This Easter egg stinks immensely

What a smelly present the gold-shorties aka hedge funds have laid for us gold-bulls in the nest! By virtue of the facts definitely created last Tuesday, April 15, the hope should be kissed goodbye that gold might test the 1400$ mark again during the first half year of 2014. To me even the important 1372$ Gann Magnet or just the 1350$ seems completely out of reach for the next 8-12 weeks.

It’s patently obvious now that the downswing, got started on 03/17 at 1392.60, is much more likely to come to an end (80% of probability) the week after next at the combined weekly and monthly 1255 GUNNER24 Support than at the earliest next week (20% of probability). Until the middle of May gold is going to be supported poitively seasonally, before from then till July/August 2014 for all the gold-bulls another - thoroughly very painful – drought-stricken period full of fear and sweat will be in store. This one is lax and easily able to smash the so far absolutely stalwart 1180 monthly support thereby finally working off the mostly preferred absolute and final low of the correction (last notified in this issue) lasting since September 2011 on monthly base at 1050$.

The most hopeful that might happen to gold till July/August is to defend the 1*1 Bull-Market Gann Angle on monthly closing base – starting from the 2008 low - during the whole summer! This important bull-market angle takes its course between 1195 and 1210, depending on the summer month.

The derivation of this angle, its importance, its signaling effect and fundamental signification can be taken from the Monthly 8 Candle GUNNER24 Up Setup and the subsequent analysis in detail in the GUNNER24 Forecasts of 03/16/2014. In this issue of the GUNNER24 Forecasts the most important milestones for the coming months are listed. They have not changed reading as follows:

A monthly close below 1300 will activate attaining the 1*1 Bull-Market Gann Angle. All right, if April or May as well (and June, too, of course) close below 1300, so heading for and new working off the 1*1 Bull-Market Gann Angle = 1195-1210 will be necessary in summer.

If this 1*1 bull-market Gann Angle does not hold in summer – hence in summer a monthly close below the angle is produced – the 1050 will be supposed to be headed for until August respectively perhaps until September thus being finished the entire correction on monthly base.

Let’s get now to the occurrences of April 15, 2014. In the GUNNER24 Forecasts of 04/06/2014, I stated why the deadline of April 16, 2014 combined with the currently very most important gold pivot = Gann Magnet of 1322$ should be decisive for the rough direction gold intends to pursue gold in the coming months.

April 16, 2014 is a so-called Gann Date because this is when the correction current since September 2011 for the first time attained respectively worked off the 1322 magnet, exactly one year ago.

On April 14, last Monday, was the very day gold succeeded in closing above the important combined GUNNER24 weekly and monthly 1322 resistance. Tuesday, April 15 the market decided not to hold the 1322, to put it mildly. Last Tuesday, it came to the heftiest intraday sell-off since 10/01/2013. Hence, it was the heftiest sell-off for more than 5 months! And I mean, this is quite a clear message that reads: For the time being, 1322$ keep being the main resistance for the rest of spring time and the entire summer of 2014!

Please, have another look at the weekly setup above minding both very most important Aspects. A) Observe exactly the course of the ATH Angle. It derives from the ATH. This angle first provided support at 1., was broken finally then at 2. and negatively tested back at 3. and at the first double arc resistance. The rally of the December 2013 lows pushed it upwards then. At 7 it was successfully tested first and foremost. This ATH Angle is now an important gold support, it’s even an existential one.

Then comes B) The very most important resistance on weekly base is the 2012 Resistance Angle. Last week, this one was overcome briefly on daily closing base on Monday 04/14. But its resistance function was definitely confirmed by the super sell-off on 04/15.

Now I transferred both ruling Gann Angles into the following weekly down setup. It started at the August 2013 highs, at 3. in the chart above comprising 8 weeks first initial down impulse and showing us where gold is most likely to turn in order to start another weak rebound until the middle of May 2014 afterwards:

So, the 8 week down impulse started at the ATH Resistance Angle in August 2013 implying a possible important low at the first double arc support. At the end of December 2013 we see at A) two important weekly lows, touching down the former exactly at the upper line of the first and dipping the second a little bit into the space between the lines of the first on 12/31/2013. Then, to schedule at the first trading day of 2014, starting from the first double arc support a strong upleg began that from the middle of February felt forced to join the upward directed magnet effect of the Blue Arc. In the course of the strong exhaustion middle/end of March, even one exceedance of the 2012 Resistance Angle on closing base succeeded. It was a false signal. By the action of last week at C) this is confirmed unambiguously as well as the furthermore existing resistance function of the 2012 Resistance Angle.

Since the last thrust of energy starting from the 2012 Resistance Angle is directed downwards, consequently it appears compelling that newly the ATH Angle will have to be tested and headed for. For next week, the ATH Angle takes a course at D) 1265. In case the 1265 does not hold on daily closing base next week (daily close below 1260) as early as next week a new touching down onto the upper line of the first will have to be reckoned with. This upper line of the first takes a course at 1250 for next week.

But, as gold is presenting itself at the moment, I think that the very strongest Gann Magnet, i.e. the price where the ATH Angle intersects the upper line support of the first at E), will not be reached before the week after next =1255.

From there, E) = 1255 – a super strong weekly Gann Support Magnet – gold is supposed to start another upleg up to the 2012 Resistance Angle until the middle of May = F), about 1310 in order to dive deep subsequently. Because then the technically pretty strong support function of the first double arc won’t be likely to be able any longer to support gold.

A final break of the first double arc now in April already is extremely unlikely for the 1250-1255 would have to hold because also an important monthly Gann Support is lying there (see next chart). Respectively in May (high probability), according to the GUNNER24 Trading Rules, such a break will release a mighty sell signal that will certainly make compelling the 1195-1250 area till summer and, after its break, turn necessary the 1050 as a result of the technically always existing weak summer seasonality.

A monthly close above 1322 in May or June would lead gold absolutely out of the woods, as far as a test of the 1050 is concerned!!

For April, the 1250-1255 is the strongest point of attraction in the weekly as well as monthly chart. At the same time, this area is also a strong combined support. In the weekly time frame, the support of the upper line of the first takes its course there. In the monthly chart the 1*1 Gann Angle resides there, starting from the previously absolute correction low of June 2013. Now, after the 1322 newly turns out to be unsurmountable implying the weekly time frame a new test of the 1250-1255, it appears just logical that also in the monthly time frame the 1*1 Gann Angle has to be headed for.

This approach run is the matter of a classical test of the 1*1 Gann Angle. Please pay attention to the close of the January 2014 candle. Then a marginal close above the 1*1 succeeded. Then February 2014 opened rather exactly at the 1*1. Now the 1*1 will be tested back, as to my assessment.

The 1250-1255 are supposed to hold in April heaving gold up again till the middle of May. May 2014 is not likely to achieve a close above 1322. I expect a May high to happen near 1310. From there gold is supposed to fall through August/September 2014, perhaps targeting the 1050. At the moment there are so many determining and signaling marks and magnets that does not only make it difficult to retain the general view. On the other hand, I cannot go into details of all of them. That’s why I’m giving here briefly and for making notes all the signals I’ve got:

A monthly close below 1300 in April or May will activate the 1205 until July/August 2014.

A monthly close below the 1250 in April respectively a monthly close below the 1255 in May 2014 will confirm the 1205 until July/August 2014.

A weekly close below the 1250 in April will activate the 1205.

A monthly close from May to July 2014 below 1195-1210 will activate the 1050 until August/September 2014.

If April achieves once more to close above the 1302 GUNNER24 Support – thoroughly possible because technically from the 1255 support area a hefty quick rebound upwards may occur – in that case gold seems to be able to defend the 1255 in May as well. Then the summer would rather take a sideways course between 1350 and 1250.

A monthly close above 1322 in May or June would lead gold absolutely out of the woods, as far as a test of the 1050 is concerned. The worst to fear then in the course of the summer is a new reaching and testing of the 1250 mark. Such a closing scenario would even permit a heading for the 1522 till the end of 2014!

Be prepared!

Eduard Altmann