Bottom fishing

After having cocooned for many weeks – seemingly safe – above the horizontal 1620-1625 support, last week gold suffered the break of that support with a tremendous bang going to a plunge down to the actual 1571 lows. Since even the important 1600 mark we had worked out in the last issue was broken downwards almost effortlessly, in the course of next week the important 1555-1557 support will be headed for:

Here’s again a detail from the important monthly 13 candle up of the last issue showing the origin and the position of this important Gann support. After the 1*1 Gann Angle lying at 1600 for May 2012 was clearly broken on daily basis, working off the 1557 will be on the agenda. If this mark is taken on daily basis the 1500 will be headed for. For the continuation of the upwards trend, hereafter there’ll be the need that the market turns at 1557 closing May near or above the 1600 again.

If that is not the case, if May doesn’t close near the 1600 or above gold will be positioned in the lower half of three important monthly setups that begin at the lows 05/2005 (see again last Sunday issue) and thus in the bearish half of this setup being activated the 1500 as the next important down target until the middle of June. But the 1500 are supposed to be just a medium-term stopover to the final correction target: 1400 until August 2012 are the long-term down target for the correction ending then after twelve months.

The 1557 are the next important down target for gold now. If the actual 1571 are fallen below just marginally the 1557 will be activated:

In the weekly 13 Candle GUNNER24 Up we see that gold has reached an important weekly magnet at 1571. It’s the magnet where the actual support Gann Angle intersects with the lower line of the 3rd double arc at 1571. This constellation has the potential for a weaker rebound on daily basis, but let’s be honest about this: In terms of timing it’s most unlikely that the 1571 on daily basis won’t be fallen below next week being reached thus the 1557.

The 1571 are the new year-low. With the Friday close at 1579.90 we see the lowest daily close in 2012. Furthermore the lowest weekly close in 2012 is quoted. For as many as eight trading days the precious metals haven’t achieved any higher daily high, the Friday closings are near the weekly lows. The stock markets are expected to make at least a turn downwards, and that’s putting a strain on all the precious metals as well. US Crude Oil isn’t looking rosy, the important 1620 break and the resulting actual daily sell signal happened just four days ago. Even though the daily and the weekly indicator situation are absolutely oversold virtually crying out for a bounce the downwards trend perfectly intensified with the break of the 1620 and the 1600 having reached now the capitulation status, from my point of view. I.e. from the GUNNER24 point of view, now a final sell-off is possible at any time in case the 1571 are broken, and that’s very, very likely as mentioned above.

As I consider the gathered GUNNER24 precious metal and stock setups, as early as within the next sixteen trading hours the decline is supposed to continue being broken the 1571.

Next down target in this case are the 1557, the next important weekly and monthly GUNNER24 Support. Just consider about that the four red arrows in the weekly 13 candle up setup above. They’re pointing to four important weekly lows that are very close to the lower line of the 3rd double arc. The lower line of the 3rd double arc is supporting the market, that’s where some important lows are made and some weak rebounds are developing. With the decline of last week gold is parking at the lower line of the 3rd as it were, no rebound is to be made out which points to the probability that the decline hasn’t ended yet. Combining now usefully these important lows at the red arrows with the elliptical arc technique we get the following picture:

The “allowed and probable” low of next week is positioned exactly at 1557. Think the market cannot turn before that mark…

But in the sell-off mode there aren’t any strong supports any more. These ones tend to a quick break without resistance in the sell-off mode, as we could see at the 1600.

Seen from the angle of the Fibonacci count the daily down trend that began on 02/29 last Friday was on its day # 52. From there a final low won’t be possible before next Wednesday/Thursday, probably at 1557, on the day # 55 of the current down swing.

If this 1557 support breaks in the sell-off the next important combined GUNNER24 Weekly and Monthly Support cushion point won’t be until the surroundings of the 1500. See about that the support marks recorded in the monthly and weekly up setup. The conventional chart technique – trendline method – is likewise showing the importance of the 1557 and the 1500 surroundings: