GOLD TRADER: “PREPARE FOR WHIPSAWS AS THE BULLS TRY TO DEFEND $1400”

SEPTEMBER 2, 2013

Traders need to prepare for some whipsaw’s early next week as the bulls try to defend $1400, followed by a hard move down into the daily cycle low at the end of the week or the beginning of the next week.

Once we put this daily cycle bottom behind us I think the next daily cycle will test the April stop run level at $1523. Then depending on what unfolds in the dollar we could very well see a fourth daily cycle higher that tests the QE 4 manipulation level at $1700-$1800.

From Tekoa Da Silva,

Following a mild sell-off in gold this week, coupled with a sharp step-back in miners, one of the world’s top gold traders and recent interview guest, Gary Savage, shared some powerful charts and commentary on what investors can expect going into next week.

Speaking to the sell-off, Gary noted that, “Now that gold has broken its daily cycle trend line I think we can assume that the daily cycle decline has probably begun. My best guess is that we will see gold drop into this week’s employment report and test the support zone and intermediate trend line between $1340-$1350.

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We knew this was coming, as gold will enter the timing band for a daily cycle low on Monday, so no one needs to freak out. That being said, daily cycle declines need to make traders freak out in order to reset sentiment and prepare for the next leg up.

So I suspect what is going to happen is that the bulls will try to defend that $1400 level for a few days, followed by a very scary $30-$40 crash day that will bring gold back down to that support zone and a final daily cycle low possibly on the employment report or the following Monday.

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The bullish percent chart is also suggesting it’s time for a minor rest. It hasn’t reached levels indicative of an intermediate top yet (80%-90%), but the big surge off the bottom needs to pull back and consolidate before the next push higher.

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All in all, I think traders need to prepare for some whipsaw’s early next week as the bulls try to defend $1400, followed by a hard move down into the daily cycle low at the end of the week or the beginning of the next week.

Once we put this daily cycle bottom behind us I think the next daily cycle will test the April stop run level at $1523. Then depending on what unfolds in the dollar we could very well see a fourth daily cycle higher that tests the QE 4 manipulation level at $1700-$1800.