A quick review of the possible scenarios I have drafted last week (Wed. Feb. 21), which I have still played into the current one
Thus, three different scenarios to take into account:
REJECTION of current area + buyers take control – Gold experiences an important retracement towards the $1580´s, $1590,s, even $1600 – I do not see it very likely, unless the above referenced levels are breached with intense and continued buying action
CONSOLIDATION INTO THE CURRENT (LOWER) VALUE AREA – Possible scenario, contained towards the $1585 area.
POSSIBLE CONTINUATION INTO LOWER AREAS OF VALUE – Also possible. In this case, I´ll be looking at the levels provided above. $1525 is key. I would be wary if price breaks down this level.
Yesterdays chart, pointed out critical areas to be aware of
Current chart, at the time of writing (8:24 PM, ET)
Higher value areas have been reached today (“REJECTION” scenario, above), thus the need to review the possible outcomes.
Todays move surpassed the original targets, reaching the HOD at $1619.70, which is located at the bottom of the $1624-$1619 value area, which should be bring some form of containment. So far, the current balance is located within $1619-$1610.
As always, some hypotesis to work with:
BREAK OF BALANCE TOWARDS HIGHER VALUE AREAS: buyers manage to keep in control without opposition form sellers, rotation around the current levels, followed by another push. I would be looking at $1625 and $1635 as possible areas for sellers to regain control.
REJECTION OF CURRENT LEVELS + CONSOLIDATION: I would be looking into two different subsettings:
a-) retracement, followed by acceptance of lower value area into the $1600-$1598 area, which should provide some (at least) short term support
b-) retracement into lower are of value, below $1595. I would be looking at as possibility for buyers to reagiung into todays lows at $1584. I will be looking here specially $1592.
I tend to pay special attention these type of moves. Specifically, I would be looking into tonight/tomorrow how much pressure can sellers provide (if any) and the extent of it (fast + intense vs. progressive and steady). There´s a lot of space to back fill, specially into the $1600-$1596, which will be a key value area I will be looking into, in the event a retracement takes place.