We followed through nicely on that triangle breakout from yesterday, and we’re now actually into overbought territory on a 30-min scale:
Source: Prophet.net
I closed my futures longs just now and actually reversed the position to an extent. 10-min bar is showing negative divergence during this push from 10,200 to 10,300.
What a move in platinum today! Glad I closed that one yesterday. The metal should provide shorts another nice move before long. I just want to see a bit more of the structure play out before jumping back in.
UPDATE (3:15): We got a tiny contracting triangle correction instead of a drop, followed by an upside breakout.
Chart (3:22). Just shorted on account of the overbought 2-min RSI and a pattern of successively lower peaks in 10-min RSI:
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Mike,
I’ve been staring at the gold chart, and the following question arises. If it turns back down from near the present peak and bounces off support at 1075-1080, wouldn’t that constitute some kind of triangle – and thus portend a rise to new highs?
I know that this goes against the general forces of deflation, but I want to be prepared for the possibility that gold is “different.” After all S&P just threatened another downgrade of U.S. debt, and this sort of crisis has historically favored gold.
Good eye. Yes, that is certainly a possibility. Silver does not show the pattern, however.
Stocks peaked in July and Oct 2007, but gold peaked in March 2008 and other commodities peaked in June/July 2008. If the pattern repeats, commodities could surge ahead of stocks now.
That said, commodity bullishness was so extreme for so long this year, and many uptrends are now broken.