impossible ==>
The reason: According to the rule of 3 and the rule of 4, such important magnets cannot be overcome finally before the 3rd or 4th test respectively hit. The now possible very first test (2nd hit) of the Blue Arc resistance – at about 1240-1250, to be expected for May 2015 – should really result negatively. Then gold will be supposed to dive strongly again till at least October 2015.
If the Blue Arc is nevertheless overcome finally at the very first test – contrary to the rules of 3 and of 4 – (due to a possible Grexit and/or the foreseeable further tightening of the Ukraine war till May 2015), gold will have pretty good chances of the final bear low to have been established in November 2014 in fact!
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Be prepared!
Eduard Altmann
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