December Gold Futures
While some may have gravitated to the kitchen to bask in the aromas of the upcoming feast or perhaps laid early claim to their spot in front of the TV, I spent the better part of my Holiday morning pouring over gold future price charts. The structural evidence to me suggests that the advance from the late October lows of 1263.80 is unsustainable. It appears to me that the this rally could be characterized as non-impulsive and has unfolded in a complex WYZ pattern that is nearing its completion. The December contract as of this morning is trading at 1288.50. If prices were able to press up above the recent high of 1297.50 I’d be strongly favoring an investment in a bearish position. The channel extension comes in overhead between 1299 and 1302. This should mark the Z wave high of the structure I am observing. Historical cyclical studies blended with price projection analysis suggest roughly a 45 to 65 dollar decline. This scenario could take place within a 3 to 5 week time period from the structures terminating point. Implementing a January options strategy which is priced on the February futures currently trading at a 4.5 premium to December would allow one to take advantage of this assessment. The risk/reward measurement is extremely favorable. Please feel free to reach out to me at Walsh Trading to discuss this and other market opportunities.
My analytical breakdown focuses on a blend of wave pattern recognition, long and short term geometrical extensions and momentum signal interpretation.
Please join me next Tuesday as I apply Wave Theory and Geometric targets levels to this and other commodity markets.