June Gold Futures
When I observe the structural nature of the gold market over the last few months it appears more than a bit messy. I had originally thought that we were in the process of forming some kind of triangle however this all changed to me when we broke the inner low of 1303.3 established in late February. With the triangle theory out the window I now contend that we are in the C wave of a large A-B-C corrective sequence. I don’t believe that the market is due for a complete rug pull to complete the C wave but 30 point decent would satisfy my wave count. Looking at the sloppy recovery off the 1302.3 low it would be difficult for me to categorize it as anything but non-impulsive. It is either an a-b-c structure or an w-x-y rebound. In either case the arrow points lower. I’d like to see a moderate rise to say 1321.5 (+/-) for an opportunity to establish a short position. With a stop placed above 1327 and I would be looking to capture a full week ATR projection. This is where the 30 point calculation comes from which roughly computes to a 5 to 1 risk reward. A slip and hold below 1310 would be a favorable signal. I expect this level to put up a fight. Both the first wave 1 to 1 measurement and the ATR reading ( weekly ) project to +/-1290. This is where I would be looking to cover my position. I do believe we could overshoot down to the low 1280’s. In my opinion, were this to play out, the pattern would be complete. On the flip side a fortification of 1324 will look to extend to +/-1335. That could mark the Z wave extreme of a more complex w-x-y-x-z formation. This is all very tricky. Please feel free to contact me at Walsh Trading to discuss my insights and suggested trade strategies in this and other futures markets.