Gold desperately oversold, time to correct

Carol Harmer Charmer Trading

SUPPORT: 1207/05 * 1199 1190 1172 1164 1157 1145

RESISTANCE: 1220 1223 1234 1242* 1248 1252 1255 If

Gold is to correct...now is the time to do it....It has tried the downside...it has failed to break 1199...it is desperately oversold....the $ needs a correction from its heavy advance...We have double based ahead of this 1199 area...and therefore I think as we have seen a huge sell off in Gold mainly over 3 days now it is time to correct....Point Is....where can it correct to....well the 23.6 fib is at 1234.....so we know resistance is at 1235 so we need to clear this before we see rallies...we know the $ is strong...we are looking for a correction and this 1235 will determine whether we trade higher or go down and take out the 1199 lows...can the $ march higher as it as done...we know nothing goes in a straight line...although Gold pretty much did....Its not unusual for Gold to trade this way...we saw in 2011 and 2012 just how Gold could fall like a stone...and really we haven't recovered from that period is any real way...we saw a retracement towards the long term 38.2 fib @ 1380...we reached 1375...and I guess that because we couldn't break above here it was time for Gold to trade lower...Can we break this critical support at 1199 before soe sort of correction....I would have thought if we was going top do it we would have done it by now....so I am thinking that we do need some corrective pressure in Gold at least to ease the med term overbought scenario....However...looking at the monthly charts...which we have to do these have just turned negative....now 180 $ lower dosnt instil in my a rush to go out and sell Gold...However...we have to look at the longer term timeframes to judge the market...and the failure at 1375 was a clue that Gold had not finished with the downside....Now if we break above 1235 we can correct further with the break point of 1255 looking to entice...I personally feel Gold will run out of steam in this 1255/60 area so we wold liquidate any longs and re-sell...keeping stops then above 1275..

Gold Current Trading Positions

Sell 50%

Buy 50%

Avg Sell Price 1232.60

Avg Buy Price 1235.23

Liquidity Distribution

Author

Carol Harmer

Charmer Trading

Carol Harmer has over 39 years experience of analysing and trading the world's markets and is undoubtedly one of the most respected technical trader in the world today.

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