Global Markets
Gold continued its slide on Friday, on course for its biggest weekly loss in nine months, as a breach of key support levels pushed more sellers to cut their exposure. Spot gold fell as much as 1.2% to $1,077 an ounce, bringing its losses this week to more than 4%. Copper is also feeling the burn amid a rout in commodities and mining stocks. The red metal extended its slide to the lowest price since 2009, heading for a 4.6% drop this week.
Trading
Violation of the Three Day Pivot Zone (2112 – 2115) on Tuesday was the first “tell” of further weakness to come…Failure to convert this key zone on test back up setup continued decline yesterday as we outlined in Scenario 2 in DTS Report 07.23.15. Here is excerpt: “Failure to convert 2112 SPOT and subsequent violation of 2108 opens door for retest of CD1 Low (2102.25). Violation of the level expands downside targets 2095.50 – 2092.25 STATX Zone with CD3 Violation Target 2090 handle. Possible LOD = 2090.50″.
The actual LOD was 2091.50, just 4 tics from projection and well within Margin of Error (MOE). In overnight trade price has bounced back a bit to the Daily Pivot 2102.25. This level may illicit some initial resistance for buyers. To change the current downtrend dynamics price must clear and convert two major hurdles…2108.00 SPOT and 2112.00 SPOT. Unless those challenges are met, the downtrend remains in effect.
Today is Cycle Day 1 (CD1)…Odds of Decline > 10 = 72%; Odds of Decline > 20 = 41%; Average Range = 17.75; Max Average Range = 22.00; Possible HOD = 2114.50 based upon Average Cycle Rally; Possible LOD = 2081 based upon Violation of CD3 low on CD1.
***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Hypotheses: September (U) Contract
*****The levels outlined below are more general framework within a larger range…They are to be used are reference prices from which to consider trade opportunities, not hard trade levels.
Scenario 1: IF price can hold above 2098 handle and convert 2102 handle, THEN there is a 55% chance of hitting 2106 – 2108 3D CPZ, which should be some resistance. Should bulls have enough strength to overcome selling resistance, price is open to rally to next key hurdle between 2112 – 2114.
Scenario 2: Price has bounced in overnight trade to Central Pivot (2102.25) initial resistance…Failure to convert this level and subsequent violation of 2098.00 handle opens door to retest 2092 handle and Average Cycle Range Decline Target. Violation of this level targets 2088.50 followed by deep extreme CD1 Violation Target 2081.00.
Trade Strategy: Our tactical trade strategy will simply remain unaltered…We’ll be flexible to trade both long and short side from Decision Pivot Levels. Continue to focus on Bull/Bear Stackers and Premium/Discounts. As always, remaining in alignment with dominant intra-day force increases probabilities of producing winning trades.
Stay Focused…Non-Biased…Disciplined ALWAYS USE STOPS!
Good Trading…David
“Knowing is not enough, We must APPLY. Willing is not enough, We must DO.” –Bruce Lee